Document:

EXHIBIT 4(i)

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

                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  by and among

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

                            U.S.B. HOLDING CO., INC.,
                                   as Sponsor,

                                       and
            THOMAS E. HALES, RAYMOND J. CROTTY and STEVEN T. SABATINI
                               as Administrators,

                            Dated as of June 26, 2002

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

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

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

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

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

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

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

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         Section 6.7.      Rights of Holders; Waivers of Past Defaults...........................................24

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

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

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

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

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

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

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

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

                                       ii

<PAGE>

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                             USB STATUTORY TRUST III

                                  June 26, 2002

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

         WHEREAS, the Institutional Trustee, the Administrators and the Sponsor
established USB Statutory Trust III (the "Trust"), a statutory trust under the
Statutory Trust Act (as defined herein) pursuant to a Declaration of Trust dated
as of June 4, 2002 (the "Original Declaration"), and a Certificate of Trust
filed with the Secretary of State of the State of Connecticut on June 4, 2002,
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain debentures of the Debenture Issuer (as defined
herein);

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

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

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

                                   ARTICLE I

                         INTERPRETATION AND DEFINITIONS

         SECTION 1.1 DEFINITIONS. Unless the context otherwise requires:

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

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

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

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

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

                                       1

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

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

         "Administrators" means each of Thomas E. Hales, Raymond J. Crotty and
Steven T. Sabatini, solely in such Person's capacity as Administrator of the
Trust created and continued hereunder and not in such Person's individual
capacity, or such Administrator's successor in interest in such capacity, or any
successor appointed as herein provided.

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

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

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

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

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

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

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

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

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

         "Certificate" means any certificate evidencing Securities.

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

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

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

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

                                       2

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

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

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

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

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

         "Debenture Issuer" means U.S.B. Holding Co., Inc., a Delaware
corporation, in its capacity as issuer of the Debentures under the Indenture.

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

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

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

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

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

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

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

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

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

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

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

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

                                       3

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       4

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       5

<PAGE>

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

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

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

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

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

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

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

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

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

         "Sponsor" means U.S.B. Holding Co., Inc., a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.

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

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

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

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

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

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

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

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

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

                                       6

<PAGE>

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

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

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

                                   ARTICLE II

                                  ORGANIZATION

         SECTION 2.1 NAME. The Trust is named "USB Statutory Trust III," as such
name may be modified from time to time by the Administrators following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrators.

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

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

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

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

                                       7

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         SECTION 2.6 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE AND
THE ADMINISTRATORS.

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

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

                     (A) the issuance and sale of the Securities;

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

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

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

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

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

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

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

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

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

                                       8

<PAGE>

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

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

                     (A) the establishment of the Property Account;

                     (B) the receipt of the Debentures;

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

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

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

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

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

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

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

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

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

                                       9

<PAGE>

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

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

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

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

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

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

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

                                       10

<PAGE>

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

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

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

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

         SECTION 2.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE INSTITUTIONAL
TRUSTEE.

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

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

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

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

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

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

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

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

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

                                       11

<PAGE>

         SECTION 2.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE.

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

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

         (c) The Institutional Trustee shall:

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

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

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

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

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

                                       12

<PAGE>

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

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

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

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

         SECTION 2.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL
TRUSTEE AND ADMINISTRATORS.

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

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

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

                                       13

<PAGE>

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

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

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

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

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

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

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

         SECTION 2.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE. Subject to the
provisions of Section 2.9:

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

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

                                       14

<PAGE>

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

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

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

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

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

         (g) the Institutional Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request or
direction of any of the Holders pursuant to this Declaration, unless such
Holders shall have offered to the Institutional Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve the
Institutional Trustee, subject to Section 2.9(b), upon the occurrence of an
Event of Default, to exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs;

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

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

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

                                       15

<PAGE>

Securities in respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;

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

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

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

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

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

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

         SECTION 2.12 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Institutional Trustee does not assume any
responsibility for their correctness. The Institutional Trustee makes no
representations as to the value or condition of the property of the Trust or any
part thereof. The Institutional Trustee makes no representations as to the
validity or sufficiency of this Declaration, the Debentures or the Securities.

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

         SECTION 2.14 MERGERS.

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

                                       16

<PAGE>

body, except as described in this Section 2.14(b) and (c) and except in
connection with the liquidation of the Trust and the distribution of the
Debentures to Holders of Securities pursuant to Section 7.1(a)(iv) of the
Declaration or Section 4 of Annex I.

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       17

<PAGE>

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

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

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

                                  ARTICLE III

                                     SPONSOR

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

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

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

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

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

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

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

                                       18

<PAGE>

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

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

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

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

                                   ARTICLE IV

                    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

         SECTION 4.1 INSTITUTIONAL TRUSTEE; ELIGIBILITY.

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

             (i) not be an Affiliate of the Sponsor;

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

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

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

         (c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act of
1939, as amended, the Institutional Trustee shall either eliminate such interest
or resign, to the extent and in the manner provided by, and subject to this
Declaration.

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

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<PAGE>

         SECTION 4.2 ADMINISTRATORS. Each Administrator shall be a U.S. Person,
21 years of age or older and authorized to bind the Sponsor. The initial
Administrators shall be Thomas E. Hales, Raymond J. Crotty and Steven T.
Sabatini. There shall at all times be at least one Administrator. Except where a
requirement for action by a specific number of Administrators is expressly set
forth in this Declaration and except with respect to any action the taking of
which is the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator.

         SECTION 4.3 APPOINTMENT, REMOVAL AND RESIGNATION OF INSTITUTIONAL
TRUSTEE AND ADMINISTRATORS.

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

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

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

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

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

                                       20

<PAGE>

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

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

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

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

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

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

                                       21

<PAGE>

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

         SECTION 4.7 DELEGATION OF POWER.

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

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

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

                                   ARTICLE V

                                  DISTRIBUTIONS

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

                                   ARTICLE VI

                             ISSUANCE OF SECURITIES

         SECTION 6.1 GENERAL PROVISIONS REGARDING SECURITIES.

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

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<PAGE>

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

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

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

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

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

         SECTION 6.3 FORM AND DATING. The Capital Securities and the
Institutional Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A-1, and the Common Securities shall be
substantially in the form of Exhibit A-2, each of which is hereby incorporated
in and expressly made a part of this Declaration. Certificates may be typed,
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrators, as conclusively evidenced by their
execution thereof. The Securities may have letters, numbers, notations or other
marks of identification or designation and such legends or endorsements required
by law, stock exchange rule, agreements to which the Trust is subject if any, or
usage (provided that any such notation, legend or

                                       23

<PAGE>

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

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

         SECTION 6.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If:

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

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

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

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

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

         SECTION 6.7 RIGHTS OF HOLDERS; WAIVERS OF PAST DEFAULTS.

         (a) The legal title to the Trust Property is vested exclusively in the
Institutional Trustee (in its capacity as such) in accordance with Section 2.5,
and the Holders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Securities
                                       24

<PAGE>

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

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

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

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

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

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

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

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

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

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

         Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities, a record date shall be established for
determining Holders of outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Institutional Trustee receives such notice. The Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that

                                       25

<PAGE>

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

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

                                   ARTICLE VII

                      DISSOLUTION AND TERMINATION OF TRUST

         SECTION 7.1 DISSOLUTION AND TERMINATION OF TRUST.

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

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

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

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

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

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

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

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

                                       26

<PAGE>

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

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

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

                                  ARTICLE VIII

                              TRANSFER OF INTERESTS

         SECTION 8.1 GENERAL.

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

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

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

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

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

                                       27

<PAGE>

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

         SECTION 8.2 TRANSFER PROCEDURES AND RESTRICTIONS.

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

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

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

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<PAGE>

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

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

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

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

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

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

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

                                       29

<PAGE>

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

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

                                   ARTICLE IX

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

         SECTION 9.1 LIABILITY.

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

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

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

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

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

         SECTION 9.2 EXCULPATION.

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

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

                                       30

<PAGE>

pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.

         SECTION 9.3 FIDUCIARY DUTY.

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

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

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

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

         SECTION 9.4 INDEMNIFICATION.

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

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

                                       31

<PAGE>

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

         SECTION 9.6 COMPENSATION; FEE. The Sponsor agrees:

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

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

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

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<PAGE>

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

                                   ARTICLE X

                                   ACCOUNTING

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

         SECTION 10.2 CERTAIN ACCOUNTING MATTERS.

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

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

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

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

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

                                       34

<PAGE>

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

                                   ARTICLE XI

                             AMENDMENTS AND MEETINGS

SECTION 11.1 AMENDMENTS.

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

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

             (i)  the Institutional Trustee shall have first received

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

             (i) cure any ambiguity;

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

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

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

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

         SECTION 11.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.

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

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

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

                                       36

<PAGE>

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

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

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

                                  ARTICLE XII

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

         SECTION 12.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL TRUSTEE.
The initial Institutional Trustee represents and warrants to the Trust and to
the Sponsor at the date of this Declaration, and each Successor Institutional
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:

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

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

                                       37

<PAGE>

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

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

                                  ARTICLE XIII

                                  MISCELLANEOUS

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

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

             USB Statutory Trust III
             c/o U.S.B. Holding Co., Inc.
             100 Dutch Hill Road
             Orangeburg, New York  10962
             Attention:  Steven T. Sabatini
             Telecopy:  845-365-4695

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

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

             With a copy to:

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

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

             U.S.B. Holding Co., Inc.
             100 Dutch Hill Road
             Orangeburg, New York  10962
             Attention:  Steven T. Sabatini
             Telecopy:  845-365-4695

                                       38

<PAGE>

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

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

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

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

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

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

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

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

                     Signatures appear on the following page

                                       39

<PAGE>

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

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

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

                                    U.S.B. HOLDING CO., INC., as Sponsor

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

                                    USB STATUTORY TRUST III

                                    By:
                                       -----------------------------------------
                                       Administrator

                                    By:
                                       -----------------------------------------
                                       Administrator

                                    By:
                                       -----------------------------------------
                                       Administrator

                                       40
<PAGE>

                                     ANNEX I

                               TERMS OF SECURITIES

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

         1. Designation and Number.
            ----------------------

            (a) 10,000 Floating Rate Capital Securities of USB Statutory Trust
III (the "Trust"), with an aggregate stated liquidation amount with respect to
the assets of the Trust of ten million and 00/100 dollars ($10,000,000) and a
stated liquidation amount with respect to the assets of the Trust of $1,000.00
per Capital Security, are hereby designated for the purposes of identification
only as the "Capital Securities". The Capital Security Certificates evidencing
the Capital Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice.

            (b) 310 Floating Rate Common Securities of the Trust (the "Common
Securities") will be evidenced by Common Security Certificates substantially in
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.

         2. Distributions.
            -------------

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

                                      I-1

<PAGE>

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

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

                                      I-2

<PAGE>

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

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

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

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

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

                                      I-3

<PAGE>

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

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

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

         4. Redemption and Distribution.
            ---------------------------

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

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

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

                                       I-4

<PAGE>

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

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

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

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

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

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

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

                                      I-5

<PAGE>

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

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

         "Maturity Date" means June 26, 2032.

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

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

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

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

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

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

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

                                      I-6

<PAGE>

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

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

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

            (e) Redemption or Distribution Procedures.
                -------------------------------------

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

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

                                      I-7

<PAGE>

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

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

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

         5. Voting Rights - Capital Securities.
            ----------------------------------

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

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

                                      I-8

<PAGE>

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

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

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

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

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

                                      I-9

<PAGE>

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

         6. Voting Rights - Common Securities.
            ---------------------------------

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

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

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

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

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

                                      I-10

<PAGE>

         7. Amendments to Declaration and Indenture.
            ---------------------------------------

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

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

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

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

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

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

                                      I-11

<PAGE>

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

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

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

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

                                      I-12
<PAGE>

                                   EXHIBIT A-1

                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

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

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

                                     A-1-1

<PAGE>

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

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

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

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

              Certificate Number P-1             10,000 Capital Securities

                                    June 26, 2002

             Certificate Evidencing Floating Rate Capital Securities

                                       of

                             USB Statutory Trust III

               (liquidation amount $1,000.00 per Capital Security)

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

                                     A-1-2

<PAGE>

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

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

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

                       Signatures appear on following page

                                     A-1-3
<PAGE>

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

                                  USB STATUTORY TRUST III

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

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

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

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

                                     A-1-4
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

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

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

                                     A-1-5

<PAGE>

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

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

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

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

                                     A-1-6

<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

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

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

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

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

         Signature Guarantee:(1)

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

                                     A-1-7

<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

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

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

           Certificate Number C-1               310 Common Securities

                                  June 26, 2002

             Certificate Evidencing Floating Rate Common Securities

                                       of

                             USB Statutory Trust III

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

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

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

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

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

                                     A-2-1

<PAGE>

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

                                    USB STATUTORY TRUST III

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

                                     A-2-2
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

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

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

                                     A-2-3

<PAGE>

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

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

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

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

                                     A-2-4
<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

         Signature Guarantee (2)

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

                                     A-2-5
<PAGE>

                                    EXHIBIT B

                          SPECIMEN OF INITIAL DEBENTURE

                                (See Tab No. 16)

                                      B-1
<PAGE>

                                    EXHIBIT C

                               PLACEMENT AGREEMENT

                                 (See Tab No. 1)

                                      C-1EXHIBIT 10.2

                               ASSET PURCHASE AND
                         LIABILITY ASSUMPTION AGREEMENT

          AGREEMENT, dated as of June 14, 2002, by and between UNION STATE BANK,
a New York State Banking Association with its principal office located at 100
Dutch Hill Road, Orangeburg, New York 10962 ("Buyer"), and FOURTH FEDERAL
SAVINGS BANK, a Federally Chartered Savings Association with its principal
offices located at The Fourth Federal Building, 325 Hamilton Avenue, White
Plains, New York 10601-1715 ("Seller").

                                   WITNESSETH:

          WHEREAS, Seller operates the branch office listed in Exhibit A hereto
(hereinafter referred to as the "Branch Office");

          WHEREAS, Seller desires to transfer and Buyer desires to acquire
certain of the assets and assume the deposits and certain other liabilities of
the Seller's Branch Office, including, certain contractual rights associated
with the Branch Office, all of the fixtures and personal property located at the
Branch Office and cash on hand at the Branch Office;

          NOW THEREFORE, in consideration of the premises, the mutual promises
and covenants hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Seller and Buyer
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

          For the purposes of this Agreement, the definitions in this Article I
and elsewhere in this Agreement shall apply:

          (a) "Account Loans" shall have the meaning set forth in Article IV(b).

          (b) "Assets" shall have the meaning set forth in Article IV.

          (c) "Assumption Funds" shall have the meaning set forth in Article
V(a).

                                       1
<PAGE>

          (d) "Branch Office" means the Branch Office of Seller listed on
Exhibit A hereto.

          (e) "Closing Date" shall have the meaning set forth in Article VI(a).

          (f) "Cut-Off Date" shall have the meaning set forth in Article II(c).

          (g) "Environmental Laws" means all applicable federal, state and local
laws and regulations and rules relating to pollution or discharge of hazardous
substances into the environment.

          (h) "Lease" shall have the meaning set forth in Article III.

          (i) "Six Percent (6%) Liabilities" shall have the meaning set forth in
Article II(a).

          (j) "Three Percent (3%) Liabilities" shall have the meaning set forth
in Article II(b).

          (k) "Liabilities" shall have the meaning set forth in Article II(c).

          (1) "Operating Assets" shall have the meaning set forth in Article
IV(c).

          (m) "Records" shall have the meaning set forth in Article VI(c).

          (n) "Regulatory Approvals" shall have the meaning set forth in Article
X(a).

          (o) "Material Adverse Effect" shall have the meaning set forth in
Article VII(c).

          (p) "Market Areas" shall have the meaning set forth in Article
XIV(b)(5).

          (q) "Contract" shall have the meaning set forth in Article II(d).

          (r) "Deposit Accounts" shall have the meaning set forth in Article II
(a) and (b).

          (s) "ERISA" shall mean the Employee Retirement Income Security Act as
most currently amended.

          (t) "Excluded Deposits" shall have the meaning set forth in Article
II(e)(i).

          (u) "Purchase Price" shall mean the amount payable by Seller to Buyer
calculated in accordance with Article V.

                                        2

<PAGE>

                                   ARTICLE II

                            ASSUMPTION OF LIABILITIES
                            -------------------------

          Upon the terms and subject to the conditions hereinafter set forth,
Seller agrees to assign, and Buyer agrees to assume liability on the Closing
Date for:

          (a) Six-Percent Liabilities - Those certain Deposit Accounts
maintained at or for the Branch Office (except for Excluded Deposits) as the
same shall exist on the Closing Date, together with interest accrued thereon
through the Closing Date (the "Six Percent (6%) Liabilities") as more fully
identified on Exhibit B and detailed on Exhibit B(a) and Exhibit B(b).

          (b) Three-Percent Liabilities - Those certain Deposit Accounts
maintained at or for the Branch Office (except for Excluded Deposits) as the
same shall exist on the Closing Date, as defined in Article VI hereof, together
with interest accrued thereon through the Closing Date (the "Three Percent (3%)
Liabilities") as more fully identified on Exhibit B-1.

          (c) Said Six Percent (6%) and Three Percent (3%) Liabilities on
Exhibit B and Exhibit B-1, respectively, which total approximately
$18,567,031.70 as of June 6, 2002, are collectively referred to as
"Liabilities". Exhibit B and Exhibit B-1 shall be updated as of a date agreed
upon by the parties which date shall be within ten (10) business days prior to
the Closing Date (the "Cutoff Date"). Exhibit B and Exhibit B-1 shall be further
updated by Seller as of the Closing Date and delivered by Seller to Buyer within
fifteen (15) days after the Closing Date. In connection with the assumption by
Buyer of the Liabilities, Seller shall transfer and deliver to Buyer as of the
Closing Date the originals of all records, documents and information relating to
the Liabilities, including such as shall be necessary to enable Buyer to comply
with any applicable tax withholding requirements relating to the Liabilities.

          (d) Contracts and Other Obligations - Contractual obligations
assumable by Buyer without penalty and related to the operation of the Branch
Office and any other obligations

                                        3

<PAGE>

assumed by Buyer associated with the Assets, as defined below, are described on
Exhibit C hereto. Exhibit C shall also include any other agreements not
otherwise assumed affecting the occupancy of the Branch Office or which restrict
the use of the Branch Office. Seller shall, upon execution of this Agreement,
provide copies of the Contracts identified on Exhibit C. For purposes of this
Agreement, Contracts shall mean those agreements set forth on Exhibit C
including the Lease herein. Exhibit C shall be further updated as of the Closing
Date and delivered by Seller to Buyer at Closing.

          (e) No Assumption of Other Liabilities - Except for the liabilities
specifically assumed as set forth in Article II(a), (b) and (c) of this
Agreement, Buyer is not assuming any other liabilities or obligations, whether
or not the same is in any way involved, either directly or indirectly, with the
operation by Seller of its business or to which Seller may have become a party
or liable by reason of its business. Liabilities not assumed include, but are
not limited to, the following:

          (i) Excluded Deposits which shall mean those Liabilities not included
          in Exhibit B and B-1;

          (ii) Seller's cashier checks, money orders, interest checks and
          expense checks issued prior to the Closing Date, consignments of U.S.
          Government bonds, if any, and any and all traveler's checks;

          (iii) liabilities or obligations of Seller with respect to any
          litigation, suits, claims, demands or governmental proceedings
          existing at the time of or arising out of or relating to acts, events
          or omissions to act that occurred at or prior to the Closing Date;

          (iv) liabilities of Seller for or under any data processing contracts;
          and

          (v) other equipment leases not specifically assumed by Buyer as listed
          on Exhibit

                                        4

<PAGE>

                                   ARTICLE III

                                  BRANCH LEASE
                                  ------------

          The consummation of the transactions contemplated by this Agreement is
expressly conditioned upon the execution and delivery, on the Closing Date, of
an assignment of the lease for the Branch Office which lease shall be in the
form set forth at Exhibit H (the "Lease") and the compliance by Seller with all
conditions precedent set forth in said Lease or alternatively a new lease
between Landlord and Buyer.

                                   ARTICLE IV

                               PURCHASE OF ASSETS
                               ------------------

          On the Closing Date, Buyer shall purchase, acquire and accept, and
Seller shall sell, transfer, convey, assign and deliver to Buyer all of the
right, title and interest of Seller, free and clear of all liabilities,
obligations which are associated with account loans, liens and encumbrances,
with the exception of those liabilities and obligations described on Exhibit C
and Exhibit E hereto, upon the terms and subject to the conditions hereinafter
set forth, in the following assets (the "Assets"):

          (a) Operating Assets - The personal property, office equipment and
fixtures and improvements located in and being on the premises of the Branch
Office as of the date hereof and which are described in detail on Exhibit D
hereto ("Operating Assets"), less items disposed of in the ordinary course of
business consistent with past practice. Exhibit D shall be further updated as of
the Closing Date and delivered by Seller to Buyer on the Closing Date. The
purchase price of the Operating Assets described on Exhibit D shall be $-0-.

          (b) Account Loans - All loans and lines of credit secured by or
associated with the Liabilities maintained at or for the Branch Office and which
are identified on Exhibit E hereto together with accrued interest thereon
("Account Loans"), which Exhibit shall be updated as of the Cut-Off Date and
such updated Exhibit shall be delivered by Seller to Buyer on the Closing

                                        5

<PAGE>

Date, and shall be further updated as of the Closing Date and delivered by
Seller to Buyer, within fifteen (15) days after the Closing Date. Buyer reserves
the right to examine the credit file and credit reports related to the Account
Loans and, upon thirty (30) days prior notice to Seller prior to the Closing
Date, to delete such Account Loans as do not meet Buyer's reasonable credit
criteria. The purchase price for the Account Loans shall be an amount equal to
the outstanding principal balance for such Account Loans on the Closing Date
plus accrued interest. To the extent that there are any late charges or fees
owed through the Closing Date for the Account Loans purchased by Buyer, then
Buyer shall remit to Seller within ten (10) days after receipt of such charges
or fees such late charges and/or fees actually collected and which were due and
owing with respect to the purchased Account Loans as of the Closing Date.

                                    ARTICLE V

                PAYMENT FOR ASSETS AND ASSUMPTION OF LIABILITIES
                ------------------------------------------------

          (a) On the Closing Date, Seller shall pay to Buyer the Purchase Price
("Purchase Price") by wire transfer of immediately available funds in an amount
equal to:

                            (1) The total outstanding balance of the Liabilities
                            at the Closing Time plus the net amount of any pro
                            rata items owed by Seller to Buyer under Article
                            V(c) below, if any, less

                            (2) the sum of (i) the amount of the purchase price
                            of the Operating Assets and the Account Loans
                            determined in accordance with Article IV, (ii) the
                            amount of any cash on hand at the Branch Office to
                            be transferred to Buyer on the Closing Date, (iii)
                            the net amount of any prorated items owed by Buyer
                            to Seller under Article V(c) below, (iv) a premium
                            equal to six (6.00%) percent of the total
                            outstanding balance amount of liabilities described
                            in Exhibit B as of the Closing Date, (v) a premium
                            equal to

                                        6

<PAGE>

                            three (3.0%) percent of the total outstanding
                            balance amount of liabilities described in Exhibit
                            B-1 as of the Closing Date and (vi) the amount of
                            all security or other deposits paid by Seller in
                            connection with any contractual obligations, as set
                            forth in Exhibit C hereto, and assumed by Buyer on
                            the Closing Date. The funds being transferred from
                            Seller to Buyer pursuant to this Article V(a) are
                            hereinafter referred to as the "Assumption Funds".
                            The amount of Assumption Funds to be paid on the
                            Closing Date shall be based upon the respective
                            balances of the Liabilities and Assets on the
                            Cut-Off Date, provided that the amount of the
                            Assumption Funds shall be subsequently adjusted
                            pursuant to paragraph (d) below.

          (b) Notwithstanding the provisions of Paragraph (a) above, in the
event the amount of the Liabilities is less than $16.0 million as of the Closing
Date, Buyer shall have the right but not the obligation to terminate this
Agreement without any further liabilities or obligations to perform hereunder.
In the event that the Liabilities are in excess of $20.0 million, Buyer's
obligations hereunder shall remain in effect, however, there shall be no premium
paid on any amount of Liabilities which exceed $20.0 million.

          (c) Pro rationing - Federal deposit insurance premiums, insurance
premiums, taxes withheld, collected from or payable on behalf of employees; and
other amounts both payable and/or receivable and equipment, alarm, and other
service agreement costs with respect to the Branch Office premises, including
accrued interest, if any, shall be prorated as of the Closing Date on the basis
of a 365 day year and reflected on the Closing Statement as set forth below. Any
items susceptible of being prorated but which cannot be prorated by the Closing
Date shall be prorated as soon as the requisite information is available and
shall be paid within fifteen (15) days thereafter by the appropriate party to
the other party.

                                        7

<PAGE>

          (d) Post-Closing Adjustments - The actual Assumption Funds will be
calculated based upon the respective balances of the Liabilities and Assets as
of the Closing Date, as soon as the requisite information is available. An
amount equal to the difference between the Assumption Funds transferred on the
Closing Date and the amount of Assumption Funds determined to be actually due
from Seller to Buyer or Buyer to Seller, as the case may be, (the "Post-Closing
Adjustments") shall be transferred, together with interest accrued thereon from
the Closing Date at the Federal Funds rate, which shall be determined by the
average of the high and low rates quoted for overnight Federal Funds in the
"Money Rates" column of the Wall Street Journal on the Closing Date, to Seller
from Buyer or to Buyer from Seller, as the case may be and shall be paid by wire
transfer of immediately available funds. The Post-Closing Adjustments shall be
calculated and paid at a mutually agreed upon time and place within twenty (20)
days after the Closing Date.

          (e) Adjustment to Assumption Funds - An appropriate adjustment to the
amount of Assumption Funds shall be made in the event that a good faith error in
calculating the amount of the Liabilities or Assets is discovered within ninety
(90) days after the Post-Closing Adjustments referred to in paragraph V(d)
above.

                                   ARTICLE VI

                        CLOSING AND TRANSITIONAL MATTERS
                        --------------------------------

          (a) Closing - The closing of the transactions contemplated by this
Agreement shall take place within 30 days following the date on which all of the
regulatory approvals referred to in Article X(a) of this Agreement shall have
been obtained, all applicable waiting periods have expired or on such other date
as shall be mutually agreed to by the parties hereto (the "Closing Date").

                                       8

<PAGE>

          The closing shall take place at the offices of Buyer at 10:00 a.m.,
Eastern Time, on the date set forth above or at such other time and place as
shall be mutually agreed to by the parties hereto. Seller and Buyer agree to
diligently and in good faith take all actions prescribed by this Agreement to
effect consummation of the transactions contemplated by this Agreement by on or
before October 31, 2002 (the "target date"). The closing of this transaction by
the "target date" shall not, however, be binding nor enforceable by either
Seller or Buyer. The provisions of this Agreement relating to the Closing Date
shall, in all events, be applicable.

          (b) Closing Payment - The amount of the Assets and Liabilities to be
transferred pursuant to this Agreement shall be determined as of the Closing
Date, and the assumption of the Liabilities and the transfer of the Assets shall
be deemed to take place immediately upon the close of business on the Closing
Date.

          (c) Closing Statement - Calculation of the payment for Assets and
assumption of Liabilities shall be set forth on a Closing Statement. Seller
shall afford Buyer and its accountants and attorneys the opportunity to review
all work papers and documents used by Seller in preparing the Closing Statement.

          (d) Transfer of Records and Retention of Records - On the Closing
Date, Seller shall transfer, assign and deliver to Buyer such of the following
records (the "Records") pertaining to the Liabilities as exist in whatever form
or medium such records are maintained by Seller on the Closing Date: (i)
signature cards, orders and contracts between Seller and depositors, and records
of similar character, (ii) deposit slips and cancelled checks or withdrawal
orders representing charges to depositors, (iii) individual retirement account
("IRA") and Keogh documents and authorization for IRA and Keogh customers, (iv)
special customer authorizations, including stop payments, other account holds,
wire transfer instructions and automatic transfers, (v) organization and
business account resolutions and authorizations, (vi) passbook loan contracts,

                                        9

<PAGE>

collateral, and related documents, (vii) overdraft line of credit contracts and
related documents, (viii) copies of tax identification numbers, copies of ACH
origination forms and records and such other records as may be reasonably
requested by Buyer. Seller shall be entitled to retain copies of Records.

          Buyer acknowledges and agrees that it will preserve and safely keep,
for as long as may be required by applicable law, all of the records of account
referred to above for the joint benefit of Seller and Buyer, and that, with
respect to transactions occurring on or before the Closing Date and involving
the Liabilities, it will provide to Seller or its designated representatives,
upon request, at any reasonable time and from time to time, information
concerning the records of account and/or extracts therefrom or copies thereof.
Seller and Buyer each acknowledge and agree that they shall provide to the
Internal Revenue Service (IRS), to the extent required by law, Form 1099's with
respect to each accountholder in respect of the Liabilities for the periods
during which Seller and Buyer respectively administer such Liabilities. At all
times each party shall preserve and maintain the confidentiality of all such
records of account and other depositor or customer information in accordance
with customary banking practice and all applicable federal and state laws, rules
and regulations.

          (e) Checking Accounts/Notice to Depositors - In order to reduce the
continuing charges to Seller through the check clearing system of the banking
industry which will result from check forms of Seller being used after the
Closing Date by depositors or holders of the Liabilities, Seller shall after
receipt of all regulatory approvals and, not less than thirty (30) days prior to
the Closing Date, provide notice to depositors or holders of Liabilities by
letter in a form reasonably acceptable to Buyer and in compliance with
applicable law and regulations, notifying the depositor or holder of Liabilities
of the pending transfer of his or her account pursuant to this Agreement and
subject to closing requirements. Buyer, provided that Seller has provided Buyer

                                       10

<PAGE>

with customer deposit information in a readable format, at its cost and expense,
on or immediately after the Closing Date, shall prepare and mail, and Seller
shall cooperate with Buyer in connection therewith, to each depositor or other
holder of a Liability, as appropriate, (i) a letter prepared by Buyer and
reasonably acceptable to Seller notifying each such depositor or holder of the
transfer of his or her account pursuant to this Agreement and requesting where
appropriate that effective on a future date at some reasonable time after the
Closing Date such depositor or holder cease writing checks, drafts and
withdrawal orders on forms provided by Seller and carrying its imprint
(including name and transit routing number) against any such account, and that
such depositor or holder destroy unused checks and withdrawal orders of Seller,
and (ii) as appropriate, signature cards and checks and withdrawal order forms
of Buyer with instructions to utilize the checks or withdrawal orders of Buyer
from the designated date forward.

          (f) Routing of Checks - On or before the Closing Date, Seller and
Buyer shall cooperate and shall take all such action as is necessary to arrange
for the direct routing to Buyer through the check clearing system of the banking
industry, effective immediately after the Closing Date, of all checks, drafts
and withdrawal orders on forms provided by Seller and carrying its imprint
(including name and transit routing number) and relating to the Liabilities. In
the event that after the Closing Date, Seller shall receive any such checks,
drafts or withdrawal orders through the check clearing system of the banking
industry, Seller shall immediately forward to Buyer or Buyer's agent to a
location designated by Buyer, at the cost and expense of Buyer, by courier
service, overnight delivery service, or such other means as Buyer shall
reasonably request, all such checks, drafts, and withdrawal orders for
processing by Buyer. Seller's obligations hereunder shall terminate on the
expiration of 120 days from the Closing Date.

                                       11

<PAGE>

          (g) Payment of Checks - Following the Closing Date, Buyer agrees to
pay in accordance with law and customary banking practices all properly drawn
checks, drafts and withdrawal orders presented to Buyer by mail, over the
counter, through the check clearing system of the banking industry, and/or in
the manner set forth below, by depositors or holders of the Liabilities, whether
drawn on the checks, drafts or withdrawal order forms provided by Seller or by
Buyer, and in all other respects, to discharge after the Closing Date, in the
usual course of the banking business, all duties and obligations with respect to
the balances due and owing to the depositors or holders of the Liabilities.

          (h) Demand for Payment from Seller - If any such depositors or
holders, instead of accepting the obligation of Buyer to pay the Liabilities
assumed by Buyer pursuant to this Agreement, shall demand payment from Seller
for all or any part of such assumed Liabilities, Seller shall refer all such
depositors or holders to Buyer in the manner and with such instructions, if any,
as shall be hereafter established by Seller and Buyer, and Buyer shall thereupon
be responsible for making such payment (if still demanded) to such depositor or
holder. If any of such depositors or holders after the Closing Date shall
present to Seller, whether in person by mail, or otherwise, a check, draft or
withdrawal order drawn against any of the Liabilities, Seller shall refer such
depositor or holder, or deliver such check, draft or withdrawal order, to Buyer
as set forth above. Buyer shall pay all such properly drawn checks, drafts and
withdrawal orders as set forth above and shall promptly reimburse Seller for all
expenses paid and charges incurred, if any, by Seller with respect to all such
properly drawn checks, drafts and withdrawal orders. Seller shall not, at any
time, be liable or responsible for making payment on such items by reason of its
obtaining custody of them for transmittal to Buyer.

          (i) Direct Deposits - Seller shall provide all information and take
all steps required to be taken by it that are reasonably necessary for Buyer to
effect the transfer of any direct deposit

                                       12

<PAGE>

arrangement affecting any of the Liabilities and shall promptly pay to Buyer any
funds received by Seller which are intended to be credited to any such
Liability. Buyer shall complete all actions necessary to effect the transfer of
such direct deposit arrangements within 60 days of the Closing Date. Seller
shall have the right to return to the payor any direct deposit item received by
it subsequent to 60 days after the Closing Date, or such other time period as
Buyer and Seller may mutually agree upon.

          (j) Notice to Customers - Seller shall cooperate and use commercially
reasonable efforts to assist in the transfer to Buyer of the Liabilities,
Account Loans, Leasehold and Operating Assets, and shall take all actions
necessary to accomplish such transfer, including but not limited to the
provision of any required notices to customers in respect of the Liabilities and
the Account Loans. Seller shall supply Buyer with such information and records
in its possession and control relating to the Liabilities and the Account Loans
as Buyer may reasonably request, including, but not limited to, periodic
portfolio reports and computer tapes setting forth current account information
in machine-readable format and any information required for inclusion in all
applications to regulatory authorities necessary to consummate the transactions
contemplated by this Agreement. Further, Seller shall assist to facilitate a
smooth transfer of information from Seller's processing system to Buyer's
processing system.

          (k) Retirement Plan Accounts - Prior to the Closing Date, Buyer shall
designate a successor trustee or custodian, which may be Buyer ("Successor
Trustee/Custodian"), as to any IRA or Keogh plan account constituting
Liabilities and the parties will cooperate with the Successor Trustee/Custodian.
Seller will transfer the trusteeship/custody of all such IRA and Keogh plan
accounts to the Successor Trustee/Custodian on the Closing Date, subject to the
Successor Trustee's/Custodian's written acceptance of its duties as Successor
Trustee/Custodian in form and substance acceptable to Seller and to the extent
permitted by the documentation

                                       13

<PAGE>

governing each IRA and Keogh Plan. Seller shall be responsible for all federal,
state and local income tax reporting for such IRAs and Keogh plan accounts for
the period of time ending on the Closing Date and the Successor
Trustee/Custodian shall be responsible for such reporting thereafter. In the
event that any customer should object to the transfer of any IRA or Keogh plan
account to the Buyer herein, then such account will be transferred as directed
by said customer and the purchase price herein shall be adjusted accordingly.

          1. Holds and Stop Payments - Holds or stop payment orders that have
been placed by Seller on particular Liabilities or on individual checks, drafts
or other instruments that are transferred to Buyer as Liabilities shall be
continued by Buyer under the same terms. Seller shall deliver to Buyer on the
Closing Date a schedule of such holds or stop payment orders.

          m. ATM Cards, ACH Transactions and Returned Checks - Seller and Buyer
agree that the issues and requirements related to ATM cards, ACH transactions
and returned checks cannot be resolved as of the date of this Agreement and both
Seller and buyer hereby agree that each shall diligently and in good faith
resolve such issues and adopt such procedures as are mutually acceptable. An
Operations representative from Seller and Buyer respectively shall communicate
and shall cooperate to achieve the foregoing.

                                   ARTICLE VII

                    REPRESENTATIONS AND WARRANTIES OF SELLER
                    ----------------------------------------

          Seller represents and warrants to Buyer that:

          (a) Corporate Organization and Standards - Seller is a savings
association duly organized and validly existing under the laws of the United
States; has the corporate power and authority to own and operate its properties
and to conduct its business as a savings association in the manner in which it
is presently being conducted; and has the corporate power and authority

                                       14

<PAGE>

to execute and deliver this Agreement and to carry out all of the transactions
contemplated by this Agreement.

          (b) Corporate Authority and Authorization - The execution and delivery
of this Agreement and each of the documents and instruments contemplated hereby
have been duly authorized by all necessary corporate action to be taken on the
part of Seller; and upon execution and delivery, this Agreement and each of such
other documents and instruments will be valid and binding obligations of Seller,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, fraudulent
conveyance, fraudulent transfer or other similar laws relating to or affecting
the enforcement of creditors' rights generally, laws affecting the rights of
creditors of financial institutions the deposits of which are insured by the
Federal Deposit Insurance Corporation (FDIC) and to general principles of
equity, whether considered in a proceeding at law or in equity.

          (c) No Violation - The execution and delivery of this Agreement and of
the other instruments and documents contemplated hereby do not and will not
conflict with, violate, breach or cause a default under the (i) Charter or
Bylaws of Seller, (ii) any material agreement or other instrument to which
Seller is a party or by which it is bound, or (iii) any order, judgment,
injunction, decree or award of any court, arbitrator, government or governmental
agency by which Seller is bound; or (iv) any law, ordinance, rule or regulation
of any governmental authority as such laws, ordinances, rules or regulations
related to the conduct of Seller's business, except in the case of clauses (ii),
(iii) and (iv) above, for any conflict, violation, breach or default that,
individually or in the aggregate, would not have a Material Adverse Effect. For
purposes of this Agreement, "Material Adverse Effect" shall mean: A substantial
change in the business presently conducted by Seller at the Branch Office or its
ability to conduct such business at the

                                       15

<PAGE>

Branch Office in substantially the same manner as presently conducted as of the
date of the Agreement.

          (d) Deposit Insurance - The deposit accounts of Seller are insured by
the FDIC to applicable limits and no action is pending or, to the knowledge of
Seller, threatened with respect to the termination of such insurance.

          (e) Good and Marketable Title to Operating Assets - Seller has good
and marketable title to the Operating Assets free and clear of all liens,
claims, charges, security interests and encumbrances other than (i) liens of
current taxes not yet due, and (ii) such imperfections of title, encumbrances or
easements, if any as are not substantial in character, amount or extent and do
not materially detract from the value or interfere with the present or proposed
use thereof. Seller has not undertaken any construction or improvements on the
premises leased pursuant to the current Lease which would give rise to any
mechanics', materialmen's or other liens which Buyer would be required to
discharge.

          (f) Operating Assets - All Operating Assets to be conveyed or assigned
by Seller are conveyed or assigned "as-is" and without further representation or
warranty other than that all such Operating Assets are appropriate for the
purposes intended and Seller agrees to maintain the Operating Assets through the
Closing Date, ordinary wear and tear excepted.

          (g) Regulatory Approvals - Seller has all approvals, authorizations,
consents, permits, licenses and orders of the Office of Thrift Supervision
("OTS") required for the business conducted by Seller at the Branch Office.
Other than compliance with 12 C.F.R. ss. 563.22, no notices, reports or other
filings are required to be made by Seller with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
Seller from any governmental or regulatory authorities of the United States or
any state in connection with the

                                       16

<PAGE>

execution and delivery of this Agreement by Seller or the consummation of the
transactions contemplated hereby by Seller.

          (h) No Litigation - There are no actions, proceedings or, to the
knowledge of Seller, investigations pending or threatened against or affecting
Seller (or any basis therefor known to Seller) which, if decided adversely,
would have a Material Adverse Effect or would have the effect of enjoining or
impairing the ability of Seller to consummate the transactions contemplated by
this Agreement.

          (i) Broker's Fees - Other than FINPRO, Inc., Seller has not retained
or otherwise engaged any third party agent or broker, or agreed to pay any fee
or commission to any such person or entity in connection with or with respect to
the transactions contemplated by this Agreement. Seller is solely responsible
for the payment of any fees or commissions to FINPRO, Inc.

          (j) Accounts Loans - Each Account Loan is a legal, valid and binding
obligation of the borrower, secured by the related Liability in accordance with
Seller's underwriting standards as disclosed to Buyer, has been originated and
serviced in all material respects accordance with all applicable laws,
regulations and orders, and is authorized under applicable laws, regulations and
orders to be transferred by Seller to Buyer hereunder. Seller, to the best of
its knowledge, is not subject to any liability for violations of any applicable
law, regulation or order with respect to any such Account Loan arising out of
actions or events occurring prior to the Closing Date or the transfers
contemplated hereby. Seller is the sole owner of each Account Loan free and
clear of all liens, claims, security interests, charges and encumbrances.

                                       17

<PAGE>

                                  ARTICLE VIII

                     REPRESENTATIONS AND WARRANTIES OF BUYER
                     ---------------------------------------

          Buyer represents and warrants to Seller that:

          (a) Corporate Organization and Standing - Buyer is a New York State
Banking Association duly organized and validly existing under the laws of the
State of New York; it has the corporate power and authority to own and operate
its properties and to conduct its business as a bank in the manner in which it
is presently being conducted, and it has the corporate power and authority to
execute and deliver this Agreement and to carry out all of the transactions
contemplated by this Agreement.

          (b) Corporate Authority, Due Authorization; Execution and Delivery -
The execution and delivery of this Agreement and each of the documents and
instruments contemplated hereby have been duly authorized by all necessary
corporate action to be taken on the part of Buyer; and, upon execution and
delivery, this Agreement and each of such other documents and instruments will
be valid and binding obligations of Buyer, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyances, fraudulent transfers or
other similar laws relating to or affecting the enforcement of creditors' rights
generally, laws affecting the rights of creditors of financial institutions the
deposits of which are insured by the Federal Deposit Insurance Corporation
(FDIC) and to general principles of equity, whether considered in a proceeding
at law or in equity.

          (c) No Violation - The execution and delivery of this Agreement and of
the other instruments and documents contemplated hereby do not and will not
conflict with, violate, breach or cause a default under the Charter or Bylaws of
Buyer, or any agreement or other instrument to which Buyer is a party or by
which it is bound, or any order, judgment, injunction, decree or award of any
court, arbitrator, government or governmental agency by which Buyer is

                                       18

<PAGE>

bound; or result in the creation of any lien, charge or encumbrance upon the
assets of Buyer or any part thereof; or constitute a violation by Buyer of any
law, ordinance, rule or regulation of any governmental authority as such laws,
ordinances, rules or regulations relate to Buyer or the conduct of its business.

          (d) Deposit Insurance - The deposit accounts of Buyer are insured by
the FDIC to applicable limits and no action is pending or, to the knowledge of
Buyer, threatened with respect to the termination of such insurance.

          (e) No Broker - Buyer has not retained or otherwise engaged any
third-party agent or broker or finder or agreed to pay any fee or commission to
any such person or entity in connection with or with respect to the transactions
contemplated by for or on account of this Agreement.

          (f) Regulatory Approvals - Other than as required by Bank Merger Act,
the FDIC and the New York State Banking Department, no notices, reports or other
filings must be made by Buyer with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Buyer from any
governmental or regulatory authorities of the United States or any state in
connection with the execution and delivery of this Agreement by Buyer or the
consummation of the transactions contemplated hereby by Buyer. Buyer has not
received any indication from any federal, state or other governmental agency
that such agency would oppose or refuse to grant or issue its consent or
approval, if required, with respect to the transactions contemplated hereby.

                                   ARTICLE IX

                                    COVENANTS
                                    ---------

          (a) Access to Records and Properties - Upon the execution of this
 Agreement, Seller shall provide Buyer, its agents, attorneys, accountants and
 employees access upon at least twenty-four (24) hours notice during normal
 business hours to the premises and records of the

                                       19

<PAGE>

Branch Office in order to conduct such additional investigation of the business
of the Branch Office and the Operating Assets and Liabilities, to be transferred
pursuant to this Agreement, and to the collateral and documents related thereto,
that Buyer deems necessary or appropriate, provided that such inspection shall
not disrupt or unduly interfere with the conduct of Seller's business and such
access shall be subject to Seller's normal security procedures. Seller will
furnish to Buyer copies of such documents and information with respect to the
Assets and Liabilities, and the business, properties and personnel of the Branch
Office as Buyer shall from time to time reasonably request. The foregoing shall
be coordinated by senior personnel of Seller and Buyer. Nothing in this section
shall be deemed to require Seller to breach any obligation of confidentiality.

          (b) Ordinary Course of Business - Between the date hereof and the
Closing Date, Seller shall not engage in any transaction related to the Branch
Office outside the ordinary course of business of the Branch Office as conducted
as of the date hereof, except for activities or transactions contemplated by
this Agreement. Seller will not change the terms of the Liabilities or
materially increase the rate paid on the Liabilities other than changes made in
the ordinary course of business consistent with past practice or changes to
conform with Seller's practices to those of Buyer.

          (c) Preservation of Business - From the date hereof until the Closing
Date, Seller will use commercially reasonable best efforts to obtain and retain
deposit accounts and to maintain all other customer and business relations at
the Branch Office in the ordinary course consistent with past practices. Seller
agrees to use commercially reasonable best efforts to preserve its business
operation as conducted at the Branch Office intact , and to preserve for the
Buyer the goodwill of its customers; and to exercise reasonable efforts to
cooperate with and assist Buyer in assuring the orderly transition of such
business from Seller to Buyer. Nothing in this section shall be

                                       20

<PAGE>

construed as requiring Seller to engage in any activity or effort outside the
ordinary course of business as presently conducted.

          (d) Buyer and Seller Regulatory Applications - With Seller's
cooperation as provided herein, Buyer shall promptly prepare and file within
thirty (30) days after the date of this Agreement with the New York State
Banking Department and the FDIC, and any other regulatory agency all
applications or notices necessary for the carrying out of the transactions
contemplated by this Agreement, shall publish or distribute such notices as may
be required under the Bank Merger Act or otherwise and shall exercise its best
efforts to obtain approvals of all such applications. Buyer shall promptly
provide Seller with copies of all filed applications. Seller shall prepare and
file such applications to OTS or other regulatory agencies as may be required to
effect the transaction,

          (e) Use of Seller's Name - Buyer agrees that after the Closing Date
the name of Seller shall not be used in any manner in connection with the
operation of the Branch Office without the express, prior written consent of
Seller. Buyer shall not state or imply that Seller is in any way involved as a
partner, joint venturer or otherwise in the business of Buyer.

          (f) Cooperation - Neither Seller nor Buyer shall voluntarily undertake
any course of action inconsistent with the satisfaction of the requirements
applicable to it in this Agreement, and each shall promptly do all such acts and
take all such measures as may be appropriate to enable it to perform as early as
practicable the obligations herein provided to be performed by it and to cause
all the conditions precedent to consummation to be satisfied.

          (g) Taxes, Utilities, Etc. - Seller shall pay and discharge all taxes,
general and special assessments, rents, utilities and other charges of every
description which may be levied on or assessed against the Operating Assets and
which are payable before the Closing Date and shall not sell, lease or encumber
the Operating Assets from the date hereof through the Closing Date.

                                       21

<PAGE>

In addition, Seller shall maintain insurance with respect to the Operating
Assets and the Branch Office against losses, liabilities and risks of such types
and in such amounts at least equal to their respective net book values or such
greater amounts as are customarily carried by depository institutions, for the
period prior to the Closing Date.

          (h) Condition of Operating Assets - Seller shall keep, or cause to be
kept, in good repair the Operating Assets. All Operating Assets purchased by
Buyer under this Agreement are purchased as is, without any warranty, either
expressly written or otherwise implied, as to use or performance of the
Operating Assets after the Closing Date.

          (i) Inability to Comply with Covenants - Seller, on the one hand, and
Buyer on the other shall from time to time, as promptly as possible, give or
cause to be given to each other written notice of any information that may
become known to it indicating that it may be impossible to satisfy all
conditions precedent to Closing hereunder or which, if known on or before the
date of this Agreement, would have been subject to disclosure or render any
representation herein inaccurate.

          (j) No Solicitation - From the date of execution of this Agreement
until the earlier of the Closing Date or termination of this Agreement, Seller
shall not actively solicit any agreement, negotiation or discussion or enter
into any agreement, negotiation or discussion with any party other than Buyer
regarding the sale, assignment, transfer or other disposition of the Assets or
the assumption of the Liabilities

          (k) Return of Information - In the event that the transactions
contemplated hereby are not consummated for any reason, Buyer agrees that it
will return, or cause to be returned, to Seller all information obtained in
connection with the transactions contemplated by this Agreement and shall not,
except as otherwise required by law, disclose or use such information in the
conduct of Buyer's business.

                                       22

<PAGE>

          (1) Employee Matters - Buyer agrees to offer employment to Seller's
employees at such employee's current base salary subject to completion of
satisfactory interviews with Buyer and in compliance with Buyer's standard
hiring practices. Buyer is not assuming, nor shall it have responsibility
whatsoever for the continuation of or any liability under or in connection with
(i) any employment contract, collective bargaining agreement, plan or
arrangement providing for insurance coverage or for deferred compensation,
bonuses, stock options or other forms or incentive compensation or
post-retirement compensation or benefits which are entered into or maintained,
as the case may be, by Seller; (ii) any "employee benefit plan" as defined in
Section 3(3) of ERISA which is subject to any provision of ERISA and is
maintained, administered or contributed to by Seller or any affiliate of Seller;
(iii) any withholding or payroll taxes or penalty related thereto; (iv) any
employee benefits of Seller; or (v) any other employment-related obligation
arising as a result of actions by Seller or any affiliate thereof subsequent to
the Closing Date. This Agreement is not intended to create and shall not create
any contractual or legal rights in or enforceable by any employee of Seller.
Buyer agrees to obtain prior approval of Seller of any written or oral
communications to any employee thereof concerning the subject matter of this
Section, which approval shall not be unreasonably withheld. This Article IX(l)
of this Agreement may be amended or terminated without liability to any employee
of Seller.

                                    ARTICLE X

                CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
                -------------------------------------------------

          The obligation of Buyer to carry out the transactions contemplated by
this Agreement are subject to the fulfillment (or waiver in writing by Buyer),
on or prior to the Closing Date, of each of the following conditions:

          (a) Regulatory Approvals - Buyer and Seller shall have received all
applicable and required governmental and regulatory approvals, including, but
not limited to, that of the New

                                       23

<PAGE>

York State Banking Department, FDIC, OTS and Federal Trade Commission or
Department of Justice, as applicable, with respect to the transactions
contemplated by this Agreement; all applicable waiting periods relating thereto
shall have expired; and Buyer and Seller shall have complied fully with all
conditions of such approvals which can be complied with at or prior to the
Closing Date (all such approvals and the expiration of such waiting periods,
hereinafter the "Regulatory Approvals").

          (b) Accuracy of Representations and Warranties - In all material
respects, the representations and warranties of Seller shall be true and correct
on the Closing Date and Seller shall not have breached any of its covenants
under this Agreement and shall have complied in all material respects with all
of its obligations under this Agreement. The Chief Executive Officer and the
Chief Financial Officer of Seller shall deliver a certificate on the Closing
Date to such effect.

          (c) Delivery by Seller - Buyer shall have received a duly executed
Bill of Sale and Assignment of Assets of Seller conveying the Assets in
substantially the form set forth in Exhibit F hereto and Seller shall have
executed the Assignment and Assumption Agreement in substantially the form set
forth in Exhibit G hereto.

          (d) Delivery of Schedules - Seller shall have delivered to Buyer
Exhibits B, B-1, C, D and E certified by an officer of Seller as complete and
correct, listing the Liabilities, Contractual Obligations, Operating Assets and
Account Loans, as of the dates specified in Article I.

          (e) Delivery of Lease - Buyer shall have received on the Closing Date
a fully executed original Lease for the Branch Office in the form annexed which
Lease shall have been assigned by Seller and consented to by Landlord and as set
forth in Exhibit H.

          (f) Opinion of Seller's Counsel - Buyer shall have received the
opinion of counsel for Seller in satisfactory form substantially as set forth in
Exhibit I hereto.

                                       24

<PAGE>

          (g) No Governmental Action - No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in effect
and prohibits consummation of any of the transactions contemplated by the
Agreement.

          (h) Condition of Branch Office - Between the date hereof and the
Closing Date, there shall have been no material damage to or destruction or
condemnation of the Branch Office.

          (i) No Material Adverse Effect - Between the date hereof and the
Closing Date, there shall have occurred no Material Adverse Effect in the
operations or business of the Branch Office other than any such change which is
a result of changes in general economic conditions which affect the banking
industry as a whole.

          (j) Delivery of Records - On or prior to the Closing Date, to the
extent in Seller's possession, Seller shall deliver to Buyer the Records, and
other files, documents, papers, and records as shall be reasonably necessary to
conduct a banking business at the Branch Office and to administer the Assets and
the Liabilities or as Buyer shall reasonably request.

          (k) Delivery of Certificate - Buyer shall have received a certificate
from Seller, signed by a duly authorized officer thereof, stating that all
conditions set forth in this Article X have been fulfilled.

                                   ARTICLE XI

              CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER
              -----------------------------------------------------

          The obligations of the Seller to carry out the transactions
contemplated by this Agreement are subject to the fulfillment (or waiver in
writing by Seller) on or prior to the Closing Date, of each of the following
conditions:

                                       25

<PAGE>

          (a) Regulatory Approvals - Seller and Buyer shall have received all
Regulatory Approvals Approvals; Seller and Buyer shall have complied fully with
all reasonable conditions of such approvals which can be complied with, at, or
prior to, the Closing Date; and all applicable waiting periods related thereto
have expired.

          (b) Accuracy of Representations and Warranties - The representations
and warranties of Buyer shall be true and correct in all material respects on
the Closing Date and Buyer shall not have breached any of its covenants under
this Agreement and shall have complied in all material respects with all of its
obligations under this Agreement. The Chief Executive Officer and Chief
Financial Officer of Buyer shall deliver a certificate on the Closing Date to
such effect.

          (c) No Governmental Action - No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, judgment, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in effect
and prohibits consummation of any of the transactions contemplated by the
Agreement.

          (d) Delivery by Buyer - Buyer shall have executed and delivered the
Assignment and Assumption Agreement in substantially the form set forth in
Exhibit G hereto.

          (e) Opinion of Buyer's Counsel - Seller shall have received the
opinion of counsel for Buyer in satisfactory form substantially as set forth in
Exhibit J hereto.

          (f) Delivery of Buyer's Certificate - Seller shall have received a
certificate signed by a duly authorized officer of Buyer stating that all
conditions set forth in this Article XI have been fulfilled.

                                       26

<PAGE>

                                   ARTICLE XII

                                    INDEMNITY
                                    ---------

          (a) Indemnification by Seller - Seller agrees to indemnify and hold
Buyer harmless for a period of two (2) years following the Closing Date against
any and all losses, liabilities, expenses, claims or damages, including
reasonable attorneys' fees and expenses, resulting from any third party claim
based upon (i) any material breach of Seller's representations and warranties
contained in Article VII, (ii) any material breach or failure to perform any
agreement or covenant required to be performed by Seller pursuant to this
Agreement, (iii) actions or omissions by Seller on or before the Closing Date
with respect to the Liabilities, employee-related matters and the Branch Office,
and (iv) any material breach or failure by Seller on or before the Closing Date
to perform any agreement or covenant required to be performed by Seller pursuant
to the Contracts set forth on Exhibit C to this Agreement.

          (b) Indemnification by Buyer - Buyer agrees to indemnify and hold
Seller harmless for a period of two (2) years following the Closing Date against
any and all liabilities, expenses, claims or damages, including reasonable
attorneys' fees and expenses, resulting from any third party claim based upon
(i) any material breach of Buyer's representations and warranties contained in
Article VIII, (ii) any material breach or failure to perform any agreement or
covenant required to be performed by Buyer pursuant to this Agreement, (iii)
actions or omissions by Buyer after the Closing Date with respect to the
Liabilities, employee-related matters and the Branch Office and (iv) any
material breach or failure by Buyer after the Closing Date to perform any
agreement or covenant required to be performed by Buyer with respect to the
contracts set forth on Exhibit C to this Agreement.

                                       27

<PAGE>

          (c) Procedures to Indemnification - Any party claiming indemnification
hereunder (the "Indemnified Party") shall give the other party (the
"Indemnifying Party") prompt written notice of any claim which may give rise to
indemnification hereunder; provided, however, that any failure promptly to give
such notice shall not affect the Indemnified Party's rights hereunder except to
the extent that such failure shall adversely affect the Indemnifying Party or
its rights hereunder. The Indemnified Party shall afford the Indemnifying Party
the opportunity, at its sole cost and expense, to defend against such claims for
liability. In any such action or proceeding, the Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at its own expense unless (i) both parties mutually agree to the
retention of such counsel or (ii) the named parties to any such suit, action or
proceeding (including any impleaded parties) include both Buyer and Seller, and
in the reasonable judgment of counsel to the Indemnified Party, representation
of both parties by the same counsel would be inadvisable due to actual conflicts
of interest between them.

                                  ARTICLE XIII

                               FURTHER ASSURANCES
                               ------------------

          Each party will execute and deliver all additional documents or
instruments reasonably requested by the other party to farther evidence or
assure the sales, transfers and assignments contemplated by this Agreement or to
be used in any application or notice to be filed with applicable regulatory
authorities. In the event of any dispute between either party and a holder of a
liability or loan assumed or purchased by Buyer under this Agreement, each party
shall cooperate with and make its records available to the other to the extent
reasonably requested.

                                       28

<PAGE>

                                   ARTICLE XIV

                        CONDUCT OF BUSINESS AFTER CLOSING
                        ---------------------------------

          (a) Liabilities - As of the Closing Date, all of the Liabilities
described on Exhibit B and Exhibit B-1 and as set forth on the Closing Statement
shall become the accounts of Buyer of the same amount, terms, rate and maturity.
All other Deposit Accounts of Seller shall remain accounts of Seller.

          (b) Non-Compete Provisions

                (1) After the execution of this Agreement, Seller will use its
          best efforts to avoid causing customers of the Branch Office to
          transfer all or part of their business to another financial
          institution and Seller will not otherwise solicit business from such
          customers.

          (2) For a period of twelve (12) months from the Closing Date, Seller
covenants and agrees not to directly target or solicit deposits from any persons
within the Market Areas as hereinafter defined.

          (3) For a period of twelve (12) months from the Closing Date, Seller
will not open a deposit taking or loan production office or install an ATM or
supermarket branches or any other deposit taking facility in any of the Market
Areas as hereinafter defined.

          (4) Notwithstanding anything contained herein, the provisions of this
Paragraph (b) shall not limit the right of Seller to advertise or solicit
banking business from the public generally or from customers at other branches
of the Seller.

          (5) Market Areas for purposes of the foregoing Paragraph (b) shall be
the entire area of the City of Yonkers, County of Westchester.

                                       29

<PAGE>

                                   ARTICLE XV

                                  MISCELLANEOUS
                                  -------------

          (a) Payment of Expenses - Except as otherwise provided in this
Agreement, Buyer and Seller shall pay their own expenses in connection with the
transactions contemplated hereby.

          (b) Termination of Agreement - Notwithstanding any other provision of
this Agreement, this Agreement and the transactions contemplated hereby may be
terminated at any time before the Closing Date as follows:

          (1)      By mutual written consent of the Buyer and Seller.

          (2)      By written notice of either Buyer or Seller if the
                   transactions contemplated hereby are not consummated on or
                   before January 31, 2002 or such later date mutually
                   acceptable to the parties.

          (3)      By written notice of either Buyer or Seller if:

                   (A) Any representation or warranty made herein by the other
                   party or in any exhibit hereto or in any application, report,
                   certificate or financial statement furnished pursuant to the
                   provisions hereof, shall prove to have been false or
                   misleading in any material respect when made or furnished to
                   the extent it has a Material Adverse Effect on Buyer or
                   Seller as the case may be; or

                   (B) If the other party shall default in any material respect
                   in the performance or observance of any covenant, agreement,
                   provision, or duty hereunder which requires the defaulting
                   party to take or to omit from taking action hereunder and
                   such default shall not be remedied within thirty (30) days
                   after receipt of written notice from the other party;
                   provided that termination pursuant to this provision shall
                   not relieve the breaching party of liability for such breach
                   or otherwise. Notwithstanding anything to the contrary herein
                   contained, neither party hereto shall have the right to
                   terminate this Agreement on account of its own breach.

                                       30

<PAGE>

          (4)      By written notice of either Buyer or Seller at any time after
                   any governmental agency has denied or revoked any Regulatory
                   Approval required to be obtained pursuant to this Agreement.
                   Provided, however, that the imposition of reasonable
                   conditions by any regulatory agency shall not be deemed a
                   denial or revocation of the approvals required to be obtained
                   pursuant to this Agreement.

          (c) Effect of Termination - Upon any such termination as described in
Article XV(b) above, neither Buyer nor Seller shall have any liability or
obligation hereunder to the other, except as follows:

                   (1) Each party will return all documents, work papers and
                   other materials and any and all copies thereof received from
                   the other party relating to the transactions contemplated
                   hereby;

                   (2) All information received by either party hereto with
                   respect to the business of the other party or its
                   subsidiaries (other than information which is a matter of
                   public record or whose disclosure may be required by
                   applicable law) shall be held in confidence and not disclosed
                   to any other person or entity or used by either party for
                   their own business operations;

                   (3) Buyer shall return promptly after such termination any
                   and all lists of customers of Seller or other materials in
                   its possession or control which identify customers of Seller,
                   and shall not use any information obtained by Buyer in
                   connection with this Agreement or the transactions
                   contemplated herein to solicit in any manner any of Seller's
                   customers or otherwise to interfere with the conduct of
                   Seller's business or the value of its assets or operations;
                   and

                                       31

<PAGE>

          (d) All notices or other communications provided for or required under
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered or mailed (registered or certified mail, postage paid) as follows:

          If to Seller:

                   Fourth Federal Savings Bank
                   The Fourth Federal Building
                   325 Hamilton Avenue
                   White Plains, New York 10601-1715

          Copy to:

                   Kent M. Krudys
                   Christina M. Gattuso
                   Muldoon, Murphy & Faucette, LLP
                   5101 Wisconsin Avenue, N.W.
                   Washington, D.C. 20016

          If to Buyer:

                   Union State Bank
                   100 Dutch Hill Road
                   Orangeburg, New York 10962
                   Attention: Robert E. Blackburn, General Counsel
                   Copy to: Steven T. Sabatini, Chief Financial Officer

          Additional Copy to:

          (e) Public Announcements - No party to this Agreement shall make,
issue or release any public announcement, statement or acknowledgement of the
existence of, or reveal the terms, conditions or the status of, the transactions
provided for herein without first attempting to the extent reasonably possible
and in all cases with regard to written matter, to clear such announcement,
statement, acknowledgement, or revelation with the other party, provided that
Buyer or Seller may make any such release or announcement which in the opinion
of counsel for Seller or Buyer, as the case may be, is necessary or appropriate
to comply with applicable law.

                                       32

<PAGE>

The parties hereto agree that they will not unreasonably withhold, condition or
delay any such clearances.

          (f) Assignment - This Agreement may not be assigned by either Buyer or
Seller without the prior written consent of the other.

          (g) Survival of Representations and Warranties - The representations,
warranties and covenants made by Seller and Buyer set forth in this Agreement
shall survive the Closing Date for one (1) year after the Closing Date.

          (h) Governing Law - This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, to the extent not governed
by federal law.

          (i) Severability - If any part of this Agreement shall be adjudged by
any court of competent jurisdiction to be invalid, such judgment shall not
impair any other provision hereof.

          (j) Counterparts - This Agreement, including all exhibits referred to
herein and made a part hereof, may be executed in duplicate, each of which shall
be a valid and binding original, but all of which taken together shall
constitute one and the same instrument.

          (k) Entirety of Agreement - This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings of the
parties in connection therewith. No modification or termination of this
Agreement shall be binding unless executed in writing by both parties hereto. No
waiver of any provision of this Agreement shall be deemed to be, or shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

                                       33

<PAGE>

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

                                     FOURTH FEDERAL SAVINGS BANK

                                 BY:
                                     ------------------------------
                                     KENNETH A. MARTINEK, PRESIDENT
                                     AND CHIEF OPERATING OFFICER

                                     UNION STATE BANK

                                 BY: /S/ STEVEN T. SABATINI
                                     ------------------------------
                                     STEVEN T. SABATINI, SENIOR EXECUTIVE
                                     VICE-PRESIDENT AND CHIEF FINANCIAL OFFICER

                                       34

<PAGE>

                                Index to Exhibits

A. Identification of Branch Office

B. Identification of Six Percent Liabilities

B-1. Identification of Three Percent Liabilities

C. Contractual Obligations and Copies of Related Documents

D. Operating Assets

E. Identification of Account Loans

F. Bill of Sale and Assignment of Assets

G. Assignment and Assumption Agreement

H. Executed copy of Lease for the Branch Office

I. Form of Seller's Counsel's Opinion

J. Form of Buyer's Counsel's Opinion

                                       35

<PAGE>

                                    EXHIBIT A

                                  BRANCH OFFICE

2500 Central Park Avenue
Yonkers, New York

                                       36

<PAGE>

                                    EXHIBIT B

                             SIX PERCENT LIABILITIES

The following is a summary of certain Liabilities to be assumed consisting of
various accounts at the Yonkers branch as of June 6, 2002. Detailed lists of
Liabilities are attached as Exhibit B(a) and Exhibit B(b). The Liabilities to be
assumed shall not include brokered deposits, loan hold back accounts, overdrawn
accounts, dormant accounts, other wholesale deposits and Affiliate Deposits**
("Excluded Deposits").

NDA Liabilities (per attached Exhibit B(a))                 $ 1,597,249.00

Savings Account Liabilities (per attached Exhibit B(b))     $15,245,806.50
                                                            --------------
                                                            $16,843,055.50

----------
**Affiliate Deposits are hereby defined as those deposits maintained at the
Branches and owned by related entities of Seller including correspondent banks,
subsidiaries, employees, officers, directors or major shareholders or entities
in which Seller has an interest greater than ten (10%) percent.

                                       37

<PAGE>

                                   EXHIBIT B-1

                            THREE PERCENT LIABILITIES

The following is a list of certain Liabilities to be assumed consisting of
various accounts at the Yonkers branch as of June 6, 2002. The Liabilities to be
assumed shall not include brokered deposits, loan hold back accounts, overdrawn
accounts, dormant accounts, other wholesale deposits and Affiliate Deposits**
("Excluded Deposits").

----------
** Affiliate Deposits are hereby defined as those deposits maintained at the
Branches and owned by related entities of Seller including correspondent banks,
subsidiaries, employees, officers, directors or major shareholders or entities
in which Seller has an interest greater than ten (10%) percent.

                                       38

<PAGE>

                                    EXHIBIT C

                           CONTRACTUAL OBLIGATIONS AND
                           COPIES OF RELATED DOCUMENTS

There are two service contracts in place relating to the Branch attached hereto.

          1. Prop Mechanical, Inc. - HBAC Service Agreement
          2. ATM Service Agreement

                            P R O P MECHANICAL, INC.
               Air Conditioning, Heating, & Refrigeration Service
                    P.O. Box 141, Albertson, New York, 11507
                  16 McKinley Avenue, Albertson, New York 11507
                        (516)877-PROP * Fax(516)877-7772

Fourth Federal Bank                                           September 4, 2001
325 Hamilton Avenue
White Plains, NY  10601

Attn: David Wong                             Re: HVAC Service Agreement Renewal
                                                 2500 Central Park Ave., Yonkers

Dear Mr. Wong,

Enclosed is the renewal of your Service Agreement offered by Pop Mechanical,
Inc. for the above referenced location.

If you wish to accept this renewal agreement, please sign both copies and return
to us together with your check.

Let your equipment be our responsibility.

We hope that you will give us the opportunity to show you how much we appreciate
your valued business. Please feel free to call to discuss any questions you may
have.

                                                 Very truly yours, PROP
                                                 MECHANICAL, INC.

                                                 /s/ Clement P. Schuerlein
                                                 -------------------------------
CS:kv                                            Clement P. Schuerlein
                                                 President

                                       39
<PAGE>

                            P R O P MECHANICAL, INC.
               Air Conditioning, Heating, & Refrigeration Service
                    P.O. Box 141, Albertson, New York, 11507
                  16 McKinley Avenue, Albertson, New York 11507
                         (516)877-PROP * Fax(516)877-7772
                                SERVICE AGREEMENT

Name   Fourth Federal Bank Attn: David Wong
       -------------------------------------------------------------------------
Street 325 Hamilton Avenue                City White Plains, NY    Zip  10601
       ---------------------------------       ------------------       -------

                            LOCATION (S) OF EQUIPMENT

Name   Fourth Federal Bank (914) 779-1430
       -------------------------------------------------------------------------
Street 2500 Central Park Avenue           City Yonkers, NY          Zip 10710
       ---------------------------------       -------------------      -------

                               EQUIPMENT COVERED:

         (1) 2 ton Amaua rooftop unit (ATM area)
--------------------------------------------------------------------------------
         (2) 10 ton Lennox rooftop unit (Main area)
--------------------------------------------------------------------------------

PROP MECHANICAL INCORPORATED (Prop) agrees to furnish and the Customer agrees to
accept this "Service Agreement" on the air conditioning equipment listed above
at the location(s) indicated, subject to and upon the following terms and
conditions:

1.   Term. This agreement shall continue for a period of one (1) year from the
     date hereof.

2.   Services Furnished. The following "Prop service" is designed to keep your
     air conditioning units in normal operation and will be furnished to the
     extent Prop deems necessary:

(a)  Performing examinations with respect to all functioning components of your
     equipment, and in connection therewith, making necessary or indicated
     adjustments, lubrications and cleaning of operating parts:

(b)  Repairing or replacing fuses, refrigerants or other parts and materials
     required for the efficient operation of your air conditioning system, as
     are necessitated by normal wear and tear only, and for no other cause. You
     agree to pay us for the costs of any parts or materials used in any such
     repairs or replacements, and we agree to provide at our expense the labor
     necessary to make such repairs and replacements. Where the cost of such
     parts for materials exceed Two Hundred and Fifty ($250.00) Dollars, unless
     required for emergency repairs, we shall first obtain your written
     authorization before furnishing same:

(c)  Supplying lubricants to assure efficient performance of your equipment:

                                       40
<PAGE>

(d) (Specify any other services:) Provide and change filters six times a year.
                                  ----------------------------------------------

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

3.   Price. The charge for this service shall be $834.00 plus applicable taxes
     $68.80 for one (1) year payable in 1 installments of $902.80 in advance.

Prop may in its sole and uncontrolled discretion, withhold service where the
payments required hereunder are in arrears, without being liable for any damage,
direct or consequently, resulting from its refusal to render the services
required hereunder.

4.   Type of Labor and Materials Used. In performing the maintenance services
     required hereunder, Prop shall endeavor to use trained and adequately
     supervised personnel, and to the extent available, those manufactured parts
     which are warranted against defects in workmanship and materials by the
     manufacturer thereof.

5.   Services not Included. (A) Prop assumes no responsibility for painting,
     scraping, rehabilitating, refinishing or cleaning the internal structure or
     external trim, unless specifically stated above. Prop's obligation to
     examine, lubricate, adjust, repair or replace equipment is strictly limited
     to the terms of air conditioning equipment enumerated above. No other work
     or service on Prop's part is included or intended unless specifically set
     forth above. (B) Labor for replacing major components such as compressors,
     condensers, evaporators, heat exchangers, shaft & bearings, etc. All major
     component replacements will be quoted separately. (C) Repairs necessitated
     by a preexisting condition. (D) Water treatment for circulating systems.
     (E) missing text here!! (F) Refrigeration recovery, leak checking, labor
     and (missing text here!!)

6.   Overtime and Emergencies. All maintenance service is to be performed during
     regular working hours of regular working days (8:00 A.M. to 4:30 P.M.,
     Monday to Friday, inclusive), unless otherwise specified. Examinations and
     repairs requiring overtime or emergency adjustment call-back service are
     not included in this agreement, and in the event Prop makes any emergency
     maintenance service in periods outside of regular working hours of regular
     working days, you agree to pay Prop a sum equal to the difference between
     regular and overtime labor at the regular billing rate for bonus time. Such
     overtime charges shall not be less than two hours for one man for Saturdays
     and a full day for Sundays

7.   Additional Services and Charges Therefor. Prop further agrees, but solely
     in its discretion:

(a)  To make such other replacements or repairs to the air conditioning
     equipment as your may request:

(b)  To install new attachments on the air conditioning equipment as recommended
     or directed by Governmental authorities or insurance companies:

(c)  To make replacements mentioned herein with parts of a different design.

     You agree to compensate Prop for such additional services on the basis of
Prop's then applicable list price for the materials used and it's the applicable
billing rate for labor, such billing to be made on a progress basis payable net
ten days after date of invoice.

                                       41
<PAGE>

8.   Liability of Negligence. Nothing in this agreement shall be construed to
     mean that Prop assumes any liability on account of injuries to persons or
     to property, except those directly due to the negligent acts or omissions
     of Prop's employees. Your own responsibility for accidents to property or
     to persons while being in or about the air conditioning installation
     referred to above is in no way affected by this agreement.

     Moreover, Prop does not assume the risk of loss resulting from water
     damage, nor is Prop liable for any damage, direct or consequential, that
     may be due to its inability for any cause to supply personnel or parts
     within a reasonable time after your request therefor, Prop is not
     responsible for damage to ceiling tiles in order to perform its service.

9.   Excused from Performance. Prop shall be excused from the performance of its
     obligations hereunder and shall not be responsible or liable for any loss,
     damages (including consequential damages), detention, or delay resulting
     from accidents, strikes, lockouts, fire, freezing, flood, explosion, theft,
     lightning, vandalism, abnormal use of equipment, failure of power supply,
     blown fuses, windstorm, earthquake, floods, storms, riot, civil commotion,
     malicious mischief, Act of God or any cause beyond the reasonable control
     of Prop, whether or not the same is herein specified.

10.  Cooperation of Users. It is understood that your representatives and
     employees shall at all times cooperate with employees of Prop to the best
     of their ability but without being required to undertake or assist in any
     of the duties and responsibilities undertaken herein by Prop. To provide
     Prop servicemen ready access to the equipment and use of common building
     maintenance tools, such as ladders.

11.  Airborne Contaminants. Since Prop has no control over the contaminants
     airborne or otherwise that may enter the water-cooled or air-cooled
     condensers, Prop assumes no responsibility for damage, direct or
     consequential, resulting from any clogging, corrosion, scaling, or other
     deleterious action. Prop does undertake, however, to supply the labor
     necessary to clean the sludge and other materials from water strainers
     which interfere with the operation of the air conditioning system listed
     above.

12.  Insurance. Prop carries Workmen's Compensation, Pubic Liability, and
     Property Damage Insurance for your protection. This agreement when signed
     by you and by an authorized representative of Prop shall constitute a
     binding contract between us. All prior representations or agreements,
     whether written or verbal, not incorporated herein, are hereby superseded
     and this contract may not be changed or modified in any manner except by a
     writing signed by the parties hereto. This agreement is subject to
     cancellation by either party on the anniversary date or with 30 days
     written notice.

13.  Before the starting date of this Service agreement, all existing equipment
     covered under this agreement must be brought up to proper working order.
     All labor required will be billed at the current service rate.

                                         Respectfully submitted,
                                         PROP MECHANICAL, INC.

                                         By: /s/ Clement P. Schuerlein
ACCEPTED                                    ------------------------------------
                                         Authorized Representative

Fourth Federal Savings Bank              Clement P. Schuerlein
---------------------------------
     (Name of Company)                   President

By:   /s/ Dave Wong
   ------------------------------
      Maintenance Manager                EFFECTIVE DATE OF CONTRACT
   ------------------------------
            (Title)                      From: 10/28/01  To: 10/28/02

                                       42
<PAGE>

                                    EXHIBIT D

                                OPERATING ASSETS

                                  SEE ATTACHED

                                       43
<PAGE>

FOURTH FEDERAL SAVINGS BANK                                               Page 9
--------------------------------------------------------------------------------

     ------------------------
           Fixed Assets
     ------------------------

      Name                                 Acquired Value      Net Book Value
      -----------------------------------------------------------------------
      Eastman Kodak Microfilmer              $  4,509.00    $      -
      Eastman Kodak Microfilmer and Rder        9,822.60           -
      Steel Legal Fire Files                      264.41           -
      File Data Cabinet                           229.71           -
      Tiffany Stand                               248.97           -
      8 Drawer Check File                         580.92           -
      10 Melrin Phones                          5,287.10           -
      Check File Guides                           937.80           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray Guest Chair                            250.39           -
      Gray HI Back Chair                          356.14           -
      Gray HI Back Chair                          356.14           -
      Gray Secretary's Chair                      234.52           -
      Merlin Phone System                       3,974.14           -
      Saf Lettrer Board Rate Sign                 271.39           -
      Bill Ely Art Work                           550.00           -
      Alliance Paper Shedder                    1,077.09           -
      Clerical Desk                               341.99           -
      Clerical Desk                               342.00           -
      Card File                                   600.79           -
      Merlin Feeder Box/Now                       777.08           -
      Alliance Table Top Burster                1,185.34           -
      Inmac Printer Stand                         210.22           -
      Black Walnut Desk                           371.00           -
      Corp-Legal File Cabinet                     218.76           -
      Power Shred 410 Shedder                   4,075.61           -
      Gray HI Back Chair                          215.42           -
      Gray HI Back Chair                          215.42           -
      Gray Side Chair                             162.37           -
      IBM Wheelwriter Typewriter                  833.53           -
      Security Camera                             611.61           -
      2500 Central Ave Lease Buy Out           62,000.00      7,706.22
      ATM Security System Improve               7,254.79        901.73
      200 Ampere Board                          2,000.00        248.63
      Diebold Safe                             13,637.84           -
      Tiffany Stand                               215.42           -
      2500 Central Ave Renovation             218,500.00     27,312.48
      Non Illuminated Sign                      5,596.53        699.58
      Security System                           8,400.20        369.40
      2500 Central Ave Renovation               2,888.03           -
      Bandit Barrier                           10,198.23           -
      Merlin Plus System                        1,573.78           -
      Platform Desk                               573.72           -
      Platform Desk                               573.72           -
      Platform Desk with Return                   790.24           -
      HP Pax 900                                  920.13           -
      SynOptics 2813-04                         1,214.34           -
      Time Lapse VCR & B/W Monitor              2,710.85           -
      Glory Currency Counter                    1,369.36           -
      IBM 10R Plus Laser Printer                1,766.02           -
      Branck Lan-Yonkers                        6,770.98           -
      Interbold IX-Series 1072 Walk-Up ATM     46,062.54           -
      Air Conditioner Motor                     1,014.58           -

--------------------------------------------------------------------------------
           Confidential

<PAGE>

FOURTH FEDERAL SAVINGS BANK                                              Page 10
--------------------------------------------------------------------------------

      Name                                    Acquired Value  Net Book Value
      ----------------------------------------------------------------------
      Slimline-100 Mhtz 14" Video 540 HD         2,086.95          243.48
      Slimline-100 Mhtz 14" Video 540 HD         2,086.95          243.48
      Slimline-100 Mhtz 14" Video 540 HD         2,086.95          243.48
      Magtek ATM Card Pin Machine                2,018.86          235.54
      Craden DP6 Passbook Printer                2,273.25          265.21
      Craden DP6 Passbook Printer                2,273.25          265.21
      Craden DP6 Passbook Printer                2,273.25          265.21
      Craden DP6 Passbook Printer                2,273.25          265.21
      Craden DP6 Passbook Printer                2,273.25          265.21
      Video Security Cameras                     2,687.71          313.57
      Interior Signage-Rate Board                 2463.77          287.45
      TrippLite 450 Smart UPS                     31 1.40           90.82
      EDC Terminal - Printer/Imprinter             671.18          195.75
      Acer P233 MMX                                854.10          249.11
      Acer P233 MMX                                854.09          249.11
      Novell Y2K Patches                           924.46          431.42
      Diebold Y2K Software                       2,110.88          985.07
      Acer P233 MMX                              1,188.05          554.42
      AcerPower PII-266                          1,188.04          554.42
      AcerPower PII-266                          1,188.04          554.42
      5 Ton A/C Compressor                       2,438.88        1,138.14
      5 Ton A/C Compressor                       1,952.29          911.07
      400W Metal halide fixtures                 2,662.95        1,242.71
      VHS Security System                        2,360.82        1,573.89
      Merlin Phone System                        5,810.53        3,873.69
      Security System Monitor                    1,337.86          891.91
      VHS Security System                        4,946.59        3,297.73
      Kodak Desktop 2 Microfilmer                2,404.24        2,083.68
      ----------------------------------------------------------------------
      Total                                  $ 494,897.33       59,008.45

     ------------------------
          BRANCH STAFFING
     ------------------------
                                                Staff
                                   -------------------------------
                                        Title            Salary
                                   ----------------    -----------
                                   1 Teller            $   16,120
                                   1 Head Teller           18,616
                                   1 Asst. Manager         26,300
                                   1 Branch Manager        40,436
                                   -------------------------------
                                                       $  101,472

<PAGE>

                                    EXHIBIT E

                         IDENTIFICATION OF ACCOUNT LOANS

                                  SEE ATTACHED

                                       44

<PAGE>

<TABLE>
<CAPTION>
                                       Exhibit E    Account Loans (1)
           ACCT NBR     OB AT D-L-A  HOLD AMOUNTS RATE INT  UNCOL  INT ACCRUD CREDIT LIMIT
           USED BALANCE  ACCOUNT BALANCE  AVAILABLE BALANCE
           <S>           <C>                 <C>               <C>        <C>       <C>
           20003364      2 54 051502          0.00 14.250      0.00       9.85       2,000
             1,144.53          1,144.53            855.47
           20004578      2 54 051502          0.00 14.250      0.00       1.28         342
               144.31            144.31            197.69
           20004602      2 54 060402          0.00 14.250      0.00       0.00       2,000
               436.64            436.64          1,563.36
           20004610      2 54 060701          0.00 13.250      0.00       0.00       2,000
                  .00               .00          2,000.00
           20004750      2 54 051002          0.00 14.250      0.00       4.07         500
               474.43            474.43             25.57
           20005328      2 54 060701          0.00 13.250      0.00       0.00       2,000
                  .00               .00          2,000.00
           20005393      2 54 070301          0.00 13.250      0.00       0.00         500
                  .00               .00            500.00
           20005880      2 54 050902          0.00 13.250      6.18       4.26       5,000
               540.73            540.73          4,459.27
           20005906      2 54 030802          0.00 13.250      1.27       0.00         500
                 1.27              1.27            498.73
           ----------                         -----------                          -------
TOTALS      $2,741.91                          $12,100.09                          $14,842
           ==========                         ===========                          =======
</TABLE>

                                     Page 1

<PAGE>

                                    EXHIBIT F

                      BILL OF SALE AND ASSIGNMENT OF ASSETS

          THIS BILL OF SALE AND ASSIGNMENT OF ASSETS ("Bill of Sale") is made as
of the__________ day of __________ 2002 by FOURTH FEDERAL SAVINGS BANK, a
federally chartered savings association ("Seller").

          WHEREAS, Seller, and Union State Bank, a New York State Banking
Association ("Buyer"), entered into an Asset Purchase and Liability Assumption
Agreement, dated __________ 2002 ("Purchase Agreement"), which, among other
things, provides that Buyer will purchase from Seller and Seller will sell,
assign and transfer to Buyer all of Seller's right, title and interest in and to
the Operating Assets and the Account Loans (unless otherwise indicated,
capitalized terms used herein shall have the same meaning as defined in the
Purchase Agreement), each as more particularly set forth in the Purchase
Agreement; and

          NOW, THEREFORE, and in consideration of the payment by Buyer pursuant
to the terms of the Purchase Agreement of the purchase price for the Operating
Assets, the receipt and sufficiency of which are hereby acknowledged, and in
further consideration of the mutual covenants and agreements contained in the
Purchase Agreement and pursuant to the terms thereof, Seller does hereby sell,
assign, transfer, convey and deliver to Buyer all of Seller's right, title and
interest in and to the Operating Assets (all as more fully described in Exhibit
A hereto, which is incorporated by reference thereto and made a part hereof);

          Buyer acknowledges the receipt of all documents, instruments and
agreements pertaining to the Operating Assets. Seller hereby agrees, from and
after the date hereof upon the reasonable request of Buyer, to execute such
other documents or instruments in order to obtain the full

                                       45

<PAGE>

benefit of this Bill of Sale. An updated and finalized Exhibit A shall be
attached hereto on the Closing Date.

          Nothing in this Bill of Sale, express or implied, is intended or shall
be construed to confer upon any person or entity other than Buyer any remedy or
claim, and all the terms and conditions of this instrument shall be for the sole
and exclusive benefit of Buyer and its successors and assigns.

                                            FOURTH FEDERAL SAVINGS BANK

ATTEST:                                 By:
        --------------------------          ---------------------------------
        ASSISTANT SECRETARY

                                            UNION STATE BANK

Attest:                                 By:
        --------------------------          ---------------------------------
        ASSISTANT SECRETARY                 THOMAS E. HALES, PRESIDENT and
                                            CHIEF EXECUTIVE OFFICER

                                       46

<PAGE>

                                    EXHIBIT G

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

          THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is made this
__________ day of __________ 2002 by and between UNION STATE BANK, a New York
State Banking Association ("Buyer"), and FOURTH FEDERAL SAVINGS BANK, a
Federally Chartered Savings Association ("Seller"),

                                   WITNESSETH:

          WHEREAS, Seller and Buyer have entered into the Asset Purchase and
Liability Assumption Agreement dated __________ 2002, (the "Purchase
Agreement"), which, among other things, provides for (i) the sale, transfer,
assignment, and conveyance to Buyer of certain of the assets owned by Seller and
used in connection with the operation and maintenance of certain Branch Office
of Seller as set forth in Exhibit A to the Purchase Agreement (the "Branch
Office"), (ii) the assignment by Seller of the Liabilities as set forth in
Exhibits B-1 and B-2 to the Asset Purchase and Liability Assumption Agreement
(unless otherwise indicated, all capitalized terms as used herein shall have the
same meanings as set forth in the Purchase Agreement) to Buyer and the
assumption of payment by Buyer of all liability of Seller existing on the
Closing Date for the Liabilities, and (iii) the assignment to and assumption by
Buyer of certain other contractual obligations.

          NOW, THEREFORE, in consideration of the premises and in accordance
with the terms and conditions of the Purchase Agreement and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, Seller and Buyer agree as follows.

          1. Seller hereby sells, transfers, conveys, assigns and delivers to
Buyer and Buyer hereby purchases, accepts, assumes and receives from Seller and
agrees to discharge and pay the

                                       47

<PAGE>

duties, liabilities and obligations of Seller set forth in this Section 1 which
are to be performed after the date hereof:

                   (a) All Liabilities of Seller set forth on Exhibit A to the
                   Asset Purchase and Liability Assumption Agreement hereto; and

                   (b) The contractual obligations set forth on Exhibit B to the
                   Asset Purchase and Liability Assumption Agreement hereto.

          2. Other than as set forth in Section 1 of this Agreement, Buyer is
not assuming and shall not be responsible, or deemed to be responsible, for
paying or discharging any other liability or obligation of Seller.

          3. The rights and obligations of the parties hereto with respect to
the subject matter of this Assignment and Assumption Agreement shall be set
forth or referred to in the Asset Purchase and Liability Assumption Agreement.

          4. Seller and Buyer agree to execute such further agreements and
documents as may be necessary or appropriate to effectuate the purposes of this
Agreement.

          5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permissible assigns.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York.

          IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as
of the day and year first written above.

                                            FOURTH FEDERAL SAVINGS BANK

ATTEST:                                 By:
        --------------------------          ---------------------------------
        ASSISTANT SECRETARY

                                            UNION STATE BANK

Attest:                                 By:
        --------------------------          ---------------------------------
        ASSISTANT SECRETARY                 THOMAS E. HALES, PRESIDENT and
                                            CHIEF EXECUTIVE OFFICER

                                       48

<PAGE>

                                    EXHIBIT H

                                COPY OF LEASE FOR
                                THE BRANCH OFFICE

                                       49

<PAGE>

                               AGREEMENT OF LEASE

                                 By and Between

                   ACKLINIS ASSOCIATES ...............Landlord

                                       AND

             FOURTH FEDERAL SAVINGS AND LOAN ASSOCIATION OF NEW YORK

                   PREMISES: YONKERS, NEW YORK Central Avenue

 Dated: As of 1/10/89

<PAGE>

                                      INDEX

                                                                Page
                                                                ----
ARTICLE I                Term, Renewal Option and
                             Construction                        3
ARTICLE II              Rent, Additional Rent and
                             Other Charges                       5
ARTICLE III              Use, Operation and Maintenance          9
ARTICLE IV               Indemnity & Insurance                  12
ARTICLE V                Damage - Destruction                   15
ARTICLE VI               Condemnation                           17
ARTICLE VII              Changes and Alterations
                             by Tenant                          19
ARTICLE VIII             Mechanic's Liens                       20
ARTICLE IX               Lawful Use; Surrender of the
                             Demised Premises;
                             Inspection of the
                             Demised Premises                   21
ARTICLE X                Assignment and Subletting              22
ARTICLE XI               Subordination                          24
ARTICLE, XII             Default Provisions -
                         Conditional Limitation                 25
ARTICLE XIII             Limitation of Landlord's
                             Liability                          29
ARTICLE XIV              Invalidity of Particular
                             Provisions                         30
ARTICLE XV               Certificate of Tenant                  30
ARTICLE XVI              Notices                                31
ARTICLE XVII             Cumulative Remedies
                             No Waiver - No Oral Change         32
ARTICLE XVIII            Quiet Enjoyment                        32
ARTICLE XIX              Waiver of Jury Trail                   33
ARTICLE XX               sign Provisions                        33
ARTICLE XXI              Miscellaneous                          34

<PAGE>

          AGREEMENT OF LEASE, made as of the 10th day of January, 1989, by and
between ACKLINIS ASSOCIATES (hereinafter the "Landlord"), a New York
partnership, having an office at 43rd floor, 888 Seventh Avenue New York, New
York 10106, and FOURTH FEDERAL SAVINGS AND LOAN ASSOCIATION OF NEW YORK having
an office at 1355 First Avenue, New York, New York 10021 (hereinafter the
"Tenant").

                              W I T N E S S E T H
                              -------------------

          Landlord is the tenant by Assignment from S. Klein Department Stores,
Inc., dated July 5, 1983, under a certain Ground Lease dated May 9, 1958
between Vioe Realty Corp., as landlord (the "Overlandlord"), and S. Klein
Department Stores, Inc., as tenant, a short form of which was recorded in the
Office of the Clerk of Westchester County (Division of Land Records) on June 17,
1958, in Liber 5812 of Deeds at page 24, and which lease was heretofore modified
by two agreements, both dated June 24, 1958, and by agreements dated April 13,
1959, June 24, 1959, November 25, 1964, April 24, 1969, December 1, 1972, July
17, 1975, November 5, 1975, and as of November 23, 1976, collectively the
"Overlease", (a copy of which was furnished Tenant, and is deemed to be part
hereof as though incorporated in full) covering the premises described therein.

          Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, for the term, at the rental, and subject to the provisions herein set
forth, certain store premises, containing approximately 2,000 square feet of
enclosed building, with approximate dimensions of 25 feet in frontage by 80 feet
in depth, as shown cross-hatched on Exhibit "A" annexed hereto and made a part
hereof (the store premises hereinafter referred to as the "Demised Premises",
and the entire premises Demised to Landlord as tenant under the Overlease being
hereinafter referred to as the "Shopping Center", all as shown on Exhibit
"A-1"). All measurements of depth are made from the outside of the front
exterior wall to the outside

<PAGE>

of the rear exterior wall, and measurements of width are made from center to
center of shared interior walls; provided however that a wall not shared is
measured from outside its exterior.

          TOGETHER WITH:

          The right, in common with Landlord, other tenants of Landlord and
their customers, employees and invitees to the use by Tenant and Tenant's
customers, employees and invitees of the "Common Areas" of the Shopping Center,
as hereinafter defined, for the purposes of pedestrian and vehicular access,
ingress and egress to and from Central Park Avenue, and the parking of cars,
subject to such reasonable non-discriminatory rules and regulations as Landlord
may from time to time impose. The "Common Areas" shall be those portions of the
Shopping Center intended for use of all tenants, including parking areas,
roadways, driveways, entrances, exits, landscaped areas, loading areas, ramps,
sidewalks, steps, malls, promenades, lighting and drainage facilities, utility
lines, pipes and installations of every kind serving the buildings in the
Shopping Center. Landlord may exclude the "buffer zone" shown on Exhibit A-1, or
any part thereof, from the Common Areas. Landlord reserves full right to use
portions of the Shopping Center for future construction with the effect of
withdrawing such areas from the Common Areas, provided such use does not
materially interfere with access to or visibility of the Demised Premises.
Landlord agrees with Tenant that, subject to the provisions of Article VI,
during the term of this Lease, the Common Areas shall contain not less than the
number of parking spaces required pursuant to applicable zoning regulations in
effect from time to time.

          SUBJECT TO:

          1. The terms, covenants and conditions of the overlease,

                                        2

<PAGE>

          Tenant, having received a true copy of said Overlease, acknowledges
and accepts the fact that this Lease is subject to all of the terms thereof.

          2. Liens, encumbrances, easements, reservations, covenants and
conditions, of record provided same do not prohibit Tenant's use.

          3. All federal, state and local laws, ordinances, rules and
regulations affecting the Demised Premises including but not limited to zoning
regulations and ordinances now existing, or hereafter enacted, by any applicable
governmental authority in which the Demised Premises lie.

          4. Any state of facts a physical inspection of the Shopping Center,
the Demised Premises or the Common Areas would disclose.

          5. Landlord represents and warrants to Tenant that; (i) it has full
right and authority to enter into this Lease for the full term hereof; and (ii)
the overlease is in full force and effect, and Land lord has received no notice
of default thereunder, and is presently in full compliance with all terms,
conditions and covenants of the Overlease.

          This Lease is made upon the foregoing and following terms, provisions,
conditions and limitations, and the parties respectively covenant and agree as
follows:

                                    ARTICLE I

                      Term, Renewal Option and Construction
                      -------------------------------------

          Section 1.1 The term of this Lease shall commence on January 10, 1989
(the "Term Commencement Date"), and shall expire at midnight on

                                        3
<PAGE>

the last day of the month in which the tenth anniversary of the Term
Commencement Date shall occur (the "Lease Term"); subject to earlier termination
as herein elsewhere provided. Tenant shall commence paying rent on March 11,
1989 (the "Rent Commencement Date").

          Section 1.2 Provided this Lease then be in full force and effect and
Tenant shall not be in default beyond the expiration of any applicable grace
period hereunder, Tenant shall have the option to extend the term of this Lease
for one (1) additional term of five (5) years, commencing at the end of the then
existing term, upon the same terms and conditions hereof, except: (i) as
hereinafter provided with respect to Fixed Rent, and (ii) that Tenant shall have
no further option to renew or extend the term hereof. The option to extend may
be exercised by Tenant by giving notice to Landlord not later than twelve (12)
months prior to the expiration of the term then existing. In the event such
notice of exercise shall not be given as aforesaid, Tenant shall be deemed to
have waived and forfeited all rights to extend the term of this Lease. The
annual Fixed Rent for the first option term shall be at $32.70 per square foot
(i.e. $65,400.00) for the first two years six-months of the option term, and
$35.70 per square foot (i.e. $71,400.00) for the final two years six months of
the option term.

          Section 1.3 Notwithstanding the provisions of Section 1.1, in the
event that Landlord is delayed, by reason of any strike, labor dispute, fire or
other casualty, or for any other reason which is beyond Landlord's reasonable
control or which is not reasonably foreseeable, in having the present occupant
vacate the Demised Premises and in delivering possession thereof to Tenant on
January 10, 1989, Landlord shall have no liability to Tenant on account of such
delay and the Term Commencement Date shall be deferred until vacant possession
of the Demised Premises is delivered to Tenant by Landlord.

                                       4
<PAGE>

          Section 1.4 Within thirty (30) days after the Rent Commencement date
Tenant, upon the request of Landlord, shall execute and deliver to Landlord,
without charge a written declaration duly acknowledged: (i) ratifying this
Lease; (2) confirming the Commencement and Expiration dates of the Lease Term;
and (3) confirming the Rent Commencement Date.

          Section 1.5 Tenant has been given full opportunity to inspect and
examine the Demised Premises, and has so inspected and examined them to its
complete satisfaction, and thus does hereby accept them in their present "as
is" condition as of the date hereof, and as at the Term Commencement Date.

          Section 1.6 All betterments and improvements in or upon the Demised
Premises, made by either party (except Tenant's personal property, stock in
trade, furniture and furnishings, signs and trade fixtures provided at Tenant's
expense - collectively "Tenant's Personal Property") including, without
limitation, all lighting fixtures, heating, ventilating and air conditioning
equipment and all pipes, ducts, conduits, wiring, paneling, partitions, railings
and the like shall remain upon and be surrendered with the Demised Premises as a
part thereof at the expiration or sooner termination of the Lease Term, and
shall become the property of Landlord at such time, provided, however, with
respect to any alterations Tenant may make, Landlord may elect to have all or
portions thereof removed by Tenant (which election, shall be made by Landlord,
not less than five (5) days prior to the expiration or sooner termination of the
Lease Term), and Tenant shall repair any damage such removal may cause.

                                   ARTICLE II

                    Rent, Additional Rent, and other Charges
                    ----------------------------------------

          Section 2.1 (A) Fixed Rent and Additional Rent (as hereinafter
defined) shall be payable to Landlord at the address hereinabove

                                        5
<PAGE>

first set forth, or to such address as Landlord may from time to time
otherwise designate, in lawful money of the United States which shall be legal
tender for the payment of all debts, public and private, without any
counterclaim, set-off or deduction whatsoever, and without any prior demand
therefor.

          (B) "Additional Rent" shall be deemed to consist of all sums of money
which shall become due from and payable by Tenant hereunder (excluding Fixed
Rent), including but not limited to Tenant's Tax Charge, Tenant's Common Area
Charge and any other payments made by Landlord on behalf of Tenant or otherwise
payable by Tenant hereunder. If Tenant defaults in the payment of Additional
Rent, Landlord shall have the same remedies as for a default in the payment of
Fixed Rent.

          Section 2.2 Tenant shall pay to Landlord during the Lease Term
commencing on the Rent Commencement Date the Fixed Rent as hereinafter set forth
in equal monthly installments, in advance, on the first day of each and every
calendar month throughout the balance of the Lease Term. In the event the Rent
Commencement Date is other than the first day of a calendar month, the Fixed
Rent (as well as all Additional Rent and other charges and sums reserved
hereunder) for the portion of the then current calendar month shall be prorated
and shall be paid immediately upon the Rent Commencement Date. The Fixed Rent
commencing on the Rent Commencement Date is as follows:

                (i)        For the first three years of the term figured
                           from the Term Commencement Date: $25.00 per
                           square foot, for an annual rental of $50,000.00,
                           payable in equal monthly installments of $4,166.67
                           each;

                (ii)       For the next three years of the term figured
                           at $27.00 per square foot, an annual rental of
                           $54,000.00, payable in equal monthly installments of

                                       6
<PAGE>

                           $4,500.00 each; and

                (iii)      For the balance of the term: $30.00 per square foot,
                           for an annual rental of $60,000.00, payable in equal
                           monthly installments of $5,000.00 each.

          Section 2.3 If Tenant shall fail to pay any Fixed Rent or Additional
Rent, after the same became due and payable, such unpaid amounts shall bear
interest at a rate of 2% above the prime rate set by Chemical Bank, but in no
event more than the highest legal rate, from the due date thereof to the date of
payment of the default rent.

          Section 2.4 Landlord agrees to pay, before they become delinquent, all
real estate taxes and special assessments lawfully levied or assesed against the
Shopping Center; however, Landlord may, at its expense, contest and dispute the
same and in such case the disputed item need not be paid by Landlord until
finally adjudged to be valid. Tenant agrees to pay to Landlord throughout the
term of this Lease, as additional rent within fifteen (15) days after written
demand from the Landlord, and at least ten days prior to Landlord's due date,
its pro rata share of all real estate taxes lawfully levied or assessed against
the shopping Center (land, building and improvements). Landlord's demand shall
be accompanied by a copy of the tax bill(s) for the Shopping Center, together
with a computation as to the amount of Tenant's pro rata share. For the
purposes of this Section and Section 2.5, Tenant's pro rata share is .652% and
is based upon the ratio which the ground floor square feet of the premises
leased to Tenant (i.e., 2,000 square feet) bears to the leaseable ground floor
square feet of all buildings (including the Demised Premises, i.e., 306,700
square feet), as the same may be increased front time to time in the Shopping
Center and Tenant's pro-rata share shall be reduced accordingly. In the event
any proceeding is instituted for the reduction of assessed valuation

                                        7
<PAGE>

which results in a refund of taxes, Tenant shall be entitled to its pro rata
share (less any expenses in connection therewith), including any refund after
the termination of this Lease relating to a period prior to such termination.
Tenant's share of taxes for the first and last years of the term of this Lease
which are not within a fiscal period of the taxing authority, shall be equitably
adjusted. As used herein "real estate taxes" shall include but shall not be
limited to, betterment and other assessments, water and sewer rents, if any,
and other charges and/or otherwise levied, assessed or imposed, general or
special, ordinary or extraordinary, for land or improvements.

          Section 2.5 Additional Rent - Common Area Maintenance Costs.

          (A) The term "Common Area Maintenance Costs" shall mean the cost paid
or incurred for the operation, maintenance and repairs of the Common Areas, and
of any installations therein or thereon, including, without limitation,
cleaning, snow and ice removal; planting, replanting and replacing flowers and
landscaping; maintaining and cleaning sidewalks and curbs; maintenance and
repair of utility systems; premiums for liability, fire (including all
additional and extended coverages thereunder) and workmen's compensation
insurance; salaries (including employee benefits) of employees performing
service in connection with the Shopping Center; management fees; unemployment
taxes; social security taxes, personal property taxes, if any; sales and use
taxes on material and equipment; supplies; operation of loudspeakers and other
equipment, if any; supply of music to the Common area or any part thereof;
policing, security, and patrolling the Common Areas (including costs relating to
controlling traffic thereto and/or therefrom); reasonable straightline
depreciation of movable equipment (and rental thereof) used in the operation;
repair and maintenance of the Common Areas, but in any such case without
duplication as to depreciation charges on any such movable equipment (as to the
rental of such movable equipment,

                                       8
<PAGE>

Landlord agrees to rent such equipment only if the rental thereof will, in the
good faith judgment of Landlord, be less expensive to Tenant than depreciation
on owned equipment would be in assessing common area maintenance costs to
Tenant); and other similar direct costs properly chargeable to such operation,
but excluding (i) real estate taxes and assessments applicable to the Common
Areas; (ii) salaries of employees of Landlord above the level of the Shopping
Center Manager, (iii) the cost of alterations incurred for the re-leasing of
premises; and (iv) debt service.

          (B) During the Lease Term, Tenant shall pay to Landlord as additional
rent, Tenant's pro rata share (i.e., presently .652%, as defined in Section 2.4)
of the Common Area Maintenance Costs. Landlord shall in the first instance, and
prior to the beginning of each Calendar Year, estimate Tenant's pro rata share
of the Common Area Maintenance Costs for each year and shall give notice thereof
to Tenant. Tenant shall be required to pay Landlord on the first day of each
calendar month during such year, one-twelfth of the annual estimated pro rata
share for such year. Within ninety (90) days after the end of each Calendar
Year, Landlord shall furnish to Tenant a statement ("Landlord's Statement") in
reasonable detail of the actual Common Area Maintenance Costs paid or incurred
by Landlord for said year, and thereupon there shall be an adjustment between
Landlord and Tenant. In the event (a) the aggregate of Tenant's monthly
contributions in any year shall be less than the Tenant's actual annual pro rata
share as shown on Landlord's Statement, Tenant Shall pay the Landlord the
difference within ten (10) days from receipt of Landlord'S Statement, or (b) the
aggregate of Tenant's monthly contributions are in excess of Tenant's actual
annual pro rata share, the amount of such excess shall be credited against
Tenant's common area contribution for the next ensuing year.

          Section 2.6 Tenant agrees to pay all charges for heat, air
conditioning, water, gas, electricity, sprinkler charges and other

                                        9
<PAGE>

utilities used in its; operations in the Demised Premises. Landlord shall
provide separate meters to measure such utilities, and Tenant shall pay the
charge therefor directly to the utility company, excepting electricity as
hereinafter set forth. Landlord shall submeter electric power and Tenant agrees
to purchase same from Landlord, who covenants that the charge therefor shall be
no greater than if Tenant were to purchase same directly from the utility
company.

          Section 2.7 Landlord reserves the right to interrupt any of the
foregoing services when necessary by reason of accident, damage by the elements,
strikes, laws, orders or regulations, or any other reason beyond the control of
Landlord, and Landlord's sole responsibility or liability in the event of
interruption in the supplying of any such services shall be to use its
reasonable efforts to repair or restore the same as promptly as reasonably
possible.

                                   ARTICLE III

                         Use, Operation and Maintenance
                         ------------------------------

          Section 3.1 Tenant agrees: (A) To use the Demised Premises, and
operate therein under the name Fourth Federal Savings and Loan Association,
solely for any use permitted to a federal savings and loan association (the
"Permitted Use") and for no other use or purpose; and (B) Except when, and to
the extent that, as elsewhere in this Lease provided, the Demised Premises may
be untenantable by reason of damage by fire or other casualty, to continuously
and uninterruptedly occupy and use during the Lease Term the entire Demised
Premises for the Permitted Use, and to conduct Tenant's business therein in a
reputable manner; to remain open for business during all normal and customary
banking hours; to keep the display windows, If any, and all signs well lighted
during such hours and days that the Common Areas are lighted by Landlord; to
keep and maintain the Demised Premises and Tenant's Personal Property and

                                       10
<PAGE>

signs therein or thereon, and the exterior and interior portions of all windows,
doors and all glass or plate glass, in a neat, clean, sanitary and safe
condition; to apply for, secure, maintain and comply with all licenses or
permits which may be required for the conduct by Tenant of the Permitted Use,
and to pay, if, as and when due, all required license, permit fees and charges
of a similar nature; and (C) To store all trash and refuse in appropriate
containers within the Demised Premises so as not to be visible to the public,
and to attend to the daily disposal thereof in the manner and by the agency
designated by Landlord; to utilize any compactor installed by Landlord and pay
Tenant's pro rata share of the operating cost thereof, including Tenant's pro
rata share of the cost of removal of such compacted garbage by an independent
collector designated by Landlord and whose prices shall be competitive, to keep
all drains inside the Demised Premises open; and to receive and deliver goods
and merchandise only in the manner and areas and at times reasonably designated
by Landlord, and (D) To cooperate with Landlord in complying with any local,
state or federal laws, rules or regulations concerning environmental protection,
and to such end, from time to time and without cost or delay, upon Landlord's
request Tenant shall complete documents dealing with the nature and conduct of
its business.

          Section 3.2 Tenant shall comply with all laws and requirements of all
governmental authorities applicable to the Demised Premises, excluding the
requirement of making structural changes to the Demised Premises, unless
required by reason of Tenant's use. Notwithstanding the foregoing, Tenant may,
in good faith (and wherever necessary, in the name of, but without expense to,
Landlord, and having secured Landlord to its reasonable satisfaction by cash,
securities or a surety company bond against loss or damage), contest the
validity or application in whole or in part, of any such legal requirements;
and, pending the final determination of such contest,

                                       11
<PAGE>

may postpone compliance therewith, but not so as to subject Landlord to any fine
or penalty or to prosecution for a crime, or to cause the Demised Premises, or
any part thereof, to be placed in danger of forfeiture, sale or condemnation.

          Section 3.3 (A) Tenant shall keep the Demised Premises and
improvements in good and substantial order and repair at the sole cost and
expense of Tenant, and shall make all repairs, renewals and replacements
necessary to that end, except for repairs expressly required to be made by
Landlord as hereinafter provided.

          (B) Landlord shall, at its own cost and expense make all necessary
structural repairs and replacements to the building of which the Demised
Premises forms a part, including the roof and exterior walls (excluding store
front, signs, window glass, plate glass and all doors and door frames),
exterior pipes and equipment, and foundation; excepted from the foregoing
obligations are (i) any repairs or replacements to alterations or improvements
made by Tenant, and (ii) any repairs or replacements required by reason of the
negligence of Tenant, its agents or employees, unless, however, if such damage
is covered by Landlord's insurance, then Landlord will either make the repairs
or give Tenant such insurange proceeds to effect the repairs. As used herein,
the expressions "roof" and "exterior walls" do not include roof top heating
and/or air conditioning units which service the Demised Premises exclusively,
repair and replacement of which are Tenant's responsibility.

          Section 3.4 Tenant shall not permit (i) the extermination of vermin to
be performed in, on or about the Demised Premises except by a person or company,
if any, approved by Landlord; or (ii) laundry accumulated in Tenant's operations
or on the Demised Premises to be collected and serviced except by the person or
company, if any, designated or approved by Landlord; or (iii) window cleaning or

                                       12
<PAGE>

janitorial services or any other cleaning or maintenance service in or for the
Devised Premises, or on the exterior of the Demised Premises to be performed
except by its own employees or an outside person or company designated or
approved by Landlord during reasonable hours designated from time to time for
such purposes by Landlord; in each of the aforesaid Landlord designated
services, the prices to be charged shall be competitive.

                                   ARTICLE IV

                              Indemnity - Insurance
                              ---------------------

          Section 4.1 Tenant agrees to protect, indemnify and save harmless
Landlord and the Overlandlord from time to time, from and against any and all
claims, demands and causes of action of any nature whatsoever, and any expenses
(including reasonable attorneys' fees and disbursements) incident to defense of
Landlord or therefrom, for injury to or death of persons or loss off or damage
to property (i) occurring on the Demised Premises, or (ii) in any manner growing
out of or connected with Tenant's use and occupancy of the Demised Premises, or
the condition thereof, or (iii) occurring anywhere on the Shopping Center if
caused by or resulting from any act, omission or negligence of Tenant, or anyone
claiming under Tenant; provided that with respect to clauses (i) and (ii) above,
Tenant shall not be liable or obligated under this Section 4.1 if the events
described are caused by, or result from, the negligence of Landlord or
Overlandlord, or anyone claiming under either thereof.

          Section 4.2 Tenant shall also maintain for the mutual benefit of
Landlord, Tenant and the Overlandlord, as their respective interests may appear,
insurance against claims for personal injury or property damage, under a policy
of general public liability insurance of not less than Five Hundred
Thousand/Three Million ($500,000/$3,000,000) Dollars in respect of bodily injury
or death, and Fifty Thousand ($50,000) Dollars for property damage. The parties
recognize that in

                                       13
<PAGE>

certain cases under Article 5 (A) of the Overlease, the Overlandlord may effect,
at its sole cost, the insurance required in this Section 4.2, in which event the
Tenant shall, on demand, reimburse Landlord for Tenant's proportionate share (as
determined by the insurer) of the charge therefor made by the Overlandlord to
Landlord, based on the formula set forth in said Article 5(A); provided, that
Landlord shall notify Tenant that the Overlandlord is maintaining such insurance
as soon as practicable after it is apprised of the same.

          Section 4.3. Landlord agrees to carry fire and extended coverage
insurance on the buildings located in the Shopping center, including the Demised
Premises, of the type described in the Overlease to be carried by Landlord as
tenant thereunder on all buildings. Such insurance shall not cover Tenant's
inventory, fixtures, equipment, furnishings and installations which Tenant must
separately insure at its own cost and expense. Tenant shall not permit any
operations to be conducted in the Demised Premises which would cause suspension
or cancellation of the fire and extended coverage insurance policies carried by
Landlord. Landlord represents and warrants that the use of the Demised Premises
in accordance with Section 3.1 hereof will not result in the suspension or
cancellation of the aforesaid insurance policies.

          Section 4.4. All insurance provided for under this Lease shall be
effected under valid enforceable policies issued by insurers of recognized
responsibility, and licensed or authorized to do business in the State of New
York. The original policies or certificates thereof of any insurance required to
be obtained by Tenant shall be delivered to Landlord, at least fifteen (15) days
prior to the Rent Commencement Date. At least ten (10) days prior to the
expiration date of any policy, the original renewal policy for such insurance
shall be delivered by Tenant to Landlord together with satisfactory evidence of
payment of the premium on such policy. Insofar as, and

                                       14
<PAGE>

to the extent that, the following provisions may be effective without
invalidating or making it impossible to secure insurance coverage obtzinable
from responsible insurance companies doing business in the State of New York
(even though extra premiums may result therefrom), Landlord and Tenant mutually
agree that with respect to any loss which is covered by insurance then being
carried by them respectively, the one carrying such insurance and suffering said
loss releases the other of and from any and all claims with respect to such
loss, and they further mutually agree that their respective insurance companies
shall have no right of subrogation against the other on account thereof. In the
event that extra premiums are payable by either party as a result of this
provision, the other party shall reimburse the party paying the amount of such
extra premium. If, at the written request of one party, this release and
non-subrogation provision is waived, then the obligation of reimbursement shall
cease for such period or time as such waiver shall be effective, but nothing
contained in this Section shall be deemed to modify or otherwise affect releases
elsewhere herein contained for claims of either party.

          Section 4.5. That neither Landlord nor Landlord's agents shall be
liable for, and Tenant waives all claims for any and all loss, cost, liability,
damage and expense (including attorney's fees and disbursements), penalties and
fines incurred in connection with or arising from any injury to Tenant or to any
other person or for any damage to, or loss (by theft or otherwise) of, any of
Tenant's property and/or of the property of any other person, irrespective of
the cause of such injury, damage or loss (including the acts or negligence of
any tenant or occupant of the Shopping Center or of any owners or occupants of
adjacent or contiguous property) and whether occasioned by or from explosion,
falling plaster, broken glass, electricity, smoke, wind, water, snow or ice
being upon or coming through or from the street, roof, subsurface, skylight,
trapdoor or

                                       15
<PAGE>

windows, electric wiring, plumbing, dampness, water, gas, steam or other pipes
or sewage, or the failure of the airconditioning or refrigeration system, or the
breaking of any electric wire, the bursting, leaking or running of water from
any tank, washstand, watercloset, wastepipe, sprinkler system, radiator, or any
other pipe in, above, upon or about the Demised Premises or the Building, or
which may at any time hereafter be placed therein, or from any other cause
whatsoever, excluding, however, if any of the foregoing results from the
negligence of Landlord or its servants, agents, and/or employees.

                                     ARTICLE

                              Damage - Destruction
                              --------------------

          Section 5.1. if the Demised Premises shall be damaged by fire or other
cause, the damage shall be repaired by, and at the expense of, Landlord promptly
and with due diligence after Landlord receives the insurance proceeds, but in
all events, not more than six (6) months after the occurrence of the damage, and
the rent until such repairs shall be made shall be apportioned according to the
part of the Demised Premises which is usable by Tenant. Notwithstanding anything
to the contrary herein, in the event the Demised Premises ate substantially
damaged by fire or other causes so that the Demised Premises cannot be operated
by Tenant, then the rent and additional rent (except taxes) shall be fully
abated until (a) Landlord completes repairs to the Demised Premises and same may
be lawfully occupied by Tenant for the purposes set forth in Section 3.1 hereof,
and (b) the earlier of the date Tenant opens for business or .thirty (30) days
after (a) occurs. Tenant acknowledges that Landlord is not obligated to carry
insurance on Tenant's furniture and/or furnishings or any fixtures or equipment,
improvements, alterations or appurtenances owned, made or installed by Tenant,
and agrees that Landlord is not obligated to repair any damages thereto or
replace the sane. Landlord's obligation to repair and restore the Demised

                                       16
<PAGE>

Premises is limited to the condition of the Demised Premises as it was
immediately preceeding the damage. No penalty shall accrue for unavoidable
delays, or any other cause beyond Landlord's control; provided, Landlord uses
due diligence to complete the required repairs. Notwithstanding anything to
the contrary herein, in the event the premises are substantially damaged by fire
or other cause during the last two (2) years of the initial or extended term,
Tenant and Landlord shall each have the right to terminate this Lease by giving
thirty (30) days notice to the other party of its election to terminate this
Lease, and thereupon the term of this Lease shall expire upon the date set forth
in said notice, and Tenant shall surrender possession of the Demised Premises to
Landlord on or before said date, and the rent and additional rent shall be
apportioned and paid to said date.

          Section 5.2. If fifty (50%) percent or more of the gross leasable area
of the Shopping Center shall be damaged or destroyed by fire or other cause,
notwithstanding the fact that the Demised Premises may be unaffected by such
occurrence, Landlord shall have the right, to be exercised by giving
written notice to Tenant within sixty (60) days after said occurrence, to elect
to cancel and terminate this Lease, Upon the giving of such notice to Tenant,
the Lease term hereof shall expire upon the thirtieth (30th) day after such
notice is given, and Tenant shall vacate the Demised Premises and surrender the
same to Landlord.

                                   ARTICLE VI

                                  Condemnation
                                  ------------

          Section 6.1. if, at any time during the term of this Lease there shall
be a total permanent taking of the Shopping Center, or the buildings comprising
same, in condemnation proceedings, or by any right of eminent domain, or police
power, this Lease shall terminate on the date of vesting of title in the taking
authority, and the

                                       17
<PAGE>

Fixed Rent, Additional Rent and other charges payable by Tenant hereunder shall
be apportioned and paid to said date. If 50% or more of the Shopping Center is
taken (whether or not the Demised Premises is affected) Landlord or Tenant may
cancel this Lease on ninety (90) days notice to the other. If the Demised
Premises are taken or the taking reduces parking below the amount required by
the zoning regulations, and Landlord cannot replace such Demised Premises and/or
the parking, then Landlord or Tenant shall, at any time prior to sixty (60) days
after the date of vesting of title in and to said parking or Demised Premises,
have the option of terminating this Lease upon giving written notice to the
other party. Said termination shall be effective as of the date possession of
the part so taken shall vest in the taking authority.

          Section 6.2. In the event of any such total taking or partial taking
resulting in termination of the Lease as aforesaid, Landlord shall be entitled
to receive and retain the entire a-mount of any award, except as provided in
Section 6.5.

          Section 6.3. In the event of a taking not resulting in a termination
of this Lease as set forth in this Article VI, this Lease shall not be affected
in any way, except as provided in Section 6.4, and Landlord shall proceed with
due diligence, after receipt of the award monies, subject to unavoidable delays,
to restore, repair, replace or rebuild the Demised Premises to their former
condition as. nearly as may be reasonably possible. The Fixed Rent and
Additional Rent provided hereunder shall abate to the extent to which the
Demised Premises are no longer available to Tenant.

          Section 6.4. In the event of a partial taking of the Demised Premises
not resulting in termination of this Lease, this Lease shall terminate as to the
portion of the Demised Premises so taken, and the Fixed Rent and Additional Rent
payable for the balance of the term of

                                       18
<PAGE>

this Lease shall be equitably and proportionately reduced from the date of such
taking.

       Section 6.5. Notwithstanding anything in this Article VI to the contrary,
 Tenant shall have the right, in connection with any taking Of all or a portion
 of the Demised Premises, provided such awards are made by the condemnation
 court (in addition to, and do not result in a reduction of any award made by it
 for the land and buildings taken) to claim, prove and receive such awards as
 may be allowed for furnishings, movable trade fixtures and other items of
 personalty owned by Tenant, as well as moving expenses. In no event shall
 Tenant, as a result of any condemnation referred to in this Article VI have or
 make any claim for the value of the unexpired term of this Lease which would in
 any way diminish Landlord's recovery.

          Section 6.6. In the event that pursuant to the Overlease, Landlord or
the overlandlord shall, by reason of an event of condemnation set forth therein,
have elected to terminate the overlease, this Lease shall, upon written notice
to Tenant, terminate and expire as of the date the Overlease shall terminate,
whether or not the event of condemnation forming the basis for said election
shall involve a taking of the Demised Premises.

                                   ARTICLE VII

                        Changes and Alterations by Tenant
                        ---------------------------------

          Section 7.1. Except as specifically provided in this Article VII,
tenant shall have the right to make all non-structural alterations, additions or
improvements to any part of the Demised Premises without the Landlord's prior
written consent. Such permitted changes and alterations shall be made in all
cases subject to the following conditions, which Tenant covenants to observe and
perform:

                                       19
<PAGE>

          (a)     No change or alteration shall be undertaken until Tenant shall
                  have procured and paid for, so far as the same may be
                  required, all municipal and other governmental permits and
                  authorizations of the various municipal departments and
                  governmental subdivisions having jurisdiction, and Landlord
                  agrees to join in the application for such permits or
                  authorizations whenever such action is necessary.

          (b)     All work done in connection with any change or alteration
                  shall be done in a good and workmanlike manner and in
                  compliance with all laws, ordinances, orders and requirements
                  of all federal, state and municipal governments, and the
                  appropriate departments, commissions, boards and officers
                  thereof. Workmen's compensation insurance covering all persons
                  employed in connection with the work and with respect to whom
                  death or bodily injury claims could be asserted against
                  Landlord, Tenant, or the Demised Premisess, and general
                  liability and property damage insurance for the mutual benefit
                  of Tenant and Landlord with limits of not less than those
                  required to be carried pursuant to Section 4.2, shall be
                  maintained by Tenant, at Tenant's sole cost and expense at all
                  times when any work is in process in connection with any
                  change or alteration.

          (c)     Tenant shall furnish Landlord with two (2) copies of "As
                  Built" plans within thirty (30) days after completion of any
                  such work.

                                  ARTICLE VIII

                                Mechanic's Liens
                                ----------------

          Section 8.1 Tenant shall not suffer or permit any mechanic's liens to
be filed against the Demised Premises, or the building or any part of the
Shopping Center, nor against Tenant's leasehold

                                       20
<PAGE>

interest in the Demised Premises by reason of work, labor, services or materials
supplied, or claimed to have been supplied, to Tenant, or anyone holding any
interest in the Demised Premises. If any such mechanic's lien shall at any time
be filed against such property, Tenant shall, within thirty (30) days after
notice of the filing thereof, proceed to cause the same to be discharged of
record by payment, deposit, bond, or order of a court of competent jurisdiction.
If Tenant shall fail to proceed to cause such lien to be discharged within the
period aforesaid, then in addition to any other right or remedy of Landlord,
Landlord nay, but shall not be obligated to, discharge the same either by paying
the amount claimed to be due or by procuring the discharge of such lien by
deposit or by bonding proceedings. Tenant shall promptly, on demand, and as
Additional Rent, reimburse Landlord for all costs incurred in discharging said
lien, including but not limited to reasonable attorney's fees and interest at
the highest legal rate permitted in the state where the Demised Premises is
located.

                                   ARTICLE IX

                 Lawful Use; Surrender of the Demised Premises:
                 ----------------------------------------------
                       Inspection of the Demised Premises
                       ----------------------------------

          Section 9.1. Tenant shall not use or allow the Demised Premises, or
any part thereof, to be used or occupied for any unlawful purpose or for any
dangerous or noxious trade or business, or in violation of any certificate of
occupancy affecting the use of the Demised Premises. No auction, fire,
bankruptcy, going out of business or similar sale will be conducted, or be
advertised as being conducted, in the demised premises, without the written
consent of Landlord, which shall not be unreasonably withheld, provided it is in
fact a fire, bankruptcy or going out of business sale. No merchandise shall be
displayed or stored outside the Demised Premises.

          Section 9.2. Tenant shall, upon the expiration or termination of this
Lease, surrender the Demised Premises to Landlord without delay,

                                       21
<PAGE>

in broom clean condition, and, subject to the provisions of Article V, in good
order, condition and repair, reasonable wear and tear excepted. All
installations, alterations, additions and improvements made to, or upon, the
Demised Premises, whether made by Landlord or Tenant (except only permitted
signs, trade fixtures and movable equipment installed in the Demised Premises
during the term of this Lease at Tenant's cost) shall be deemed part of the
Demised Premises, and, upon the expiration or earlier termination of this Lease,
shall be surrendered with the Demised Premises, in the condition as aforesaid.
Said signs, movable equipment and trade fixtures shall not be deemed part of the
Demised Premises, and may be removed by Tenant at any time or times during the
term hereof. Upon the termination of this Lease, all signs, movable equipment
and trade fixtures shall be removed by Tenant, and Tenant will promptly repair
and restore any damage caused by such removal. Any such property not so removed
may be deemed, at Landlord's option, abandoned by Tenant, and may be removed or
otherwise disposed of by Landlord at Tenant's expense, and Landlord shall have
no liability therefor; provided, however, nothing herein shall be deemed to
waive Tenant's obligation to remove said property.

                                    ARTICLE X

                           Assignment, and Subletting
                           --------------------------

          Section 10.1(A). If at any time after the initial four (4) years of
the term hereof, Tenant desires to assign all of its interest in this Lease, or
to sublet all or a portion of the Demised Premises for the then unexpired term
thereof, Tenant shall so advise Landlord in writing. within sixty (60) days from
the date of receipt of said notice, Landlord shall have the option to recapture
all or that portion of the Demised Premises and terminate this Lease by notice
to Tenant of its intention to so recapture the Demised Premises.

                      (B)  Should Landlord elect to recapture all or that

                                       22
<PAGE>

                           portion of the Demised Premises as aforesaid, the
                           resultant termination shall be effective thirty (30)
                           days following Landlord's notice of election to
                           recapture the Demised Premises.

                (C)        Landlord agrees not to unreasonably withhold its
                           consent to an assignment of all (but not part) of
                           Tenant's interest in this Lease in connection with
                           the sale of Tenant's business, subject to the
                           provisions set forth in Subparagraph (D) (i), (ii)
                           and (iii) below. In such event, Landlord's right to
                           recapture shall not apply.

                (D)        In the event Landlord elects not to recapture the
                           Demised Premises, as provided above, then in such
                           event, Tenant shall be permitted to assign or sublet
                           the entire or a portion of the Demised Premises for a
                           use as permitted by this Lease, provided that: (i)
                           the Assignee's or Sublessee's net worth at such time
                           is the same or better than Tenant's net worth as of
                           the date hereof; and (ii) the proposed use shall not
                           be in conflict with any restriction contained in any
                           of the leases Landlord has with other tenants in the
                           Shopping Center; (iii) Tenant remains liable on the
                           Lease; and (iv) any rent ,Tenant receives in excess
                           of the rental herein provided shall be delivered
                           monthly to Landlord.

          Section 10.2. In the case of any assignment or subletting permitted
pursuant to Section 10.1, Tenant shall in each case comply with each of the
following conditions:

          (1)   A duplicate original executed copy of any such assignment or
                sublease shall be delivered to Landlord thirty days prior to the
                Commencement Date thereof, and in the case of any assignment an
                assumption agreement by Assignee of all obligations of Tenant
                thereafter arising, reasonably satisfactory in form and
                substance to Landlord; and

                                       23

<PAGE>

          (2)   Each sublease shall provide that, in the event of cancellation
                of this Lease, the subtenant under said sublease shall, at the
                option of the Landlord, attorn to and become direct subtenant of
                Landlord on the same terms and conditions as are provided in
                said sublease, except that Landlord shall not be liable for
                defaults of Tenant as sublandlord occurring prior to such
                attornment.

          Section 10.3. Notwithstanding any provision to the contrary herein
contained, Tenant may assign this Lease to a corporation in which it retains a
majority stock interest without the prior written consent of Landlord.

                                   ARTICLE XI

                                  Subordination
                                  -------------

          Section 11.1. This Lease is, and all of Tenant's rights hereunder are,
and shall be subject and subordinate at all times to all covenants,
restrictions, easements and encumbrances now or hereafter affecting the fee
title of the Shopping Center and to all ground and underlying leases, if any,
and mortgages or any other method of financing in any amounts, and all advances
thereon, which may now or hereafter be placed against or affect any or all of
the land or the Demised Premises, or any or all of the buildings and
improvements now or at any time hereafter constituting a part of or adjoining
the Shopping Center, and to all renewals, modifications, consolidations,
participations, replacements, spreaders and extensions thereof. The term
"mortgages" as used herein shall be deemed to include trust indentures and deeds
of trust, and the term "mortgagees" as used in this Lease shall be deemed to
include trustees or beneficiaries under trust indentures and deeds of trust. The
aforesaid provisions shall be self-operative and no further instrument of
subordination shall be necessary unless required by any

                                       24
<PAGE>

such ground or underlying lessors or mortgagees. Should Landlord or any ground
or underlying lessors or mortgagees desire confirmation of such subordination,
Tenant within ten (10) days following Landlord's request therefor, agrees to
execute, acknowledge and deliver, without charge, any and all documents (in form
acceptable to such ground or underlying lessors or mortgagees) subordinating
this Lease and Tenant's rights hereunder. However, should any such ground or
underlying lessors or any mortgagees request that this Lease be made superior,
rather than subordinate, to any such ground or underlying lease or mortgage,
then Tenant within ten (10) days following Landlord's request therefor, agrees
to execute, acknowledge and deliver, without charge, any and all documents (in
form acceptable to such ground or underlying lessors or mortgagees) effectuating
such priority. In the event Tenant fails to execute, acknowledge and deliver any
of such documents within ten (10) days after Landlord's request, Tenant shall be
deemed to be in default under this Lease. if, in connection with the obtaining,
continuing or receiving of financing for which all or any part of the Shopping
Center, in whole or in part, represents collateral, any such mortgagee, trustee
or lessor shall request reasonable modifications of this Lease as a condition of
such financing, Tenant shall not unreasonably withhold or delay its consent
thereto, provided that such modifications do not materially and adversely affect
the rights of Tenant under this Lease. Upon request by Tenant, Landlord shall
use reasonable efforts to obtain non-disturbance agreements from underlying
lessors or mortgagees of the Shopping Center.

                                   ARTICLE XII

                   Default Provisions - Conditional Limitation
                   -------------------------------------------

          Section 12.1. In case one or more of the following events (herein
called an "Event of Default") shall have occurred, and shall not have been
remedied within the tine, and in the manner, hereinafter set forth:

                                       25
<PAGE>

          (a)   default shall be made in the payment of the Fixed Rent, or of
                Additional Rent, and such default shall continue for a period of
                seven (7) days after written notice, specifying such default,
                shall have been given to Tenant; or

          (b)   default shall be made in the performance of any other covenant
                or agreement on the part of Tenant to be performed hereunder,
                and such default shall continue for a period of thirty (30) days
                after written notice specifying such default shall have been
                given to Tenant; provided, however, in the case of a default
                which is of such a nature that it cannot, with due diligence, be
                remedied by Tenant within a period of thirty (30) days, so long
                as Tenant commences, as promptly as may reasonably be possible
                within said 30 days after the service of such notice, to cure
                the default, and thereafter to prosecute such cure with all due
                diligence to completion, the 30 day period aforesaid within
                which to remedy the default shall be extended for such period as
                may be necessary to cure the same with all due diligence (but in
                no event beyond the period granted Landlord to cure such a
                DEFAULT PURSUANT to the Overlease);

          (c)   (i) if a receiver, trustee or liquidator of Tenant, or of all,
                or a substantial part of Tenant's assets, shall be appointed; or
                (ii) Tenant shall be adjudicated a bankrupt or insolvent; or
                (iii) Tenant shall make an assignment of its property for the
                benefit of creditors, or shall file a petition seeking
                reorganization or an arrangement with creditors, or seek to take
                advantage of any insolvency law; or (iv) an involuntary petition
                shall be filed against Tenant under any bankruptcy,
                reorganization or insolvency law, and Tenant has not proceeded
                to take the necessary

                                       26
<PAGE>

                steps to discontinue the petition within ninety (90) days from
                the filing thereof;

                Then, and in any of such events set forth in subparagraphs (a),
                (b) and (c) above, Landlord may, at its option, give to Tenant a
                notice of election to end the tern of this Lease at the
                expiration of ten (10) days from the date of such notice; and,
                if said notice is given, then at the expiration of said ten (10)
                days the term of this Lease and all right, title and interest of
                Tenant hereunder, shall expire as fully and completely as if
                that day were the date herein specifically fixed for the
                expiration of the term of this Lease, and Tenant will then quit
                and surrender the Demised Premises to Landlord; provided,
                however, that Tenant shall nevertheless remain liable to
                Landlord as hereinafter provided.

          Section 12.2. (A) Upon any such expiration or termination of this
Lease pursuant to Section 12.1 above, or any termination by summary proceedings
or otherwise, Landlord may, without further notice, re-enter upon the Demised
Premises, and possess and repossess itself thereof, by force, summary
proceedings, ejectment or otherwise, and may dispossess Tenant, and remove
Tenant and all other persons and property from the Demised Premises, and nay
have, hold and enjoy the Demised Premises, and the right to receive all rental
income of and from the same.

                (B) At any time, or from time, after any such expiration or
          termination of this Lease, Landlord may relet the Demised Premises, or
          any part thereof, in the name of Landlord or otherwise, for such tern
          or terms (which may be greater or less than the period which would
          otherwise have constituted the balance of the term of this Lease) and
          on such conditions as Landlord, in its uncontrolled

                                       27
<PAGE>

          discretion, nay determine, and may collect and receive the rents
          therefor. Landlord shall in no way be responsible or liable for any
          failure to relet the Demised Premises, or any part thereof, or for any
          failure to collect any rent due upon any such reletting.

                (C) No expiration or termination of this Lease pursuant to
          Section 12.1 above, shall relieve Tenant of its liability and
          obligations under this Lease, and such liability and obligations shall
          survive any such expiration, termination or reentry. In the event of
          any such expiration, termination or reentry, whether or not the
          Demised Premises or any part thereof shall have been relet, Tenant
          shall pay to Landlord the rent, and all other charges required to be
          paid by Tenant, up to the time of such expiration or termination of
          this Lease; and thereafter Tenant, until the end of what would have
          been the term hereof in the absence of such expiration, termination or
          reentry, shall be liable to Landlord and shall pay to Landlord, as and
          for agreed upon liquidated damages resulting from Tenant's default,
          and not as a penalty, the equivalent of the amount of Fixed Rent and
          Additional Rent and charges, which would be payable by Tenant under
          this Lease if it were still in effect, less the net proceeds of any
          reletting effected pursuant to the provisions of (B) above, after
          deducting all of Landlord's expenses in connection therewith,
          including, without limitation, all repossession costs, brokerage and
          management commissions, operating expenses, reasonable attorneys'
          fees, alteration costs and expenses of preparation for such reletting.

                Tenant shall pay such liquidated damages (hereinafter
          "Deficiency".) to Landlord monthly, on the days on which the Fixed
          -'-Rent would have been payable hereunder if this Lease were still in
          effect, and Landlord shall be entitled to recover from Tenant each
          monthly Deficiency as the same shall arise.

                                       28
<PAGE>

          Section 12.3. Tenant hereby expressly waives any and all right to
redemption in case Tenant shall be dispossessed by a judgment, or by warrant of
any court or judge. Tenant and Landlord each waive, and will waive, any and all
rights to a trial by jury in the event that summary proceedings shall be
instituted by Landlord. Tenant hereby waives the right to interpose any
counterclaim in a summary proceeding or in any action based on non-payment by
Tenant of Fixed Rent or Additional Rent.

          Section 12.4. If Tenant shall default in the observation or
performance of any of the terms, covenants or conditions upon its part to be
observed or performed under the terms of this Lease, the Landlord, after ten
(10) days' written notice, and provided Tenant has not proceeded to cure said
default (except in cases of emergency, where only notice reasonable under the
circumstances need be given), may, but shall not be required to, perform the
same for the account and on behalf of the Tenant and, if Landlord makes any
expenditure or incurs any obligations in connection with the default of Tenant,
then the amount thereof shall be paid by Tenant to Landlord on demand. The term
"expenditure" or "obligation", as used in this section, shall include reasonable
attorneys' fees, and interest at the prime rate of Landlord's bank, on any
monies advanced for, or on account of Tenant.

                                  ARTICLE XIII

                       Limitation of Landlord's Liability
                       ----------------------------------

          Section 13.1. The term "landlord" as used in this Lease shall be
limited to mean, and include only, the owner or owners at the time in question
of Landlord's interest in the Demised Premises, and in the event of any transfer
or transfers of the title to such interest, Landlord herein named (and in case
of any subsequent transfers or conveyances the then transferor) shall be
automatically freed and relieved, from and after the date of such transfer or
conveyance, of

                                       29
<PAGE>

all personal liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed; provided that, any funds in the hands of such Landlord, or the then
transferor) at the time of such transfer, in which Tenant has an interest, shall
be turned over and/or assigned to the transferee, and any amount then due and
payable to Tenant by Landlord, or the then transferor under any provisions of
this Lease, shall be paid to the new Landlord; and provided further, that upon
such transfer, the transferee shall be deemed to expressly assume, subject to
the limitations of this Article XIII, all of the terms, covenants and conditions
in this Lease contained on the part of Landlord thereafter to be performed; it
being intended hereby that the covenants and obligations contained in this Lease
on the part of the Landlord shall, subject as aforesaid, be binding on Landlord,
its successors and assigns, only during, and in respect of, their respective
successive periods of ownership.

          Section 13.2. Waiver of Liability. Anything contained in this Lease to
the contrary notwithstanding, Tenant agrees that Tenant shall look solely to the
estate and property of Landlord in the land and buildings comprising the
Shopping Center of which the Demised Premises forms a part and the rentals
therefrom for the collection of any judgment requiring the payment of money by
Landlord in the event of any default or breach by Landlord with respect to any
of the terms, covenants and conditions of this Lease to be observed and
performed by Landlord, subject, however, to the prior rights of any ground or
underlying lessor or the holder of any mortgage covering the Shopping Center. No
other assets of Landlord shall be subject to levy, execution or other judicial
process for the satisfaction of Tenant's claim.

                                   ARTICLE XIV

                       Invalidity of Particular Provisions
                       -----------------------------------

          Section 14.1. If any term or provision of this Lease, or the

                                       30
<PAGE>

application thereof, to any person or circumstance, shall to any extent to be
held to be invalid or unenforceable by any court having jurisdiction hereover,
the remainder of this Lease (or the application of such term or provision to
persons or circumstances other than those as to which it has been held invalid
or unenforceable), shall not be affected thereby, and each term and provision of
this Lease shall be valid and be enforceable to the fullest extent permitted by
law.

                                   ARTICLE XV

                             Certificates of Tenant
                             ----------------------

          Section 15.1. Tenant agrees at any time, and from time to time, within
ten (10) days after notice by Landlord, or any fee mortgage, to execute,
acknowledge and deliver to such requesting party, a statement in writing,
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the Lease is in full force and effect, as
modified, and stating the modification), and the dates to which the Fixed Rent
and Additional Rent has been paid; and stating whether or not to the best
knowledge of Tenant, Landlord is in default in keeping, observing or performing
any term, covenant, or provision, contained in this Lease and, if in default,
specifying each such default; it being intended that any such statement
delivered pursuant to this Section 15.1 may be relied upon by Landlord, or any
prospective purchaser of Landlord's interest in the Demised Premises, or any
mortgage thereof, or any assignee of any such mortgage, but reliance on such
statement may not exceed to any default as to which Tenant shall have had no
actual knowledge.

                                   ARTICLE XVI

                                     Notices
                                     -------

          Section 16.1. Any notice, demand or request which, under the terms
hereof, or under any statute, must or may be given the parties

                                       31
<PAGE>

hereto, must be in writing, by mailing the sane: (A) If to Landlord: then to
Landlord at its address as set forth on page 1 hereof, to the attention of Mr.
Irwin Ackerman; and, (B) If to Tenant: then to Tenant at its Demised Premises,
with a copy to Tenant at 1355 First Avenue, New York, New York 10021, attention
Charles Vavra, Branch Administrator. All notices given hereunder shall be made
by depositing same in a United States general or branch post office, by
certified or registered mail, return receipt requested. The date of delivery
shall be deemed to be either (a) the date shown on the return receipt; or (b) in
the event the addressee refuses delivery, then 2 days after said nailing date.
If requested in writing by any mortgagee of' Landlord's interest in the Demised
Premises, Tenant agrees that any notice given Landlord shall also be given
contemporaneously to such mortgagee. Either party, and any mortgagee may
designate by notice in writing, given as herein specified, a new or other
address to which such notice or demand shall thereafter be so given or made.

                                  ARTICLE XVII

                               Cumulative Remedies
                               -------------------
                           No Waiver - No Oral Change
                           --------------------------

          Section 17.1. The specified remedies to which Landlord or Tenant may
resort under the terms of this Lease are cumulative, and are not intended to be
exclusive of any other remedies or means of redress to which Landlord or Tenant
may be lawfully entitled, in case of any breach or threatened breach by Tenant
or Landlord, as the case may be, of any provisions of this Lease. The failure of
Landlord or Tenant to insist upon the strict performance of any of the covenants
of this Lease, or to exercise any option herein contained, shall not be
construed as a waiver for the future of such covenant or option. No waiver by
Landlord or Tenant of any provision of this Lease shall be deemed to have been
made, unless expressed in writing, and signed by the other party. In addition to
the other remedies in this Lease provided, Landlord and Tenant shall be entitled
to an injunction

                                       32
<PAGE>

against any violation, or threatened violation, of any of the covenants,
conditions or provisions of this Lease.

          Section 17.2. This Lease contains the entire agreement of the parties,
all prior understandings and agreements being merged herein, and can be modified
only by an agreement in writing executed and acknowledged by Landlord and
Tenant.

                                  ARTICLE XVIII

                                 Quiet Enjoyment
                                 ---------------

          Section 18.1. Landlord covenants and agrees that Tenant, upon paying
the Fixed Rent, Additional Rent and all other charges herein provided fox-, and
upon observing and keeping all of the covenants, agreements and provisions
hereof on its part to be observed and kept, shall lawfully and quietly hold,
occupy and enjoy the Demised Premises during the term hereof, without hindrance
or molestation by, or from anyone claiming by, through or under Landlord,
subject to the terns, covenants and conditions hereof.

                                   ARTICLE XIX

                              Waiver of Jury Trial
                              --------------------

          Section 19.1. The parties hereto waive a trial-by jury on any or all
issues arising in any action or proceeding between them, or their successors,
arising hereunder, or resulting from the Tenant's use or occupancy of the
Demised Premises.

                                   ARTICLE XX

                                 Sign Provisions
                                 ---------------

          Section 20.1. (A) Subject to compliance by Tenant with provisions of
this Lease, and with applicable laws and regulations of governmental
authorities, Landlord agrees that it will not unreasonably withhold its consent
to the installation by Tenant of a sign designating Tenant's name and business
on the front facade of

                                       33
<PAGE>

the Demised Promises, provided that any such sign must be affixed
horizontal/flush to the facade of the Demised Premises. Tenant agrees to
deliver, in advance of installation, a detailed drawing of any such sign for
Landlord's consent. The withholding of consent shall not be deemed unreasonable
for any proposed sign that includes flashing/blinking lights in its design.
Tenant shall be required to maintain its; sign in good condition and repair, to
remove the same at the end of the term hereof, and to promptly repair any damage
caused by said removal.

                (B) Tenant shall have the option to have that certain space on
          the Pathmark pylon sign previously used by the former tenant, Central
          Avenue Camera. Such space sign shall be provided by Tenant at its cost
          and expense and shall be maintained by Tenant in good condition and
          repair.

                                   ARTICLE XXI

                                  Miscellaneous
                                  -------------

          Section 21.1. This instrument shall not be recorded by either party
hereto. Each party agrees to execute, at the request of the other, a memorandum
of this Lease to be recorded at the expense of the party requesting it.

          Section 21.2. Each party hereto represents that it has had no dealings
with any broker or agent in connection with this Lease. Tenant agrees to
indemnify and hold Landlord harmless from the claims of any broker or agent whom
Tenant, and not Landlord, dealt with or employed.

          Section 21.3. The agreements herein contained shall bind and inure to
the benefit of the parties hereto, their respective heirs, successors and
assigns.

          Section 21.4 In consideration of Landlord's leasing the Demised

                                       34
<PAGE>

Premises to Tenant and obtaining the surrender of the prior tenant's lease,
Tenant agrees to pay Landlord upon the mutual execution and delivery of this
Lease the sum of Sixty Two Thousand Dollars ($62,000.00).

          IF WITNESS WHEREOF, the parties hereto duly executed this Agreement as
of the day and year first above written.

WITNESS:                                    ACKLINIS ASSOCIATES, Landlord

                                            By
-----------------------------                  ---------------------------------
                                                        General Partner

ATTEST:                                     FOURTH FEDERAL SAVINGS AND LOAN
                                            ASSOCIATION OF NEW YORK, TENANT

-----------------------------               ------------------------------------
                                                          (Title)
  VICE PRESIDENT &                          EXECUTIVE VICE PRESIDENT &
  MORTGAGE OFFICER                          CHIEF OPERATING OFFICER

                                             ACKNOWLEDGMENTS
                                             ---------------
                                                LANDLORD
                                                --------

STATE OF NEW YORK        )
                         :  ss:
COUNTY OF NEW YORK       )

          On the 22nd day of December, 1988, before me came Irwin Ackerman, to
me known, who, being by me duly sworn did depose and say that he resides in New
York, New York; that he is the General Partner of Acklinis Associates, the
partnership described in, and which executed the foregoing instrument.

                                            ------------------------------------
                                                       Notary Public

                                                      RICHARD BERGER
                                              NOTARY PUBLIC STATE of New YORK
                                                      NO. 31-4795722.
                                               QUALIFIED IN New York County
                                             Commission Expires Oct. 31, 2989

                                       35
<PAGE>

                                     TENANT
                                     ------

STATE OF NEW YORK     )
                      :  ss.:
COUNTY OF NEW YORK    )

          On the 22nd day of December - 1988, before me personally came KENNETH
A.MARTINEK, to me known, who being by me duly sworn, did depose and say that he
resides at 145 Sunrise Hill Lane, Conn.; that he is the E.V.P. & C.O.O. of
Fourth Federal Savings and Loan Association of New York 1355 First Ave. New
York, N.Y. the corporation described in, and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.

                                                        /s/ Paul Reilly
                                            ------------------------------------
                                                         Notary Public

                                                          PAUL REILLY
                                               NOTARY PUBLIC, STATE OF NEW YORK
                                                        NO. 03-4693802
                                                   QUALIFIED IN BRONX COUNTY
                                                    COMMISSION EXPIRES JAN

                                       36

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