Document:

<PAGE>

                                                                     EXHIBIT 4.3

                        AMENDED AND RESTATED DECLARATION

                                    OF TRUST

                      STERLING BANCSHARES CAPITAL TRUST III

                         Dated as of September 26, 2002

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
<S>                                                                                        <C>
Article I           Interpretation And Definitions .......................................... 1
   Section 1.1      Definitions ............................................................. 1

Article II          Trust Indenture Act ..................................................... 7
   Section 2.1      Trust Indenture Act; Application ........................................ 7
   Section 2.2      Lists Of Holders Of Securities .......................................... 7
   Section 2.3      Reports By The Property Trustee ......................................... 8
   Section 2.4      Periodic Reports To Property Trustee .................................... 8
   Section 2.5      Evidence Of Compliance With Conditions Precedent ........................ 8
   Section 2.6      Events Of Default; Waiver ............................................... 8
   Section 2.7      Event Of Default; Notice ............................................... 11

Article III         Organization ........................................................... 12
   Section 3.1      Name ................................................................... 12
   Section 3.2      Office ................................................................. 12
   Section 3.3      Purpose ................................................................ 12
   Section 3.4      Authority .............................................................. 12
   Section 3.5      Title To Property Of The Trust ......................................... 13
   Section 3.6      Powers And Duties Of The Administrative Trustees ....................... 13
   Section 3.7      Prohibition Of Actions By The Trust And The Trustees ................... 15
   Section 3.8      Powers And Duties Of The Property Trustee .............................. 16
   Section 3.9      Certain Duties And Responsibilities Of The Property Trustee ............ 18
   Section 3.10     Certain Rights Of Property Trustee ..................................... 20
   Section 3.11     Delaware Trustee ....................................................... 22
   Section 3.12     Execution Of Documents ................................................. 22
   Section 3.13     Not Responsible For Recitals Or Issuance Of Securities ................. 22
   Section 3.14     Duration Of Trust ...................................................... 22
   Section 3.15     Mergers ................................................................ 23

Article IV          Sponsor ................................................................ 24
   Section 4.1      Sponsor's Purchase Of Common Securities ................................ 24
   Section 4.2      Responsibilities Of The Sponsor ........................................ 24
   Section 4.3      Right To Proceed ....................................................... 25

Article V           Trustees ............................................................... 25
   Section 5.1      Number Of Trustees: Appointment Of Co-Trustee .......................... 25
   Section 5.2      Delaware Trustee ....................................................... 26
   Section 5.3      Property Trustee; Eligibility .......................................... 27
   Section 5.4      Certain Qualifications Of Administrative Trustees And Delaware Trustee
                    Generally .............................................................. 27
   Section 5.5      Administrative Trustees ................................................ 28
   Section 5.6      Appointment, Removal And Resignation Of Trustees ....................... 28
   Section 5.7      Vacancies Among Trustees ............................................... 30
   Section 5.8      Effect Of Vacancies .................................................... 30
   Section 5.9      Meetings ............................................................... 30
</TABLE>

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<TABLE>
<S>                                                                                        <C>
   Section 5.10     Delegation Of Power .................................................. 31
   Section 5.11     Merger, Conversion, Consolidation Or Succession To Business .......... 31

Article VI          Distributions ........................................................ 31
   Section 6.1      Distributions ........................................................ 31

Article VII         Issuance Of Securities ............................................... 31
   Section 7.1      General Provisions Regarding Securities .............................. 31
   Section 7.2      Execution And Authentication ......................................... 32
   Section 7.3      Form And Dating ...................................................... 32
   Section 7.4      Registrar And Paying Agent ........................................... 34
   Section 7.5      Paying Agent To Hold Money In Trust .................................. 34
   Section 7.6      Replacement Securities ............................................... 34
   Section 7.7      Outstanding Preferred Securities ..................................... 35
   Section 7.8      Preferred Securities In Treasury ..................................... 35
   Section 7.9      Temporary Securities ................................................. 35
   Section 7.10     Cancellation ......................................................... 36
   Section 7.11     Cusip Numbers ........................................................ 36

Article VIII        Termination Of Trust ................................................. 37
   Section 8.1      Termination Of Trust ................................................. 37

Article IX          Transfer Of Interests ................................................ 38
   Section 9.1      Transfer Of Securities ............................................... 38
   Section 9.2      Transfer Procedures And Restrictions ................................. 39
   Section 9.3      Deemed Security Holders .............................................. 42
   Section 9.4      Book-Entry Interests ................................................. 42
   Section 9.5      Notices To Clearing Agency ........................................... 43
   Section 9.6      Appointment Of Successor Clearing Agency. ............................ 43

Article X           Limitation Of Liability Of Holders Of Securities,
                    Trustees Or Others ................................................... 43
   Section 10.1     Liability ............................................................ 43
   Section 10.2     Exculpation .......................................................... 44
   Section 10.3     Fiduciary Duty ....................................................... 44
   Section 10.4     Indemnification ...................................................... 45
   Section 10.5     Outside Businesses ................................................... 48

Article XI          Accounting ........................................................... 48
   Section 11.1     Fiscal Year .......................................................... 48
   Section 11.2     Certain Accounting Matters ........................................... 48
   Section 11.3     Banking .............................................................. 49
   Section 11.4     Withholding .......................................................... 49

Article XII         Amendments And Meetings .............................................. 49
   Section 12.1     Amendments ........................................................... 49
   Section 12.2     Meetings Of The Holders; Action By Written Consent ................... 51

Article XIII        Representations Of Property Trustee And
                    Delaware Trustee ..................................................... 53
   Section 13.1     Representations And Warranties Of Property Trustee ................... 53
</TABLE>

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<TABLE>
<S>                                                                                                       <C>
   Section 13.2     Representations And Warranties Of Delaware Trustee. ................................... 53

Article XIV Miscellaneous ................................................................................. 54
   Section 14.1     Notices. .............................................................................. 54
   Section 14.2     Governing Law. ........................................................................ 55
   Section 14.3     Intention Of The Parties. ............................................................. 55
   Section 14.4     Headings. ............................................................................. 55
   Section 14.5     Successors And Assigns. ............................................................... 56
   Section 14.6     Partial Enforceability. ............................................................... 56
   Section 14.7     Counterparts. ......................................................................... 56

ANNEX I             Terms Of Securities .................................................................. I-1

EXHIBIT A-1         Form Of Preferred Security Certificate .............................................. A1-1

EXHIBIT A-2         Form Of Common Security Certificate ................................................. A2-1

EXHIBIT B           Specimen Of Debenture ................................................................ B-1

EXHIBIT C           Underwriting Agreement ............................................................... C-1
</TABLE>

                                      iii

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
      Section of
Trust Indenture Act                                              Section of
of 1939, as amended                                              Declaration
-------------------                                              -----------
<S>                                                              <C>
310(a) .......................................................... 5.3
310(b) .......................................................... 5.3(c), 5.3(d)
311(a) .......................................................... 2.2(b)
311(b) .......................................................... 2.2(b)
312(a) .......................................................... 2.2(a)
312(b) .......................................................... 2.2(b)
313 ............................................................. 2.3
314(a) .......................................................... 2.4; 3.6(j)
314(c) .......................................................... 2.5
315(a) .......................................................... 3.9
315(b) .......................................................... 2.7(a)
315(c) .......................................................... 3.9(a)
315(d) .......................................................... 3.9(b)
316(a) .......................................................... 2.6
316(c) .......................................................... 3.6(e)
317(a) .......................................................... 3.8(e); 3.8(h)
317(b) .......................................................... 3.8(i); 7.5
</TABLE>

__________________

*     This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.

                                       iv

<PAGE>

                              AMENDED AND RESTATED
                              DECLARATION OF TRUST
                                       OF
                      STERLING BANCSHARES CAPITAL TRUST III

                               September 26, 2002

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

                                    RECITALS:

         WHEREAS, the Trustees (other than the Property Trustee (as defined
herein)) and the Sponsor established Sterling Bancshares Capital Trust III (the
"Trust"), a trust formed under the Delaware Statutory Trust Act pursuant to a
Declaration of Trust dated as of February 13, 2001 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on February 13, 2001, 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 (each as hereinafter defined), and engaging in only those other
activities necessary, advisable or incidental thereto; and

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

         WHEREAS, all of the Trustees 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 constitute the governing instrument of such statutory trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.

                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

SECTION 1.1  Definitions.

         Unless the context otherwise requires:

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

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

<PAGE>

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

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

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

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

         "Administrative Trustee" has the meaning set forth in Section 5.1(b).

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

         "Agent" means any Paying Agent or Registrar.

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

         "Book-Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.

         "Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in New York, New York or Houston, Texas are
authorized or required by law or executive order to close.

         "Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.

         "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.

         "Closing Time" means the "Closing Time" under the Underwriting
Agreement.

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

         "Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission

                                       2

<PAGE>

is not existing and performing the duties now assigned to it under applicable
Federal securities laws, then the body performing such duties at such time.

         "Common Securities" has the meaning specified in Section 7.1(a).

         "Common Securities Guarantee" means the guarantee agreement dated as of
September 26, 2002 of the Sponsor in respect of the Common Securities.

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

         "Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Deutsche Bank Trust Company Americas
(formerly known as "Bankers Trust Company"), 60 Wall Street, MS NYC60-2515, New
York, New York 20005, Attention: Corporate Trust and Agency Services.

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

         "Debenture Issuer" means Sterling Bancshares, Inc., a Texas
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.

         "Debenture Trustee" means Deutsche Bank Trust Company Americas
(formerly known as "Bankers Trust Company"), a New York banking corporation, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.

         "Debentures" means the 8.30% Junior Subordinated Deferrable Interest
Debentures due September 26, 2032 of the Debenture Issuer issued pursuant to the
Indenture.

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

         "Definitive Preferred Securities" has the meaning set forth in Section
7.3(c).

         "Delaware Trustee" has the meaning set forth in Section 5.1.

         "Direct Action" has the meaning set forth in Section 3.8(e).

         "Distribution" means a distribution payable to Holders in accordance
with Section 6.1.

         "DTC" means The Depository Trust Company, the initial Clearing Agency.

                                       3

<PAGE>

         "Event of Default" shall mean any event specified in Section 2.6(a),
continued for the period of time, if any, and after giving of the notice, if
any, therein designated.

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

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

         "Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).

         "Fiscal Year" has the meaning set forth in Section 11.1.

         "Global Preferred Security" has the meaning set forth in Section
7.3(a).

         "Holder" means a Person in whose name 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 March 21, 2001, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are issued.

         "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.

         "Legal Action" has the meaning set forth in Section 3.6(g).

         "List of Holders" has the meaning set forth in Section 2.2(a).

         "Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred 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 of all outstanding Securities of the relevant
class.

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, the Chief Executive Officer, the President,
a Vice President, the Chief Financial Officer, the Secretary or an Assistant
Secretary of such Person. Any Officers' Certificate delivered by the Trust shall
be signed by at least one Administrative Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:

                                       4

<PAGE>

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

         (b)   a brief statement or summary 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.

         "Opinion of Counsel" means a written opinion of counsel, who may be the
general counsel of the Sponsor.

         "Paying Agent" has the meaning specified in Section 7.4.

         "Payment Amount" has the meaning specified in Section 6.1.

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

         "Preferred Securities" has the meaning specified in Section 7.1(a).

         "Preferred Securities Guarantee" means the guarantee agreement dated as
of September 26, 2002 of the Sponsor in respect of the Preferred Securities.

         "Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).

         "Property Trustee" has the meaning set forth in Section 5.3(a).

         "Property Trustee Account" has the meaning set forth in Section
3.8(c)(i).

         "Prospectus" has the meaning set forth in Section 3.6(b)(i).

         "Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees,both of them, or, if there is only a single
Administrative Trustee, such Administrative Trustee.

         "Registrar" has the meaning set forth in Section 7.4.

         "Registration Statement" has the meaning set forth in Section
3.6(b)(i).

                                       5

<PAGE>

         "Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.

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

         "Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.

         "Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.

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

         "Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.

         "Special Event" has the meaning set forth in Section 4(c) of Annex I
hereto.

         "Sponsor" means Sterling Bancshares, Inc., a Texas corporation, or any
successor entity resulting from any merger, consolidation, amalgamation or other
business combination, in its capacity as sponsor of the Trust.

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

         "Successor Delaware Trustee" has the meaning set forth in Section
5.6(b)(ii).

         "Successor Entity" has the meaning set forth in Section 3.15(b)(i).

         "Successor Property Trustee" has the meaning set forth in Section
3.8(f)(ii).

         "Super Majority" has the meaning set forth in Section 2.6(b)(ii).

         "10% in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred 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 of all outstanding Securities of the relevant
class.

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

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

         "Underwriting Agreement" means the Underwriting Agreement dated
September 23, 2002, between the Sponsor, the Trust and the underwriters named
therein for the initial offering and sale of Preferred Securities, providing for
the sale of the Preferred Securities.

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1   Trust Indenture Act; Application.

         (a)   This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration in order for this
Declaration to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions.

         (b)   The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.

         (c)   If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control and to
such extent such provision shall be deemed appropriately modified or amended.

         (d)   The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.

SECTION 2.2   Lists of Holders of Securities.

         (a)   Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide (or cause to be provided) the Property Trustee, unless
the Property Trustee is Registrar for the Securities, (i) not later than 14 days
after each record date for payment of Distributions, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Administrative Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time that the List of Holders
does not differ from the most recent List of Holders given to

                                       7

<PAGE>

the Property Trustee by or on behalf of the Sponsor and the Administrative
Trustees on behalf of the Trust, and (ii) at any other time, not later than 30
days after receipt by the Trust of a written request for a List of Holders as of
a date no more than 14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in the Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity), provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.

         (b)   The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

SECTION 2.3   Reports by the Property Trustee.

         Within 60 days after September 15 of each year, commencing September
15, 2003, the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

SECTION 2.4   Periodic Reports to Property Trustee.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.

SECTION 2.5   Evidence of Compliance with Conditions Precedent.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.

SECTION 2.6   Events of Default; Waiver.

         (a)   One or more of the following events of default shall constitute
an Event of Default hereunder (whatever the reason for such Event of Default 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 an administrative or governmental body):

               (i)    an Event of Default (as defined in the Indenture) that has
         occurred and is continuing in respect of the Debentures; or

               (ii)   default in the payment of any Distribution (including
         Compounded Interest or Additional Sums, if any) when it becomes due and
         payable, and continuance of such default for a period of 30 days;
         provided, however, that a valid deferral of

                                       8

<PAGE>

     Distributions during an Extension Period (as defined in Section 2(b) of
     Annex I) in accordance with the terms of the Securities shall not
     constitute a default in the payment of Distributions for this purpose; or

           (iii)  default by the Trust in the payment of all or any part of the
     liquidation amount of any Security as and when the same shall become due
     and payable either at maturity, upon prepayment or redemption, by
     declaration of acceleration of maturity or otherwise; or

           (iv)   default in the performance, or breach, of any covenant or
     warranty of the Trustees or the Trust in this Declaration (other than a
     covenant or warranty a default in whose performance or whose breach is
     elsewhere in this Section 2.6(a) specifically dealt with), and continuance
     of such default or breach for a period of 90 days after there has been
     given, by registered or certified mail, to the defaulting Trustee by the
     holders of at least 25% in aggregate liquidation amount of the outstanding
     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

           (v)    a court having jurisdiction in the premises shall enter a
     decree or order for relief in respect of the Property Trustee 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 the Property Trustee 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

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

     (b)   The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:

           (i)    is not waivable under the Indenture, the Event of Default
     under the Declaration shall also not be waivable; or

           (ii)   requires the consent or vote of greater than a majority in
     aggregate principal amount of the holders of the Debentures (a "Super
     Majority") to be waived under the Indenture, the Event of Default under the
     Declaration may only be waived by the vote of the Holders of at least the
     proportion in aggregate liquidation amount of the

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<PAGE>

     Preferred Securities that the relevant Super Majority represents of the
     aggregate principal amount of the Debentures outstanding; or

           (iii)  requires the consent or vote of each holder of the Debentures
     to be waived under the Indenture, then the Event of Default under the
     Declaration may only be waived by each holder of the Preferred Securities.

The foregoing provisions of this Section 2.6(b) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities 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 an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.

     (c)   The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:

           (i)    is not waivable under the Indenture, except where the Holders
     of the Common Securities are deemed to have waived such Event of Default
     under the Declaration as provided below in this Section 2.6(c), the Event
     of Default under the Declaration shall also not be waivable except to the
     extent so provided below in this Section 2.6(c); or

           (ii)   requires the consent or vote of (A) a Super Majority to be
     waived, the Event of Default under the Declaration may only be waived by
     the vote of the Holders of at least the proportion in aggregate liquidation
     amount of the Common Securities that the relevant Super Majority represents
     of the aggregate principal amount of the Debentures outstanding or (B) each
     holder of the Debentures to be waived, then the Event of Default under the
     Declaration may only be waived by each Holder of the Preferred Securities,
     except where the Holders of the Common Securities are deemed to have waived
     such Event of Default under the Declaration as provided below in this
     Section 2.6(c);

provided further, the Holders of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and their consequences if all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. If any Event

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<PAGE>

of Default with respect to the Preferred Securities is waived by the Holders of
the Preferred Securities as provided in this Declaration, the Holders of Common
Securities agree that such waiver shall also constitute the waiver of such Event
of Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote or consent of the Holders of the
Common Securities. The foregoing provisions of this Section 2.6(c) shall be in
lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(c), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities 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 with respect
to the Common Securities or impair any right consequent thereon.

     (d)   A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(d) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.

SECTION 2.7 Event of Default; Notice.

     (a)   The Property Trustee shall, within 90 days after the occurrence of a
default actually known to a Responsible Officer, transmit by mail, first class
postage prepaid, to the Holders, notices of all defaults with respect to the
Securities actually known to a Responsible Officer, unless such defaults have
been cured before the giving of such notice (the term "default(s)" for the
purposes of this Section 2.7(a) and Section 2.7(b) being hereby defined to be an
Event of Default, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for (i) a default in the payment of principal of or interest (including
Compounded Interest and Additional Sums (as such terms are defined in the
Indenture)), if any, on any of the Debentures, or (ii) a default under Section
2.6(a)(ii) and (iii) of this Declaration, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer in
good faith determines that the withholding of such notice is in the interests of
the Holders.

     (b)   The Property Trustee shall not be deemed to have knowledge of any
default except:

           (i)    a default under Sections 5.1(a) (other than the payment of
     Compounded Interest and Additional Sums) and 5.1(b) of the Indenture;

           (ii)   a default under Section 2.6(a)(ii) and (iii) of this
     Declaration; or

           (iii)  any default as to which the Property Trustee shall have
     received written notice or of which a Responsible Officer charged with the
     administration of the Declaration shall have actual knowledge.

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<PAGE>

     (c)   Within five Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Event of Default to the Holders of the Preferred
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certificate as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration.

                                   ARTICLE III
                                  ORGANIZATION

SECTION 3.1  Name.

     The Trust continued by this Declaration is named "Sterling Bancshares
Capital Trust III" as such name may be modified from time to time by the
Administrative Trustees following written notice to the Delaware Trustee, the
Property Trustee and the Holders. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Administrative
Trustees.

SECTION 3.2  Office.

     The address of the principal office of the Trust is c/o Sterling
Bancshares, Inc., 2550 North Loop, Suite 600, Houston, Texas 77092. On 10
Business Days' advance written notice to the Delaware Trustee, the Property
Trustee and the Holders of Securities, the Administrative Trustees may designate
another principal office.

SECTION 3.3  Purpose.

     The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities, (b) use the proceeds from the sale of the Securities to acquire the
Debentures, and (c) except as otherwise limited herein, to engage in only those
other activities necessary, advisable or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, mortgage
or 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 3.4  Authority.

     Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Administrative Trustees shall have exclusive
and complete authority to carry out the purposes of the Trust. An action taken
by the Administrative Trustees in accordance with their powers shall constitute
the act of and serve to bind the Trust and an action taken by the Property
Trustee on behalf of the Trust in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.

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<PAGE>

SECTION 3.5  Title to Property of the Trust.

     Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.

SECTION 3.6  Powers and Duties of the Administrative Trustees.

     The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:

     (a)   to issue and sell the Securities in accordance with this Declaration;
provided, however, that (i) the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities, (ii)
there shall be no interests in the Trust other than the Securities, and (iii)
the issuance of Securities shall be limited to a simultaneous issuance of both
Preferred Securities and Common Securities at the Closing Time;

     (b)   in connection with the issue and sale of the Preferred Securities at
the direction of the Sponsor, to:

           (i)    prepare and execute, as necessary, a prospectus and prospectus
     supplement (the "Prospectus") in preliminary and final form prepared by the
     Sponsor, in relation to the offering and sale of Preferred Securities and
     to execute and file with the Commission a registration statement (the
     "Registration Statement"), including any amendments thereto, for the
     offering and sale of Preferred Securities;

           (ii)   execute and file any documents prepared by the Sponsor, or
     take any acts as determined by the Sponsor to be necessary or appropriate
     in order to qualify or register all or part of the Preferred Securities for
     offer and sale in any State in which the Sponsor has determined to qualify
     or register such Preferred Securities for sale;

           (iii)  execute and file an application, prepared by the Sponsor, to
     permit the Preferred Securities to trade or be quoted on or included in The
     Nasdaq National Market or any other automated quotation system or listed on
     any national securities exchange;

           (iv)   execute and deliver letters, documents, or instruments with
     DTC and other Clearing Agencies relating to the Preferred Securities;

           (v)    execute and file with the Commission a registration statement
     on Form 8-A, including any amendments thereto, prepared by the Sponsor,
     relating to the registration of the Preferred Securities under Section
     12(b) or (g) of the Exchange Act; and

           (vi)   execute, enter into and perform the Trust's obligations under
     the Underwriting Agreement;

                                       13

<PAGE>

     (c)   to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders;

     (d)   to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event;

     (e)   to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;

     (f)   to take all actions and perform such duties as may be required of the
Administrative Trustees pursuant to the terms of the Securities;

     (g)   to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;

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

     (i)   to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;

     (j)   to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;

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

     (l)   to act as, or appoint another Person to act as, Registrar for the
Securities or to appoint a Paying Agent for the Securities as provided in
Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;

     (m)   to give prompt written notice to the Property Trustee and to Holders
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment period
under the Indenture;

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

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<PAGE>

     (o)   to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:

           (i)    causing the Trust not to be deemed to be an Investment Company
     required to be registered under the Investment Company Act;

           (ii)   causing the Trust to be classified for United States Federal
     income tax purposes as a grantor trust; and

           (iii)  cooperating with the Debenture Issuer to ensure that the
     Debentures will be treated as indebtedness of the Debenture Issuer for
     United States Federal income tax purposes;

     (p)   to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Administrative Trustees, on behalf of the
Trust; and

     (q)   to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.

     The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.

     Subject to this Section 3.6, the Administrative Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.

     Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.

SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.

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

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

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

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

           (iv)   make any investments other than investments represented by the
     Debentures;

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<PAGE>

           (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;

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

           (vii)   incur any indebtedness for borrowed money;

           (viii)  other than as provided in this Declaration or Annex I, (A)
     direct the time, method and place of conducting any proceeding with respect
     to any remedy available to the Debenture Trustee, or exercising any trust
     or power conferred upon the Debenture Trustee with respect to the
     Debentures, (B) waive any past default that is waivable under the
     Indenture, or (C) exercise any right to rescind or annul any declaration
     that the principal of all the Debentures shall be due and payable; or

           (ix)    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 an opinion of independent tax counsel experienced
     in such matters to the effect that such amendment, modification or
     termination will not cause more than an insubstantial risk that for United
     States Federal income tax purposes the Trust will not be classified as a
     grantor trust.

SECTION 3.8  Powers and Duties of the Property Trustee.

     (a)   The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders. The right, title and interest of the Property Trustee to the Debentures
shall vest automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.6. 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 Property Trustee shall not transfer its right, title and interest
in the Debentures to the Administrative Trustees or to the Delaware Trustee (if
the Property Trustee does not also act as Delaware Trustee).

     (c)   The Property Trustee shall:

           (i)     establish and maintain a segregated non-interest bearing
     trust account (the "Property Trustee Account") in the name of and under the
     exclusive control of the Property Trustee on behalf of the Holders and,
     upon the receipt of payments of funds made in respect of the Debentures
     held by the Property Trustee, deposit such funds into the Property Trustee
     Account and make payments or cause the Paying Agent to make payments to the
     Holders from the Property Trustee Account in accordance with Section 6.1.
     Funds in the Property Trustee Account shall be held uninvested until
     disbursed in accordance with this Declaration. The Property Trustee Account
     shall be an account that is maintained with a banking institution the
     rating on whose long-term unsecured indebtedness by a "nationally
     recognized statistical rating organization," as that term is

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<PAGE>

defined for purposes of Rule 436(g)(2) under the Securities Act, is at least
investment grade;

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

           (iii) upon written notice of distribution issued by the
     Administrative Trustees 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 upon the occurrence
     of certain events.

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

     (e)   Subject to Section 3.9(a), the Property Trustee shall take any Legal
Action which arises out of or in connection with (i) an Event of Default of
which a Responsible Officer has actual knowledge or (ii) the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act. If the
Property Trustee shall have failed to take such Legal Action, the Holders of the
Preferred Securities may take such Legal Action, to the same extent as if such
Holders of Preferred Securities held an aggregate principal amount of Debentures
equal to the aggregate liquidation amount of such Preferred Securities, without
first proceeding against the Property Trustee or the Trust; 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 the principal of or
interest (including Compounded Interest and Additional Sums, if any) on the
Debentures on the date such principal or interest (including Compounded Interest
and Additional Sums, if any) is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest (including Compounded Interest and Additional Sums, if
any) on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred 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 Preferred
Securities to the extent of any payment made by the Debenture Issuer to such
Holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences of this Section 3.8(e), the Holders of Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Debentures.

     (f)   The Property Trustee shall not resign as a Trustee unless either:

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

           (ii) a Successor Property Trustee has been appointed and has accepted
     that appointment in accordance with Section 5.6 (a "Successor Property
     Trustee").

     (g)   The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default

                                       17

<PAGE>

actually known to a Responsible Officer occurs and is continuing, the Property
Trustee shall, for the benefit of Holders, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.

     (h)   The Property Trustee shall be authorized to undertake any actions set
forth in Section 317(a) of the Trust Indenture Act.

     (i)   For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property
Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is so acting as Paying Agent.

     (j)   The Property Trustee shall give prompt written notice to Holders of
the Securities of any notice received by it from the Debenture Issuer of the
Debenture Issuer's election to defer payments of interest on the Debentures by
extending the interest payment period with respect thereto.

     (k)   Subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Administrative Trustees
set forth in Section 3.6.

     Notwithstanding anything expressed or implied to the contrary in this
Declaration or any Annex or Exhibit hereto, (i) the Property Trustee must
exercise the powers set forth in this Section 3.8 and in Sections 3.9 and 3.10
in a manner that is consistent with the purposes and functions of the Trust set
out in Section 3.3, (ii) the Property Trustee shall not take any action that is
inconsistent with the purposes and functions of the Trust set out in Section
3.3, and (iii) the Property Trustee shall not be bound, obligated or required to
take any action at the request or direction of any Holder pursuant to this
Declaration if such Holder shall not have made available to the Property
Trustee, security or indemnity reasonably acceptable to the Property Trustee
against the costs, expenses and liabilities (including fees and expenses of its
agents and counsel) which might be incurred by it in compliance with the written
request or direction.

SECTION 3.9  Certain Duties and Responsibilities of the Property Trustee.

     (a)   The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and in the Securities and no implied covenants shall be read into
this Declaration against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer has actual knowledge, the Property 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.

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<PAGE>

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

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

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

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

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

           (iii)  the Property 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 Securities relating to the time, method and place of
     conducting any proceeding for any remedy available to the Property Trustee,
     or exercising any trust or power conferred upon the Property Trustee under
     this Declaration;

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

           (v)    the Property Trustee's sole duty with respect to the custody,
     safe keeping and physical preservation of the Debentures and the Property
     Trustee Account shall be to deal with such property in a similar manner as
     the Property Trustee deals with similar

                                       19

<PAGE>

     property for its own account, subject to the protections and limitations on
     liability  afforded to the Property  Trustee under this Declaration and the
     Trust Indenture Act;

           (vi)    the Property Trustee shall have no duty or liability for or
     with respect to the value, genuineness, existence or sufficiency of the
     Debentures or the payment of any taxes or assessments levied thereon or in
     connection therewith;

           (vii)   the Property 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. Money held by the Property Trustee need not be segregated from
     other funds held by it except in relation to the Property Trustee Account
     maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
     to the extent otherwise required by law; and

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

SECTION 3.10  Certain Rights of Property Trustee.

     (a)   Subject to the provisions of Section 3.9:

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

           (ii)    any direction or act of the Sponsor or the Administrative
     Trustees contemplated by this Declaration may be sufficiently evidenced by
     an Officers' Certificate;

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

           (iv)    the Property 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 registration thereof;

           (v)     the Property Trustee may consult with counsel or other
     experts of its selection and the advice or opinion of such counsel and
     experts with respect to legal matters or advice within the scope of such
     experts' area of expertise shall be full and complete authorization and
     protection in respect of any action taken, suffered or omitted by it
     hereunder in good faith and in accordance with such advice or opinion, such
     counsel

                                       20

<PAGE>

     may be counsel to the Sponsor or any of its Affiliates, and may include any
     of its employees. The Property Trustee shall have the right at any time to
     seek instructions concerning the administration of this Declaration from
     any court of competent jurisdiction;

          (vi)   the Property 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 Holder, unless such Holder shall have provided to the
     Property Trustee security and indemnity, reasonably satisfactory to the
     Property Trustee, against the costs, expenses (including reasonable
     attorneys' fees and expenses and the expenses of the Property Trustee's
     agents, nominees or custodians) and liabilities that might be incurred by
     it in complying with such request or direction, including such reasonable
     advances as may be requested by the Property Trustee provided, that,
     nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the
     Property Trustee, upon the occurrence of an Event of Default, of its
     obligation to exercise the rights and powers vested in it by this
     Declaration;

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

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

          (ix)   any action taken by the Property Trustee or its agents
     hereunder shall bind the Trust and the Holders, and the signature of the
     Property 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 Property 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 Property Trustee's or its agent's
     taking such action;

          (x)    whenever in the administration of this Declaration the Property
     Trustee shall deem it desirable to receive instructions with respect to
     enforcing any remedy or right or taking any other action hereunder, the
     Property Trustee (i) may request instructions from the Holders which
     instructions may only be given by the Holders of the same proportion in
     liquidation amount of the Securities as would be entitled to direct the
     Property Trustee under the terms of the 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 protected in conclusively relying on or acting in or
     accordance with such instructions;

                                       21

<PAGE>

          (xi)   except as otherwise expressly provided by this Declaration, the
     Property Trustee shall not be under any obligation to take any action that
     is discretionary under the provisions of this Declaration; and

          (xii)  the Property Trustee shall not be liable for any action taken,
     suffered, or omitted to be taken by it in good faith, without negligence,
     and reasonably believed by it to be authorized or within the discretion or
     rights or powers conferred upon it by this Declaration.

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

SECTION 3.11   Delaware Trustee.

     Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Administrative Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Statutory Trust Act. In the event the Delaware Trustee shall at any time be
required to take any action or perform any duty hereunder, the Delaware Trustee
shall be entitled to the benefits of Section 3.9(b)(ii)-(viii) and Section 3.10.

SECTION 3.12   Execution of Documents.

     Unless otherwise determined by the Administrative Trustees, and except as
otherwise required by the Statutory Trust Act, a majority of the Administrative
Trustees or, if there are only two, any Administrative Trustee or, if there is
only one, such Administrative Trustee is authorized to execute on behalf of the
Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.6.

SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.

     The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.

SECTION 3.14 Duration of Trust.

     The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall continue in existence until 5:00 p.m., Houston, Texas time on the
thirtieth (30th) anniversary of the effective date of this Declaration.

                                       22

<PAGE>

SECTION 3.15   Mergers.

     (a)  The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, except as described in
Sections 3.15(b) and (c).

     (b)  The Trust may, at the request of the Sponsor, with the consent of the
Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, a trust organized as such under the
laws of any State; provided that:

          (i)  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 long as 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 the same powers and duties as the Property Trustee as the
     holder of the Debentures;

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

          (iv)  if the Preferred Securities (including any Successor Securities)
     are rated by any nationally recognized statistical rating organization
     prior to such transaction, such merger, consolidation, amalgamation,
     replacement, conveyance, transfer or lease does not cause the Preferred
     Securities (including any Successor Securities), or if the Debentures are
     so rated, the Debentures, to be downgraded by any nationally recognized
     statistical rating organization within 120 days after such transaction;

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

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

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

                                       23

<PAGE>

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

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

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

          (viii) the Sponsor or any permitted successor or assignee owns all of
     the common securities of such Successor Entity and guarantees the
     obligations of such Successor Entity under the Successor Securities at
     least to the extent provided by the Preferred Securities Guarantee and the
     Common Securities Guarantee; and

          (ix)   there shall have been furnished to the Property Trustee an
     Officer's Certificate and an Opinion of Counsel, each to the effect that
     all conditions precedent in this Declaration to such transaction have been
     satisfied.

     (c)  Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, any
other Person or permit any other Person to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity not
to be classified as a grantor trust for United States Federal income tax
purposes.

                                   ARTICLE IV
                                     SPONSOR

SECTION 4.1    Sponsor's Purchase of Common Securities.

     At the Closing Time, the Sponsor will purchase all of the Common Securities
then issued by the Trust, in an amount equal to at least 3% of the total capital
of the Trust, at the same time as the Preferred Securities are issued and sold
pursuant to the Underwriting Agreement.

SECTION 4.2    Responsibilities of the Sponsor.

     In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:

     (a) to prepare the Prospectus and Registration Statement for filing by the
Trust with the Commission, including any amendments thereto;

                                       24

<PAGE>

     (b)  to determine the states in which to take appropriate action to qualify
or register for sale all or part of the Preferred 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;

     (c)  if deemed necessary or advisable by the Sponsor, to prepare for filing
by the Trust an application to permit the Preferred Securities to trade or be
quoted on or included in the Nasdaq National Market or any other automated
quotation system or listed on any national securities exchange;

     (d)  to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A, including any amendments thereto, relating to the
registration of the Preferred Securities under Section 12(b) or (g) of the
Exchange Act; and

     (e)  to negotiate the terms of the Underwriting Agreement providing for the
sale of the Preferred Securities.

SECTION 4.3    Right to Proceed.

     The Sponsor acknowledges the rights of the Holders of Preferred Securities,
in the event that a failure of the Trust to pay Distributions on the Preferred
Securities is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures, to institute a proceeding directly
against the Debenture Issuer for enforcement of its payment obligations on the
Debentures.

                                   ARTICLE V
                                    TRUSTEES

SECTION 5.1    Number of Trustees: Appointment of Co-Trustee.

     The number of Trustees initially shall be five (5), and:

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

     (b)  after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or pursuant to written consent;

provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, is an entity which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an officer of the Sponsor (an "Administrative Trustee"); and (3)
one Trustee shall be the Property Trustee for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the

                                       25

<PAGE>

applicable requirements. Notwithstanding the above, unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of the Trust's property may at the time be located, the
Holders of a Majority in liquidation amount of the Common Securities acting as a
class at a meeting of the Holders of the Common Securities or pursuant to
written consent, and the Administrative Trustees shall have power to appoint one
or more Persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of the Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.

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

SECTION 5.2 Delaware Trustee.

     If required by the Statutory Trust Act, the Delaware Trustee shall be:

     (a) a natural person who is a resident of the State of Delaware; or

     (b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law,

provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.

     The initial Delaware Trustee shall be:

          Deutsche Bank Trust Company Delaware
          (formerly known as "Bankers Trust (Delaware)")
          1011 Centre Road
          Wilmington, Delaware 19805
          Attention: Corporate Trustee, Administration Department

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<PAGE>

SECTION 5.3    Property Trustee; Eligibility.

     (a)  There shall at all times be one Trustee (the "Property Trustee") which
shall act as Property Trustee which shall:

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

          (ii) be a corporation organized and doing business under the laws of
     the United States of America or any State or Territory thereof or of the
     District of Columbia, or a corporation or Person permitted by the
     Commission to act as an institutional trustee under the Trust Indenture
     Act, authorized under such laws to exercise corporate trust powers, having
     a combined capital and surplus of at least $50,000,000, and subject to
     supervision or examination by Federal, state, territorial or District of
     Columbia authority. If such corporation publishes reports of condition at
     least annually, pursuant to law or to the requirements of the supervising
     or examining authority referred to above, then for the purposes of this
     Section 5.3(a)(ii), the combined capital and surplus of such corporation
     shall be deemed to be its combined capital and surplus as set forth in its
     most recent report of condition so published.

     (b)  If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately resign in the
manner and with the effect set forth in Section 5.6(c).

     (c)  If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

     (d)  The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.

     (e)  The initial Property Trustee shall be:

          Deutsche Bank Trust Company Americas
          (formerly known as "Bankers Trust Company")
          60 Wall Street
          New York, New York 20005
          Attention:  Corporate Trust and Agency Services

SECTION 5.4    Certain Qualifications of Administrative Trustees and Delaware
               Trustee Generally.

     Each Administrative Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.

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<PAGE>

SECTION 5.5    Administrative Trustees.

     The initial Administrative Trustees of the Trust as set forth in the
Original Declaration were:

          George Martinez
          J. Downey Bridgwater
          Michael A. Roy

     Since the date of the Original Declaration, Michael A. Roy has resigned as
Administrative Trustee and the Sponsor, pursuant to the terms of the Original
Declaration, has appointed Eugene S. Putnam, Jr. as an Administrative Trustee.

     (a)  Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.

     (b)  Unless otherwise determined by the Administrative Trustees, and except
as otherwise required by the Statutory Trust Act or applicable law, any
Administrative Trustee is authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6.

     (c)  An Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.

SECTION 5.6    Appointment, Removal and Resignation of Trustees.

     (a)  Subject to Section 5.6(b) and to Section 6(b) of Annex I hereto,
Trustees may be appointed or removed without cause at any time:

          (i)   until the issuance of any Securities, by written instrument
     executed by the Sponsor;

          (ii)  unless an Event of Default shall have occurred and be continuing
     after the issuance of any Securities, by vote of the Holders of a Majority
     in liquidation amount of the Common Securities voting as a class at a
     meeting of the Holders of the Common Securities; and

          (iii) if an Event of Default shall have occurred and be continuing
     after the issuance of the Securities, with respect to the Property Trustee
     or the Delaware Trustee, by vote of Holders of a Majority in liquidation
     amount of the Preferred Securities voting as a class at a meeting of
     Holders of the Preferred Securities.

     (b)  (i)   The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until a Successor Property Trustee has been
appointed and has

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<PAGE>

accepted such appointment by written instrument executed by such Successor
Property Trustee and delivered to the Administrative Trustees and the Sponsor.

          (ii) The Trustee that acts as Delaware Trustee shall not be removed in
     accordance with Section 5.6(a) until a successor Trustee possessing the
     qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
     "Successor Delaware Trustee") has been appointed and has accepted such
     appointment by written instrument executed by such Successor Delaware
     Trustee and delivered to the Administrative Trustees and the Sponsor.

     (c)  A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:

          (i)  no such resignation of the Trustee that acts as the Property
     Trustee shall be effective:

               (A) until a Successor Property Trustee has been appointed and has
          accepted such appointment by instrument executed by such Successor
          Property Trustee and delivered to the Trust, the Sponsor and the
          resigning Property Trustee; or

               (B) until the assets of the Trust have been completely liquidated
          and the proceeds thereof distributed to the Holders; and

          (ii) no such resignation of the Trustee that acts as the Delaware
     Trustee shall be effective until a Successor Delaware Trustee has been
     appointed and has accepted such appointment by instrument executed by such
     Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
     resigning Delaware Trustee.

     (d)  The Holders of the Common Securities or, if an Event of Default shall
have occurred and be continuing after the issuance of the Securities, the
Holders of the Preferred Securities shall use their best efforts to promptly
appoint a Successor Delaware Trustee or Successor Property Trustee, as the case
may be, if the Property Trustee or the Delaware Trustee delivers an instrument
of resignation in accordance with this Section 5.6.

     (e)  If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.6
within 60 days after delivery of an instrument of resignation or removal, the
Property Trustee or Delaware Trustee resigning or being removed, as applicable,
may petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.

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

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<PAGE>

     (g) At the time of resignation or removal of the Property Trustee or the
Delaware Trustee, the Debenture Issuer shall pay to such Trustee any amounts
that may be owed to such Trustee pursuant to Section 10.4.

SECTION 5.7 Vacancies among Trustees.

     If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.

SECTION 5.8 Effect of Vacancies.

     The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.6, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.

SECTION 5.9 Meetings.

     If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees 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 such meeting. Notice of
any telephonic meetings of the Administrative Trustees 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 an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees 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 Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.

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<PAGE>

SECTION 5.10 Delegation of Power.

     (a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and

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

SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into which the Property Trustee or the Delaware Trustee or
any Administrative Trustee that is not a natural person, as the case may be, may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee, as the case may be, shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Property Trustee or the Delaware Trustee, as the case may be, shall be
the successor of the Property Trustee or the Delaware Trustee, as the case may
be, hereunder, provided such corporation 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 VI
                                  DISTRIBUTIONS

SECTION 6.1 Distributions.

     Holders shall receive Distributions in accordance with the applicable terms
of the relevant Holder's Securities. If and to the extent that the Debenture
Issuer makes a payment of interest (including Compounded Interest and Additional
Sums, if any) or principal on the Debentures held by the Property Trustee or any
other payments with respect to the Debentures held by the Property Trustee (the
amount of any such payment being a "Payment Amount"), the Property Trustee shall
and is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.

                                  ARTICLE VII
                             ISSUANCE OF SECURITIES

SECTION 7.1 General Provisions Regarding Securities.

     (a) The Administrative Trustees shall on behalf of the Trust issue one
class of Preferred Securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or

                                       31

<PAGE>

other interests in the assets of the Trust other than the Preferred Securities
and the Common Securities.

     (b) 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.

     (c) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.

     (d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner 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.

SECTION 7.2 Execution and Authentication.

     (a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though the person who signed such Securities had not ceased to be such
Administrative Trustee; and any Securities may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the execution
and delivery of the Declaration any such person was not such a Administrative
Trustee.

     (b) One Administrative Trustee shall sign the Preferred Securities for the
Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.

     A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Property Trustee. The signature shall
be conclusive evidence that the Preferred Security has been authenticated under
this Declaration.

     Upon a written order of the Trust signed by one Administrative Trustee, the
Property Trustee shall authenticate the Preferred Securities for original issue.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the Terms in Annex I hereto except as provided in
Section 7.6.

     The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Sponsor or an Affiliate.

SECTION 7.3 Form and Dating.

     The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the

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form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates representing the Securities may be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by their
execution thereof. The Securities may have letters, CUSIP or other numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the Trust
is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). The Trust at the direction of
the Sponsor shall furnish any such legend not contained in Exhibit A-1 to the
Property Trustee in writing. Each Preferred Security shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part
of the terms of this Declaration and to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.

     (a) Global Securities. Securities shall be issued in the form of one or
more permanent global Securities in definitive, fully registered form without
distribution coupons with the appropriate global legends set forth in Exhibit
A-1 hereto (a "Global Preferred Security"), which shall be deposited on behalf
of the purchasers of the Preferred Securities represented thereby with the
Property Trustee, at its New York office, as custodian for the Clearing Agency,
and registered in the name of the Clearing Agency or a nominee of the Clearing
Agency, duly executed by the Trust and authenticated by the Property Trustee as
hereinafter provided. The number of Preferred Securities represented by a Global
Preferred Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Clearing Agency
or its nominee as hereinafter provided.

     (b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the
Global Preferred Securities and such other Preferred Securities in global form
as may be authorized by the Trust to be deposited with or on behalf of the
Clearing Agency.

     The Trust shall execute and the Property Trustee shall, in accordance with
this Section 7.3, authenticate and make available for delivery initially one or
more Global Preferred Securities that (i) shall be registered in the name of
Cede & Co. or other nominee of such Clearing Agency and (ii) shall be delivered
by the Trustee to such Clearing Agency or pursuant to such Clearing Agency's
written instructions or held by the Property Trustee as custodian for the
Clearing Agency.

     Members of, or participants in, the Clearing Agency ("Participants") shall
have no rights under this Declaration with respect to any Global Preferred
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Preferred Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Preferred Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Preferred Security.

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     (c) Definitive Preferred Securities. Except as provided in Section 7.9 or
9.2(d)(i), owners of beneficial interests in a Global Preferred Security will
not be entitled to receive physical delivery of certificated Preferred
Securities ("Definitive Preferred Securities").

     (d) Authorized Denominations. The Preferred Securities are issuable only in
denominations having a liquidation preference of $25 and any integral multiple
thereof.

SECTION 7.4 Registrar and Paying Agent.

     The Trust shall maintain in the Borough of Manhattan, The City of New York,
(i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar") and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Trust may appoint the Registrar and the Paying Agent and may
appoint one or more co-registrars and one or more additional paying agents in
such other locations as it shall determine. The term "Registrar" includes any
additional registrar and the term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent, Registrar or co-registrar without
prior notice to any Holder. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees. The
Trust shall notify the Property Trustee of the name and address of any Agent not
a party to this Declaration. If the Trust fails to appoint or maintain another
entity as Registrar or Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust
shall act as Paying Agent and Registrar and Exchange Agent for the Common
Securities.

     The Trust initially appoints the Property Trustee as Registrar and Paying
Agent for the Preferred Securities.

SECTION 7.5 Paying Agent to Hold Money in Trust.

     The Trust shall require each Paying Agent other than the Property Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Property Trustee all money held by the Paying Agent for the
payment of liquidation amounts or Distributions, and will notify the Property
Trustee if there are insufficient funds for such purpose. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.

SECTION 7.6 Replacement Securities.

     If a Holder claims that a Security owned by it has been lost, destroyed or
wrongfully taken or if such Security is mutilated and is surrendered to the
Trust or in the case of the Preferred Securities to the Property Trustee, the
Trust shall issue and the Property Trustee shall, upon written order of the
Trust, authenticate a replacement Security if the Property Trustee's and

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<PAGE>

the Trust's requirements, as the case may be, are met. An indemnity bond must be
provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security.

     Every replacement Security is an additional beneficial interest in the
Trust.

SECTION 7.7 Outstanding Preferred Securities.

     The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those cancelled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.

     If a Preferred Security is replaced, paid or purchased pursuant to Section
7.6 hereof, it ceases to be outstanding unless the Property Trustee receives
proof satisfactory to it that the replaced, paid or purchased Preferred Security
is held by a bona fide purchaser.

     If Preferred Securities are considered paid in accordance with the terms of
this Declaration, they cease to be outstanding and Distributions on them shall
cease to accumulate.

     A Preferred Security does not cease to be outstanding because any of the
Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.

SECTION 7.8 Preferred Securities in Treasury.

     In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.

SECTION 7.9 Temporary Securities.

     (a) Until Definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Preferred Securities, the Property Trustee upon
written request of the Trust signed by any two Administrative Trustees shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Trust
considers appropriate for temporary Securities. Without unreasonable delay, the
Trust shall prepare and, in the case of the Preferred Securities, the Property
Trustee upon written request of the Trust signed by any two Administrative
Trustees shall authenticate Definitive Securities in exchange for temporary
Securities.

     (b) A Global Preferred Security deposited with the Clearing Agency or with
the Property Trustee as custodian for the Clearing Agency pursuant to Section
7.3 shall be transferred to the beneficial owners thereof in the form of
certificated Preferred Securities only if such transfer complies with Section
9.2 and (i) the Clearing Agency notifies the Sponsor that it is

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<PAGE>

unwilling or unable to continue as Clearing Agency for such Global Preferred
Security or if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not appointed by the
Sponsor within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to
cause the issuance of certificated Preferred Securities.

     (c) Any Global Preferred Security that is transferable to the beneficial
owners thereof in the form of certificated Preferred Securities pursuant to this
Section 7.9 shall be surrendered by the Clearing Agency to the Property Trustee
located in the Borough of Manhattan, The City of New York, to be so transferred,
in whole or from time to time in part, without charge, and the Property Trustee
shall authenticate and make available for delivery, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Securities of authorized denominations in the form of certificated Preferred
Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be registered in such names as the Clearing Agency shall
direct. Any Preferred Security in the form of certificated Preferred Securities
delivered in exchange for an interest in the Restricted Global Preferred
Security shall, except as otherwise provided by Sections 7.3 and 9.1, bear the
Restricted Securities Legend set forth in Exhibit A-1 hereto.

     (d) Subject to the provisions of Section 7.9(c), the Holder of a Global
Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.

     (e) In the event of the occurrence of any of the events specified in
Section 7.9(b), the Trust will promptly make available to the Property Trustee a
reasonable supply of certificated Preferred Securities in fully registered form
without distribution coupons.

SECTION 7.10 Cancellation.

     The Trust any time may deliver Preferred Securities to the Property Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Property
Trustee any Preferred Securities surrendered to them for registration of
transfer, redemption or payment. The Property Trustee shall promptly cancel all
Preferred Securities, surrendered for registration of transfer, redemption,
exchange, payment, replacement or cancellation and shall dispose of cancelled
Preferred Securities in accordance with its customary procedures unless the
Trust otherwise directs. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has exchanged.

SECTION 7.11 CUSIP Numbers.

     The Trust in issuing the Preferred Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that, any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be

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<PAGE>

placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.

                                  ARTICLE VIII
                              TERMINATION OF TRUST

SECTION 8.1 Termination of Trust.

     (a)  The Trust shall automatically dissolve:

          (i)   upon the bankruptcy of the Sponsor;

          (ii)  upon the filing of a certificate of dissolution or liquidation
     or its equivalent with respect to the Sponsor; or the revocation of the
     Sponsor's charter and the expiration of 90 days after the date of
     revocation without a reinstatement thereof;

          (iii) following the distribution of a Like Amount of the Debentures to
     the Holders, provided that, the Property Trustee has received written
     notice from the Sponsor directing the Property Trustee to terminate the
     Trust (which direction is optional, and except as otherwise expressly
     provided below, within the discretion of the Sponsor) and provided,
     further, that such direction and such distribution is conditioned on (a)
     the prior approval of the Federal Reserve Board if such approval is then
     required under applicable capital guidelines or policies of the Federal
     Reserve Board and the receipt of any other required regulatory approval,
     and (b) the Administrative Trustees' receipt of an opinion of an
     independent tax counsel experienced in such matters, which opinion may rely
     on published rulings of the Internal Revenue Service, to the effect that
     the Holders will not recognize any gain or loss for United States Federal
     income tax purposes as a result of the dissolution of the Trust and the
     distribution of Debentures;

          (iv)  upon the entry of a decree of judicial dissolution of the Trust
     by a court of competent jurisdiction;

          (v)   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

          (vi)  the expiration of the term of the Trust provided in Section
     3.14.

     (b)  Upon the completion of winding up of the Trust, including the payment
or the making of reasonable provision for payment of all obligations of the
Trust in accordance with Section 3808(e) of the Statutory Trust Act, the
Administrative Trustees shall file a certificate of cancellation with the
Delaware Secretary of State in accordance with Section 3810 of the Statutory
Trust Act, at which time the Trust and this Declaration (other than Section 3.9
and Article X) shall terminate. The Administrative Trustees shall act as the
liquidators of the Trust and shall be responsible for taking all required
actions in connection with winding up the Trust.

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<PAGE>

     (c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

SECTION 9.1 Transfer of Securities.

     (a) 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. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.

     (b) Subject to this Article IX, Preferred Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.

     (c) For so long as the Trust Securities remain outstanding, the Sponsor
will covenant: (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities of the Trust, provided that any permitted
successor of the Sponsor under the Indenture may succeed to the Sponsor's
ownership of such Common Securities, (ii) not to cause, as Sponsor of the Trust,
or to permit, as Holder of the Common Securities, the dissolution, winding up or
termination of the Trust, except in connection with a distribution of the
Debentures as provided in the Declaration and in connection with certain
mergers, consolidations or amalgamations permitted by this Declaration, (iii) to
use its reasonable efforts to cause the Trust (a) to remain a statutory trust,
except in connection with the distribution of Debentures to the Holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities, or certain mergers, consolidations or amalgamations, each as
permitted by this Declaration, and (b) to otherwise continue to be classified as
a grantor trust for United States Federal income tax purposes; (iv) to use its
reasonable efforts to cause each holder of the Common Securities to be treated
as owning an undivided beneficial interest in the Debentures, and (v) use
commercially reasonable efforts to maintain the eligibility of the Preferred
Securities for quotation or listing on any national securities exchange or other
organization on which the Preferred Securities are then quoted or listed
(including, if applicable, The Nasdaq National Market) and shall use
commercially reasonable efforts to keep the Preferred Securities so quoted or
listed for so long as the Preferred Securities remain outstanding.

     (d) The Administrative Trustees shall provide for the registration of
Preferred Securities, and the transfer thereof, which will be effected without
charge but only upon payment (with such indemnity as the Administrative Trustees
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
Preferred Securities, the Administrative Trustees shall cause one or more new
Preferred Securities to be issued in the name of the designated transferee or
transferees. Every Preferred Security surrendered for registration of transfer
shall be accompanied by a written instrument of transfer in form satisfactory to
the Administrative Trustees duly executed by the Holder or such Holder's
attorney duly authorized in writing. Each Preferred Security

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<PAGE>

surrendered for registration of transfer shall be canceled by the Property
Trustee. A transferee of a Preferred Security shall be entitled to the rights
and subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Preferred Security. By acceptance of a Preferred Security, each
transferee shall be deemed to have agreed to be bound by this Declaration.

SECTION 9.2 Transfer Procedures and Restrictions.

     (a) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar or co-Registrar:

         (i)  to register the transfer of such Definitive Preferred Securities;
     or

         (ii) to exchange such Definitive Preferred Securities which became
     mutilated, destroyed, defaced, stolen or lost, for an equal number of
     Definitive Preferred Securities,

the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing;

     (b) Restrictions on Transfer of a Definitive Preferred Security for a
Beneficial Interest in a Global Preferred Security. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with written instructions
directing the Property Trustee to make, or to direct the Clearing Agency to
make, an adjustment on its books and records with respect to the appropriate
Global Preferred Security to reflect an increase in the number of the Preferred
Securities represented by such Global Preferred Security, then the Property
Trustee shall cancel such Definitive Preferred Security and cause, or direct the
Clearing Agency to cause, the aggregate number of Preferred Securities
represented by the appropriate Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Administrative Trustee, an appropriate number of Preferred Securities in
global form.

     (c) Transfer and Exchange of Global Preferred Securities. Subject to
Section 9.2(d), the transfer and exchange of Global Preferred Securities or
beneficial interests therein shall be effected through the Clearing Agency, in
accordance with this Declaration (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Clearing Agency therefor.

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<PAGE>

     (d)  Transfer of a Beneficial Interest in a Global Preferred Security for a
Definitive Preferred Security.

          (i)  Any Person having a beneficial interest in a Global Preferred
     Security may upon request, but only upon 20 days prior notice to the
     Property Trustee, and only if accompanied by the information specified
     below, exchange such beneficial interest for a Definitive Preferred
     Security representing the same number of Preferred Securities. Upon receipt
     by the Property Trustee from the Clearing Agency or its nominee on behalf
     of any Person having a beneficial interest in a Global Preferred Security
     of written instructions or such other form of instructions as is customary
     for the Clearing Agency or the Person designated by the Clearing Agency as
     having such a beneficial interest in a Restricted Preferred Security and a
     certification from the transferor (in a form substantially similar to that
     attached hereto as the form of "Assignment" in Exhibit A-1) upon which the
     Property Trustee may conclusively rely (unless such instructions contain a
     manifest error, are not believed to be genuine or to have been presented by
     the proper party) which may be submitted by facsimile, then the Property
     Trustee will cause the aggregate number of Preferred Securities represented
     by Global Preferred Securities to be reduced on its books and records and,
     following such reduction, the Trust will execute and the Property Trustee,
     upon written receipt of a written order of the Trust signed by one
     Administrative Trustee, will authenticate and make available for delivery
     to the transferee a Definitive Preferred Security.

          (ii) Definitive Preferred Securities issued in exchange for a
     beneficial interest in a Global Preferred Security pursuant to this Section
     9.2(d) shall be registered in such names and in such authorized
     denominations as the Clearing Agency, pursuant to instructions from its
     Clearing Agency Participants or otherwise, shall instruct the Property
     Trustee in writing. The Property Trustee shall deliver such Preferred
     Securities to the Persons in whose names such Preferred Securities are so
     registered in accordance with such instructions of the Clearing Agency.

     (e)  Restrictions on Transfer and Exchange of Global Preferred Securities.
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in subsection (f) of this Section 9.2), a Global Preferred
Security may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.

     (f)  Authentication of Definitive Preferred Securities. If at any time:

          (i)  there occurs a Default or an Event of Default which is
     continuing, or

          (ii) the Trust, in its sole discretion, notifies the Property Trustee
     in writing that it elects to cause the issuance of Definitive Preferred
     Securities under this Declaration,

then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Administrative Trustee requesting the
authentication and delivery of Definitive Preferred Securities to the Persons
designated by the Trust, will authenticate and make available

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<PAGE>

for delivery Definitive Preferred Securities, equal in number to the number of
Preferred Securities represented by the Global Preferred Securities, in exchange
for such Global Preferred Securities.

     (g)  Cancellation or Adjustment of Global Preferred Security. At such time
as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be canceled by the
Property Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Preferred Security is exchanged for Definitive Preferred
Securities, Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of the
Clearing Agency and the Registrar to reflect such reduction.

     (h)  Obligations with Respect to Transfers and Exchanges of Preferred
Securities.

          (i)   To permit registrations of transfers, the Trust shall execute
     and the Property Trustee shall authenticate Definitive Preferred Securities
     and Global Preferred Securities at the Registrar's or co-Registrar's
     request in accordance with the terms of this Declaration.

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

          (iii) The Registrar or co-Registrar shall not be required to register
     the transfer of or exchange of (a) Preferred Securities during a period
     beginning at the opening of business 15 days before the day of mailing of a
     notice of redemption or any notice of selection of Preferred Securities for
     redemption and ending at the close of business on the day of such mailing;
     or (b) any Preferred Security so selected for redemption in whole or in
     part, except the unredeemed portion of any Preferred Security being
     redeemed in part.

          (iv)  Prior to the due presentation for registration of transfer of
     any Preferred Security, the Trust, the Property Trustee, the Paying Agent,
     the Registrar or any co-Registrar may deem and treat the Person in whose
     name a Preferred Security is registered as the absolute owner of such
     Preferred Security for the purpose of receiving Distributions on such
     Preferred Security and for all other purposes whatsoever, and none of the
     Trust, the Property Trustee, the Paying Agent, the Registrar or any
     co-Registrar shall be affected by notice to the contrary.

          (v)   All Preferred Securities issued upon any registration of
     transfer pursuant to the terms of this Declaration shall evidence the same
     security and shall be entitled to the same benefits under this Declaration
     as the Preferred Securities surrendered upon such registration of transfer.

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<PAGE>

     (i)  No Obligation of the Property Trustee.

          (i)   The Property Trustee shall have no responsibility or obligation
     to any beneficial owner of a Global Preferred Security, a Clearing Agency
     Participant in the Clearing Agency or other Person with respect to the
     accuracy of the records of the Clearing Agency or its nominee or of any
     Clearing Agency Participant thereof, with respect to any ownership interest
     in the Preferred Securities or with respect to the delivery to any Clearing
     Agency Participant, beneficial owner or other Person (other than the
     Clearing Agency) of any notice (including any notice of redemption) or the
     payment of any amount, under or with respect to such Preferred Securities.
     All notices and communications to be given to the Holders and all payments
     to be made to Holders under the Preferred Securities shall be given or made
     only to or upon the order of the registered Holders (which shall be the
     Clearing Agency or its nominee in the case of a Global Preferred Security).
     The rights of beneficial owners in any Global Preferred Security shall be
     exercised only through the Clearing Agency subject to the applicable rules
     and procedures of the Clearing Agency. The Property Trustee may
     conclusively rely and shall be fully protected in relying upon information
     furnished by the Clearing Agency or any agent thereof with respect to its
     Clearing Agency Participants and any beneficial owners.

          (ii)  The Property Trustee and the Registrar shall have no obligation
     or duty to monitor, determine or inquire as to compliance with any
     restrictions on transfer imposed under this Declaration or under applicable
     law with respect to any transfer of any interest in any Preferred Security
     (including any transfers between or among Clearing Agency Participants or
     beneficial owners in any Global Preferred Security) other than to require
     delivery of such certificates and other documentation or evidence as are
     expressly required by, and to do so if and when expressly required by, the
     terms of this Declaration, and to examine the same to determine substantial
     compliance as to form with the express requirements hereof.

SECTION 9.3 Deemed Security Holders.

     The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security 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 Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.

SECTION 9.4 Book-Entry Interests.

     Global Preferred Securities shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 7.9 and Section 9.2. Unless and until definitive, fully registered
Preferred Securities certificates have been issued to the Preferred Security
Beneficial Owners pursuant to Section 7.9 and Section 9.2:

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     (a) the provisions of this Section 9.4 shall be in full force and effect;

     (b) the Trust and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Preferred Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;

     (c) to the extent that the provisions of this Section 9.4 conflict with any
other provisions of this Declaration, the provisions of this Section 9.4 shall
control; and

     (d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants.

SECTION 9.5  Notices to Clearing Agency.

     Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, the Trustees shall give all such notices and
communications specified herein to be given to the Holders of Global Preferred
Securities to the Clearing Agency, and shall have no notice obligations to the
Preferred Security Beneficial Owners.

SECTION 9.6  Appointment of Successor Clearing Agency

     If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.

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

SECTION 10.1 Liability.

     (a) Except as expressly set forth in this Declaration, the Securities
Guarantees 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 which shall be made
     solely from assets of the Trust; and

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

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

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<PAGE>

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

SECTION 10.2 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, cost,
liability, 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, cost,
liability, damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.

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

SECTION 10.3 Fiduciary Duty.

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

     (b)  Unless otherwise expressly provided herein:

          (i)  whenever a conflict of interest exists or arises between an
     Indemnified Person and any Covered Persons; or

          (ii) whenever this Declaration or any other agreement contemplated
     herein or therein provides that an Indemnified Person shall act in a manner
     that is, or provides terms that are, fair and reasonable to the Trust or
     any Holder of Securities,

the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the

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<PAGE>

resolution, action or term so made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.

     (c)  Notwithstanding any other provision of this Declaration or otherwise
applicable law, 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.

SECTION 10.4 Indemnification.

     (a)  (i)   The Debenture Issuer shall indemnify, to the full extent
     permitted by law, any Company Indemnified Person who was or is a party or
     is threatened to be made a party to any threatened, pending or completed
     action, suit or proceeding, whether civil, criminal, administrative or
     investigative (other than an action by or in the right of the Trust) by
     reason of the fact that he is or was a Company Indemnified Person against
     expenses (including 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 such Company Indemnified
     Person 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
     Company 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.

          (ii)  The Debenture Issuer shall indemnify, to the full extent
     permitted by law, any Company Indemnified Person who was or is a party or
     is threatened to be made a party to any threatened, pending or completed
     action or suit by or in the right of the Trust to procure a judgment in its
     favor by reason of the fact that he is or was a Company Indemnified Person
     against expenses (including 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 and
     except that no such indemnification shall be made in respect of any claim,
     issue or matter as to which such Company Indemnified Person shall have been
     adjudged to be liable to the Trust unless and only to the extent that the
     Court of Chancery of Delaware or the court in which such action or

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<PAGE>

     suit was brought shall determine upon application that, despite the
     adjudication of liability but in view of all the circumstances of the case,
     such Person is fairly and reasonably entitled to indemnity for such
     expenses which such Court of Chancery or such other court shall deem
     proper.

           (iii) To the extent that a Company Indemnified Person shall be
     successful on the merits or otherwise (including dismissal of an action
     without prejudice or the settlement of an action without admission of
     liability) in defense of any action, suit or proceeding referred to in
     paragraphs (i) and (ii) of this Section 10.4(a), 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) actually and
     reasonably incurred by him in connection therewith.

           (iv)  Any indemnification under paragraphs (i) and (ii) of this
     Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
     Issuer only as authorized in the specific case upon a determination that
     indemnification of the Company Indemnified Person is proper in the
     circumstances because he has met the applicable standard of conduct set
     forth in paragraphs (i) and (ii). Such determination shall be made (1) by
     the Administrative Trustees by a majority vote of a Quorum consisting of
     such Administrative Trustees who were not parties to such action, suit or
     proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable,
     if a Quorum of disinterested Administrative Trustees so directs, by
     independent legal counsel in a written opinion, or (3) by the Common
     Security Holder of the Trust.

           (v)   Expenses (including attorneys' fees and expenses) incurred by a
     Company Indemnified Person in defending a civil, criminal, administrative
     or investigative action, suit or proceeding referred to in paragraphs (i)
     and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
     advance of the final disposition of such action, suit or proceeding upon
     receipt of an undertaking by or on behalf of such Company Indemnified
     Person to repay such amount if it shall ultimately be determined that he is
     not entitled to be indemnified by the Debenture Issuer as authorized in
     this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
     made by the Debenture Issuer if a determination is reasonably and promptly
     made (i) by the Administrative Trustees by a majority vote of a quorum of
     disinterested Administrative Trustees, (ii) if such a quorum is not
     obtainable, or, even if obtainable, if a quorum of disinterested
     Administrative Trustees so directs, by independent legal counsel in a
     written opinion or (iii) the Common Security Holder of the Trust, that,
     based upon the facts known to the Administrative Trustees, counsel or the
     Common Security Holder at the time such determination is made, such Company
     Indemnified Person acted in bad faith or in a manner that such person did
     not believe to be in or not opposed to the best interests of the Trust, or,
     with respect to any criminal proceeding, that such Company 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
     Administrative Trustees, independent legal counsel or Common Security
     Holder reasonably determine that such person deliberately breached his duty
     to the Trust or its Common or Preferred Security Holders.

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<PAGE>

           (vi)   The indemnification and advancement of expenses provided by,
     or granted pursuant to, the other paragraphs of this Section 10.4(a) 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 Debenture
     Issuer or Preferred 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
     10.4(a) shall be deemed to be provided by a contract between the Debenture
     Issuer and each Company Indemnified Person who serves in such capacity at
     any time while this Section 10.4(a) is in effect. Any repeal or
     modification of this Section 10.4(a) shall not affect any rights or
     obligations then existing.

           (vii)  The Debenture Issuer or the Trust may purchase and maintain
     insurance  on behalf  of any  person  who is or was a  Company  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
     Debenture  Issuer  would  have the  power to  indemnify  him  against  such
     liability under the provisions of this Section 10.4(a).

           (viii) For purposes of this Section 10.4(a), 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 10.4(a) with respect to the
     resulting or surviving entity as he would have with respect to such
     constituent entity if its separate existence had continued.

           (ix)   The indemnification and advancement of expenses provided by,
     or granted pursuant to, this Section 10.4(a) shall, unless otherwise
     provided when authorized or ratified, continue as to a person who has
     ceased to be a Company Indemnified Person and shall inure to the benefit of
     the heirs, executors and administrators of such a person.

     (b) The Debenture Issuer agrees to indemnify (i) the Property Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
on the part of such Fiduciary Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending against or investigating any claim or liability in
connection with the exercise or performance of any of the powers or duties of
such Fiduciary Indemnified Person hereunder. The obligation to indemnify as set
forth in this Section 10.4(b) shall survive the resignation or removal of the
Property Trustee or the Delaware Trustee and the satisfaction and discharge of
this Declaration.

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<PAGE>

     (c) The Debenture Issuer agrees to pay the Property Trustee and the
Delaware Trustee, from time to time, such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided herein,
to reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.

SECTION 10.5  Outside Businesses.

     Any Covered Person, the Sponsor, the Delaware Trustee and the Property
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 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 and the doctrine of corporate opportunity, or any analogous doctrine,
shall not apply to such Persons. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property 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.

                                   ARTICLE XI
                                   ACCOUNTING

SECTION 11.1  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 11.2 Certain Accounting Matters.

     (a) At all times during the existence of the Trust, the Administrative
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the
Administrative Trustees.

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     (b) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any 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 Administrative Trustees shall endeavor to
deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.

     (c) The Administrative Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, 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 Administrative Trustees on behalf of the Trust with any state or local
taxing authority.

SECTION 11.3  Banking.

     The Trust may maintain 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 Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.

SECTION 11.4  Withholding.

     The Trust and the Administrative Trustees shall comply with all withholding
requirements under United States Federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Administrative Trustees 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 Trust is required
to withhold and pay over any amounts to any authority with respect to
Distributions or allocations to any Holder, the amount withheld shall be deemed
to be a Distribution in the amount of the withholding to the Holder. In the
event of any claim of excess withholding, 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 Trust may reduce subsequent
Distributions by the amount of such withholding.

                                  ARTICLE XII
                             AMENDMENTS AND MEETINGS

SECTION 12.1  Amendments.

     (a) Except as otherwise provided in this Declaration (including Section 7
of Annex I hereto) or by any applicable terms of the Securities, this
Declaration may only be amended by a written instrument approved and executed
by:

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           (i)   the Administrative Trustees (or if there are more than two
     Administrative Trustees, a majority of the Administrative Trustees);

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

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

     (b) No amendment shall be made, and any such purported amendment shall be
void and ineffective:

           (i)   unless, in the case of any proposed amendment, the Property
     Trustee shall have first received 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);

           (ii)  unless, in the case of any proposed amendment which affects the
     rights, powers, duties, obligations or immunities of the Property Trustee,
     the Property Trustee shall have first received:

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

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

     provided, however, that the Property Trustee shall not be required to sign
     any such amendment; and

           (iii) to the extent the result of such amendment would be to:

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

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

                 (C) cause the Trust to be deemed to be an Investment Company
           required to be registered under the Investment Company Act;

     (c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder may

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<PAGE>

be effected only with such additional requirements as may be set forth in the
terms of such Securities;

     (d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders;

     (e) Article IV shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities and;

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

     (g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders to:

         (i)  cure any ambiguity, correct or supplement any provision in this
     Declaration that may be inconsistent with any other provision of this
     Declaration or to make any other provisions with respect to matters or
     questions arising under this Declaration which shall not be inconsistent
     with the other provisions of the Declaration; and

         (ii) to modify, eliminate or add to any provisions of the Declaration
     to such extent as shall be necessary to ensure that the Trust will be
     classified for United States Federal income tax purposes as a grantor trust
     at all times that any Securities are outstanding or to ensure that the
     Trust will not be required to register as an Investment Company under the
     Investment Company Act;

provided, however, that in the case of clause (i) of this Section 12.1(g), such
action shall not adversely affect in any material respect the interests of the
Holders, and any amendments of this Declaration shall become effective when
notice thereof is given to the Holders.

SECTION 12.2  Meetings of the Holders; Action by Written Consent.

     (a) Meetings of the Holders of any class of Securities may be called at any
time by the Administrative Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Administrative Trustees 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 Administrative Trustees one or
more notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.

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<PAGE>

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

           (i)   notice of any such meeting shall be given to all the Holders
     having a right to vote thereat at least seven days and not more than 60
     days before the date of such meeting. Whenever a vote, consent or approval
     of the Holders is permitted or required under this Declaration or the rules
     of any stock exchange on which the Preferred Securities are listed or
     admitted for trading, such vote, consent or approval may be given at a
     meeting of the Holders. Any action that may be taken at a meeting of the
     Holders may be taken without a meeting if a consent in writing setting
     forth the action so taken is signed by the Holders owning not less than the
     minimum amount of Securities in liquidation amount that would be necessary
     to authorize or take such action at a meeting at which all Holders 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 entitled to vote
     who have not consented in writing. The Administrative Trustees may specify
     that any written ballot submitted to the Security Holder for the purpose of
     taking any action without a meeting shall be returned to the Trust within
     the time specified by the Administrative Trustees;

           (ii)  each Holder may authorize any Person to act for it by proxy on
     all matters in which a Holder 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 eleven months from the date thereof
     unless otherwise provided in the proxy. Every proxy shall be revocable at
     the pleasure of the Holder executing it. Except as otherwise provided
     herein, all matters relating to the giving, voting or validity of proxies
     shall be governed by the General Corporation Law of the State of Delaware
     relating to proxies, and judicial interpretations thereunder, as if the
     Trust were a Delaware corporation and the Holders were stockholders of a
     Delaware corporation;

           (iii) each meeting of the Holders shall be conducted by the
     Administrative Trustees or by such other Person that the Administrative
     Trustees may designate; and

           (iv)  unless the Statutory Trust Act, this Declaration, the terms of
     the Securities, the Trust Indenture Act or the listing rules of The Nasdaq
     National Market, or any automated quotation system or any national
     securities exchange, as the case may be, on which the Preferred Securities
     are then listed or trading, otherwise provides, the Administrative
     Trustees, in their sole discretion, shall establish all other provisions
     relating to meetings of Holders, including notice of the time, place or
     purpose of any meeting at which any matter is to be voted on by any
     Holders, 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.

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                                  ARTICLE XIII
            REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE

SECTION 13.1 Representations and Warranties of Property Trustee.

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

     (a)  the Property Trustee is a New York banking corporation, a national
banking association or a bank or trust company organized under the laws of any
State of the United States or the District of Columbia, in any case with trust
powers 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 Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);

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

     (d)  no consent, approval or authorization of, or registration with or
notice to, any New York, Texas or Delaware State or Federal banking authority is
required for the execution, delivery or performance by the Property Trustee of
this Declaration.

SECTION 13.2 Representations and Warranties of Delaware Trustee.

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

     (a)  The Delaware Trustee is duly organized, validly existing and in good
standing under the laws of the State of Delaware or the United States, 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 Delaware Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. This Declaration has been duly executed and
delivered by the Delaware Trustee and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable

                                       53

<PAGE>

against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);

     (c)  No consent, approval or authorization of, or registration with or
notice to, any Federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration; and

     (d)  The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.

                                  ARTICLE XIV
                                 MISCELLANEOUS

SECTION 14.1 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 or
mailed by first class mail, overnight courier service or confirmed telecopy, as
follows:

     (a)  if given to the Trust, in care of the Administrative Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Property Trustee, the Delaware Trustee and the Holders):

          Sterling Bancshares Capital Trust III
          c/o Sterling Bancshares, Inc.
          2550 North Loop, Suite 600
          Houston, Texas 77092
          Attention: J. Downey Bridgwater, Administrative Trustee
          Telecopy: (713) 849-5498

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

          Deutsche Bank Trust Company Delaware
          1011 Centre Road, Suite 200
          Wilmington, Delaware 19805
          Attention: Corporate Trust Department
          Telecopy: (302) 636-3222

                                       54

<PAGE>

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

          Deutsche Bank Trust Company Americas
          c/o DB Services NJ, Inc.
          100 Plaza One
          MS JCY03-0604
          Jersey City, New Jersey 07311
          Attention: Corporate Trust and Agency Services
          Telecopy: (201) 593-6527

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

          Sterling Bancshares, Inc.
          2550 North Loop, Suite 600
          Houston, Texas 77092
          Attention: J. Downey Bridgwater
          Telecopy: (713) 849-5498

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

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

SECTION 14.2 Governing Law.

     THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.

SECTION 14.3 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 14.4 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.

                                       55

<PAGE>

SECTION 14.5 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 Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.

SECTION 14.6 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 14.7 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 Trustees to one 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.

                  [Remainder of Page Intentionally Left Blank]

                                       56

<PAGE>

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

                              /s/ George Martinez
                              _________________________________________________
                              George Martinez, as Administrative Trustee

                              /s/ J. Downey Bridgwater
                              __________________________________________________
                              J. Downey Bridgwater, as Administrative Trustee

                              /s/ Eugene S. Putnam, Jr.
                              __________________________________________________
                              Eugene S. Putnam, Jr., as Administrative Trustee

                              DEUTSCHE BANK TRUST COMPANY DELAWARE,
                              as Delaware Trustee

                              By: /s/ Elizabeth B. Ferry
                                 _______________________________________________
                              Name: Elizabeth B. Ferry
                              Title: Authorized Signatory

                              DEUTSCHE BANK TRUST COMPANY AMERICAS,
                              as Property Trustee

                              By: /s/ Susan Johnson
                                 _______________________________________________
                              Name: Susan Johnson
                              Title: Vice President

                              STERLING BANCSHARES, INC., as Sponsor and
                              Debenture Issuer

                              By: /s/ J. Downey Bridgwater
                                 _______________________________________________
                              Name: J. Downey Bridgwater
                              Title: President and Chief Executive Officer

         (Signature Page to Amended and Restated Declaration of Trust]

<PAGE>

                                     ANNEX I
                                    TERMS OF
                   8.30% CUMULATIVE TRUST PREFERRED SECURITIES
                             8.30% COMMON SECURITIES

     Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of September 26, 2002 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below in Section 2(c) of this Annex I):

     1.   Designation and Number.

     (a)  Preferred Securities. 1,250,000 8.30% Cumulative Trust Preferred
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of $31,250,000 and each with a liquidation amount with
respect to the assets of the Trust of $25 per security, are hereby designated
for the purposes of identification only as Preferred Securities. The
certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of The Nasdaq National Market or any automated
quotation system or national securities exchange, as the case may be, on or in
which the Preferred Securities are listed, traded or quoted.

     (b)  Common Securities. 38,660 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of $966,500
and each with a liquidation amount with respect to the assets of the Trust of
$25 per security, are hereby designated for the purposes of identification only
as Common Securities. The certificates evidencing the Common Securities shall be
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 payable on each Security will be fixed at a rate per
annum of 8.30% (the "Coupon Rate") of the liquidation amount of $25 per Security
(the "Liquidation Amount"), such rate being equivalent to the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarterly period will bear additional distributions
thereon compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the extent
the Property Trustee has funds on hand legally available therefor.

     (b)  Distributions on the Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from September 26, 2002, and will be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on December 31, 2002, except as otherwise

                                      I-1

<PAGE>

described below and on the Stated Maturity Date (each, a "Distribution Date").
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months and for any period less than a full calendar month on the
basis of the actual number of days elapsed in such month. As long as no Event of
Default has occurred and is continuing under the Indenture, the Debenture Issuer
has the right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly periods, including the first
such quarterly period during such period (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Stated Maturity Date of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, Distributions will continue to accumulate with
interest thereon (to the extent permitted by applicable law but not at a rate
greater than the rate at which interest is then accruing on the Debentures) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
defer payments of interest by further extending such Extension Period; provided
that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 20 consecutive quarterly
periods, including the first quarterly period during such Extension Period, or
extend beyond the Stated Maturity Date of the Debentures. Upon the termination
of any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.

     (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 close of business on
the 15th day of the month in which the relevant Distribution Date occurs, which
Distribution Dates correspond to the interest payment dates on the Debentures.
Subject to any applicable laws and regulations and the provisions of the
Declaration, each such payment in respect of the Preferred Securities will be
made as described under the heading "Description of the Trust Preferred
Securities - Distributions" and "--Payment and Paying Agency" in the Prospectus
Supplement dated September 23, 2002, of the Debenture Issuer and the Trust
relating to the Securities and the Debentures. The relevant record dates for the
Common Securities shall be the same as the record dates for the Preferred
Securities. Distributions payable on any Securities that are not punctually paid
on any Distribution Date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, will cease to be payable to the Holder 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
next succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such 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.

                                      I-2

<PAGE>

     3.   Liquidation Distribution Upon Dissolution.

     In the event of any termination of the Trust, or if the Sponsor otherwise
gives notice of its election to liquidate the Trust pursuant to Section
8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing to the Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
Holders will be entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders an amount equal to the aggregate
of the liquidation amount of $25 per Security plus accumulated and unpaid
Distributions thereon to the date of payment, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law (such amount being the
"Liquidation Distribution").

     "Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a liquidation amount equal to the principal amount of
Debentures to be paid or prepaid in accordance with their terms and (ii) with
respect to a distribution of Debentures upon the dissolution or liquidation of
the Trust, Debentures having a principal amount equal to the liquidation amount
of the Securities of the Holder to whom such Debentures are distributed.

     If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.

     4.   Redemption and Distribution.

     (a)  Upon the repayment or prepayment of the Debentures in whole or in
part, at maturity or otherwise (either at the option of the Debenture Issuer or
following a Special Event, as described below), the proceeds from such repayment
or prepayment shall be simultaneously applied by the Property Trustee (subject
to the Property Trustee having received written notice no later than 45 days
prior to such repayment or prepayment) to redeem a Like Amount of the Securities
at a redemption price (the "Redemption Price") equal to 100% of the liquidation
amount of the Securities to be redeemed, plus in each case, the accumulated and
unpaid Distributions thereon, if any, to the applicable date of redemption.
Holders will be given not less than 30 nor more than 60 days notice of such
redemption.

     (b)  In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Securities to be redeemed will
be determined as described in Section 4(f)(ii) below.

     The Debenture Issuer shall have the right (subject to the conditions in the
Indenture) to elect to prepay the Debentures in whole or in part at any time on
or after September 26, 2007 upon not less than 30 days and not more than 60 days
notice, at the Redemption Price and, simultaneous with such prepayment, to cause
a Like Amount of the Securities to be prepaid by the Trust at the Redemption
Price on a Pro Rata basis.

                                      I-3

<PAGE>

     (c)  If at any time an Investment Company Event, a Tax Event or a
Regulatory Capital Event (each as defined below, and each a "Special Event")
occurs, the Debenture Issuer shall have the right (subject to the conditions set
forth in the Indenture) at any time prior to September 26, 2007 upon not less
than 30 nor more than 60 days' notice, to prepay the Debentures in whole, but
not in part, within the 180 days following the occurrence of such Special Event
(the "180 Day Period"), and, simultaneous with such redemption, to cause a Like
Amount of the Securities to be redeemed by the Trust at the Redemption Price on
a Pro Rata basis.

     "Investment Company Event" means the receipt by the Trust and the Debenture
Issuer of an opinion of counsel, rendered by a law firm experienced in such
matters, to the effect that, as a result of change in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, the Trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act, which change becomes effective on or after the date
of original issuance of the Preferred Securities of the Trust.

     A "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 or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after September 23, 2002,
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.

     "Regulatory Capital Event" shall mean that the Debenture Issuer shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the
Federal Reserve Board or any regulatory authority applicable to the Debenture
Issuer or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after September
23, 2002, the Preferred Securities do not constitute, or within 90 days of the
date thereof, will not constitute, Tier 1 Capital (or its then equivalent);
provided, however, that the inability of the Company to treat all or a portion
of the Preferred Securities as Tier 1 Capital (or its equivalent) shall not
constitute the basis for a Regulatory Capital Event if such inability results
from the Company having cumulative preferred stock, minority interests in
consolidated subsidiaries, or any other class of security or interest which the
Federal Reserve now or may hereafter accord treatment as Tier 1 Capital (or its
equivalent) in excess of the amount which may qualify for treatment as Tier 1
Capital under applicable capital adequacy guidelines of the Federal Reserve;
provided further, however, that the distribution of the

                                      I-4

<PAGE>

Debentures in connection with the liquidation of the Trust by the Debenture
Issuer shall not in and of itself constitute a Regulatory Capital Event unless
such liquidation shall have occurred in connection with a Tax Event.

     (d)  On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing Securities not held by the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of Debentures until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.

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

     (f)  The procedure with respect to redemptions or distributions of
Securities shall be as follows:

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

          (ii) In the event that fewer than all the outstanding Securities are
     to be redeemed, the particular Securities to be redeemed shall be selected
     on a Pro Rata basis (based upon Liquidation Amounts) not more than 60 days
     prior to the date fixed for redemption from the outstanding Preferred
     Securities not previously called for redemption; provided, however, that
     with respect to Holders that would be required to hold less than 100 but
     more than zero Securities as a result of such pro rata redemption, the
     Trust shall redeem Securities of each such Holder so that after such
     redemption such Holder shall hold either 100 Securities or such Holder no
     longer holds any Securities, and in selecting Securities for redemption
     shall use such method (including, without limitation, by lot) as the Trust
     shall deem fair and appropriate; and provided, further, that any such
     proration may be made on the basis of the aggregate Liquidation Amount of
     Securities held by each Holder thereof and may be made by making such
     adjustments as

                                      I-5

<PAGE>

     the Trust deems fair and appropriate in order that only Securities in
     denominations of $25 liquidation amount or integral multiples thereof shall
     be redeemed. In respect of Preferred Securities registered in the name of
     and held of record by the Clearing Agency or its nominee (or any successor
     Clearing Agency or its nominee) or any nominee, the distribution of the
     proceeds of such redemption will be made to the Clearing Agency and
     disbursed by such Clearing Agency in accordance with the procedures applied
     by such agency or nominee.

          (iii) If Securities are to be redeemed and the Trust gives a
     Redemption/Distribution Notice, (which notice will be irrevocable), then
     (A) with respect to Preferred Securities issued in book-entry form, by
     12:00 noon, New York City time, on the redemption date, provided that the
     Debenture Issuer has paid the Property Trustee a sufficient amount of cash
     in connection with the related redemption or maturity of the Debentures by
     10:00 a.m., New York City time, on the maturity date or the date of
     redemption, as the case requires, the Property Trustee will deposit
     irrevocably with the Clearing Agency or its nominee (or successor Clearing
     Agency or its nominee) funds sufficient to pay the applicable Redemption
     Price with respect to such Preferred Securities and will give the Clearing
     Agency irrevocable instructions and authority to pay the Redemption Price
     to the relevant Clearing Agency Participants, and (B) with respect to
     Preferred Securities issued in certificated form and Common Securities,
     provided that the Debenture Issuer has paid the Property Trustee a
     sufficient amount of cash in connection with the related prepayment or
     maturity of the Debentures, the Property Trustee will pay the relevant
     Redemption Price to the Holders by check mailed to the address of the
     relevant 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, if applicable, then immediately prior to
     the close of business on the date of such deposit, or on the redemption
     date, as applicable, Distributions will cease to accumulate on the
     Securities so called for redemption and all rights of Holders so called for
     redemption will cease, except the right of the Holders of such Securities
     to receive the Redemption Price, but without interest on such Redemption
     Price, and such Securities shall cease to be outstanding.

          (iv)  Payment of accumulated and unpaid Distributions on the
     Redemption Date of the Securities will be subject to the rights of Holders
     on the close of business on a regular record date in respect of a
     Distribution Date occurring on or prior to such Redemption Date.

          Neither the Administrative Trustees nor the Trust shall be required to
     register or cause to be registered the transfer of (i) any Securities
     beginning on the opening of business 15 days before the day of mailing of a
     notice of redemption or any notice of selection of Securities for
     redemption or (ii) any Securities selected for redemption except the
     unredeemed portion of any Security being redeemed. If any date fixed for
     redemption of Securities is not a Business Day, then payment of the
     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 next succeeding Business
     Day falls in the next succeeding calendar year, such payment shall be made
     on the immediately preceding Business Day, with the same force and effect

                                      I-6

<PAGE>

     as if made on such date fixed for redemption. If payment of the Redemption
     Price in respect of any Securities is improperly withheld or refused and
     not paid either by the Property Trustee or by the Sponsor as guarantor
     pursuant to the relevant Securities Guarantee, Distributions on such
     Securities will continue to accumulate 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.

          (v)  Redemption/Distribution Notices shall be sent by the Property
     Trustee on behalf of the Trust to (A) in respect of the Preferred
     Securities, to the Clearing Agency or its nominee (or any successor
     Clearing Agency or its nominee) if the Global Certificates have been issued
     or, if Definitive Preferred Security Certificates have been issued, to the
     Holder thereof, and (B) in respect of the Common Securities, to the Holder
     thereof.

          (vi) Subject to the foregoing and applicable law (including, without
     limitation, United States Federal securities laws and banking laws),
     provided 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 Preferred Securities by
     tender, in the open market or by private agreement.

     5.   Voting Rights - Preferred Securities.

     (a)  Except as provided under Sections 5(b), 6(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.

     (b)  So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method or place of conducting any
proceeding for any remedy available to the Debenture Trustee or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.7 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in liquidation amount
of all outstanding Preferred Securities; provided, however, that where a consent
under the Indenture would require the consent of a Super Majority, only the
Holders of at least a Super Majority in aggregate liquidation amount of the
Preferred Securities may direct the Property Trustee to give such consent or
take such action; and provided further, that where a consent under the Indenture
would require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each Holder of the Preferred Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities except by subsequent vote of such Holders. The Property
Trustee shall notify each Holder of Preferred Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Preferred Securities, prior to taking any of
the foregoing actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not be classified
as an association taxable as a corporation for United States Federal income tax
purposes on account of such action.

                                      I-7

<PAGE>

     If an Event of Default under the Declaration has occurred and is continuing
and such event is attributable to the failure of the Debenture Issuer to pay
principal of or interest on the Debentures on the due date (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on a Like Amount of Debentures (a "Direct Action") on
or after the respective due date specified in the Debentures. In connection with
such Direct Action, the rights of the Common Securities Holder will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Debenture Issuer to such Holder of Preferred Securities
in such Direct Action. Except as provided in the second preceding sentence, the
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.

     Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustees will cause a notice of any
meeting at which Holders of Preferred 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 Preferred 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 Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.

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

     6.   Voting Rights - Common Securities.

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

     (b)  Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by the holder of the Common Securities. If an
Event of Default has occurred and is continuing, the Property Trustee and the
Delaware Trustee may be removed at such time by the holders of a Majority in
liquidation amount of the outstanding Preferred Securities. In no event will the
holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees, which voting rights are vested exclusively
in the Sponsor as the holder of the Common Securities. No resignation or removal
of a Trustee and no appointment of a successor trustee shall be effective until
the acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.

                                      I-8

<PAGE>

     (c)  Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived or
otherwise eliminated, so long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.7
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in liquidation amount
of all outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of a Super Majority, only the
Holders of at least a Super Majority in aggregate liquidation amount of the
Common Securities may direct the Property Trustee to give such consent or take
such action; and provided further, that where a consent under the Indenture
would require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each Holder of the Common Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Common Securities of any notice of default with respect to
the Debentures. In addition to obtaining the foregoing approvals of such Holders
of the Common Securities prior to taking any of the foregoing actions, the
Trustees shall obtain an opinion of counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States Federal income tax purposes on account of such
action.

     If an Event of Default under the Declaration has occurred and is continuing
and such event is attributable to the failure of the Debenture Issuer to pay
principal of or interest on the Debentures on the due date (or in the case of
redemption, on the redemption date), then a Holder of Common Securities may
institute a Direct Action for enforcement of payment to such Holder of the
principal of or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection with Direct
Action, the rights of the Common Securities Holder will be subordinated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Common Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Common Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.

     Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Administrative Trustees will cause a notice of any meeting at which
Holders of 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 record of 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.

                                      I-9

<PAGE>

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

     7.   Amendments to Declaration and Indenture.

     In addition to the requirements set out in Section 12.1 of the Declaration,
the Declaration may be amended from time to time by the Sponsor, the Property
Trustee and the Administrative Trustees without the consent of the Holders (i)
to cure any ambiguity, correct or supplement any provisions in the Declaration
that may be inconsistent with any other provisions, or to make any other
provisions with respect to matters or questions arising under the Declaration
which shall not be inconsistent with the other provisions of the Declaration; or
(ii) to modify, eliminate or add to any provisions of the Declaration to such
extent as shall be necessary to ensure that the Trust will be classified for
United States Federal income tax purposes as a grantor trust at all times that
any Securities are outstanding or to ensure that the Trust will not be required
to register as an "Investment Company" under the Investment Company Act;
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any Holder, and any
amendments of the Declaration shall become effective when notice thereof is
given to the Holders. The Declaration may also be amended by the Trustees and
the Sponsor with (i) the consent of Holders representing a Majority in
liquidation amount of all outstanding Securities, and (ii) receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United States Federal
income tax purposes or the Trust's exemption from status as an Investment
Company under the Investment Company Act, provided that, without the consent of
each Holder of Trust Securities, the Declaration may not be amended to: (i)
change the amount or timing of any Distribution on the Trust Securities or
reduce the amount payable on redemption thereof or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date; or (ii) restrict the right of a holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date.

     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 according to
the aggregate liquidation amount of the Securities held by the relevant Holder
in relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default under the Declaration has
occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Preferred Securities pro rata
according to the aggregate liquidation amount of Preferred Securities held by
the relevant Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and, only after satisfaction of all amounts
owed to the Holders of the Preferred Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.

                                      I-10

<PAGE>

     9.   Ranking.

     The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.

     10.  Acceptance of Securities Guarantee and Indenture.

     Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.

     11.  No Preemptive Rights.

     The Holders shall have no preemptive 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 Preferred
Securities Guarantee, the Common Securities Guarantee (as may be appropriate),
and the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Sponsor at its principal place of business.

                                      I-11

<PAGE>

                                   EXHIBIT A-1

          FORM OF 8.30% CUMULATIVE TRUST PREFERRED SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

     [IF THIS GLOBAL SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF [THE
DEPOSITORY TRUST COMPANY]/1/ (THE "CLEARING AGENCY") OR A NOMINEE OF THE
CLEARING AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY
OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE
OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]

     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
CLEARING AGENCY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
CLEARING AGENCY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE CLEARING AGENCY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]

__________________________
/1/ Insert name of Clearing Agency for the Global Preferred Securities.

                                      A1-1

<PAGE>

Number of                                              Aggregate Liquidation
Preferred Securities                                   Amount:__________________
___________________                                    CUSIP NO. 85915Q 20 6

       Certificate Evidencing 8.30% Cumulative Trust Preferred Securities

                                       of

                      Sterling Bancshares Capital Trust III

                   8.30% Cumulative Trust Preferred Securities
                 (liquidation amount $25 per Preferred Security)

         Sterling Bancshares Capital Trust III, a statutory trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of [$_________ in
aggregate liquidation amount of Preferred Securities of the Trust]/2/ [the
aggregate liquidation amount of Preferred Securities of the Trust specified in
Schedule A hereto]/3/ representing undivided beneficial interests in the assets
of the Trust designated the 8.30% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred 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
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of September 26, 2002, as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used but not defined herein shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee (as may be appropriate),
and the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Trust at its principal place of business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.

         By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.

______________________________

/2/        Insert in Definitive Preferred Securities only.

/3/        Insert in Global Preferred Securities only.

                                      A1-2

<PAGE>

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

Dated:

                                          STERLING BANCSHARES CAPITAL TRUST III

                                          By:__________________________________
                                          Name:________________________________
                                                Administrative Trustee

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                          DEUTSCHE BANK TRUST COMPANY
                                          AMERICAS, as Property Trustee

                                          By:__________________________________
                                                Authorized Signatory

                                      A1-3

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of 8.30% (the "Coupon Rate") of the liquidation amount of $25 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.

         Distributions on the Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from September 26, 2002 will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing on December 31, 2002, except as otherwise described below and
on the Stated Maturity Date. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period less than a
full calendar month, the number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 20 consecutive calendar quarterly
periods, including the first such quarterly period during such extension period
(each an "Extension Period"), provided that no Extension Period shall end on a
date other than an Interest Payment Date for the Debentures or extend beyond the
Stated Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 20 consecutive quarterly periods, including the first quarterly
period during such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Stated Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.

         Subject to the prior approval of the Federal Reserve Board if such
approval is then required under applicable law or capital guidelines or policies
of the Federal Reserve Board and the receipt of any other required regulatory
approvals and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.

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

                                      A1-4

<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
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 Preferred 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 Preferred Security Certificate)

Signature Guarantee ***:  ___________________________________

_________________________

*** 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 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 Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.

                                      A1-5

<PAGE>

                                  Schedule A*

         The initial number of Preferred Securities evidenced by the Certificate
to which this Schedule is attached is 1,250,000 (having an aggregate liquidation
amount of $31,250,000). The notations in the following table evidence decreases
and increases in the number of Preferred Securities evidenced by such
certificate.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                              Number of Preferred
       Decrease in                  Increase in                    Securities
        Number of                    Number of                  Remaining After
        Preferred                    Preferred                   such Decrease                 Notation by
        Securities                  Securities                    or Increase                   Registrar

------------------------------------------------------------------------------------------------------------------
<S>                        <C>                           <C>                            <C>

------------------------------------------------------------------------------------------------------------------
</TABLE>

________________________________

 * Append to Global Preferred Securities only.

                                      A1-6

<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

         THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON 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, REGISTRATION.

         THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH STERLING
BANCSHARES, INC. (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER
OF THIS COMMON Security (OR ANY PREDECESSOR OF THIS COMMON SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS COMMON SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS COMMON 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 (E) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS COMMON
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

<PAGE>

                    Certificate Evidencing Common Securities

                                       of

                      Sterling Bancshares Capital Trust III
                             8.30% Common Securities
                  (liquidation amount $25 per Common Security)

         Sterling Bancshares Capital Trust III, a statutory trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________________ (the "Holder") is the registered owner of __________
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the 8.30% Common Securities (liquidation
amount $25 per Common Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of September 26,
2002, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used but not defined herein shall
have the meaning given them in the Declaration. The Sponsor will provide a copy
of the Declaration, the Common Securities Guarantee, the Preferred Securities
Guarantee (as may be appropriate) and the Indenture (including any supplemental
indenture) to a Holder without charge upon written request to the Sponsor at its
principal place of business.

         Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.

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

         IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of September, 2002.

                                           STERLING BANCSHARES CAPITAL TRUST III

                                           By:________________________________
                                           Name:______________________________
                                                 Administrative Trustee

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Common Security will be fixed at a rate
per annum of 8.30% (the "Coupon Rate") of the liquidation amount of $25 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarterly period will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor.

         Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from September 26, 2002 and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing on December 31, 2002, except as otherwise described below and
on the Stated Maturity Date. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period less than a
full calendar month, the number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 20 consecutive calendar quarterly
periods, including the first such quarterly period during such extension period
(each an "Extension Period"), provided that no Extension Period shall end on a
date other than an Interest Payment Date for the Debentures or extend beyond the
Stated Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, Distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest then accruing
on the Debentures) at the Coupon Rate compounded quarterly during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or end on a date other than an Interest Payment
Date for the Debentures or extend beyond the Stated Maturity Date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.

         Subject to the prior approval of the Federal Reserve Board if such
approval is then required under applicable law or capital guidelines or policies
of the Federal Reserve Board and the receipt of any other required regulatory
approval and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders to the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.

<PAGE>

         Under certain circumstances, the right of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Preferred
Securities (as defined in the Declaration), as provided in the Declaration.

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

                                                                     EXHIBIT 4.6

                          SECOND SUPPLEMENTAL INDENTURE

                                     Between

                            STERLING BANCSHARES, INC.

                                       and

                      DEUTSCHE BANK TRUST COMPANY AMERICAS
                   (FORMERLY KNOWN AS "BANKERS TRUST COMPANY")

                                   AS TRUSTEE

                         Dated as of September 26, 2002.

<PAGE>

                               TABLE OF CONTENTS*

<TABLE>
<CAPTION>
                                                                               PAGE
                                                                               ----
<S>                                                                            <C>
ARTICLE I DEFINITIONS ........................................................   2
    Section 1.1      Definition of Terms .....................................   2

ARTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES ....................   4
    Section 2.1      Designation and Principal Amount ........................   4
    Section 2.2      Maturity ................................................   4
    Section 2.3      Form and Payment ........................................   5
    Section 2.4      Global Debenture ........................................   5
    Section 2.5      Interest ................................................   7

ARTICLE III PREPAYMENT OF THE DEBENTURES .....................................   8
    Section 3.1      Special Event Prepayment ................................   8
    Section 3.2      Optional Prepayment by Company ..........................   8
    Section 3.3      No Sinking Fund .........................................   9

ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD ..............................   9
    Section 4.1      Extension of Interest Payment Period ....................   9
    Section 4.2      Notice of Extension .....................................   9
    Section 4.3      Limitation of Transactions ..............................  10

ARTICLE V CHANGE OF STATED MATURITY DATE .....................................  11
    Section 5.1      Change of Stated Maturity Date ..........................  11
    Section 5.2      Notice of Change of Stated Maturity Date ................  11

ARTICLE VI EXPENSES ..........................................................  12
    Section 6.1      Payment of Expenses .....................................  12
    Section 6.2      Payment Upon Resignation or Removal .....................  12

ARTICLE VII COVENANT TO LIST ON EXCHANGE .....................................  13
    Section 7.1      Listing on an Exchange ..................................  13

ARTICLE VIII FORM OF DEBENTURE ...............................................  13
    Section 8.1      Form of Debenture .......................................  13

ARTICLE IX ORIGINAL ISSUE OF DEBENTURES ......................................  13
    Section 9.1      Original Issue of Debentures ............................  13

ARTICLE X MISCELLANEOUS ......................................................  13
    Section 10.1     Ratification of Indenture ...............................  13
    Section 10.2     Trustee Not Responsible for Recitals ....................  14
    Section 10.3     Governing Law ...........................................  14
    Section 10.4     Counterparts ............................................  14
</TABLE>

   *THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A PART OF
   THIS SECOND SUPPLEMENTAL INDENTURE.

                                       i

<PAGE>

                          SECOND SUPPLEMENTAL INDENTURE
                                     Between
                            STERLING BANCSHARES, INC.
                                       and
                           DEUTSCHE BANK TRUST COMPANY
                   (Formerly Known As "Bankers Trust Company")

     SECOND SUPPLEMENTAL INDENTURE, dated as of September 26, 2002 (the "Second
Supplemental Indenture"), between Sterling Bancshares, Inc., a Texas corporation
(the "Company"), and Deutsche Bank Trust Company Americas (formerly known as
"Bankers Trust Company"), a New York banking corporation, as trustee (the
"Trustee") under the Indenture dated as of March 21, 2001 between the Company
and the Trustee (the "Indenture").

     WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's unsecured junior subordinated
securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Indenture;

     WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of such securities to be known as
its 8.30% Junior Subordinated Deferrable Interest Debentures due September 26,
2032 (the "Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this Second Supplemental Indenture;

     WHEREAS, the Company and Sterling Bancshares Capital Trust III, a Delaware
statutory trust (the "Trust"), has offered to the public $31,250,000 aggregate
liquidation amount of its 8.30% Trust Preferred Securities (the "Preferred
Securities"), representing preferred undivided beneficial interests in the
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $966,500 aggregate liquidation amount of its 8.30% Trust Common Securities
(the "Common Securities"), in $32,216,500 aggregate principal amount of the
Debentures; and

     WHEREAS, the Company has requested that the Trustee execute and deliver
this Second Supplemental Indenture and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Second Supplemental Indenture
has been duly authorized in all respects.

     NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     Section 1.1   Definition of Terms.  Unless the context otherwise requires:

            (a)    a term defined in the Indenture has the same meaning when
used in this Second Supplemental Indenture;

            (b)    a term defined anywhere in this Second Supplemental Indenture
has the same meaning throughout;

            (c)    the singular includes the plural and vice versa;

            (d)    a reference to a Section or Article is to a Section or
Article of this Second Supplemental Indenture;

            (e)    headings are for convenience of reference only and do not
affect interpretation;

            (f)    the following terms have the meanings given to them in the
Declaration:

                   (i)    Administrative Trustee;

                   (ii)   Delaware Trustee;

                   (iii)  Distributions;

                   (iv)   Preferred Securities Guarantee;

                   (v)    Property Trustee; and

                   (vi)   Underwriting Agreement.

            (g)    the following terms have the meanings given to them in this
     Section 1.1(g):

            "Additional Sums" shall have the meaning set forth in
     Section 2.5(c).

            "Compounded Interest" shall have the meaning set forth in
     Section 4.1.

            "Coupon Rate" shall have the meaning set forth in Section 2.5(a).

            "Declaration" means the Amended and Restated Declaration of Trust of
     Sterling Bancshares Capital Trust III, a Delaware statutory trust, dated as
     of September 26, 2002.

            "Deferred Interest" shall have the meaning set forth in Section 4.1.

                                        2

<PAGE>

          "Dissolution Event" means the dissolution of the Trust pursuant to the
     Declaration, and the distribution of the Debentures held by the Property
     Trustee pro rata to the holders of the Trust Securities in accordance with
     the Declaration.

          "Extended Interest Payment Period" shall have the meaning set forth in
     Section 4.1.

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

          "Global Debenture" shall have the meaning set forth in Section 2.4(a).

          "Holder" means any person in whose name at the time a Debenture is
     registered on the Securities Register.

          "Initial Optional Prepayment Date" means September 26, 2007.

          "Interest Payment Date" shall have the meaning set forth in Section
     2.5(a).

          "Investment Company Event" means the receipt by the Trust and the
     Company of an opinion of counsel, rendered by a law firm experienced in
     such matters, to the effect that, as a result of a change in law or
     regulation or a change in the interpretation or application of law or
     regulation by a legislative body, court, governmental agency or regulatory
     authority, the Trust is or will be considered an "investment company" that
     is required to be registered under the Investment Company Act of 1940, as
     amended, which change becomes effective on or after the date of original
     issuance of the Preferred Securities of the Trust.

          "Non Book-Entry Preferred Securities" shall have the meaning set forth
     in Section 2.4(a).

          "Prepayment Price" shall have the meaning set forth in Section 3.1.

          "Regulatory Capital Event" means that the Company shall have received
     an opinion of independent bank regulatory counsel experienced in such
     matters to the effect that, as a result of (a) any amendment to, or change
     (including any announced prospective change) in, the laws (or any
     regulations thereunder) of the United States or any rules, guidelines or
     policies of the Federal Reserve or any rules, guidelines or policies of any
     regulatory authority applicable to the Company, or (b) any official
     administrative pronouncement or judicial decision interpreting or applying
     such laws or regulations, which amendment or change is effective or such
     pronouncement or decision is announced on or after the date of original
     issuance of the Debentures, the Preferred Securities do not constitute, or
     within 90 days of the date thereof, will not constitute, Tier 1 Capital (or
     its equivalent) for purposes of the Federal Reserve's capital guidelines
     for bank holding companies; provided, however, that the inability of the
     Company to treat all or a portion of the Preferred Securities as Tier 1
     Capital (or its equivalent) shall not constitute the basis for a Regulatory
     Capital Event if such inability results from the Company having cumulative
     preferred stock, minority interests in consolidated subsidiaries, or any
     other class of security or interest which the Federal Reserve now or may
     hereafter accord

                                        3

<PAGE>

     treatment as Tier 1 Capital (or its equivalent) in excess of the amount
     which may qualify for treatment as Tier 1 Capital under applicable capital
     adequacy guidelines of the Federal Reserve; provided, further, however,
     that the distribution of the Debentures in connection with the liquidation
     of the Trust by the Company, as sponsor, and the treatment thereafter of
     the Debentures as other than Tier 1 Capital shall not in and of itself
     constitute a Regulatory Capital Event unless such liquidation shall have
     occurred in connection with a Tax Event.

          "Special Event" means an Investment Company Event, Tax Event or a
     Regulatory Capital Event, as the case may be.

          "Stated Maturity Date" means the date on which the Debentures mature
     and on which the principal shall be due and payable, together with all
     accrued and unpaid interest thereon including Compounded Interest and
     Additional Sums, if any, which date shall be September 26, 2032.

          "Tax Event" means that the Trust and the Company shall have received
     an opinion of counsel experienced in such matters to the effect that, as a
     result of (a) 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 (b) any official administrative pronouncement or judicial
     decision interpreting or applying such laws or regulations, which amendment
     or change is effective or which pronouncement or decision is announced on
     or after the date of the 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 Company on the Debentures is not, or within 90 days of the
     date thereof will not be, deductible by the Company, in whole or in part,
     for United States federal income tax purposes, or (iii) the Trust is, or
     will be within 90 days of the date of such opinion, subject to more than a
     de minimis amount of other taxes, duties or other governmental charges.

                                   ARTICLE II

                 GENERAL TERMS AND CONDITIONS OF THE DEBENTURES

     Section 2.1   Designation and Principal Amount.

     There is hereby authorized a series of Securities designated the "8.30%
Junior Subordinated Deferrable Interest Debentures due September 26, 2032,"
limited in aggregate principal amount to $32,216,500 which amount shall be as
set forth in any written order of the Company for the authentication and
delivery of Debentures pursuant to Section 2.4 of the Indenture.

     Section 2.2   Maturity.

     The Debentures shall mature on September 26, 2032 (the "Stated Maturity
Date").

                                        4

<PAGE>

     Section 2.3 Form and Payment.

     Except as provided in Section 2.4, the Debentures shall be issued in fully
registered certificated form without interest coupons. Principal and interest on
the Debentures issued in certificated form will be payable, the transfer of such
Debentures will be registrable and such Debentures will be exchangeable for
Debentures bearing identical terms and provisions at the office or agency of the
Company maintained for such purpose pursuant to Section 3.2 of the Indenture;
provided, however, that payment of interest with respect to Debentures (other
than a Global Debenture) may be made at the option of the Company (i) by check
mailed to the Holder entitled thereto at such address as shall appear in the
Securities Register or (ii) by wire transfer to an account appropriately
designated by the Holder entitled thereto, provided that proper transfer
instructions have been received in writing by the relevant record date.
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Property Trustee, the payment of the principal of and interest (including
Compounded Interest and Additional Sums, if any) on such Debentures held by the
Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.

     Section 2.4 Global Debenture.

          (a)  In connection with a Dissolution Event,

               (i)  if any Preferred Securities are held in book-entry form, the
          related Debentures in certificated form shall be presented to the
          Trustee (if an arrangement with the Depositary has been maintained) by
          the Property Trustee in exchange for one or more global Debentures in
          an aggregate principal amount equal to the aggregate principal amount
          of all outstanding Debentures (a "Global Debenture"), to be registered
          in the name of the Depositary, or its nominee, and delivered by the
          Trustee to the Depositary for crediting to the accounts of its
          participants pursuant to the instructions of the Administrative
          Trustees. The Company upon any such presentation shall execute one or
          more Global Debentures in such aggregate principal amount and deliver
          the same to the Trustee for authentication and delivery in accordance
          with the Indenture and this Second Supplemental Indenture. Payments on
          the Debentures issued as a Global Debenture will be made to the
          Depositary; and

               (ii) if any Preferred Securities are held in non book-entry
          certificated form, the related Debentures in certificated form may be
          presented to the Trustee by the Property Trustee and any certificate
          which represents Preferred Securities other than Preferred Securities
          in book-entry form held by the Depositary or its nominee ("Non
          Book-Entry Preferred Securities") will be deemed to represent
          beneficial interests in Debentures presented to the Trustee by the
          Property Trustee having an aggregate principal amount equal to the
          aggregate liquidation amount of the Non Book-Entry Preferred
          Securities until such Preferred Security certificates are presented to
          the Security Registrar for transfer or reissuance, at which time such
          Preferred Security certificates will be canceled and a Debenture,
          registered in the name of the holder of the Preferred Security
          certificate or the transferee of the holder of such Preferred Security
          certificate, as the case may be,

                                        5

<PAGE>

          with an aggregate principal amount equal to the aggregate liquidation
          amount of the Preferred Security certificate canceled, will be
          executed by the Company and delivered to the Trustee for
          authentication and delivery in accordance with the Indenture and this
          Second Supplemental Indenture. Upon issue of such Debentures,
          Debentures with an equivalent aggregate principal amount that were
          presented by the Property Trustee to the Trustee will be deemed to
          have been canceled.

          (b)  A Global Debenture shall represent the aggregate amount of
outstanding Debentures from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Debentures represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges or
redemptions. Any endorsement of a Global Debenture to reflect the amount of any
increase or decrease in the amount of outstanding Debentures represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.4.

          (c)  A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a successor Depositary selected
or approved by the Company or to a nominee of such successor Depositary.

          (d)  If (i) at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
for such series shall no longer be registered or in good standing under the
Exchange Act, or other applicable statute or regulation, and a successor
Depositary for such series is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such condition, as the case
may be, (ii) the Company at any time determines that the Debentures shall no
longer be solely represented by a Global Debenture or (iii) there shall have
occurred an Event of Default, then the Company shall execute, and, subject to
Article II of the Indenture, the Trustee, upon written notice from the Company,
shall authenticate and deliver the Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture, in exchange for
such Global Debenture. In such event the Company shall execute, and, subject to
Section 2.6 of the Indenture, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company and a Company Order,
shall authenticate and make available for delivery the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Debenture, in exchange for such Global Debenture. Upon the exchange of the
Global Debenture for such Debentures in definitive registered form without
coupons, in authorized denominations, the Global Debenture shall be canceled by
the Trustee. Such Debentures in definitive registered form issued in exchange
for the Global Debenture shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Securities to the Depositary for delivery to the
Persons in whose names such Securities are so registered.

                                        6

<PAGE>

     Section 2.5  Interest.

             (a)  Each Debenture will bear interest at the rate of 8.30% per
annum (the "Coupon Rate") from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided for,
from the original date of issuance until the principal thereof becomes due and
payable, and on any overdue principal and, to the extent that payment of such
interest is enforceable under applicable law, on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable quarterly in arrears
on the last day of March, June, September and December of each year and on the
Stated Maturity Date (each, an "Interest Payment Date"), commencing on December
31, 2002, to the Person in whose name such Debenture or any predecessor
Debenture is registered at the close of business on the relevant record date,
which will be the 15th day of the month in which the relevant Interest Payment
Date occurs, except as otherwise provided pursuant to the provisions of Article
IV hereof.

             (b)  The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full calendar month for which interest is computed, will be computed on
the basis of the actual number of days elapsed in the calendar month. In the
event that any Interest Payment Date falls on a day that is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date that such interest otherwise would have been payable.

             (c)  During such time as the Property Trustee is the holder of any
Debentures, the Company shall pay any additional amounts on the Debentures as
may be necessary in order that the amount of Distributions then due and payable
by the Trust on the outstanding Trust Securities shall not be reduced as a
result of any additional taxes, duties and other governmental charges to which
the Trust has become subject as a result of a Tax Event ("Additional Sums").
Whenever in the Indenture, this Second Supplemental Indenture, or the Debentures
there is a reference in any context to the payment of principal of or interest
on the Debentures, such mention shall be deemed to include mention of the
payments of the Additional Sums provided for in this paragraph to the extent
that, in such context, Additional Sums are, were or would be payable in respect
thereof pursuant to the provisions of this paragraph and express mention of the
payment of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 4.1 or the provisions of the Debentures shall
not defer the payment of any Additional Sums that may be due and payable.

                                        7

<PAGE>

                                   ARTICLE III

                          PREPAYMENT OF THE DEBENTURES

     Section 3.1 Special Event Prepayment.

     If, prior to the Initial Optional Prepayment Date, a Special Event has
occurred and is continuing, then notwithstanding Section 3.2(a) but subject to
Section 3.2(c), the Company shall have the right, at any time within 180 days
following the occurrence of such Special Event, upon (i) not less than 45 days
prior written notice to the Trustee, and (ii) not less than 30 days nor more
than 60 days prior written notice to the Holders, to prepay the Debentures, in
whole (but not in part), at a prepayment price equal to 100% of the principal
amount of the Debentures plus accrued and unpaid interest thereon (including
Compounded Interest), if any, and Additional Sums, if any, to the applicable
date of prepayment (the "Prepayment Price"). The Prepayment Price shall be paid
prior to 12:00 noon, New York City time, on the date of such prepayment or such
earlier time as the Company determines, provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Prepayment Price by 10:00 a.m.,
New York City time, on the date such Prepayment Price is to be paid.

     Section 3.2 Optional Prepayment by Company.

          (a) Subject to the provisions of this Article III, the Company shall
have the right to prepay the Debentures, in whole or in part, from time to time,
on or after the Initial Optional Prepayment Date, at the Prepayment Price.

          If the Debentures are only partially prepaid pursuant to this Section
3.2, the Debentures to be prepaid shall be selected on a pro rata basis not more
than 60 days prior to the date fixed for prepayment from the outstanding
Debentures not previously called for prepayment, provided, however, that any
such proration may be made on the basis of the aggregate principal amount of
Debentures held by each Holder and may be made by making such adjustments as the
Company deems fair and appropriate in order that only Debentures in
denominations of $25 or integral multiples thereof shall be prepaid. The
Prepayment Price shall be paid prior to 12:00 noon, New York time, on the date
of such prepayment or at such earlier time as the Company determines, provided
further that the Company shall deposit with the Trustee an amount sufficient to
pay the Prepayment Price by 10:00 a.m., New York City time, on the date such
Prepayment Price is to be paid.

          (b) Notwithstanding the first sentence of Section 3.2(a), upon the
entry of an order for dissolution of the Trust by a court of competent
jurisdiction, the Debentures thereafter will be subject to prepayment, in whole
only, but not in part, at the option of the Company, on or after the Initial
Optional Prepayment Date, at the Prepayment Price, and otherwise in accordance
with this Article III.

          (c) Any prepayment of Debentures pursuant to Section 3.1 or Section
3.2 shall be subject to the Company obtaining the prior approval of the Federal
Reserve, if such approval is then required under applicable capital guidelines
or policies of the Federal Reserve, and any other required regulatory approvals.

                                       8

<PAGE>

          (d) If a prepayment of some but not all of the Debentures would result
in the Preferred Securities ceasing to be quoted on The Nasdaq Stock Market or
any successor thereto or result in a delisting of the Preferred Securities from
any national securities exchange on which the Preferred Securities are then
listed, the Debentures will be subject to prepayment, in whole only, but not in
part, by the Company.

     Section 3.3 No Sinking Fund.

     The Debentures are not entitled to the benefit of any sinking fund.

                                   ARTICLE IV

                      EXTENSION OF INTEREST PAYMENT PERIOD

     Section 4.1 Extension of Interest Payment Period. So long as no Event of
Default has occurred and is continuing, the Company shall have the right, at any
time and from time to time during the term of the Debentures, to defer payments
of interest by extending the interest payment period of such Debentures for a
period not exceeding 20 consecutive quarterly periods, including the first such
quarterly period during such extension period (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be due
and payable; provided that no Extended Interest Payment Period shall end on a
date other than an Interest Payment Date or extend beyond the Stated Maturity
Date. To the extent permitted by applicable law, interest, the payment of which
has been deferred because of the extension of the interest payment period
pursuant to this Section 4.1, will bear interest thereon at the Coupon Rate
compounded quarterly for each quarterly period of the Extended Interest Payment
Period ("Compounded Interest"). At the end of the Extended Interest Payment
Period, the Company shall pay all interest accrued and unpaid on the Debentures,
including any Additional Sums and Compounded Interest (together, "Deferred
Interest") that shall be payable to the Holders of the Debentures in whose names
the Debentures are registered in the Securities Register on the record date for
the first regular Interest Payment Date next preceding the end of the Extended
Interest Payment Period (which Interest Payment Date shall be as specified in
the Debenture). Before the termination of any Extended Interest Payment Period,
the Company may further defer payments of interest by further extending such
period, provided that such period, together with all such previous and further
extensions within such Extended Interest Payment Period, shall not exceed 20
consecutive quarterly periods, including the first such quarterly period during
such Extended Interest Payment Period, end on a date other than an Interest
Payment Date or extend beyond the Stated Maturity Date. Upon the termination of
any Extended Interest Payment Period and the payment of all Deferred Interest
then due, the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.

     Section 4.2 Notice of Extension.

          (a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give

                                       9

<PAGE>

written notice to the Administrative Trustees, the Property Trustee and the
Trustee of its selection of such Extended Interest Payment Period five Business
Days before the earlier of (i) the next succeeding date on which Distributions
on the Trust Securities issued by the Trust are payable, and (ii) the date the
Trust is required to give notice of the record date, or the date such
Distributions are payable, to any national securities exchange or to holders of
the Preferred Securities issued by the Trust, but in any event at least five
Business Days before such record date.

          (b) If the Property Trustee is not the only holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to any national securities exchange.

          (c) The quarterly period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarterly periods permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.

     Section 4.3 Limitation of Transactions.

     If (i) the Company shall exercise its right to defer payment of interest as
provided in Section 4.1 and the Extended Interest Payment Period is continuing,
(ii) there shall have occurred any event, of which the Company has actual
knowledge that (a) is, or with the giving of notice or the lapse of time, or
both, would constitute, an Event of Default and (b) in respect of which the
Company shall not have taken reasonable steps to cure, or (iii) the Debentures
are held by the Property Trustee and the Company shall be in default with
respect to its payment obligations under the Preferred Securities Guarantee,
then the Company will not: (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Company's capital stock (which includes common and preferred stock)
(other than (1) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company, (2)
any declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (3)
as a result of a reclassification of any class or series of the Company's
capital stock solely into another class or series of the Company's capital
stock, (4) the purchase of fractional shares resulting from such
reclassification or pursuant to the conversion or exchange provisions of such
capital stock or any security convertible or exchangeable into shares of the
Company's capital stock, and (5) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans); (ii) make any payment of principal, premium, if any, or
interest on or repay or repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Debentures; or (iii) make any guarantee payments (other than
payments under the Preferred Securities Guarantee) with respect to any guarantee
by the Company of the debt securities of any Subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Debentures.

                                       10

<PAGE>

                                    ARTICLE V

                         CHANGE OF STATED MATURITY DATE

     Section 5.1 Change of Stated Maturity Date.

     So long as no Event of Default has occurred and is continuing and subject
to Section 5.2(c), the Company shall have the right, at any time, but only once,
during the term of the Debentures, to reduce the term of the Debentures by
selecting a date, not earlier than the Initial Optional Prepayment Date, as the
new "Stated Maturity Date" for the purposes of this Second Supplemental
Indenture and the Debentures; provided that such new "Stated Maturity Date" is
an Interest Payment Date and provided further that such new "Stated Maturity
Date" shall not be later than September 26, 2032 or be earlier than any date
that has occurred.

     Section 5.2 Notice of Change of Stated Maturity Date.

          (a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company designates a new "Stated Maturity Date"
pursuant to Section 5.1, the Company shall give written notice to the
Administrative Trustees, the Property Trustee and the Trustee of its selection
of such new "Stated Maturity Date" five Business Days before the earlier of (i)
the next succeeding date on which Distributions on the Trust Securities issued
by the Trust are payable, and (ii) the date the Trust is required to give notice
of the record date, or the date such Distributions are payable, to any national
securities exchange or to holders of the Preferred Securities issued by the
Trust, but in any event at least five Business Days before such record date.

          (b) If the Property Trustee is not the only holder of the Debentures
at the time the Company selects a new "Stated Maturity Date" pursuant to Section
5.1, the Company shall give the Holders of the Debentures and the Trustee
written notice of its selection of such new "Stated Maturity Date" at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to any national securities exchange.

          (c) It is a condition precedent to the exercise of the Company's right
under Section 5.1 that the Company shall have obtained the approval of the
Federal Reserve for such exercise, if such approval is then required for such
exercise under applicable laws, regulations, capital guidelines or policies of
the Federal Reserve, and any other regulatory approval required for such
exercise.

          (d) Any selection of a new "Stated Maturity Date" shall have no effect
under this Second Supplemental Indenture unless and until the Company and the
Trustee have given the written notices required by Section 5.2(a) or (b). If all
such notices have been given in accordance with Section 5.2 (a) or (b), then the
new "Stated Maturity Date" selected in accordance with Section 5.1 shall become
the Stated Maturity Date for the Debentures with effect from the date specified
in such notices.

                                       11

<PAGE>

                                   ARTICLE VI

                                    EXPENSES

     Section 6.1 Payment of Expenses.

     In connection with the offering, sale and issuance of the Debentures to the
Property Trustee and in connection with the sale of the Trust Securities by the
Trust, the Company, in its capacity as borrower with respect to the Debentures,
shall:

          (a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriter payable
pursuant to the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.6 of the Indenture;

          (b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust), the
offering, sale and issuance of the Trust Securities (including commissions to
the underwriters in connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, 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 agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of assets of the Trust;

          (c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;

          (d) 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; and

          (e) pay all other fees, expenses, debts and obligations (other than in
respect of the Trust Securities).

     The provisions of this Section shall survive the termination of this Second
Supplemental Indenture.

     Section 6.2 Payment Upon Resignation or Removal.

     Upon termination of this Second Supplemental Indenture or the Indenture or
the removal or resignation of the Trustee, unless otherwise stated, the Company
shall pay to the Trustee all amounts accrued to the date of such termination,
removal or resignation that are payable pursuant to Section 6.6 of the
Indenture. Upon termination of the Declaration or the removal or resignation of
the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued to the date of
such termination, removal or resignation.

                                       12

<PAGE>

                                   ARTICLE VII

                          COVENANT TO LIST ON EXCHANGE

     Section 7.1 Listing on an Exchange.

     If the Debentures are distributed to the holders of the Securities issued
by the Trust, and the Preferred Securities are then so listed, the Company will
use commercially reasonable efforts to list such Debentures on The Nasdaq Stock
Market or on such other exchange as the Preferred Securities are then listed.

                                  ARTICLE VIII

                                FORM OF DEBENTURE

     Section 8.1 Form of Debenture.

     The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon shall be substantially in the form of Exhibit A, the terms of
which are incorporated in and made a part of this Second Supplemental Indenture.

                                   ARTICLE IX

                          ORIGINAL ISSUE OF DEBENTURES

     Section 9.1 Original Issue of Debentures.

     Debentures in the aggregate principal amount of $32,216,500, may, upon
execution of this Second Supplemental Indenture or upon any written order of the
Company setting forth the amount therefor, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its President, or any Vice President and its
Treasurer, its Secretary, any Assistant Treasurer, or any Assistant Secretary,
without any further action by the Company.

                                    ARTICLE X

                                  MISCELLANEOUS

     Section 10.1 Ratification of Indenture.

     The Indenture, as supplemented by this Second Supplemental Indenture, is in
all respects ratified and confirmed, and this Second Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.

                                       13

<PAGE>

     Section 10.2 Trustee Not Responsible for Recitals.

     The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Second Supplemental Indenture.

     Section 10.3 Governing Law.

     This Second Supplemental Indenture and each Debenture shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.

     Section 10.4 Counterparts.

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

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

[Seal]                                  STERLING BANCSHARES, INC.

Attest:

By: /s/ James W. Goolsby, Jr.           By: /s/ J. Downey Bridgwater
   ________________________________        _____________________________________
Name:   James W. Goolsby, Jr.           Name:   J. Downey Bridgwater
Title: Secretary                        Title: President and Chief Executive
                                                Officer

                                        DEUTSCHE BANK TRUST COMPANY AMERICAS
                                         (formerly known as "Bankers Trust
                                         Company"), as Trustee

                                        By: /s/ Susan Johnson
                                           __________________________________
                                        Name:   Susan Johnson
                                        Title: Vice President

                                       14

<PAGE>

STATE OF TEXAS           (S)
                         (S)
COUNTY OF HARRIS         (S)

     On the 25th day of September before me personally came J. Downey
Bridgwater, to me known, who, being by me duly sworn, did depose and say that he
resides in Houston, Texas; that he is President and Chief Executive Officer of
Sterling Bancshares, Inc., one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

                                        /s/ Jennifer F. Wilson
                                        ____________________________________
                                        Notary Public, State Of Texas
[seal]                                  Commission expires: Oct. 8, 2005

                                       15

<PAGE>

                                    EXHIBIT A
                           (FORM OF FACE OF DEBENTURE)

No. __________                                   Principal Amount: $____________
                                                      CUSIP No. ________________

     [IF THE DEBENTURE IS A GLOBAL DEBENTURE, INSERT: THIS DEBENTURE IS A GLOBAL
DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE (OTHER THAN A
TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     IF THE DEPOSITARY FOR THIS DEBENTURE IS THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), THEN, UNLESS THIS DEBENTURE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEBENTURE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]

                                      A-1

<PAGE>

                            STERLING BANCSHARES, INC.

         8.30% SERIES JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
                             DUE SEPTEMBER 26, 2032

     Sterling Bancshares, Inc., a Texas corporation (the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______ or registered assigns, [the
principal sum of] [$___________ Dollars]/1/ [specified on Schedule A attached
hereto]/2/ on September 26, 2032 (subject to no earlier date having been
designated in accordance with Article V of the Second Supplemental Indenture to
the Indenture, the "Stated Maturity Date"), unless previously prepaid or
redeemed, and to pay interest on the outstanding principal amount hereof from
September 26, 2002, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, quarterly (subject
to deferral as set forth herein) in arrears on March 31, June 30, September 30
and December 31 of each year, commencing December 31, 2002, and on the Stated
Maturity Date (each such date, an "Interest Payment Date") at the rate of 8.30%
per annum until the principal hereof shall have become due and payable, and on
any overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. In the event that any date on
which the principal of, or interest on this Debenture is payable is not a
Business Day, then the payment payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that if such next succeeding Business Day
falls in the next calendar year, then such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. Pursuant to the Second Supplemental Indenture to the
Indenture, in certain circumstances the Company will be required to pay
Additional Sums and Compounded Interest (each as defined in the Second
Supplemental Indenture to the Indenture) with respect to this Debenture.

     The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Debenture (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be at the close
of business on the 15th day of the month in which the relevant Interest Payment
Date falls. Payments of interest may be deferred by the Company pursuant to the
provisions of Article IV of the Second Supplemental Indenture to the Indenture.
Any such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the Holders on such regular record date and may
be paid to the Person in whose name this Debenture (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the Holders of this series of Debentures not less than
10 days prior to such special record date, or

_____________
/1/  Insert in Definitive Securities only.
/2/  Insert in Global Securities only.

                                      A-2

<PAGE>

may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.

     The principal of and interest (including Compounded Interest and Additional
Sums, if any) on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that, payment of interest may be made at the
option of the Company by (i) check mailed to the Holder at such address as shall
appear in the Securities Register or (ii) by transfer to an account maintained
by the Person entitled thereto, provided that proper written transfer
instructions have been received by the relevant record date. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the Property Trustee, the
payment of the principal of and interest (including Compounded Interest and
Additional Sums, if any,) on this Debenture will be made at such place and to
such account as may be designated by the Property Trustee.

     So long as no Event of Default has occurred and is continuing, and subject
to the Company having received prior approval of the Federal Reserve if then
required under applicable capital guidelines, policies or regulations of the
Federal Reserve, the Company shall have the right, at any time, but only once,
during the term of the Debentures, to reduce the term of the Debentures by
selecting a date, not earlier than the Initial Optional Prepayment Date, as the
new "Stated Maturity Date"; provided that such new "Stated Maturity Date" is an
Interest Payment Date and provided further that such new "Stated Maturity Date"
shall not be later than September 26, 2032 or be earlier than any date that has
occurred.

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

     This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.

     The provisions of this Debenture are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect although fully
set forth at this place.

                                      A-3

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and sealed.

     Dated: September ___, 2002.

Attest:                                    STERLING BANCSHARES, INC.

By:____________________________________    By:__________________________________
Name:__________________________________    Name:________________________________
Title:_________________________________    Title:_______________________________

                     (FORM OF CERTIFICATE OF AUTHENTICATION)

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Securities referred to in the within-mentioned Indenture
and Second Supplemental Indenture.

DEUTSCHE BANK TRUST COMPANY AMERICAS
(formerly known as "Bankers Trust Company"), as Trustee

By__________________________________
         Authorized Officer

                                      A-4

<PAGE>

                          (FORM OF REVERSE OF SECURITY)

     This Debenture, designated as the 8.30% Junior Subordinated Deferrable
Interest Debentures due September 26, 2032 (herein sometimes referred to as the
"Debentures"), is one of the series of Securities of the Company specified in
the Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture, dated as of March 21, 2001, duly executed and
delivered between the Company and Deutsche Bank Trust Company Americas (formerly
known as "Bankers Trust Company"), as Trustee (the "Trustee"), as supplemented
by the Second Supplemental Indenture dated as of September 26, 2002 between the
Company and the Trustee (the Indenture, as so supplemented, being referred to as
the "Indenture") to which Indenture reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Debentures. By the
terms of the Indenture, the Securities are issuable in series that may vary as
to amount, date of maturity, rate of interest and in other respects as provided
in the Indenture. This series of Debentures is limited in aggregate principal
amount as specified in the Second Supplemental Indenture.

     Upon the occurrence and continuation of a Special Event, as defined in the
Second Supplemental Indenture, prior to September 26, 2007 (the "Initial
Optional Prepayment Date"), the Company shall have the right, at any time within
180 days following the occurrence of such Special Event, to prepay this
Debenture in whole (but not in part) at the Prepayment Price. "Prepayment Price"
shall mean an amount in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest on the Debenture to be so prepaid (including
Compounded Interest and Additional Sums, if any) to the date of such prepayment.

     In addition, subject to the Company having received the prior approval of
the Federal Reserve System (the "Federal Reserve"), if then required under
applicable guidelines or policies of the Federal Reserve, and any other required
regulatory approvals, the Company shall have the right to prepay this Debenture,
in whole or in part, at any time on or after the Initial Optional Prepayment
Date at the Prepayment Price.

     The Prepayment Price shall be paid prior to 12:00 noon, New York City time,
on the date of such prepayment or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Prepayment Price by 10:00 a.m., New York City
time, on the date such Prepayment Price is to be paid. Any prepayment pursuant
to this paragraph will be made upon not less than 30 days or more than 60 days
notice. If the Debentures are only partially prepaid by the Company pursuant to
an Optional Prepayment, the particular Debentures to be prepaid shall be
selected on a pro rata basis not more than 60 days prior to the date fixed for
prepayment from the outstanding Debentures not previously called for prepayment,
provided, however, that any such proration may be made on the basis of the
aggregate principal amount of Debentures held by each Holder thereof and may be
made by making such adjustments as the Company deems fair and appropriate in
order that only Debentures in denominations of $25 or integral multiples thereof
shall be prepaid.

     In the event of prepayment of this Debenture in part only, a new Debenture
or Debentures for the portion hereof that has not been prepaid will be issued in
the name of the Holder hereof upon the cancellation hereof.

                                      A-5

<PAGE>

     Notwithstanding the foregoing, any prepayment of Debentures by the Company
shall be subject to the prior approval of the Federal Reserve, if such approval
is then required under applicable capital guidelines or policies of the Federal
Reserve, and the receipt of any other required regulatory approvals.

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

     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of a majority in aggregate principal amount of
the Securities of each series affected at the time outstanding, as defined in
the Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of the Securities; provided, however, that no such
supplemental indenture shall, without the consent of each Holder of Securities
then outstanding and affected thereby, (i) extend or change the Stated Maturity
Date of any Securities (except as expressly permitted in accordance with the
terms of any supplemental indenture establishing such series of Securities in
accordance with Section 2.2 of the Indenture), or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
of interest thereon, or extend the time of payment of interest thereon (except
as expressly permitted in accordance with the terms of any supplemental
indenture establishing such series of Securities in accordance with Section 2.2
of the Indenture), or make the principal of, or interest on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage amount of Securities, the Holders of which
are required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Securities of any series at the time outstanding affected thereby,
on behalf of all of the Holders of the Securities of such series, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of or
interest on any of the Securities or a default in respect of any covenant or
provision under which the Indenture cannot be modified or amended without the
consent of each Holder of Securities affected thereby. Any such consent or
waiver by the holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof, irrespective of whether or not any notation of such
consent or waiver is made upon this Debenture.

     No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest (including
Compounded Interest and Additional Sums, if any) on this Debenture at the time
and place and at the rate and in the money herein prescribed.

     So long as no Event of Default shall have occurred and be continuing, the
Company shall have the right, at any time and from time to time during the term
of the Debentures, to defer payments of interest by extending the interest
payment period of such Debentures for a period

                                      A-6

<PAGE>

not exceeding 20 consecutive quarterly periods, including the first such
quarterly period during such extension period, and not extending beyond the
Stated Maturity Date of the Securities (an "Extended Interest Payment Period")
or ending on a date other than an Interest Payment Date, at the end of which
period the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Debentures to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended Interest
Payment Period, provided that such Extended Interest Payment Period, together
with all such previous and further extensions within such Extended Interest
Payment Period, (i) shall not exceed 20 consecutive quarterly periods, including
the first quarterly period during such Extended Interest Payment Period, (ii)
shall not end on any date other than an Interest Payment Date, and (iii) shall
not extend beyond the Stated Maturity Date of the Debentures. Upon the
termination of any such Extended Interest Payment Period and the payment of all
accrued and unpaid interest and any additional amounts then due, the Company may
commence a new Extended Interest Payment Period, subject to the foregoing
requirements.

     The Company has agreed that it will not: (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Common Stock
of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) as a result of a reclassification of any class or series
of the Company's capital stock solely into another class or series of the
Company's capital stock, (d) the purchase of fractional shares resulting from
such a reclassification or pursuant to the conversion or exchange provisions of
such capital stock or any security convertible or exchangeable into shares of
the Company's capital stock, and (e) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans); (ii) make any payment of principal, interest on or repay or
prepay or repurchase or redeem any debt securities of the Company that rank pari
passu with or junior in right of payment to the Debentures; or (iii) make any
guarantee payments with respect to any guarantee (other than payments under the
Preferred Securities Guarantee) by the Company of the debt securities of any
Subsidiary of the Company if such guarantee ranks pari passu or junior in right
of payment to the Debentures, if at such time (1) there shall have occurred any
event of which the Company has actual knowledge that (a) is or, with the giving
of notice or the lapse of time, or both, would be, an Event of Default and (b)
in respect of which the Company shall not have taken reasonable steps to cure,
(2) the Company shall be in default with respect to its payment obligations
under the Preferred Securities Guarantee or (3) the Company shall have given
notice of its election of the exercise of its right to extend the interest
payment period and any such extension shall be continuing.

     Subject to (i) the prior approval of the Federal Reserve, if such approval
is then required under applicable capital guidelines or policies of the Federal
Reserve and the receipt of any other required regulatory approval, and (ii) the
receipt by the Company of an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Preferred Securities, the
Company will have the right at any time to liquidate the Trust and cause the
Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust.

                                      A-7

<PAGE>

     The Debentures of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Debenture is transferable
by the holder hereof on the Securities Register of the Company, upon surrender
of this Debenture for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.

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

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

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

     THE INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                      A-8

<PAGE>

                                   SCHEDULE A

     The initial aggregate principal amount of Debentures evidenced by the
Certificate to which this Schedule is attached is ____________________ (having
an aggregate liquidation amount of __________________). The notations in the
following table evidence decreases and increases in the aggregate principal
amount of the Debentures evidenced by such Certificate.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                 Aggregate principal
 Decrease in aggregate   Increase in aggregate   amount of Debentures
  principal amount of     principal amount of    remaining after such
      Debentures               Debentures        decrease or increase   Notation by Registrar
----------------------------------------------------------------------------------------------
<S>                      <C>                     <C>                    <C>

----------------------------------------------------------------------------------------------
</TABLE>

         * Append to Global Debentures only.

                                   Schedule A

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