Document:

<PAGE>
                                                                   EXHIBIT 10.13

                                                                  EXECUTION COPY

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                      AMENDED AND RESTATED TRUST AGREEMENT

                                      among

                               TOWER GROUP, INC.,
                                  as Depositor

                              JPMORGAN CHASE BANK,
                               as Property Trustee

                 CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
                               as Delaware Trustee

                                       and

                    THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
                           as Administrative Trustees

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

                         Dated as of September 30, 2003

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

                         TOWER GROUP STATUTORY TRUST II

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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       Page

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ARTICLE I.        DEFINED TERMS..........................................................................1

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

ARTICLE II.       THE TRUST..............................................................................9

         SECTION 2.1.      Name..........................................................................9

         SECTION 2.2.      Office of the Delaware Trustee; Principal Place of Business...................9

         SECTION 2.3.      Initial Contribution of Trust Property; Fees, Costs and Expenses..............9

         SECTION 2.4.      Purposes of Trust.............................................................9

         SECTION 2.5.      Authorization to Enter into Certain Transactions.............................10

         SECTION 2.6.      Assets of Trust..............................................................12

         SECTION 2.7.      Title to Trust Property......................................................12

ARTICLE III.      PAYMENT ACCOUNT; PAYING AGENTS........................................................12

         SECTION 3.1.      Payment Account..............................................................12

         SECTION 3.2.      Appointment of Paying Agents.................................................12

ARTICLE IV.       DISTRIBUTIONS; REDEMPTION.............................................................13

         SECTION 4.1.      Distributions................................................................13

         SECTION 4.2.      Redemption...................................................................14

         SECTION 4.3.      Subordination of Common Securities...........................................16

         SECTION 4.4.      Payment Procedures...........................................................16

         SECTION 4.5.      Withholding Tax..............................................................16

         SECTION 4.6.      Tax Returns and Other Reports................................................17

         SECTION 4.7.      Payment of Taxes, Duties, Etc. of the Trust..................................17

         SECTION 4.8.      Payments under Indenture or Pursuant to Direct Actions.......................17

         SECTION 4.9.      Exchanges....................................................................17

         SECTION 4.10.     Calculation Agent............................................................18

         SECTION 4.11.     Certain Accounting Matters...................................................18

ARTICLE V.        SECURITIES............................................................................19

         SECTION 5.1.      Initial Ownership............................................................19

         SECTION 5.2.      Authorized Trust Securities..................................................19

         SECTION 5.3.      Issuance of the Common Securities; Subscription and Purchase of Notes........19

         SECTION 5.4.      The Securities Certificates..................................................19

         SECTION 5.5.      Rights of Holders............................................................20

         SECTION 5.6.      Book-Entry Preferred Securities..............................................20

         SECTION 5.7.      Registration of Transfer and Exchange of Preferred Securities
                           Certificates.................................................................21
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                                        i
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<S>                                                                                                    <C>
         SECTION 5.8.      Mutilated, Destroyed, Lost or Stolen Securities Certificates.................22

         SECTION 5.9.      Persons Deemed Holders.......................................................23

         SECTION 5.10.     Cancellation.................................................................23

         SECTION 5.11.     Ownership of Common Securities by Depositor..................................23

         SECTION 5.12.     Restricted Legends...........................................................24

         SECTION 5.13.     Form of Certificate of Authentication........................................25

ARTICLE VI.       MEETINGS; VOTING; ACTS OF HOLDERS.....................................................26

         SECTION 6.1.      Notice of Meetings...........................................................26

         SECTION 6.2.      Meetings of Holders of the Preferred Securities..............................26

         SECTION 6.3.      Voting Rights................................................................26

         SECTION 6.4.      Proxies, Etc.................................................................26

         SECTION 6.5.      Holder Action by Written Consent.............................................27

         SECTION 6.6.      Record Date for Voting and Other Purposes....................................27

         SECTION 6.7.      Acts of Holders..............................................................27

         SECTION 6.8.      Inspection of Records........................................................28

         SECTION 6.9.      Limitations on Voting Rights.................................................28

         SECTION 6.10.     Acceleration of Maturity; Rescission of Annulment; Waivers of Past
                           Defaults.....................................................................28

ARTICLE VII.      REPRESENTATIONS AND WARRANTIES........................................................30

         SECTION 7.1.      Representations and Warranties of the Property Trustee and the
                           Delaware Trustee.............................................................30

         SECTION 7.2.      Representations and Warranties of Depositor..................................31

ARTICLE VIII.     THE TRUSTEES..........................................................................32

         SECTION 8.1.      Number of Trustees...........................................................32

         SECTION 8.2.      Property Trustee Required....................................................32

         SECTION 8.3.      Delaware Trustee Required....................................................32

         SECTION 8.4.      Appointment of Administrative Trustees.......................................33

         SECTION 8.5.      Duties and Responsibilities of the Trustees..................................33

         SECTION 8.6.      Notices of Defaults and Extensions...........................................34

         SECTION 8.7.      Certain Rights of Property Trustee...........................................34

         SECTION 8.8.      Delegation of Power..........................................................36

         SECTION 8.9.      May Hold Securities..........................................................36

         SECTION 8.10.     Compensation; Reimbursement; Indemnity.......................................36

         SECTION 8.11.     Resignation and Removal; Appointment of Successor............................37

         SECTION 8.12.     Acceptance of Appointment by Successor.......................................38

         SECTION 8.13.     Merger, Conversion, Consolidation or Succession to Business..................39

         SECTION 8.14.     Not Responsible for Recitals or Issuance of Securities.......................39

         SECTION 8.15.     Property Trustee May File Proofs of Claim....................................39
</TABLE>

                                       ii
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         SECTION 8.16.     Reports to and from the Property Trustee.....................................39

ARTICLE IX.       TERMINATION, LIQUIDATION AND MERGER...................................................40

         SECTION 9.1.      Dissolution Upon Expiration Date.............................................40

         SECTION 9.2.      Early Termination............................................................40

         SECTION 9.3.      Termination..................................................................40

         SECTION 9.4.      Liquidation..................................................................41

         SECTION 9.5.      Mergers, Consolidations, Amalgamations or Replacements of Trust..............42

ARTICLE X.        MISCELLANEOUS PROVISIONS..............................................................43

         SECTION 10.1.     Limitation of Rights of Holders..............................................43

         SECTION 10.2.     Agreed Tax Treatment of Trust and Trust Securities...........................43

         SECTION 10.3.     Amendment....................................................................43

         SECTION 10.4.     Separability.................................................................44

         SECTION 10.5.     Governing Law................................................................44

         SECTION 10.6.     Successors...................................................................44

         SECTION 10.7.     Headings.....................................................................44

         SECTION 10.8.     Reports, Notices and Demands.................................................45

         SECTION 10.9.     Agreement Not to Petition....................................................45

         SECTION 10.10.    Counterparts.................................................................45

Exhibit A.........Certificate of Trust of Tower Group Statutory Trust II
Exhibit B.........Form of Common Securities Certificate
Exhibit C.........Form of Preferred Securities Certificate
Exhibit D.........Junior Subordinated Indenture
Exhibit E.........Form of Transferor Certificate to be Executed for QIBs
Exhibit F.........Form of Transferee Certificate to be Executed by Transferees other than QIBs
Exhibit G.........Form of Officer's Financial Certificate of the Depositor

Schedule A .......Calculation of LIBOR
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                                      iii

<PAGE>

                  THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of
September 30, 2003, among (i) Tower Group, Inc., a Delaware corporation
(including any successors or permitted assigns, the "Depositor"), (ii) JPMorgan
Chase Bank, a New York banking corporation, as property trustee (in such
capacity, the "Property Trustee"), (iii) Chase Manhattan Bank USA, National
Association, a national banking association, as Delaware trustee (in such
capacity, the "Delaware Trustee"), (iv) Michael H. Lee, an individual, Steven G.
Fauth, an individual and Francis M. Colalucci, an individual, each of whose
address is c/o Tower Group, Inc., 120 Broadway, 14th Floor, New York, New York,
10271, as administrative trustees (in such capacities, each an "Administrative
Trustee" and, collectively, the "Administrative Trustees" and, together with the
Property Trustee and the Delaware Trustee, the "Trustees") and (v) the several
Holders, as hereinafter defined.

                                   WITNESSETH

                  WHEREAS, the Depositor, the Property Trustee and the Delaware
Trustee have heretofore created a Delaware statutory trust pursuant to the
Delaware Statutory Trust Act by entering into a Trust Agreement, dated as of
September 25, 2003 (the "Original Trust Agreement"), and by executing and filing
with the Secretary of State of the State of Delaware the Certificate of Trust,
substantially in the form attached as Exhibit A; and

                  WHEREAS, the Depositor and the Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Trust to the Depositor, (ii) the issuance and sale of the Preferred
Securities by the Trust pursuant to the Purchase Agreement and (iii) the
acquisition by the Trust from the Depositor of all of the right, title and
interest in and to the Notes;

                  NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each party, for the
benefit of the other parties and for the benefit of the Holders, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as follows:

                                   ARTICLE I.

                                  DEFINED TERMS

                  SECTION 1.1. Definitions.

                  For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

                           (a) the terms defined in this Article I have the
                  meanings assigned to them in this Article I;

                           (b) the words "include", "includes" and "including"
                  shall be deemed to be followed by the phrase "without
                  limitation";

                           (c) all accounting terms used but not defined herein
                  have the meanings assigned to them in accordance with United
                  States generally accepted accounting principles;

                           (d) unless the context otherwise requires, any
                  reference to an "Article", a "Section", a "Schedule" or an
                  "Exhibit" refers to an Article, a Section, a Schedule or an
                  Exhibit, as the case may be, of or to this Trust Agreement;

                           (e) the words "hereby", "herein", "hereof" and
                  "hereunder" and other words of similar import refer to this
                  Trust Agreement as a whole and not to any particular Article,
                  Section or other subdivision;
<PAGE>

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

                           (g) the masculine, feminine or neuter genders used
                  herein shall include the masculine, feminine and neuter
                  genders.

                  "Act" has the meaning specified in Section 6.7.

                  "Additional Interest" has the meaning specified in Section 1.1
of the Indenture.

                  "Additional Interest Amount" means, with respect to Trust
Securities of a given Liquidation Amount and/or a given period, the amount of
Additional Interest paid by the Depositor on a Like Amount of Notes for such
period.

                  "Additional Taxes" has the meaning specified in Section 1.1 of
the Indenture.

                  "Additional Tax Sums" has the meaning specified in Section
10.5 of the Indenture.

                  "Administrative Trustee" means each of the Persons identified
as an "Administrative Trustee" in the preamble to this Trust Agreement, solely
in each such Person's capacity as Administrative Trustee of the Trust and not in
such Person's individual capacity, or any successor Administrative Trustee
appointed as herein provided.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

                  "Applicable Accounting Principles" means accounting practices
prescribed or permitted by the National Association of Insurance Commissioners
and, with respect to the Depositor's subsidiary insurance companies, the
applicable insurance department of the state of domicile of such insurance
subsidiary and, in each case, applied consistently throughout the periods
involved.

                  "Applicable Depositary Procedures" means, with respect to any
transfer or transaction involving a Book-Entry Preferred Security, the rules and
procedures of the Depositary for such Book-Entry Preferred Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.

                  "Applicable Insurance Regulatory Authority" means the
Superintendent of the New York State Insurance Department or, if at any time
after the execution of this Trust Agreement any such entity is not existing and
performing the duties now assigned to it, any successor body performing similar
duties or functions.

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

                  (a) the entry of a decree or order by a court having
                  jurisdiction in the premises (i) judging such Person a
                  bankrupt or insolvent, (ii) approving as properly filed a
                  petition seeking reorganization, arrangement, adjudication or
                  composition of or in respect of such Person under any
                  applicable Federal or state bankruptcy, insolvency,
                  reorganization or other similar law, (iii) appointing a
                  custodian, receiver, liquidator, assignee, trustee,
                  sequestrator or other similar official of such Person or of
                  any substantial part of its property or (iv) ordering the
                  winding up or liquidation of its affairs, and the continuance
                  of any such decree or order unstayed and in effect for a
                  period of sixty (60) consecutive days; or

                  (b) the institution by such Person of proceedings to be
                  adjudicated a bankrupt or insolvent, or the consent by it to
                  the institution of bankruptcy or insolvency proceedings
                  against it, or the filing by it of a petition or answer or
                  consent seeking reorganization or relief under any applicable
                  Federal or State bankruptcy, insolvency, reorganization or
                  other similar law, or the consent by it to the filing of any
                  such petition or to the appointment of a custodian, receiver,
                  liquidator, assignee, trustee, sequestrator or similar
                  official of such Person or of any substantial part of its
                  property, or the making by it of an assignment for the benefit
                  of creditors, or the admission by it in writing of its
                  inability to pay its debts generally as they become due and
                  its willingness to be adjudicated a bankrupt or insolvent, or
                  the taking of corporate action by such Person in furtherance
                  of any such action.

                                       2
<PAGE>

                  "Bankruptcy Laws" means all Federal and state bankruptcy,
insolvency, reorganization and other similar laws, including the United States
Bankruptcy Code.

                  "Book-Entry Preferred Security" means a Preferred Security,
the ownership and transfers of which shall be made through book entries by a
Depositary.

                  "Business Day" means a day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in the City of New York are
authorized or required by law or executive order to remain closed or (c) a day
on which the Corporate Trust Office is closed for business.

                  "Calculation Agent" has the meaning specified in Section 4.10.

                  "Closing Date" has the meaning specified in the Purchase
Agreement.

                  "Code" means the United States Internal Revenue Code of 1986,
as amended.

                  "Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution of this Trust Agreement such Commission is not existing and
performing the duties assigned to it, then the body performing such duties at
such time.

                  "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.

                  "Common Security" means an undivided beneficial interest in
the assets of the Trust, having a liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement.

                  "Corporate Trust Office" means the principal office of the
Property Trustee at which any particular time its corporate trust business shall
be administered, which office at the date of this Trust Agreement is located at
600 Travis, Suite 1150, Houston, Texas 77002, Attention: Institutional Trust
Services.

                  "Definitive Preferred Securities Certificates" means Preferred
Securities issued in certificated, fully registered form that are not Global
Preferred Securities.

                  "Delaware Statutory Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code ss. 3801 et seq., or any successor statute
thereto, in each case as amended from time to time.

                  "Delaware Trustee" means the Person identified as the
"Delaware Trustee" in the preamble to this Trust Agreement, solely in its
capacity as Delaware Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor Delaware Trustee
appointed as herein provided.

                  "Depositary" means an organization registered as a clearing
agency under the Exchange Act that is designated as Depositary by the Depositor
or any successor thereto. DTC will be the initial Depositary.

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

                                       3
<PAGE>

                  "Depositor" has the meaning specified in the preamble to this
Trust Agreement and any successors and permitted assigns.

                  "Depositor Affiliate" has the meaning specified in Section
4.9.

                  "Distribution Date" has the meaning specified in Section 4. I
(a)(i).

                  "Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.

                  "DTC" means The Depository Trust Company or any successor
thereto.

                  "Early Termination Event" has the meaning specified in Section
9.2.

                  "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 a Note Event of Default; or

                  (b) default by the Trust in the payment of any Distribution
                  when it becomes due and payable, and continuation of such
                  default for a period of thirty (30) days; or

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

                  (d) default in the performance, or breach, in any material
                  respect of any covenant or warranty of the Trustees in this
                  Trust Agreement (other than those specified in clause (b) or
                  (c) above) and continuation of such default or breach for a
                  period of thirty (30) days after there has been given, by
                  registered or certified mail, to the Trustees and to the
                  Depositor by the Holders of at least twenty five percent (25%)
                  in aggregate Liquidation Amount of the Outstanding Preferred
                  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

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

                  "Exchange Act" means the Securities Exchange Act of 1934, and
any successor statute thereto, in each case as amended from time to time.

                  "Expiration Date" has the meaning specified in Section 9.1.

                  "Extension Period" has the meaning specified in Section
4.1(a)(ii).

                  "Fiscal Year" shall be the fiscal year of the Trust, which
shall be the calendar year, or such other period as is required by the Code.

                  "Global Preferred Security" means a Preferred Securities
Certificate evidencing ownership of Book-Entry Preferred Securities.

                  "Guarantee Agreement" means the Guarantee Agreement executed
and delivered by the Depositor and JPMorgan Chase Bank, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement for
the benefit of the holders of the Preferred Securities, as amended from time to
time.

                                       4
<PAGE>

                  "Holder" means a Person in whose name a Trust Security or
Trust Securities are registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Statutory Trust Act.

                  "Indemnified Person" has the meaning specified in Section
8.10(c).

                  "Indenture" means the Junior Subordinated Indenture executed
and delivered by the Depositor and the Note Trustee contemporaneously with the
execution and delivery of this Trust Agreement, for the benefit of the holders
of the Notes, a copy of which is attached hereto as Exhibit D, as amended or
supplemented from time to time.

                  "Indenture Redemption Price" means the Optional Note
Redemption Price or the Special Note Redemption Price, as applicable.

                  "Interest Payment Date" has the meaning specified in Section
1.1 of the Indenture.

                  "Investment Company Act" means the Investment Company Act of
1940, or any successor statute thereto, in each case as amended from time to
time.

                  "Investment Company Event" has the meaning specified in
Section 1.1 of the Indenture.

                  "LIBOR" has the meaning specified in Schedule A.

                  "LIBOR Business Day" has the meaning specified in Schedule A.

                  "LIBOR Determination Date" has the meaning specified in
Schedule A.

                  "Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.

                  "Like Amount" means (a) with respect to a redemption of any
Trust Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Notes to be contemporaneously redeemed or paid at maturity
in accordance with the Indenture, the proceeds of which will be used to pay the
Redemption Price of such Trust Securities, (b) with respect to a distribution of
Notes to Holders of Trust Securities in connection with a dissolution of the
Trust, Notes having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Notes are distributed and (c) with
respect to any distribution of Additional Interest Amounts to Holders of Trust
Securities, Notes having a principal amount equal to the Liquidation Amount of
the Trust Securities in respect of which such distribution is made.

                  "Liquidation Amount" means the stated amount of $1,000 per
Trust Security.

                  "Liquidation Date" means the date on which assets are to be
distributed to Holders in accordance with Section 9.4(a) hereunder following
dissolution of the Trust.

                  "Liquidation Distribution" has the meaning specified in
Section 9.4(d).

                  "Majority in Liquidation Amount" means Common or Preferred
Securities, as the case may be, representing more than fifty percent (50%) of
the aggregate Liquidation Amount of all (or a specified group of) then
Outstanding Common or Preferred Securities, as the case may be.

                  "Note Event of Default" means any "Event of Default" specified
in Section 5.1 of the Indenture.

                  "Note Redemption Date" means, with respect to any Notes to be
redeemed under the Indenture, the date fixed for redemption of such Notes under
the Indenture.

                                       5
<PAGE>

                  "Note Trustee" means the Person identified as the "Trustee" in
the Indenture, solely in its capacity as Trustee pursuant to the Indenture and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Trustee appointed as provided in the Indenture.

                  "Notes" means the Depositor's Floating Rate Junior
Subordinated Notes issued pursuant to the Indenture.

                  "Officers Certificate" means a certificate signed by the Chief
Executive Officer, the President or an Executive Vice President, and by the
Chief Financial Officer, Treasurer or an Assistant Treasurer, of the Depositor,
and delivered to the Trustees. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this Trust Agreement
(other than the certificate provided pursuant to Section 8.16 which is not an
Officers' Certificate) shall include:

                  (a) a statement by each officer signing the Officers'
                  Certificate that such officer 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 such officer in
                  rendering the Officers' Certificate;

                  (c) a statement that 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 such officer,
                  such condition or covenant has been complied with.

                  "Operative Documents" means the Purchase Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement, the Notes and the Trust
Securities.

                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for, or an employee of, the Depositor or any Affiliate of the
Depositor.

                  "Optional Redemption Price" means, with respect to any Trust
Security, an amount equal to one hundred percent (100%) of the Liquidation
Amount of such Trust Security on the Redemption Date, plus accumulated and
unpaid Distributions to the Redemption Date, plus the related amount of the
premium, if any, and/or accrued interest, including Additional Interest, if any,
thereon paid by the Depositor upon the concurrent redemption or payment at
maturity of a Like Amount of Notes.

                  "Optional Note Redemption Price" means, with respect to any
Note to be redeemed on any Redemption Date under the Indenture, an amount equal
to one hundred percent (100%) of the outstanding principal amount of such Note,
together with accrued interest, including any Additional Interest (to the extent
legally enforceable), thereon through but not including the date fixed as such
Redemption Date.

                  "Original Issue Date" means the date of original issuance of
the Trust Securities.

                  "Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.

                  "Outstanding", when used with respect to any Trust Securities,
means, as of the date of determination, all Trust Securities theretofore
executed and delivered under this Trust Agreement, except:

                  (a) Trust Securities theretofore canceled by the Property
                  Trustee or delivered to the Property Trustee for cancellation:

                  (b) Trust Securities for which payment or redemption money in
                  the necessary amount has been theretofore deposited with the
                  Property Trustee or any Paying Agent in trust for the Holders
                  of such Trust Securities: provided, that if such Trust
                  Securities are to be redeemed, notice of such redemption has
                  been duly given pursuant to this Trust Agreement; and

                                       6
<PAGE>

                  (c) Trust Securities that have been paid or in exchange for or
                  in lieu of which other Trust Securities have been executed and
                  delivered pursuant to the provisions of this Trust Agreement,
                  unless proof satisfactory to the Property Trustee is presented
                  that any such Trust Securities are held by Holders in whose
                  hands such Trust Securities are valid, legal and binding
                  obligations of the Trust;

provided, that in determining whether the Holders of the requisite Liquidation
Amount of the Outstanding Preferred Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or of any Trustee shall be disregarded and deemed not to be Outstanding, except
that (i) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Preferred Securities that such Trustee knows to be so owned shall be so
disregarded and (ii) the foregoing shall not apply at anytime when all of the
Outstanding Preferred Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Preferred Securities so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Preferred Securities and that the pledgee is not the
Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee.

                  "Owner" means each Person who is the beneficial owner of
Book-Entry Preferred Securities as reflected in the records of the Depositary
or, if a Depositary Participant is not the beneficial owner, then the beneficial
owner as reflected in the records of the Depositary Participant.

                  "Paying Agent" means any Person authorized by the
Administrative Trustees to pay Distributions or other amounts in respect of any
Trust Securities on behalf of the Trust.

                  "Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee for the benefit of
the Holders in which all amounts paid in respect of the Notes will be held and
from which the Property Trustee, through the Paying Agent, shall make payments
to the Holders in accordance with Sections 3.1, 4.1 and 4.2.

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

                  "Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement.

                  "Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred Securities, substantially in the form attached
as Exhibit C.

                  "Property Trustee" means the Person identified as the
"Property Trustee" in the preamble to this Trust Agreement, solely in its
capacity as Property Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor Property Trustee
appointed as herein provided.

                  "Purchase Agreement" means the Purchase Agreement executed and
delivered by the Trust, the Depositor and Dekania CDO1, Ltd., as purchaser,
contemporaneously with the execution and delivery of this Trust Agreement, as
amended from time to time.

                  "QIB" means a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act of 1933, as amended.

                                       7
<PAGE>

                  "Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided, that each Note Redemption Date and the stated maturity (or
any date of principal repayment upon early maturity) of the Notes shall be a
Redemption Date for a Like Amount of Trust Securities.

                  "Redemption Price" means the Special Redemption Price or
Optional Redemption Price, as applicable. If the Depositor has redeemed the
Notes at the Special Note Redemption Price, the Trust shall redeem the Trust
Securities at the Special Redemption Price. If the Depositor has redeemed the
Notes at the Optional Note Redemption Price, the Trust shall redeem the Trust
Securities at the Optional Redemption Price.

                  "Reference Banks" has the meaning specified in Schedule A.

                  "Responsible Officer" means, with respect to the Property
Trustee, the officer in the Institutional Trust Services department of the
Property Trustee having direct responsibility for the administration of this
Trust Agreement.

                  "Securities Act" means the Securities Act of 1933, and any
successor statute thereto, in each case as amended from time to time.

                  "Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.

                  "Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.7.

                  "Special Redemption Price" means, with respect to any Trust
Security, an amount equal to one hundred seven and one half percent (107.5%) of
the Liquidation Amount of such Trust Security on the Redemption Date, plus
accumulated and unpaid Distributions to the Redemption Date, plus the related
amount of the premium, if any, and/or accrued interest, including Additional
Interest, if any, thereon paid by the Depositor upon the concurrent redemption
or payment at maturity of a Like Amount of Notes.

                  "Special Note Redemption Price" means, with respect to any
Note to be redeemed on any Redemption Date under the Indenture, an amount equal
to one hundred seven and one half percent (107.5%) of the outstanding principal
amount of such Note, together with accrued interest, including Additional
Interest, thereon through but not including the date fixed as such Redemption
Date.

                  "Statutory Financial Statements" means all financial
statements of the Depositor's subsidiary insurance companies for each relevant
period, prepared in accordance with Applicable Accounting Principles.

                  "Successor Securities" has the meaning specified in Section
9.5(a).

                  "Tax Event" has the meaning specified in Section 1.1 of the
Indenture.

                  "Trust" means the Delaware statutory trust known as "Tower
Group Statutory Trust II," which was created on September 25, 2003 under the
Delaware Statutory Trust Act pursuant to the Original Trust Agreement and the
filing of the Certificate of Trust, and continued pursuant to this Trust
Agreement.

                                       8
<PAGE>

                  "Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented from time to
time in accordance with the applicable provisions hereof, including all
Schedules and Exhibits.

                  "Trustees" means the Administrative Trustees, the Property
Trustee and the Delaware Trustee, each as defined in this Article I.

                  "Trust Property" means (a) the Notes, (b) any cash on deposit
in, or owing to, the Payment 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 Property Trustee pursuant to the trusts of this Trust
Agreement.

                  "Trust Security" means any one of the Common Securities or the
Preferred Securities.

                                  ARTICLE II.

                                    THE TRUST

                  SECTION 2.1. Name.

                  The trust continued hereby shall be known as "Tower Group
Statutory Trust II", as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.

                  SECTION 2.2. Office of the Delaware Trustee; Principal Place
of Business.

                  The address of the Delaware Trustee in the State of Delaware
is Chase Manhattan Bank USA, National Association, c/o JPMorgan Chase Bank, 500
Stanton Christiana Road, Building 4, (3rd Floor), Newark, Delaware 19713,
Attention: Institutional Trust Services, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the Holders,
the Depositor, the Property Trustee and the Administrative Trustees. The
principal executive office of the Trust is 120 Broadway, 14th Floor, New York,
New York, 10271, Attention: Francis M. Colalucci, as such address may be changed
from time to time by the Administrative Trustees following written notice to the
Holders and the other Trustees.

                  SECTION 2.3. Initial Contribution of Trust Property; Fees,
Costs and Expenses.

                  The Property Trustee acknowledges receipt from the Depositor
in connection with the Original Trust Agreement of the sum of ten dollars ($10),
which constituted the initial Trust Property. The Depositor shall pay all fees,
costs and expenses of the Trust (except with respect to the Trust Securities) as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such fees, costs and expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
fees, costs or expenses.

                  SECTION 2.4. Purposes of Trust.

                  (a) The exclusive purposes and functions of the Trust are to
(i) issue and sell Trust Securities and use the proceeds from such sale to
acquire the Notes and (ii) engage in only those activities necessary or
incidental thereto. The Delaware Trustee, the Property Trustee and the
Administrative Trustees are trustees of the Trust, and have all the rights,
powers and duties to the extent set forth herein. The Trustees hereby
acknowledge that they are trustees of the Trust.

                  (b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trust (or the Trustees acting on behalf
of the Trust) shall not (i) acquire any investments or engage in any activities
not authorized by this Trust Agreement, (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) incur any indebtedness for borrowed money or issue any other debt, (iv)
take or consent to any action that would result in the placement of a lien on
any of the Trust Property, (v) take or consent to any action that would
reasonably be expected to cause the Trust to become taxable as a corporation or
classified as other than a grantor trust for United States federal income tax
purposes, (vi) take or consent to any action that would cause the Notes to be
treated as other than indebtedness of the Depositor for United States federal
income tax purposes or (vii) take or consent to any action that would cause the
Trust to be deemed to be an "investment company" required to be registered under
the Investment Company Act.

                                       9
<PAGE>

                  SECTION 2.5. Authorization to Enter into Certain Transactions.

                  (a) The Trustees shall conduct the affairs of the Trust in
accordance with and subject to the terms of this Trust Agreement. In accordance
with the following provisions (i) and (ii), the Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees, under this Trust Agreement, and to perform
all acts in furtherance thereof, including the following:

                           (i) As among the Trustees, each Administrative
                  Trustee shall severally 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 Trust
                  Securities;

                               (B) to cause the Trust to enter into, and to
                  execute, deliver and perform on behalf of the Trust, such
                  agreements as may be necessary or desirable in connection with
                  the purposes and function of the Trust, including, without
                  limitation, a common securities subscription agreement and a
                  junior subordinated note purchase agreement;

                               (C) assisting in the sale of the Preferred
                  Securities in one or more transactions exempt from
                  registration under the Securities Act, and in compliance with
                  applicable state securities or blue sky laws;

                               (D) assisting in (tie sending of notices (other
                  than notices of default) and other information regarding the
                  Trust Securities and the Notes to the Holders in accordance
                  with this Trust Agreement;

                               (E) the appointment of a Paying Agent and
                  Securities Registrar in accordance with this Trust Agreement;

                               (F) execution of the Trust Securities on behalf
                  of the Trust in accordance with this Trust Agreement;

                               (G) execution and delivery of closing
                  certificates, if any, pursuant to the Purchase Agreement and
                  application for a taxpayer identification number for the
                  Trust;

                               (H) preparation and filing of all applicable tax
                  returns and tax information reports that are required to be
                  filed on behalf of the Trust;

                               (I) establishing a record date with respect to
                  all actions to be taken hereunder that require a record date
                  to be established, except as provided in Section 6.10(a);

                               (J) unless otherwise required by the Delaware
                  Statutory Trust Act to execute on behalf of the Trust (either
                  acting alone or together with the other Administrative
                  Trustees) any documents that such Administrative Trustee has
                  the power to execute pursuant to this Trust Agreement; and

                               (K) the taking of any action incidental to the
                  foregoing as such Administrative Trustee may from time to time
                  determine is necessary or advisable to give effect to the
                  terms of this Trust Agreement.

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

                               (A) the receipt and holding of legal title of the
                  Notes;

                                       10
<PAGE>

                               (B) the establishment of the Payment Account;

                               (C) the collection of interest, principal and any
                  other payments made in respect of the Notes and the holding of
                  such amounts in the Payment Account;

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

                               (E) the exercise of all of the rights, powers and
                  privileges of a holder of the Notes in accordance with the
                  terms of this Trust Agreement;

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

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

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

                               (I) the taking of any action incidental to the
                  foregoing as the Property Trustee may from time to time
                  determine is necessary or advisable to give effect to the
                  terms of this Trust Agreement 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).

                  (b) In connection with the issue and sale of the Preferred
Securities, the Depositor 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 Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):

                      (i) the negotiation of the terms of, and the execution and
         delivery of, the Purchase Agreement providing for the sale of the
         Preferred Securities in one or more transactions exempt from
         registration under the Securities Act, and in compliance with
         applicable state securities or blue sky laws. and

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

                  (c) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and authorized to operate the Trust so that the Trust will not be
taxable as a corporation or classified as other than a grantor trust for United
States federal income tax purposes, so that the Notes will be treated as
indebtedness of the Depositor for United States federal income tax purposes and
so that the Trust will not be deemed to be an "investment company" required to
be registered under the Investment Company Act. In respect thereof, each
Administrative Trustee is authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that such
Administrative Trustee determines in his or her discretion to be necessary or
desirable for such purposes, as long as such action does not adversely affect in
any material respect the interests of the Holders of the Outstanding Preferred
Securities. In no event shall the Administrative Trustees be liable to the Trust
or the Holders for any failure to comply with this Section 2.5 to the extent
that such failure results solely from a change in law or regulation or in the
interpretation thereof.

                  (d) Any action taken by a Trustee in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing with
any Trustee acting on behalf of the Trust, no Person shall be required to
inquire into the authority of such Trustee to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
any Trustee as set forth in this Trust Agreement.

                                       11
<PAGE>

                  SECTION 2.6. Assets of Trust.

                  The assets of the Trust shall consist of the Trust Property.

                  SECTION 2.7. Title to Trust Property.

                  (a) Legal title to all Trust Property shall be vested at all
times in the Property Trustee and shall be held and administered by the Property
Trustee in trust for the benefit of the Trust and the Holders in accordance with
this Trust Agreement.

                  (b) The Holders shall not have any right or title to the Trust
Property other than the undivided beneficial interest in the assets of the Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The "Trust Securities shall be personal property giving only
the rights specifically set forth therein and in this Trust Agreement.

                                  ARTICLE III.

                         PAYMENT ACCOUNT; PAYING AGENTS

                  SECTION 3.1. Payment Account.

                  (a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and the Paying Agent
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Holders and for Distribution as herein provided.

                  (b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments with respect to, the Notes. Amounts held in the Payment Account
shall not be invested by the Property Trustee pending distribution thereof

                  SECTION 3.2. Appointment of Paying Agents.

                  The Paying Agent shall initially be the Property Trustee. The
Paying Agent shall make Distributions to Holders from the Payment Account and
shall report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account solely for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent in their sole discretion. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days'
written notice to the Administrative Trustees and the Property Trustee. If the
Property Trustee shall no longer be the Paying Agent or a successor Paying Agent
shall resign or its authority to act be revoked, the Administrative Trustees
shall appoint a successor (which shall be a bank or trust company) to act as
Paying Agent. Such successor Paying Agent appointed by the Administrative
Trustees shall execute and deliver to the Trustees an instrument in which such
successor Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent will hold all sums, if any, held by it for payment to the
Holders in trust for the benefit of the Holders entitled thereto until such sums
shall be paid to such Holders. The Paying Agent shall return all unclaimed funds
to the Property Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Property Trustee. The
provisions of Article VIII shall apply to the Property Trustee also in its role
as Paying Agent, for so long as the Property Trustee shall act as Paying Agent
and, to the extent applicable, to any other Paying Agent appointed hereunder.
Any reference in this Trust Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.

                                       12
<PAGE>

                                  ARTICLE IV.

                            DISTRIBUTIONS; REDEMPTION

                  SECTION 4.1. Distributions.

                  (a) The Trust Securities represent undivided beneficial
interests in the Trust Property, and Distributions (including any Additional
Interest Amounts) will be made on the Trust Securities at the rate and on the
dates that payments of interest (including any Additional Interest) are made on
the Notes. Accordingly:

                      (i) Distributions on the Trust Securities shall be
         cumulative, and shall accumulate whether or not there are funds of the
         Trust available for the payment of Distributions. Distributions shall
         accumulate from September 30, 2003, and, except as provided in clause
         (ii) below, shall be payable quarterly in arrears on March 3 1, June
         30, September 30 and December 31 of each year, commencing on December
         31, 2003. If any date on which a Distribution is otherwise payable on
         the Trust Securities is not a Business Day, then the payment of such
         Distribution shall be made on the next succeeding Business Day (and no
         interest shall accrue in respect of the amounts whose payment is so
         delayed for the period from and after each such date until the next
         succeeding Business Day), except that, if such Business Day falls 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 date (each date on which Distributions
         are payable in accordance with this Section 4.l(a)(i), a "Distribution
         Date");

                      (ii) in the event (and to the extent) that the Depositor
         exercises its right under the Indenture to defer the payment of
         interest on the Notes, Distributions on the Trust Securities shall be
         deferred. Under the Indenture, so long as no Note Event of Default has
         occurred and is continuing, the Depositor shall have the right, at any
         time and from time to time during the term of the Notes, to defer the
         payment of interest on the Notes for a period of up to twenty (20)
         consecutive quarterly interest payment periods (each such extended
         interest payment period, an "Extension Period"), during which Extension
         Period no interest on the Notes shall be due and payable (except any
         Additional Tax Sums that may be due and payable). No interest on the
         Notes 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 (to the extent payment of such interest would be
         legally enforceable) at the fixed rate equal to 7.5% through the
         interest payment date in September 2008 and thereafter at a variable
         rate equal to LIBOR plus 4.00% per annum compounded quarterly, from the
         dates on which amounts would have otherwise been due and payable until
         paid or until funds for the payment thereof have been made available
         for payment. If Distributions are deferred, the deferred Distributions
         (including Additional Interest Amounts) shall be paid on the date that
         the related Extension Period terminates, to Holders of the Trust
         Securities as they appear on the books and records of the Trust on the
         record date immediately preceding such termination date.

                      (iii) Distributions shall accumulate in respect of the
         Trust Securities at a fixed rate equal to 7.5% through the interest
         payment date in September 2008 and thereafter at a variable rate equal
         to LIBOR plus 4.00% of the Liquidation Amount of the Trust Securities,
         such rate being the rate of interest payable on the Notes. LIBOR shall
         be determined by the Calculation Agent in accordance with Schedule A.
         The amount of Distributions payable for any period less than a full
         Distribution period shall be computed on the basis of a 360-day year
         and the actual number of days elapsed in the relevant Distribution
         period. The amount of Distributions payable for any period shall
         include any Additional Interest Amounts in respect of such period; and

                      (iv) Distributions on the Trust Securities shall be made
         by the Paying Agent from the Payment Account and shall be payable on
         each Distribution Date only to the extent that the Trust has funds then
         on hand and available in the Payment Account for the payment of such
         Distributions.

                  (b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) preceding the relevant Distribution Date.
Distributions payable on any Trust Securities that are not punctually paid on
any Distribution Date as a result of the Depositor having failed to make an
interest payment under the Notes will cease to be payable to the Person in whose
name such Trust Securities are registered on the relevant record date, and such
defaulted Distributions and any Additional Interest Amounts will instead be
payable to the Person in whose name such Trust Securities are registered on the
special record date, or other specified date for determining Holders entitled to
such defaulted Distribution and Additional Interest Amount, established in the
same manner, and on the same date, as such is established with respect to the
Notes under the Indenture.

                                       13
<PAGE>

                  SECTION 4.2. Redemption.

                  (a) On each Note Redemption Date and on the stated maturity
(or any date of principal repayment upon early maturity) of the Notes and on
each other date on (or in respect of) which any principal on the Notes is
repaid, the Trust will be required to redeem a Like Amount of Trust Securities
at the Redemption Price.

                  (b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than thirty (30)
nor more than sixty (60) days prior to the Redemption slate to each Holder of
Trust. Securities to be redeemed, at such Holder's address appearing in the
Securities Register. All notices of redemption shall state:

                      (i) the Redemption Date;

                      (ii) the Redemption Price or, if the Redemption Price
         cannot be calculated prior to the time the notice is required to be
         sent, the estimate of the Redemption Price provided pursuant to the
         Indenture, as calculated by the Depositor, together with a statement
         that it is an estimate and that the actual Redemption Price will be
         calculated by the Calculation Agent on the fifth Business Day prior to
         the Redemption Date (and if an estimate is provided, a further notice
         shall be sent of the actual Redemption Price on the date that such
         Redemption Price is calculated):

                      (iii) if less than all the Outstanding Trust Securities
         are to be redeemed, the identification (and, in the case of partial
         redemption, the respective amounts) and Liquidation Amounts of the
         particular Trust Securities to be redeemed;

                      (iv) that on the Redemption Date, the Redemption Price
         will become due and payable upon each such Trust Security, or portion
         thereof to be redeemed and that Distributions thereon will cease to
         accumulate on such Trust Security or such portion, as the case may be,
         on and after said date, except as provided in Section 4.2(d);

                      (v) the place or places where the Trust Securities are to
         be surrendered for the payment of the Redemption Price; and

                      (vi) such other provisions as the Property Trustee deems
         relevant.

                  (c) The Trust Securities (or portion thereof) redeemed on each
Redemption Date shall be redeemed at the Redemption Price with the proceeds from
the contemporaneous redemption or payment at maturity of Notes. Redemptions of
the Trust Securities (or portion thereof) shall be made and the Redemption Price
shall be payable on each Redemption Date only to the extent that the Trust has
funds then on hand and available in the Payment Account for the payment of such
Redemption Price. Under the Indenture, the Notes may be redeemed by the
Depositor on any Interest Payment Date, at the Depositor's option, on or after
September 30, 2008, in whole or in part, from time to time at the Optional Note
Redemption Price; provided, that the Depositor shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required. The
Notes may also be redeemed by the Depositor, at its option pursuant to the terms
of the Indenture, in whole but not in part, upon the occurrence and during the
continuation of an Investment Company Event or a Tax Event, at the Special Note
Redemption Price; provided, that the Depositor shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required.

                                       14
<PAGE>

                  (d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then by 10:00 A.M., New York City time, on
the Redemption Date, the Depositor shall deposit sufficient funds with the
Property Trustee to pay the Redemption Price. If such deposit has been made by
such time, then by 12:00 noon, New York City time, on the Redemption Date, the
Property Trustee will, with respect to Book-Entry Preferred Securities,
irrevocably deposit with the Depositary for such Book-Entry Preferred
Securities, to the extent available therefor, funds sufficient to pay the
applicable Redemption Price and will give such Depositary irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities. With respect to Preferred Securities that are not
Book-Entry Preferred Securities, the Property Trustee will irrevocably deposit
with the Paying Agent, to the extent available therefor, funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities (or portion thereof) called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required. then upon the date of such deposit, all rights of Holders
holding Trust Securities (or portion thereof) so called for redemption will
cease, except the right of such Holders to receive the Redemption Price and any
Distribution payable in respect of the Trust Securities on or prior to the
Redemption Date, but without interest, and, in the case of a partial redemption,
the right of such Holders to receive a new Trust Security or Securities of
authorized denominations, in aggregate Liquidation Amount equal to the
unredeemed portion of such Trust Security or Securities, and such Securities (or
portion thereof) called for redemption will cease to be Outstanding. In the
event that any date on which any Redemption Price is payable is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding Business Day (and no interest shall accrue in respect of the
amounts whose payment is so delayed for the period from and after each such date
until the next succeeding Business Day), except that, if such Business Day falls
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 date. In the event that payment of the Redemption Price in
respect of any Trust Securities (or portion thereof) called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee Agreement, Distributions on such Trust
Securities (or portion thereof) will continue to accumulate, as set forth in
Section 4.1, from the Redemption Date originally established by the Trust for
such Trust Securities (or portion thereof) to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.

                  (e) Subject to Section 4.3(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall be
allocated pro rata to the Common Securities and the Preferred Securities based
upon the relative aggregate Liquidation Amounts of the Common Securities and the
Preferred Securities. The Preferred Securities to be redeemed shall be selected
on a pro rata basis based upon their respective Liquidation Amounts not more
than sixty (60) days prior to the Redemption Date by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption;
provided, that with respect to Holders that would be required to hold less than
one hundred (100) but more than zero (0) Trust Securities as a result of such
redemption, the Trust shall redeem F rust Securities of each such Holder so that
after such redemption such Holder shall hold either one hundred (100) Trust
Securities or such Holder no longer holds any Trust Securities, and shall use
such method (including, without limitation, by lot) as the Trust shall deem fair
and appropriate; and provided, further, that so long as the Preferred Securities
are Book-Entry Preferred Securities, such selection shall be made in accordance
with the Applicable Depositary Procedures for the Preferred Securities by such
Depositary. The Property Trustee shall promptly notify the Securities Registrar
in writing of the Preferred Securities (or portion thereof) selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Preferred Securities that has been or is
to be redeemed.

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

                                       15
<PAGE>

                  SECTION 4.3. Subordination of Common Securities.

                  (a) Payment of Distributions (including any Additional
Interest Amounts) on, the Redemption Price of and the Liquidation Distribution
in respect of, the Trust Securities, as applicable, shall be made, pro rata
among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the respective Trust Securities; provided, that if on any
Distribution Date, Redemption Date or Liquidation Date an Event of Default shall
have occurred and be continuing, no payment of any Distribution (including any
Additional Interest Amounts) on, Redemption Price of or Liquidation Distribution
in respect of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions
(including any Additional Interest Amounts) on all Outstanding Preferred
Securities for all Distribution periods terminating, on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities then called for redemption, or in
the case of payment of the Liquidation Distribution the full amount of such
Liquidation Distribution on all Outstanding Preferred Securities, shall have
been made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Interest Amounts) on, or the Redemption
Price of or the Liquidation Distribution in respect of, the Preferred Securities
then due and payable.

                  (b) In the case of the occurrence of any Event of Default, the
Holders of the Common Securities shall have no right to act with respect to any
such Event of Default under this Trust Agreement until all such Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not on behalf of the Holders of the
Common Securities, and only the Holders of all the Preferred Securities will
have the right to direct the Property Trustee to act on their behalf.

                  SECTION 4.4. Payment Procedures.

                  Payments of Distributions (including any Additional Interest
Amounts), the Redemption Price, Liquidation Amount or any other amounts in
respect of the Preferred Securities shall be made by wire transfer at such place
and to such account at a banking institution in the United States as may be
designated in writing at least ten (10) Business Days prior to the date for
payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case
such payments shall be made by check mailed to the address of such Person as
such address shall appear in the Securities Register. If any Preferred
Securities are held by a Depositary, such Distributions thereon shall be made to
the Depositary in immediately available funds. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Holder of all the Common Securities.

                  SECTION 4.5. Withholding Tax.

                  The Trust and the Administrative Trustees shall comply with
all withholding and backup withholding tax requirements under United States
federal, state and local law. The Administrative Trustees on behalf of the Trust
shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding and
backup withholding tax with respect to each Holder and any representations and
forms as shall reasonably be requested by the Administrative Trustees on behalf
of the Trust to assist it in determining the extent of, and in fulfilling, its
withholding and backup withholding tax obligations. The Administrative Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding and backup withholding tax is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay over
any amounts to any jurisdiction 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 Administrative Trustees on behalf of the Trust may
reduce subsequent Distributions by the amount of such required withholding.

                                       16
<PAGE>

                  SECTION 4.6. Tax Returns and Other Reports.

                  (a) The Administrative Trustees shall prepare (or cause to be
prepared) at the principal office of the Trust in the United States, as defined
for purposes of Treasury regulations section 301.7701-7, at the Depositor's
expense, and file, all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. The Administrative Trustees shall prepare at the principal office of the
Trust in the United States, as defined for purposes of Treasury regulations
section 301.7701-7, and furnish (or cause to be prepared and furnished), by
January 31 in each taxable year of the Trust to each Holder all Internal Revenue
Service forms and returns required to be provided by the Trust. The
Administrative Trustees shall provide the Depositor, Dekania Capital Management,
LLC and the Property Trustee with a copy of all such returns and reports
promptly after such filing or furnishing.

                  (b) So long as the Property Trustee for the benefit of the
Trust is the holder of the Notes, the Administrative Trustees will cause any
Statutory Financial Statements to be delivered to the Property Trustee and to
each Holder and Dekania Capital Management, LLC promptly following the filing of
each such document with the relevant Applicable Insurance Regulatory Authority.
The delivery requirement set forth in the preceding sentence may be satisfied by
submitting the required Statutory Financial Statements pursuant to Section
8.16(b) hereof.

                  SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust.

                  Upon receipt under the Notes of Additional Tax Sums and upon
the written direction of the Administrative Trustees, the Property Trustee shall
promptly pay, solely out of monies on deposit pursuant to this Trust Agreement,
any Additional Taxes imposed on the Trust by the United States or any other
taxing authority.

                  SECTION 4.8. Payments under Indenture or Pursuant to Direct
Actions.

                  Any amount payable hereunder to any Holder of Preferred
Securities shall be reduced by the amount of any corresponding payment such
Holder (or any Owner with respect thereto) has directly received pursuant to
Section 5.8 of the Indenture or Section 6.10(b) of this Trust Agreement.

                  SECTION 4.9. Exchanges.

                  (a) If at any time the Depositor or any of its Affiliates (in
either case, a "Depositor Affiliate") is the Owner or Holder of any Preferred
Securities, such Depositor Affiliate shall have the right to deliver to the
Property Trustee all or such portion of its Preferred Securities as it elects
and, subject to compliance with Sections 2.2 and 3.5 of the Indenture, receive,
in exchange therefor, a like Amount of Notes. Such election shall be exercisable
effective on any Distribution Date by such Depositor Affiliate delivering to the
Property Trustee (i) at least ten (10) Business Days prior to the Distribution
Date on which such exchange is to occur, the registration instructions and the
documentation, if any, required pursuant to Sections 2.2 and 3.5 of the
Indenture to enable the Indenture Trustee to issue the requested Like Amount of
Notes, (ii) a written notice of such election specifying the Liquidation Amount
of Preferred Securities with respect to which such election is being made and
the Distribution Date on which such exchange shall occur, which Distribution
Date shall be not less than ten (10) Business Days after the date of receipt by
the Property Trustee of such election notice and (iii) shall be conditioned upon
such Depositor Affiliate having delivered or caused to be delivered to the
Property Trustee or its designee the Preferred Securities that are the subject
of such election by 10:00 A.M. New York time, on the Distribution Date on which
such exchange is to occur. After the exchange, such Preferred Securities will be
canceled and will no longer be deemed to be Outstanding and all rights of the
Depositor Affiliate with respect to such Preferred Securities will cease.

                  (b) In the case of an exchange described in Section 4.9(a),
the Property Trustee on behalf of the Trust will, on the date of such exchange,
exchange Notes having a principal amount equal to a proportional amount of the
aggregate Liquidation Amount of the Outstanding Common Securities, based on the
ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged
pursuant to Section 4.9(a) divided by the aggregate Liquidation Amount of the
Preferred Securities Outstanding immediately prior to such exchange, for such
proportional amount of Common Securities held by the Depositor (which
contemporaneously shall be canceled and no longer be deemed to be Outstanding);
provided, that the Depositor delivers or causes to be delivered to the Property
Trustee or its designee the required amount of Common Securities to be exchanged
by 10:00 A.M. New York time, on the Distribution Date on which such exchange is
to occur.

                                       17
<PAGE>

                  SECTION 4.10. Calculation Agent.

                  (a) The Property Trustee shall initially, and, subject to the
immediately following sentence, for so long as it holds any of the Notes, be the
Calculation Agent for purposes of determining LIBOR for each Distribution Date.
The Calculation Agent may be removed by the Administrative Trustees at any time.
If the Calculation Agent is unable or unwilling to act as such or is removed by
the Administrative Trustees, the Administrative Trustees will promptly appoint
as a replacement Calculation Agent the London office of a leading bank which is
engaged in transactions in six-month Eurodollar deposits in the international
Eurodollar market and which does not control or is not controlled by or under
common control with the Administrative Trustee or its Affiliates. The
Calculation Agent may not resign its duties without a successor having been duly
appointed.

                  (b) The Calculation Agent shall be required to agree that, as
soon as possible after 11:00 a.m. (London time) on each LIBOR Determination
Date, but in no event later than 11:00 a.m. (London time) on the Business Day
immediately following each LIBOR Determination Date, the Calculation Agent will
calculate the interest rate (rounded to the nearest cent, with half a cent being
rounded upwards) for the related Distribution Date, and will communicate such
rate and amount to the Depositor, the Administrative Trustees, the Note Trustee,
each Paying Agent and the Depositary. The Calculation Agent will also specify to
the Administrative Trustee the quotations upon which the foregoing rates and
amounts are based and, in any event, the Calculation Agent shall notify the
Administrative Trustee before 5:00 p.m. (London time) on each LIBOR
Determination Date that either: (i) it has determined or is in the process of
determining the foregoing rates and amounts or (ii) it has not determined and is
not in the process of determining the foregoing rates and amounts, together with
its reasons therefor. The Calculation Agent's determination of the foregoing
rates and amounts for any Distribution Date will (in the absence of manifest
error) be final and binding upon all parties. For the sole purpose of
calculating the interest rate for the Trust Securities, "Business Day" shall be
defined as any day on which dealings in deposits in Dollars are transacted in
the London interbank market.

                  SECTION 4.11. Certain Accounting Matters.

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

                  (b) The Administrative Trustees shall either (i) if the
Depositor is then subject to such reporting requirements, cause each Form I0-K
and Form 10-Q prepared by the Depositor and filed with the Commission in
accordance with the Exchange Act to be delivered to each Holder, with a copy to
the Property Trustee, within thirty (30) days after the filing thereof or (ii)
cause to be prepared at the principal office of the Trust in the United States,
as defined for purposes of Treasury Regulations section 301.7701-7, and
delivered to each of the Holders, with a copy to the Property Trustee, within
ninety (90) days after the end of each Fiscal Year, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss.

                  (c) If the Depositor intends to file its annual and quarterly
information with the Commission in electronic form pursuant to Regulation S-T of
the Commission using the Commission's Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system, the Administrative Trustees shall notify the
Property Trustee in the manner prescribed herein of each such annual and
quarterly filing. The Property Trustee is hereby authorized and directed to
access the EDGAR system for purposes of retrieving the financial information so
filed. Compliance with the foregoing shall constitute delivery by the
Administrative Trustees of its financial statements to the Property Trustee in
compliance with the provisions of Section 314(a) of the Trust Indenture Act, if
applicable. The Property Trustee shall have no duty to search for or obtain any
electronic or other filings that the Depositor makes with the Commission,
regardless of whether such filings are periodic, supplemental or otherwise.
Delivery of reports, information and documents to the Property Trustee pursuant
to this Section 4.11(c) shall be solely for purposes of compliance with this
Section 4.11 and, if applicable, with Section 314(a) of the Trust Indenture Act.
The Property Trustee's receipt of such reports, information and documents shall
not constitute notice to it of the content thereof or any matter determinable
from the content thereof, including the Company's compliance with any of its
covenants hereunder, as to which the Property Trustee is entitled to rely upon
Officers' Certificates.

                                       18
<PAGE>

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

                                   ARTICLE V.

                                   SECURITIES

                  SECTION 5.1. Initial Ownership.

                  Upon the creation of the Trust and the contribution by the
Depositor referred to in Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are Outstanding,
the Depositor shall be the sole beneficial owner of the Trust.

                  SECTION 5.2. Authorized Trust Securities.

                  The Trust shall be authorized to issue one series of Preferred
Securities having an aggregate Liquidation Amount of $10,000,000 and one series
of Common Securities having an aggregate Liquidation Amount of $310,000.

                  SECTION 5.3. Issuance of the Common Securities; Subscription
and Purchase of Notes.

                  On the Closing Date, an Administrative Trustee, on behalf of
the Trust, shall execute and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, evidencing an aggregate
of 310 Common Securities having an aggregate Liquidation Amount of Three Hundred
Ten Thousand Dollars ($310,000), against receipt by the Trust of the aggregate
purchase price of such Common Securities of Three Hundred Ten Thousand Dollars
($310,000). Contemporaneously therewith and with the sale by the Trust to the
Holders of an aggregate of 10,000 Preferred Securities having an aggregate
Liquidation Amount of Ten Million Dollars ($10,000,000), an Administrative
Trustee, on behalf of the Trust, shall purchase from the Depositor Notes, to be
registered in the name of the Property Trustee on behalf of the Trust and having
an aggregate principal amount equal to Ten Million Dollars ($10,000,000), and,
in satisfaction of the purchase price for such Notes, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sure of Ten Million
Dollars ($10,000,000) (being the aggregate amount paid by the Holders for the
Preferred Securities, and the amount paid by the Depositor for the Common
Securities).

                  SECTION 5.4. The Securities Certificates.

                  (a) The Preferred Securities Certificates shall be issued in
minimum denominations of $100,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof, and the Common Securities Certificates shall be issued
in minimum denominations of $10,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof. The Securities Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee. Securities Certificates bearing the signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign such Securities Certificates on behalf of the Trust shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Securities Certificates or did not have
such authority at the date of delivery of such Securities Certificates.

                                       19
<PAGE>

                  (b) On the Closing Date, upon the written order of an
authorized officer of the Depositor, the Administrative Trustees shall cause
Securities Certificates to be executed on behalf of the Trust and delivered,
without further corporate action by the Depositor, in authorized denominations.

                  (c) The Preferred Securities issued to QIBs shall be, except
as provided in Section 5.6, Book-Entry Preferred Securities issued in the form
of one or more Global Preferred Securities registered in the name of the
Depositary, or its nominee and deposited with the Depositary or a custodian for
the Depositary for credit by the Depositary to the respective accounts of the
Depositary Participants thereof (or such other accounts as they may direct). The
Preferred Securities issued to a Person other than a QIB shall be issued in the
form of Definitive Preferred Securities Certificates.

                  (d) A Preferred Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the Property
Trustee. Such signature shall be conclusive evidence that the Preferred Security
has been authenticated under this Trust Agreement. Upon written order of the
Trust signed by one Administrative Trustee, the Property Trustee shall
authenticate the Preferred Securities for original issue. The Property Trustee
may appoint an authenticating agent that is a U.S. Person acceptable to the
Trust to authenticate the Preferred Securities. A Common Security need not be so
authenticated and shall be valid upon execution by one or more Administrative
Trustees. The form of this certificate of authentication can be found in Section
5.13.

                  SECTION 5.5. Rights of Holders.

                  The Trust Securities shall have no preemptive or similar
rights and when issued and delivered to holders against payment of the purchase
price therefor will be fully paid and nonassessable by the Trust. Except as
provided in Section 5.11 (b), the Holders of the Trust Securities, in their
capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.

                  SECTION 5.6. Book-Entry Preferred Securities.

                  (a) A Global Preferred Security may be exchanged, in whole or
in part, for Definitive Preferred Securities Certificates registered in the
names of the Owners only if such exchange complies with Section 5.7 and (i) the
Depositary advises the Administrative Trustees and the Property Trustee in
writing that the Depositary is no longer willing or able properly to discharge
its responsibilities with respect to the Global Preferred Security, and no
qualified successor is appointed by the Administrative Trustees within ninety
(90) days of receipt of such notice, (ii) the Depositary ceases to be a clearing
agency registered under the Exchange Act and the Administrative Trustees fail to
appoint a qualified successor within ninety (90) days of obtaining knowledge of
such event, (iii) the Administrative Trustees at their option advise the
Property Trustee in writing that the Trust elects to terminate the book-entry
system through the Depositary or (iv) a Note Event of Default has occurred and
is continuing. Upon the occurrence of any event specified in clause (i), (ii),
(iii) or (iv) above, the Administrative Trustees shall notify the Depositary and
instruct the Depositary to notify all Owners of Book-Entry Preferred Securities,
the Delaware Trustee and the Property Trustee of the occurrence of such event
and of the availability of the Definitive Preferred Securities Certificates to
Owners of the Preferred Securities requesting the same. Upon the issuance of
Definitive Preferred Securities Certificates, the Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Holders.
Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global
Preferred Security wishes at any time to transfer an interest in such Global
Preferred Security to a Person other than a QIB, such transfer shall be
effected, subject to the Applicable Depositary Procedures, in accordance with
the provisions of this Section 5.6 and Section 5.7, and the transferee shall
receive a Definitive Preferred Securities Certificate in connection with such
transfer. A holder of a Definitive Preferred Securities Certificate that is a
QIB may, upon request and in accordance with the provisions of this Section 5.6
and Section 5.7, exchange such Definitive Preferred Securities Certificate for a
beneficial interest in a Global Preferred Security.

                                       20
<PAGE>

                  (b) If any Global Preferred Security is to be exchanged for
Definitive Preferred Securities Certificates or canceled in part, or if any
Definitive Preferred Securities Certificate is to be exchanged in whole or in
part for any Global Preferred Security, then either (i) such Global Preferred
Security shall be so surrendered for exchange or cancellation as provided in
this Article V or (ii) the aggregate Liquidation Amount represented by such
Global Preferred Security shall be reduced, subject to Section 5.4, or increased
by an amount equal to the Liquidation Amount represented by that portion of the
Global Preferred Security to be so exchanged or canceled, or equal to the
Liquidation Amount represented by such Definitive Preferred Securities
Certificates to be so exchanged for any Global Preferred Security, as the case
may be, by means of an appropriate adjustment made on the records of the
Securities Registrar, whereupon the Property Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender to the Administrative Trustees or the Securities
Registrar of any Global Preferred Security or Securities by the Depositary,
accompanied by registration instructions, the Administrative Trustees, or any
one of them, shall execute the Definitive Preferred Securities Certificates in
accordance with the instructions of the Depositary. None of the Securities
Registrar or the Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.

                  (c) Every Definitive Preferred Securities Certificate executed
and delivered upon registration or transfer of, or in exchange for or in lieu
of, a Global Preferred Security or any portion thereof shall be executed and
delivered in the form of, and shall be, a Global Preferred Security, unless such
Definitive Preferred Securities Certificate is registered in the name of a
Person other than the Depositary for such Global Preferred Security or a nominee
thereof.

                  (d) The Depositary or its nominee, as registered owner of a
Global Preferred Security, shall be the Holder of such Global Preferred Security
for all purposes under this Trust Agreement and the Global Preferred Security,
and Owners with respect to a Global Preferred Security shall hold such interests
pursuant to the Applicable Depositary Procedures. The Securities Registrar and
the Trustees shall be entitled to deal with the Depositary for all purposes of
this Trust Agreement relating to the Global Preferred Securities (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities represented thereby and the giving of instructions or
directions by Owners of Book-Entry Preferred Securities represented thereby and
the giving of notices) as the sole Holder of the Book-Entry Preferred Securities
represented thereby and shall have no obligations to the Owners thereof. None of
the Trustees nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Depositary.

                  (e) The rights of the Owners of the Book-Entry Preferred
Securities shall be exercised only through the Depositary and shall be limited
to those established by law, the Applicable Depositary Procedures and agreements
between such Owners and the Depositary and/or the Depositary Participants;
provided, solely for the purpose of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided for
in this Trust Agreement, to the extent that Preferred Securities are represented
by a Global Preferred Security, the Trustees may conclusively rely on, and shall
be fully protected in relying on, any written instrument (including a proxy)
delivered to the Property Trustee by the Depositary setting forth the Owners'
votes or assigning the right to vote on any matter to any other Persons either
in whole or in part. To the extent that Preferred Securities are represented by
a Global Preferred Security, the initial Depositary will make book-entry
transfers among the Depositary Participants and receive and transmit payments on
the Preferred Securities that are represented by a Global Preferred Security to
such Depositary Participants, and none of the Depositor or the Trustees shall
have any responsibility or obligation with respect thereto.

                  (f) To the extent that a notice or other communication to the
Holders is required under this Trust Agreement, for so long as Preferred
Securities are represented by a Global Preferred Security, the Trustees shall
give all such notices and communications to the Depositary, and shall have no
obligations to the Owners.

                  SECTION 5.7. Registration of Transfer and Exchange of
Preferred Securities Certificates.

                  (a) The Property Trustee shall keep or cause to be kept, at
the Corporate Trust Office, a register or registers (the "Securities Register")
in which the registrar and transfer agent with respect to the Trust Securities
(the "Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates and registration of transfers
and exchanges of Preferred Securities Certificates as herein provided. The
Person acting as the Property Trustee shall at all times also be the Securities
Registrar. The provisions of Article VIII shall apply to the Property Trustee in
its role as Securities Registrar.

                                       21
<PAGE>

                  (b) Subject to Section 5.7(d), upon surrender for registration
of transfer of any Preferred Securities Certificate at the office or agency
maintained pursuant to Section 5.7(f), the Administrative Trustees or any one of
them shall execute by manual or facsimile signature and deliver to the Property
Trustee, and the Property Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
as may be required by this Trust Agreement dated the date of execution by such
Administrative Trustee or Trustees. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred Securities
Certificates in authorized denominations and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificate to be exchanged at
the office or agency maintained pursuant to Section 5.7(f). Whenever any
Preferred Securities Certificates are so surrendered for exchange, the
Administrative Trustees or any one of them shall execute by manual or facsimile
signature and deliver to the Property Trustee, and the Property Trustee shall
authenticate and deliver, the Preferred Securities Certificates that the Holder
making the exchange is entitled to receive.

                  (c) The Securities Registrar shall not be required, (i) to
issue, register the transfer of or exchange any Preferred Security during a
period beginning at the opening of business fifteen (15) days before the day of
selection for redemption of such Preferred Securities pursuant to Article IV and
ending at the close of business on the day of mailing of the notice of
redemption or (ii) to register the transfer of or exchange any Preferred
Security so selected for redemption in whole or in part, except, in the case of
any such Preferred Security to be redeemed in part, any portion thereof not to
be redeemed.

                  (d) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Securities Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing and (i) if such Preferred Securities Certificate is being
transferred to a QIB, accompanied by a certificate of the transferor
substantially in the form set forth as Exhibit E hereto or (ii) if such
Preferred Securities Certificate is being transferred otherwise than to a QIB,
accompanied by a certificate of the transferee substantially in the form set
forth as Exhibit F hereto.

                  (e) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Property
Trustee on behalf of the Trust may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Preferred Securities Certificates.

                  (f) The Administrative Trustees shall designate an office or
offices or agency or agencies where Preferred Securities Certificates may be
surrendered for registration of transfer or exchange. The Depositor initially
designates the Corporate Trust Office as its office and agency for such
purposes. The Administrative Trustees shall give prompt written notice to the
Depositor, the Property Trustee and to the Holders of any change in the location
of any such office or agency.

                  SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities
Certificates.

                  (a) If any mutilated Securities Certificate shall be
surrendered to the Securities Registrar together with such security or indemnity
as may be required by the Securities Registrar to save each of the Trustees
harmless, the Administrative Trustees, or any one of them, on behalf of the
Trust, shall execute and make available for delivery in exchange therefor a new
Securities Certificate of like class, tenor and denomination.

                  (b) If the Securities Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Securities Certificate and
there shall be delivered to the Securities Registrar such security or indemnity
as may be required by it to save each of the Trustees harmless, then in the
absence of notice that such Securities Certificate shall have been acquired by a
protected purchaser, the Administrative Trustees, or any one of them, on behalf
of the Trust, shall execute and make available for delivery, and, with respect
to Preferred Securities, the Property Trustee shall authenticate, in exchange
for or in lieu of any such destroyed, lost or stolen Securities Certificate, a
new Securities Certificate of like class, tenor and denomination.

                                       22
<PAGE>

                  (c) In connection with the issuance of any new Securities
Certificate under this Section 5.8, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.

                  (d) Any duplicate Securities Certificate issued pursuant to
this Section 5.8 shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Trust corresponding to that evidenced by the
mutilated, lost, stolen or destroyed Securities Certificate, as if originally
issued, whether or not the lost, stolen or destroyed Securities Certificate
shall be found at any time.

                  (e) If any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Depositor in its
discretion may, instead of issuing a new Security, pay such Security.

                  (f) The provisions of this Section 5.8 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement of mutilated, destroyed, lost or stolen Securities Certificates.

                  SECTION 5.9. Persons Deemed Holders.

                  The Trustees and the Securities Registrar shall each treat the
Person in whose name any Securities Certificate shall be registered in the
Securities Register as the owner of such Securities Certificate for the purpose
of receiving Distributions and for all other purposes whatsoever, and none of
the Trustees and the Securities Registrar shall be bound by any notice to the
contrary.

                  SECTION 5.10. Cancellation.

                  All Preferred Securities Certificates surrendered for
registration of transfer or exchange or for payment shall, if surrendered to any
Person other than the Property Trustee, be delivered to the Property Trustee,
and any such Preferred Securities Certificates and Preferred Securities
Certificates surrendered directly to the Property Trustee for any such purpose
shall be promptly canceled by it. The Administrative Trustees may at any time
deliver to the Property Trustee for cancellation any Preferred Securities
Certificates previously delivered hereunder that the Administrative Trustees may
have acquired in any manner whatsoever, and all Preferred Securities
Certificates so delivered shall be promptly canceled by the Property Trustee. No
Preferred Securities Certificates shall be executed and delivered in lieu of or
in exchange for any Preferred Securities Certificates canceled as provided in
this Section 5.10, except as expressly permitted by this Trust Agreement. All
canceled Preferred Securities Certificates shall be retained by the Property
Trustee in accordance with its customary practices.

                  SECTION 5.11. Ownership of Common Securities by Depositor.

                  (a) On the Closing Date, the Depositor shall acquire, and
thereafter shall retain, beneficial and record ownership of the Common
Securities. Neither the Depositor nor any successor Holder of the Common
Securities may transfer less than all the Common Securities, and the Depositor
or any such successor Holder may transfer the Common Securities only (i) in
connection with a consolidation or merger of the Depositor into another Person,
or any conveyance, transfer or lease by the Depositor of its properties and
assets substantially as an entirety to any Person (in which event such Common
Securities will be transferred to such surviving entity, transferee or lessee,
as the case may be), pursuant to Section 8.1 of the Indenture or (ii) to the
Depositor or an Affiliate of the Depositor, in each such case in compliance with
applicable law (including the Securities Act, and applicable state securities
and blue sky laws). To the fullest extent permitted by law, any attempted
transfer of the Common Securities other than as set forth in the immediately
preceding sentence shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE
WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."

                                       23
<PAGE>

                  (b) Any Holder of the Common Securities shall be liable for
the debts and obligations of the Trust in the manner and to the extent set forth
with respect to the Depositor and agrees that it shall be subject to all
liabilities to which the Depositor may be subject and, prior to becoming such a
Holder, shall deliver to the Administrative Trustees an instrument of assumption
satisfactory to such Trustees.

                  SECTION 5.12. Restricted Legends.

                  (a) Each Preferred Security Certificate shall bear a legend in
substantially the following form:

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

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

                  THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
                  ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
                  ACT"), AND SUCH PREFERRED SECURITIES OR ANY INTEREST THEREIN,
                  MAY NOT BE OFFERED, SOLD OR OTHERWISE -TRANSFERRED IN THE
                  ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
                  THEREFROM. EACH PURCHASER OF ANY PREFERRED SECURITIES IS
                  HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED SECURITIES
                  MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
                  5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE
                  SECURITIES ACT.

                  THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS
                  CERTIFICATE AGREES FOR THE BENEFIT OF THE TRUST AND THE
                  DEPOSITOR THAT (A) SUCH PREFERRED SECURITIES MAY BE OFFERED,
                  RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE TRUST, (II) TO
                  A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
                  INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
                  SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
                  RULE 144A, (III) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
                  WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),(3) OR (7) OF
                  RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
                  SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
                  "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
                  VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
                  DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (IV) PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR (V) PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT,
                  IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
                  OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
                  JURISDICTION AND, IN THE CASE OF (III) OR (V), SUBJECT TO THE
                  RIGHT OF THE TRUST AND THE DEPOSITOR TO REQUIRE AN OPINION OF
                  COUNSEL AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND
                  (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED
                  SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
                  (A) ABOVE.

                                       24
<PAGE>

                  THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED
                  ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT
                  LESS THAN $100,000. ANY ATTEMPTED TRANSFER OF PREFERRED
                  SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN
                  AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND
                  MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE
                  VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
                  TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH
                  PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT
                  LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH
                  PREFERRED SECURITIES; OR ANY INTEREST THEREIN, AND SUCH
                  PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
                  WHATSOEVER IN SUCH PREFERRED SECURITIES.

                  THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS
                  ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND
                  WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
                  RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
                  TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
                  1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
                  REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"),
                  OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
                  REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON
                  INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS
                  PREFERRED SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR
                  HOLDER OF THE PREFERRED SECURITIES OR ANY INTEREST THEREIN
                  WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
                  THEREOF THAT 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.

                  THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE
                  UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
                  INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE
                  "FDIC"),"

                  (b) The above legend shall not be removed from any of the
Preferred Securities Certificates unless there is delivered to the Property
Trustee and the Depositor satisfactory evidence, which may include an opinion of
counsel, as may be reasonably required to ensure that any future transfers
thereof may be made without restriction under the provisions of the Securities
Act and other applicable law. Upon provision of such satisfactory evidence, one
or more of the Administrative Trustees on behalf of the Trust shall execute and
deliver to the Property Trustee, and the Property Trustee shall deliver, at the
written direction of the Administrative Trustees and the Depositor, Preferred
Securities Certificates that do not bear the legend.

                  SECTION 5.13. Form of Certificate of Authentication.

         The Property Trustee's certificate of authentication shall be in
substantially the following form:

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

                                       25
<PAGE>

Dated:                               JPMORGAN CHASE BANK, not in its individual
                                     capacity, but solely as Property Trustee

                                     By:
                                         ------------------------------------
                                          Authorized signatory

                                  ARTICLE VI.

                        MEETINGS; VOTING; ACTS OF HOLDERS

                  SECTION 6.1. Notice of Meetings.

                  Notice of all meetings of the Holders of the Preferred
Securities, stating the time, place and purpose of the meeting, shall be given
by the Property Trustee pursuant to Section 10.8 to each Holder of Preferred
Securities, at such Holder's registered address, at least fifteen (15) days and
not more than ninety (90) days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.

                  SECTION 6.2. Meetings of Holders of the Preferred Securities.

                  (a) No annual meeting of Holders is required to be held. The
Property Trustee, however, shall call a meeting of the Holders of the Preferred
Securities to vote on any matter upon the written request of the Holders of at
least twenty five percent (25%) in aggregate Liquidation Amount of the
Outstanding Preferred Securities and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of the Holders of
the Preferred Securities to vote on any matters as to which such Holders are
entitled to vote.

                  (b) The Holders of at least a Majority in Liquidation Amount
of the Preferred Securities, present in person or by proxy, shall constitute a
quorum at any meeting of the Holders of the Preferred Securities.

                  (c) If a quorum is present at a meeting, an affirmative vote
by the holders present, in person or by proxy, holding Preferred Securities
representing at least a Majority in Liquidation Amount of the Preferred
Securities held by the Holders present, either in person or by proxy, at such
meeting shall constitute the action of the Holders of the Preferred Securities,
unless this Trust Agreement requires a lesser or greater number of affirmative
votes.

                  SECTION 6.3. Voting Rights.

                  Holders shall be entitled to one vote for each $10,000 of
Liquidation Amount represented by their Outstanding Trust Securities in respect
of any matter as to which such Holders are entitled to vote.

                  SECTION 6.4. Proxies, Etc.

                  At any meeting of Holders, any Holder entitled to vote thereat
may vote by proxy, provided, that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Administrative Trustees, or with such
other officer or agent of the Trust as the Administrative Trustees may direct,
for verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Holders of record shall be entitled to vote. When Trust Securities are held
jointly by several Persons, any one of them may vote at any meeting in person or
by proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.

                                       26
<PAGE>

                  SECTION 6.5. Holder Action by Written Consent.

                  Any action that may be taken by Holders at a meeting may be
taken without a meeting and without prior notice if Holders holding at least a
Majority in Liquidation Amount of all Preferred Securities entitled to vote in
respect of such action (or such lesser or greater proportion thereof as shall be
required by any other provision of this Trust Agreement) shall consent to the
action in writing; provided, that notice of such action is promptly provided to
the Holders of Preferred Securities that did not consent to such action. Any
action that may be taken by the Holders of all the Common Securities may be
taken without a meeting and without prior notice if such Holders shall consent
to the action in writing.

                  SECTION 6.6. Record Date for Voting and Other Purposes.

                  Except as provided in Section 6.10(a), for the purposes of
determining the Holders who are entitled to notice of and to vote at any meeting
or to act by written consent, or to participate in any distribution on the Trust
Securities in respect of which a record date is not otherwise provided for in
this Trust Agreement, or for the purpose of any other action, the Administrative
Trustees may from time to time fix a date, not more than ninety (90) days prior
to the date of any meeting of Holders or the payment of a Distribution or other
action, as the case may be, as a record date for the determination of the
identity of the Holders of record for such purposes.

                  SECTION 6.7. Acts of Holders.

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Trust Agreement to
be given, made or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by an agent thereof duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Trust Agreement and conclusive in favor of the Trustees, if made in the manner
provided in this Section 6.7.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that any Trustee receiving the same
deems sufficient.

                  (c) The ownership of Trust Securities shall be proved by the
Securities Register.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Trust Security shall bind
every future Holder of the same Trust Security and the Holder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees, the Administrative Trustees or the Trust in reliance
thereon, whether or not notation of such action is made upon such Trust
Security.

                  (e) Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.

                                       27
<PAGE>

                  (f) If any dispute shall arise among the Holders or the
Trustees with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, notice, consent, waiver or other Act
of such Holder or Trustee under this Article VI, then the determination of such
matter by the Property Trustee shall be conclusive with respect to such matter.

                  SECTION 6.8. Inspection of Records.

                  Upon reasonable written notice to the Administrative Trustees
and the Property Trustee, the records of the Trust shall be open to inspection
by any Holder during normal business hours for any purpose reasonably related to
such Holder's interest as a Holder.

                  SECTION 6.9. Limitations on Voting Rights.

                  (a) Except as expressly provided in this Trust Agreement and
in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Securities Certificates, be construed so as to constitute the Holders
from time to time as partners or members of an association.

                  (b) So long as any Notes are held by the Property Trustee on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Note
Trustee, or exercise any trust or power conferred on the Property Trustee with
respect to the Notes, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture or waive compliance with any covenant or condition
under Section 10.7 of the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Notes shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or the Notes, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities; provided, that where a consent
under the Indenture would require the consent of each holder of Notes (or each
Holder of Preferred Securities) affected thereby, no such consent shall be given
by the Property Trustee without the prior written consent of each Holder of
Preferred Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. In addition to obtaining the foregoing approvals of the Holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Property Trustee shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that such action shall not
cause the Trust to be taxable as a corporation or classified as other than a
grantor trust for United States federal income tax purposes.

                  (c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise or (ii) the dissolution, winding-up or termination of the
Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a 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 Preferred Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Trust to be taxable
as a corporation or classified as other than a grantor trust for United States
federal income tax purposes.

                  SECTION 6.10. Acceleration of Maturity; Rescission of
Annulment; Waivers of Past Defaults.

                  (a) For so long as any Preferred Securities remain
Outstanding, if, upon a Note Event of Default, the Note Trustee fails or the
holders of not less than twenty five percent (25%) in principal amount of the
outstanding Notes fail to declare the principal of all of the Notes to be
immediately due and payable, the Holders of at least twenty five percent (25%)
in Liquidation Amount of the Preferred Securities then Outstanding shall have
the right to make such declaration by a notice in writing to the Property
Trustee, the Depositor and the Note Trustee. At any time after a declaration of
acceleration with respect to the Notes has been made and before a judgment or
decree for payment of the money due has been obtained by the Note Trustee as
provided in the Indenture, the Holders of at least a Majority in Liquidation
Amount of the Preferred Securities, by written notice to the Property Trustee,
the Depositor and the Note Trustee, may rescind and annul such declaration and
its consequences if:

                                       28
<PAGE>

                      (i) the Depositor has paid or deposited with the Note
         Trustee a sum sufficient to pay:

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

                          (B) any accrued Additional interest on all of the
               Notes;

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

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

                  (ii) all Note Events of Default, other than the non-payment of
         the principal of the Notes that has become due solely by such
         acceleration, have been cured or waived as provided in Section 1.13 of
         the Indenture.

                  Upon receipt by the Property Trustee of written notice
requesting such an acceleration, or rescission and annulment thereof, by Holders
of any part of the Preferred Securities, a record date shall be established for
determining Holders of Outstanding Preferred Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Property Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is
ninety (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 ninety (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
6.10(a).

                  (b) For so long as any Preferred Securities remain
Outstanding, to the fullest extent permitted by law and subject to the terms of
this Trust Agreement and the Indenture, upon a Note Event of Default specified
in paragraph (a) or (b) of Section 5.1 of the Indenture, any Holder of Preferred
Securities shall have the right to institute a proceeding directly against the
Depositor, pursuant to Section 5.8 of the Indenture, for enforcement of payment
to such Holder of any amounts payable in respect of Notes having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such Holder. Except as set forth in Section 6.10(a) and this
Section 6.10(b), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Notes.

                  (c) Notwithstanding paragraphs (a) and (b) of this Section
6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any Note Event of Default, except any Note Event of Default arising from the
failure to pay any principal of or any premium, if any, or interest on
(including any Additional Interest) the Notes (unless such Note Event of Default
has been cured and a sum sufficient to pay all matured installments of interest
and all principal and premium, if any, on all Notes due otherwise than by
acceleration has been deposited with the Note Trustee) or a Note 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 Note.
Upon any such waiver, such Note Event of Default shall cease to exist and any
Note Event of Default arising therefrom shall be deemed to have been cured for
every purpose of the Indenture; but no such waiver shall affect any subsequent
Note Event of Default or impair any right consequent thereon.

                                       29
<PAGE>

                  (d) Notwithstanding paragraphs (a) and (b) of this Section
6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Trust Agreement,
but no such waiver shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.

                  (e) The Holders of a Majority in Liquidation Amount of the
Preferred Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee in
respect of this Trust Agreement or the Notes or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement; provided, that,
subject to Sections 8.5 and 8.7, the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Property Trustee in good faith shall, by an officer or officers of the
Property Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Holders not party to such direction, and provided, further, that nothing in this
Trust Agreement shall impair the right of the Property Trustee to take any
action deemed proper by the Property Trustee and which is not inconsistent with
such direction.

                                  ARTICLE VII.

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee.

                  The Property Trustee and the Delaware Trustee, each severally
on behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:

                  (a) the Property Trustee is a New York banking corporation,
duly organized, validly existing and in good standing under the laws of the
State of New York;

                  (b) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;

                  (c) the Delaware Trustee is a national banking association,
duly formed and validly existing under the laws of the United States:,

                  (d) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;

                  (e) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and the Delaware Trustee and constitutes
the legal, valid and binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity;

                  (f) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other action
on the part of the Property Trustee and the Delaware Trustee and do not require
any approval of stockholders of the Property Trustee and the Delaware Trustee
and such execution, delivery and performance will not (i) violate the Charter or
By-laws of the Property Trustee or the Delaware Trustee, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a default
under, or result in the imposition of any lien on any properties included in the
Trust Property pursuant to the provisions of any indenture, mortgage, credit
agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any applicable law, governmental rule or regulation of the United States
or the State of Delaware, as the case may be, governing the banking, trust or
general powers of the Property Trustee or the Delaware Trustee or any order,
judgment or decree applicable to the Property Trustee or the Delaware Trustee;

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<PAGE>

                  (g) neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Property Trustee or the Delaware
Trustee contemplated herein requires the consent or approval of, the giving of
notice to, the registration with or the taking of any other action with respect
to any governmental authority or agency under any existing law of the United
States or the State of Delaware governing the banking, trust or general powers
of the Property Trustee or the Delaware Trustee, as the case may be; and

                  (h) to the best of each of the Property Trustee's and the
Delaware Trustee's knowledge, there are no proceedings pending or threatened
against or affecting the Property Trustee or the Delaware Trustee in any court
or before any governmental authority, agency or arbitration board or tribunal
that, individually or in the aggregate, would materially and adversely affect
the Trust or would question the right, power and authority of the Property
Trustee or the Delaware Trustee, as the case may be, to enter into or perform
its obligations as one of the Trustees under this Trust Agreement.

                  SECTION 7.2. Representations and Warranties of Depositor.

                  The Depositor hereby represents and warrants for the benefit
of the Holders that:

                  (a) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation;

                  (b) the Depositor has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;

                  (c) this Trust Agreement has been duly authorized, executed
and delivered by the Depositor and constitutes the legal, valid and binding
agreement of the Depositor enforceable against the Depositor in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of equity;

                  (d) the Securities Certificates issued at the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the applicable Trustees pursuant to
the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Holders will be, as of such date, entitled to the
benefits of this Trust Agreement;

                  (e) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other action
on the part of the Depositor and do not require any approval of stockholders of
the Depositor and such execution, delivery and performance will not (i) violate
the articles or certificate of incorporation or by-laws (or other organizational
documents) of the Depositor or (ii) violate any applicable law, governmental
rule or regulation governing the Depositor or any material portion of its
property or any order, judgment or decree applicable to the Depositor or any
material portion of its property;

                  (f) neither the authorization, execution or delivery by the
Depositor of this Trust Agreement nor the consummation of any of the
transactions by the Depositor contemplated herein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing law governing the Depositor or any material portion of its property;
and

                                       31
<PAGE>

                  (g) there are no proceedings pending or, to the best of the
Depositor's knowledge, threatened against or affecting the Depositor or any
material portion of its property in any court or before any governmental
authority, agency or arbitration board or tribunal that, individually or in the
aggregate, would materially and adversely affect the Trust or would question the
right, power and authority of the Depositor, as the case may be, to enter into
or perform its obligations under this Trust Agreement.

                                 ARTICLE VIII.

                                  THE TRUSTEES

                  SECTION 8.1. Number of Trustees.

                  The number of Trustees shall be five (5); provided, that the
Property Trustee and the Delaware Trustee may be the same Person, in which case
the number of Trustees shall be four (4). The number of Trustees may be
increased or decreased by Act of the Holder of the Common Securities subject to
Sections 8.2, 8.3, and 8.4. The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul, dissolve or terminate the Trust.

                  SECTION 8.2. Property Trustee Required.

                  There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a corporation
organized and doing business under the laws of the United States or of any state
thereof, authorized to exercise corporate trust powers, having a combined
capital and surplus of at least fifty million dollars ($50,000,000), subject to
supervision or examination by federal or state authority and having an office
within the United States. If any such Person publishes reports of condition at
least annually pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section 8.2, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Property Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.2, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article VIII.

                  SECTION 8.3. Delaware Trustee Required.

                  (a) If required by the Delaware Statutory Trust Act, there
shall at all times be a Delaware Trustee with respect to the Trust Securities.
The Delaware Trustee shall either be (i) a natural person who is at least 21
years of age and a resident of the State of Delaware or (ii) a legal entity that
has its principal place of business in the State of Delaware, otherwise meets
the requirements of applicable Delaware law and shall act through one or more
persons authorized to bind such entity. If at any time the Delaware Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.3, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII. The Delaware Trustee shall have the same rights,
privileges and immunities as the Property Trustee.

                  (b) The Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the trustees of the "trust
for the sole and limited purpose of fulfilling the requirements of Section 3807
of the Delaware Statutory Trust Act and for taking such actions as are required
to be taken by a Delaware trustee under the Delaware Statutory Trust Act. The
duties (including fiduciary duties), liabilities and obligations of the Delaware
Trustee shall be limited to (a) accepting legal process served on the Trust in
the State of Delaware and (b) the execution of any certificates required to be
filed with the Secretary of State of the State of Delaware that the Delaware
Trustee is required to execute under Section 3811 of the Delaware Statutory
Trust Act and there shall be no other duties (including fiduciary duties) or
obligations, express or implied, at law or in equity, of the Delaware Trustee.

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<PAGE>

                  SECTION 8.4. Appointment of Administrative Trustees.

                  (a) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that
entity. Each of the individuals identified as an "Administrative Trustee" in the
preamble of this Trust Agreement hereby accepts his or her appointment as such.

                  (b) Except where a requirement for action by a specific number
of Administrative Trustees is expressly set forth in this Trust Agreement, any
act required or permitted to be taken by, and any power of the Administrative
Trustees may be exercised by, or with the consent of any one such Administrative
Trustee. Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 8.11, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of this
Trust Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.

                  SECTION 8.5. Duties and Responsibilities of the Trustees.

                  (a) The rights, immunities, duties and responsibilities of the
Trustees shall be as provided by this Trust Agreement and there shall be no
other duties (including fiduciary duties) or obligations, express or implied, at
law or in equity, of the Trustees; provided, however, that if an Event of
Default known to the Property Trustee has occurred and is continuing, the
Property Trustee shall, prior to the receipt of directions, if any, from the
Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require any of the Trustees to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its or their rights or
powers, if it or they shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. Whether or not herein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section 8.5. Nothing in this Trust Agreement shall be
construed to release any Administrative Trustee from liability for his or her
own negligent action, negligent failure to act; or his or her own willful
misconduct. To the extent that, at law or in equity, a Trustee has duties and
liabilities relating to the Trust or to the Holders, such Trustee shall not be
liable to the Trust or to any Holder for such Trustee's good faith reliance on
the provisions of this Trust Agreement. The provisions of this Trust Agreement,
to the extent that they restrict the duties and liabilities of the Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Holders to replace such other duties and liabilities of the Trustees.

                  (b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust 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 Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.5(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement.

                  (c) No provisions of this Trust Agreement shall be construed
to relieve the Property Trustee from liability with respect to matters that are
within the authority of the Property Trustee under this Trust Agreement for its
own negligent action, negligent failure to act or willful misconduct, except
that:

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

                                       33
<PAGE>

                      (ii) the Property Trustee shall not be liable with respect
         to any action taken or omitted to be taken by it in good faith in
         accordance with the direction of the Holders of at least a Majority in
         Liquidation Amount of the Preferred Securities relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the Property Trustee hereunder or under the Indenture, or exercising
         any trust or power conferred upon the Property Trustee under this Trust
         Agreement;

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

                      (iv) the Property Trustee shall not be liable for any
         interest on any money received by it except as it may otherwise agree
         in writing with the Depositor; and money held by the Property Trustee
         need not be segregated from other funds held by it except in relation
         to the Payment Account maintained by the Property Trustee pursuant to
         Section 3.1 and except to the extent otherwise required by law; and

                      (v) the Property Trustee shall not be responsible for
         monitoring the compliance by the Administrative Trustees or the
         Depositor with their respective duties under this Trust Agreement, nor
         shall the Property Trustee be liable for the default or misconduct of
         any other Trustee or the Depositor.

                  SECTION 8.6. Notices of Defaults and Extensions.

                  (a) Within ninety (90) days after the occurrence of a default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such default to the Holders, the Administrative Trustees and the
Depositor, unless such default shall have been cured or waived; provided, that,
except in the case of a default in the payment of the principal of or any
premium, if any, or interest (including any Additional Interest) on any Trust
Security, the Property Trustee shall be fully protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Property Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Trust Securities. For the purpose of this Section 8.6, the
term "default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.

                                       34
<PAGE>

                  (b) Within five (5) Business Days after the receipt of notice
of the Depositor's exercise of its right to defer the payment of interest on the
Notes pursuant to the Indenture, the Property Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.

                  (c) The Property Trustee shall not be deemed to have knowledge
of any Event of Default unless the Property Trustee shall have received written
notice thereof from the Depositor, any Administrative Trustee or any Holder or
unless an officer of the Property Trustee charged with the administration of
this Trust Agreement shall have obtained actual knowledge of such Event of
Default.

                  (d) The Property Trustee shall notify all Holders of the
Preferred Securities of any notice of default received with respect to the
Notes.

                  SECTION 8.7. Certain Rights of Property Trustee.

                  Subject to the provisions of Section 8.5:

                  (a) the Property Trustee may conclusively rely and shall be
protected in acting or refraining from acting in good faith and in accordance
with the terms hereof upon any resolution, Opinion of Counsel, certificate,
written representation of a Holder or transferee, certificate of auditors or any
other resolution, 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 or presented by the proper party or parties;

                  (b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds a provision ambiguous or inconsistent with any other
provisions contained herein or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any
matter as to which the Holders of the Preferred Securities are entitled to vote
under the terms of this Trust Agreement, the Property Trustee shall deliver a
notice to the Depositor requesting the Depositor's written instruction as to the
course of action to be taken and the Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be instructed in
writing to take, or to refrain from taking, by the Depositor; provided, that if
the Property Trustee does not receive such instructions of the Depositor within
ten (10) Business Days alter it has delivered such notice or such reasonably
shorter period of time set forth in such notice, the Property Trustee may, but
shall be under no duty to, take such action, or refrain from taking such action,
as the Property Trustee shall deem advisable and in the best interests of the
Holders, in which event the Property Trustee shall have no liability except for
its own negligence, bad faith or willful misconduct;

                  (c) any direction or act of the Depositor contemplated by this
Trust Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise expressly provided herein;

                  (d) any direction or act of an Administrative Trustee
contemplated by this Trust Agreement shall be sufficiently evidenced by a
certificate executed by such Administrative Trustee and setting forth such
direction or act;

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

                  (f) the Property Trustee may consult with counsel (which
counsel may be counsel to the Property Trustee, the Depositor or any of its
Affiliates, and may include any of its employees) 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 Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;

                  (g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Holders pursuant to this Trust Agreement,
unless such Holders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses (including reasonable
attorneys' fees and expenses) and liabilities that might be incurred by it in
compliance with such request or direction, including reasonable advances as may
be requested by the Property Trustee; provided, however, that nothing contained
in this Section 8.7(g) shall be construed to relieve the Property Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights
and powers in it vested by this Trust Agreement; provided, further, that nothing
contained in this Section 8.7(g) shall prevent the Property Trustee from
exercising its rights under Section 8.11 hereof;

                  (h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, 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 Property Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Property Trustee shall
determine to make such inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Depositor, personally or by agent or
attorney;

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

                                       35
<PAGE>

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

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

                  (l) without prejudice to any other rights available to the
Property Trustee under applicable law, when the Property Trustee incurs expenses
or renders services in connection with a Bankruptcy Event, such expenses
(including legal fees and expenses of its agents and 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; and

                  (m) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely on an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Depositor.

                  No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on any 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 such Person 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.

                  SECTION 8.8. Delegation of Power.

                  Any Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 its, his
or her power for the purpose of executing any documents contemplated in Section
2.5. The Trustees shall have power to delegate from time to time to such of
their number or to the Depositor the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of this Trust
Agreement.

                  SECTION 8.9. May Hold Securities.

                  Any Trustee or any other agent of any Trustee or the Trust, in
its individual or any other capacity, may become the owner or pledgee of Trust
Securities and except as provided in the definition of the terms "Outstanding"
in Article I, may otherwise deal with the Trust with the same rights it would
have if it were not an Trustee or such other agent.

                  SECTION 8.10. Compensation; Reimbursement; Indemnity.

                  The Depositor agrees:

                  (a) to pay to the Trustees from time to time such reasonable
compensation for all services rendered by them hereunder as may be agreed by the
Depositor and the Trustees 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);

                  (b) to reimburse the Trustees upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of their agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
gross negligence, bad faith or willful misconduct; and

                                       36
<PAGE>

                  (c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee,
(iii) any officer, director, shareholder, employee, representative or agent of
any Trustee or any Affiliate of any Trustee and (iv) any employee or agent of
the Trust (referred to herein as an "Indemnified Person") from and against any
loss, damage, liability, tax (other than income, franchise or other taxes
imposed on amounts paid pursuant to Section 8.10(a) or (b) hereof), penalty,
expense or claim of any kind or nature whatsoever incurred without negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of the Trust hereunder, including the
advancement of funds to cover the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.

                  The Trust shall have no payment, reimbursement or indemnity
obligations to the Trustees under this Section 8.10. The provisions of this
Section 8.10 shall survive the termination of this Trust Agreement and the
earlier removal or resignation of any Trustee.

                  No Trustee may claim any Lien on any Trust Property whether
before or after termination of the Trust as a result of any amount due pursuant
to this Section 8.10.

                  In no event shall the Property Trustee and the Delaware
Trustee be liable for any indirect, special, punitive or consequential loss or
damage of any kind whatsoever, including, but not limited to, lost profits, even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

                  In no event shall the Property Trustee and the Delaware
Trustee be liable for any failure or delay in the performance of its obligations
hereunder because of circumstances beyond its control, including, but not
limited to, acts of God, flood, war (whether declared or undeclared), terrorism,
fire, not, embargo, government action, including any laws, ordinances,
regulations, governmental action or the like which delay, restrict or prohibit
the providing of the services contemplated by this Trust Agreement.

                  SECTION 8.11. Resignation and Removal; Appointment of
Successor.

                  (a) No resignation or removal of any Trustee and no
appointment of a successor Trustee pursuant to this Article VIII shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.12.

                  (b) A Trustee may resign at any time by giving written notice
thereof to the Depositor and, in the case of the Property Trustee and the
Delaware Trustee, to the Holders.

                  (c) Unless an Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed (with or without cause) at any time by Act of the Holder of Common
Securities. If an Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed (with
or without cause) at such time by Act of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities, delivered to the removed Trustee
(in its individual capacity and on behalf of the Trust). An Administrative
Trustee may be removed (with or without cause) only by Act of the Holder of the
Common Securities at any time.

                  (d) If any Trustee shall resign, be removed or become
incapable of acting as Trustee, or if a vacancy shall occur in the office of any
Trustee for any reason, at a time when no Event of Default shall have occurred
and be continuing, the Holder of the Common Securities, by Act of the Holder of
the Common Securities, shall promptly appoint a successor Trustee or Trustees,
and such successor Trustee and the retiring Trustee shall comply with the
applicable requirements of Section 8.12. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when an
Event of Default shall have occurred and be continuing, the Holders of the
Preferred Securities, by Act of the Holders of a Majority in Liquidation Amount
of the Preferred Securities, shall promptly appoint a successor Property Trustee
or Delaware Trustee, and such successor Property Trustee or Delaware Trustee and
the retiring Property Trustee or Delaware Trustee shall comply with the
applicable requirements of Section 8.12. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when an Event of Default shall have occurred and be continuing, the holder
of the Common Securities by Act of the Holder of Common Securities shall
promptly appoint a successor Administrative Trustee and such successor
Administrative Trustee and the retiring Administrative Trustee shall comply with
the applicable requirements of Section 8.12. If no successor Trustee shall have
been so appointed by the Holder of the Common Securities or Holders of the
Preferred Securities, as the case may be, and accepted appointment in the manner
required by Section 8.12 within thirty (30) days after the giving of a notice of
resignation by a Trustee, the removal of a Trustee, or a Trustee becoming
incapable of acting as such Trustee, any Holder who has been a Holder of
Preferred Securities for at least six (6) months may, on behalf of himself and
all others similarly situated, and any resigning Trustee may, in each case, at
the expense of the Depositor, petition any court of competent jurisdiction for
the appointment of a successor Trustee.

                                       37
<PAGE>

                  (e) The Depositor shall give notice of each resignation and
each removal of the Property Trustee or the Delaware Trustee and each
appointment of a successor Property Trustee or Delaware Trustee to all Holders
in the manner provided in Section 10.8. Each notice shall include the name of
the successor Property Trustee or Delaware Trustee and the address of its
Corporate Trust Office if it is the Property Trustee.

                  (f) Notwithstanding the foregoing or any other provision of
this Trust Agreement, in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies or becomes, in the opinion of the Holder of
Common Securities, incompetent or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by (i) the unanimous act of the
remaining Administrative Trustees if there are at least two of them or (ii)
otherwise by the Holder of the Common Securities (with the successor in each
case being a Person who satisfies the eligibility requirement for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in Sections 8.3 and
8.4).

                  (g) Upon the appointment of a successor Delaware Trustee, such
successor Delaware Trustee shall file a Certificate of Amendment to the
Certificate of' Trust in accordance with Section 3810 of the Delaware Statutory
Trust Act.

                  SECTION 8.12. Acceptance of Appointment by Successor.

                  (a) In case of the appointment hereunder of a successor
Trustee, each successor Trustee shall execute and deliver to the Depositor and
to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
each such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on request of the Trust or any successor Trustee such retiring
Trustee shall, upon payment of its charges, duly assign, transfer and deliver to
such successor Trustee all Trust Property, all proceeds thereof and money held
by such retiring Trustee hereunder with respect to the Trust Securities and the
Trust.

                  (b) Upon request of any such successor Trustee, the Trust (or
the retiring Trustee if requested by the Depositor) shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.

                  (c) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VIII.

                                       38
<PAGE>

                  SECTION 8.13. Merger, Conversion, Consolidation or Succession
to Business.

                  Any Person into which the Property Trustee or the Delaware
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 such
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Trustee, shall be the successor of such
Trustee hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided, that such Person shall
be otherwise qualified and eligible under this Article VIII.

                  SECTION 8.14. Not Responsible for Recitals or Issuance of
Securities.

                  The recitals contained herein and in the Securities
Certificates shall be taken as the statements of the Trust and the Depositor,
and the Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the title to, or value or condition of,
the property of the Trust or any part thereof, nor as to the validity or
sufficiency of this Trust Agreement, the Notes or the Trust Securities. The
Trustees shall not be accountable for the use or application by the Depositor of
the proceeds of the Notes.

                  SECTION 8.15. Property Trustee May File Proofs of Claim.

                  (a) In case of any Bankruptcy Event (or event that with the
passage of time would become a Bankruptcy Event) relative to the Trust or any
other obligor upon the Trust Securities or the property of the Trust or of such
other obligor or their creditors, the Property Trustee (irrespective of whether
any Distributions on the Trust Securities shall then be due and payable and
irrespective of whether the Property Trustee shall have made any demand on the
Trust for the payment of any past due Distributions) shall be entitled and
empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:

                      (i) to file and prove a claim for the whole amount of any
         Distributions owing and unpaid in respect of the Trust Securities and
         to file such other papers or documents as may be necessary or advisable
         in order to have the claims of the Property Trustee (including any
         claim for the reasonable compensation, expenses, disbursements and
         advances of the Property Trustee, its agents and counsel) and of the
         Holders allowed in such judicial proceeding; and

                      (ii) to collect and receive any monies or other property
         payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such proceeding is hereby authorized by each
Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee first any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.

                  (b) Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or compensation
affecting the Trust Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder in
any such proceeding.

                  SECTION 8.16. Reports to and from the Property Trustee.

                  (a) The Depositor and the Administrative Trustees shall
deliver to the Property Trustee, not later than forty five (45) days after the
end of each of the first three fiscal quarters of the Depositor and not later
than ninety (90) days after the end of each fiscal year of the Trust ending
after the date of this Trust Agreement, an Officers' Certificate covering the
preceding fiscal year, stating whether or not to the knowledge of the signers
thereof the Depositor and the Trust are in default in the performance or
observance of any of the terms, provisions and conditions of this Trust
Agreement (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Depositor or the Trust shall be in default,
specifying all such defaults and the nature and status thereof of which they
have knowledge.

                                       39
<PAGE>

                  (b) The Depositor shall furnish (i) to the Property Trustee;
(ii) Dekania Capital Management, LLC, c/o Cohen Bros. & Co. 1818 Market Street,
28th Floor, Philadelphia, Pennsylvania 19103 or such other address as designated
by Dekania Capital Management, LLC); and (iii) any Owner of the Preferred
Securities reasonably identified to the Depositor and the Trust (which
identification may be made either by such Owner or by Dekania Capital
Management, LLC) a duly completed and executed certificate substantively and
substantially in the form attached hereto as Exhibit G, including the financial
statements referenced in such Exhibit, which certificate and financial
statements shall be so furnished by the Depositor not later than forty five (45)
days after the end of each of the first three fiscal quarters of each fiscal
year of the Depositor and not later than ninety (90) days after the end of each
fiscal year of the Depositor.

                  The Property Trustee shall obtain all reports, certificate and
information, which it is entitled to obtain under each of the Operative
Documents.

                                  ARTICLE IX.

                       TERMINATION, LIQUIDATION AND MERGER

                  SECTION 9.1. Dissolution Upon Expiration Date.

                  Unless earlier dissolved, the Trust shall automatically
dissolve on September 30, 2038 (the "Expiration Date"), and the Trust Property
shall be liquidated in accordance with Section 9.4.

                  SECTION 9.2. Early Termination.

                  The first to occur of any of the following events is an "Early
Termination Event", upon the occurrence of which the Trust shall be dissolved:

                  (a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor, in its capacity as the Holder of
the Common Securities, unless the Depositor shall have transferred the Common
Securities as provided by Section 5.11, in which case this provision shall refer
instead to any such successor Holder of the Common Securities;

                  (b) the written direction to the Property Trustee from the
Holder of the Common Securities at any time to dissolve the Trust and, after
satisfaction of any liabilities of the Trust as required by applicable law, to
distribute the Notes to Holders in exchange for the Preferred Securities (which
direction is optional and wholly within the discretion of the Holder of the
Common Securities), provided, that the Holder of the Common Securities shall
have received the prior approval of all necessary Applicable Insurance
Regulatory Authorities then required;

                  (c) the redemption of all of the Preferred Securities in
connection with the payment at maturity or redemption of all the Notes. and

                  (d) the entry of an order for dissolution of the Trust by a
court of competent
jurisdiction.

                  SECTION 9.3. Termination.

                  The respective obligations and responsibilities of the
Trustees and the Trust shall terminate upon the latest to occur of the
following: (a) the distribution by the Property Trustee to Holders of all
amounts required to be distributed hereunder upon the liquidation of the Trust
pursuant to Section 9.4, or upon the redemption of all of the Trust Securities
pursuant to Section 4.2; (b) the satisfaction of any expenses owed by the Trust;
and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Holders.

                                       40
<PAGE>

                  SECTION 9.4. Liquidation.

                  (a) If an Early Termination Event specified in Section 9.2(a),
(b) or (d) occurs or upon the Expiration Date, the Trust shall be liquidated by
the Property Trustee as expeditiously as the Property Trustee shall determine to
be possible by distributing, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, to each Holder a Like Amount of Notes.
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee not less than thirty (30) nor more than sixty (60) days prior to the
Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Securities Register. All such notices of liquidation shall:

                      (i) state the Liquidation Date;

                      (ii) state that from and after the Liquidation Date, the
         Trust Securities will no longer be deemed to be Outstanding and
         (subject to Section 9.4(d)) any Securities Certificates not surrendered
         for exchange will be deemed to represent a Like Amount of Notes; and

                      (iii) provide such information with respect to the
         mechanics by which Holders may exchange Securities Certificates for
         Notes, or if Section 9.4(d) applies, receive a Liquidation
         Distribution, as the Property Trustee shall deem appropriate.

                  (b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Notes to Holders,
the Property Trustee, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish a record date for such
distribution (which shall not be more than forty five (45) days prior to the
Liquidation Date nor prior to the date on which notice of such liquidation is
given to the Holders) and establish such procedures as it shall deem appropriate
to effect the distribution of Notes in exchange for the Outstanding Securities
Certificates.

                  (c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Notes will be
issued to Holders of Securities Certificates, upon surrender of such
Certificates to the exchange agent for exchange, (iii) the Depositor shall use
its best efforts to have the Notes listed on the New York Stock Exchange or on
such other exchange, interdealer quotation system or self-regulatory
organization on which the Preferred Securities are then listed, if any, (iv)
Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Notes bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on such Securities
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to Holders of Securities Certificates with respect to such Notes) and (v)
all rights of Holders holding Trust Securities will cease, except the right of
such Holders to receive Notes upon surrender of Securities Certificates.

                  (d) Notwithstanding the other provisions of this Section 9.4,
if distribution of the Notes in the manner provided herein is determined by the
Property Trustee not to be permitted or practical, the Trust Property shall be
liquidated, and the Trust shall be wound up by the Property Trustee in such
manner as the Property Trustee determines. In such event, Holders will be
entitled to receive out of the assets of the Trust available for distribution to
Holders, after satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to the Liquidation Amount per Trust Security
plus accumulated and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). If, upon any such winding up the
Liquidation Distribution can be paid only in part because the Trust leas
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The Holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such winding up pro rata (based
upon Liquidation Amounts) with Holders of all Trust Securities, except that, if
an Event of Default has occurred and is continuing, the Preferred Securities
shall have a priority over the Common Securities as provided in Section 4.3.

                                       41
<PAGE>

                  SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of Trust.

                  The Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person except pursuant to this Article IX.
At the request of the Holders of the Common Securities, without the consent of
the Holders of the Preferred Securities, the Trust may merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that:

                  (a) such successor entity either (i) expressly assumes all of
the obligations of the Trust under this Trust Agreement with respect to the
Preferred Securities or (ii) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (such
other Securities, the "Successor Securities") so long as the Successor
Securities have the same priority as the Preferred Securities with respect to
distributions and payments upon liquidation, redemption and otherwise;

                  (b) a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee is appointed to
hold the Notes;

                  (c) if the Preferred Securities or the Notes are rated, such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Preferred Securities or the Notes (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization that then assigns a rating to the Preferred Securities or the
Notes;

                  (d) the Preferred Securities are listed, or any Successor
Securities will be listed upon notice of issuance, on any national securities
exchange or interdealer quotation system on which the Preferred Securities are
then listed, if any;

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

                  (f) such successor entity has a purpose substantially
identical to that of the Trust;

                  (g) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel to the effect that (1) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material respect; (ii)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor such successor entity will be required
to register as an "investment company" under the Investment Company Act and
(iii) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Trust (or the successor entity) will continue
to be classified as a grantor trust for U.S. federal income tax purposes; and

                  (h) the Depositor or its permitted transferee owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee Agreement.

Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of all of the Preferred Securities, 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 other Person or permit any other
entity to consolidate, amalgamate, merge with or into, or replace, the Trust if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes or cause the Notes to be treated as other than
indebtedness of the Depositor for United States federal income tax purposes.

                                       42
<PAGE>

                                   ARTICLE X.

                            MISCELLANEOUS PROVISIONS

                  SECTION 10.1. Limitation of Rights of Holders.

                  Except as set forth in Section 9.2, the death, bankruptcy,
termination, dissolution or incapacity of any Person having an interest,
beneficial or otherwise, in Trust Securities shall not operate to terminate this
Trust Agreement, nor annul, dissolve or terminate the Trust nor entitle the
legal representatives or heirs of such Person or any Holder for such Person, to
claim an accounting, take any action or bring any proceeding in any court for a
partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.

                  SECTION 10.2. Agreed Tax Treatment of Trust and Trust
Securities.

                  The parties hereto and, by its acceptance or acquisition of a
Trust Security or a beneficial interest therein, the Holder of, and any Person
that acquires a beneficial interest in, such Trust Security intend and agree to
treat the Trust as a grantor trust for United States federal, state and local
tax purposes, and to treat the Trust Securities (including all payments and
proceeds with respect to such Trust Securities) as undivided beneficial
ownership interests in the Trust Property (and payments and proceeds therefrom,
respectively) for United States federal, state and local tax purposes and to
treat the Notes as indebtedness of the Depositor for United States federal,
state and local tax purposes. The provisions of this Trust Agreement shall be
interpreted to further this intention and agreement of the parties.

                  SECTION 10.3. Amendment.

                  (a) This Trust Agreement may be amended from time to time by
the Property Trustee, the Administrative Trustees and the Holder of all the
Common Securities, without the consent of any Holder of the Preferred
Securities, (i) to cure any ambiguity, correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein, or
to make or amend any other provisions with respect to matters or questions
arising under this Trust Agreement, which shall not be inconsistent with the
other provisions of this Trust Agreement, (ii) to modify, eliminate or add to
any provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will neither be taxable as a corporation nor be classified
as other than a grantor trust for United States federal income tax purposes at
all times that any Trust Securities are Outstanding or to ensure that the Notes
are treated as indebtedness of the Depositor for United States federal income
tax purposes, or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act or (iii) to add to the
covenants, restrictions or obligations of the Depositor; provided, that in the
case of clauses (i), (ii) or (iii), such action shall not adversely affect in
any material respect the interests of any Holder.

                  (b) Except as provided in Section 10.3(c), any provision of
this Trust Agreement may be amended by the Property Trustee, the Administrative
Trustees and the Holder of all of the Common Securities and with (i) the consent
of Holders of at least a Majority in Liquidation Amount of the Preferred
Securities and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not cause the Trust to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes or affect the treatment of the Notes as indebtedness
of the Depositor for United States federal income tax purposes or affect the
Trust's exemption from status (or from any requirement to register) as an
"investment company" under the Investment Company Act.

                  (c) Notwithstanding any other provision of this Trust
Agreement, without the consent of each Holder, this Trust Agreement may not be
amended to (i) change the accrual rate, amount, currency or timing of any
Distribution on or the redemption price of the Trust Securities or otherwise
adversely affect the amount of any Distribution or other payment required to be
made in respect of the Trust Securities as of a specified date, (ii) restrict or
impair the right of a Holder to institute suit for the enforcement of any such
payment on or after such date, (iii) reduce the percentage of aggregate
Liquidation Amount of Outstanding Preferred Securities, the consent of whose
Holders is required for any such amendment, or the consent of whose Holders is
required for any waiver of compliance with any provision of this Trust Agreement
or of defaults hereunder and their consequences provided for in this Trust
Agreement; (iv) impair or adversely affect the rights and interests of the
Holders in the Trust Property, or permit the creation of any Lien on any portion
of the Trust Property; or (v) modify the definition of "Outstanding," this
Section 10.3(c), Sections 4.1, 4.2, 4.3, 6.10(e) or Article IX.

                                       43
<PAGE>

                  (d) Notwithstanding any other provision of this Trust
Agreement, no Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Trust to be taxable as a corporation or to be
classified as other than a grantor trust for United States federal income tax
purposes or that would cause the Notes to fail or cease to be treated as
indebtedness of the Depositor for United States federal income tax purposes or
that would cause the Trust to fail or cease to qualify for the exemption from
status (or from any requirement to register) as an "investment company" under
the Investment Company Act.

                  (e) If any amendment to this Trust Agreement is made, the
Administrative Trustees or the Property Trustee shall promptly provide to the
Depositor and the Note Trustee a copy of such amendment.

                  (f) No Trustee shall be required to enter into any amendment
to this Trust Agreement that affects its own rights, duties or immunities under
this Trust Agreement. The Trustees shall be entitled to receive an Opinion of
Counsel and an Officers' Certificate stating that any amendment to this Trust
Agreement is in compliance with this Trust Agreement and all conditions
precedent herein provided for relating to such action have been met.

                  (g) No amendment or modification to this Trust Agreement that
adversely affects in any material respect the rights, duties, liabilities,
indemnities or immunities of the Delaware Trustee hereunder shall be permitted
without the prior written consent of the Delaware Trustee.

                  SECTION 10.4. Separability.

                  If any provision in this Trust Agreement or in the Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby, and there shall be deemed substituted for the provision at
issue a valid, legal and enforceable provision as similar as possible to the
provision at issue.

                  SECTION 10.5. Governing Law.

                  THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF
THE HOLDERS, THE TRUST, THE DEPOSITOR AND THE TRUSTEES WITH RESPECT TO THIS
TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS.

                  SECTION 10.6. Successors.

                  This Trust Agreement shall be binding upon and shall inure to
the benefit of any successor to the Depositor, the Trust and any Trustee,
including any successor by operation of law. Except in connection with a
transaction involving the Depositor that is permitted under Article VIII of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.

                  SECTION 10.7. Headings.

                  The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.

                                       44
<PAGE>

                  SECTION 10.8. Reports, Notices and Demands.

                  (a) Any report, notice, demand or other communication that by
any provision of this Trust Agreement is required or permitted to be given or
served to or upon any Holder or the Depositor may be given or served in writing
delivered in person, or by reputable, overnight courier, by telecopy or by
deposit thereof, first-class postage prepaid, in the United States mail,
addressed, (a) in the case of a Holder of Preferred Securities, to such Holder
as such Holder's name and address may appear on the Securities Register; and (b)
in the case of the Holder of all the Common Securities or the Depositor, to
Tower Group, Inc. 120 Broadway, 14th Floor, New York, New York, 10271,
Attention: Francis M. Colalucci, or to such other address as may be specified in
a written notice by the Holder of all the Common Securities or the Depositor, as
the case may be, to the Property Trustee. Such report, notice, demand or other
communication to or upon a Holder or the Depositor shall be deemed to have been
given when received in person, within one (1) Business Day following delivery by
overnight courier, when telecopied with receipt confirmed, or within three (3)
Business Days following delivery by mail, 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.

                  (b) Any notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon the Property Trustee, the Delaware Trustee, the Administrative
Trustees or the Trust shall be given in writing by deposit thereof, first-class
postage prepaid, in the U.S. mail, personal delivery or facsimile transmission,
addressed to such Person as follows: (a) with respect to the Property Trustee to
JPMorgan Chase Bank, 600 Travis, Suite 1150, Houston, Texas, 77002, Attention:
Institutional Trust Services, facsimile no. (713) 577-5200; (b) with respect to
the Delaware Trustee, to Chase Manhattan Bank USA, National Association, c/o
JPMorgan Chase Bank, 500 Stanton Christiana Road, Building 4 (3rd Floor),
Newark, Delaware 19713, Attention: Institutional Trust Services, facsimile no.:
(302) 552-6280; (c) with respect to the Administrative Trustees, to them at the
address above for notices to the Depositor, marked "Attention: Administrative
Trustees of Tower Group Statutory Trust II", and (d) with respect to the Trust,
to its principal executive office specified in Section 2.2, with a copy to the
Property Trustee. Such notice, demand or other communication to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust, the Property Trustee or the Administrative Trustees.

                  SECTION 10.9. Agreement Not to Petition.

                  Each of the Trustees and the Depositor agree for the benefit
of the Holders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any Bankruptcy Law or
otherwise join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. If the Depositor takes action in violation of this Section 10.9,
the Property Trustee agrees, for the benefit of Holders, that at the expense of
the Depositor, it shall file an answer with the applicable bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Trust may assert.

                  SECTION 10.10. Counterparts.

                  This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       45
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.

                                 TOWER GROUP, INC.,
                                 as Depositor

                                 By:       /s/  Michael H. Lee
                                      ---------------------------------------
                                       Name:  Michael H. Lee
                                       Title: President and Chief Executive
                                              Officer

<TABLE>
<S>                                                    <C>
JPMORGAN CHASE RANK, not in its individual             CHASE MANHATTAN BANK USA, NATIONAL
capacity but solely as                                 ASSOCIATION, as Delaware Trustee
Property Trustee

By:                                                     By:
    ----------------------------------------                ---------------------------------------
     Name: Donna Edmundson                                  Name: Diane P. Ledger
     Title:   Vice President                                Title:   Assistant Vice President

         /s/ Michael H. Lee                                      /s/ Steven G. Fauth
--------------------------------------------            ------------------------------------------
     Administrative Trustee                             Administrative Trustee
     Name:  Michael H. Lee                              Name:  Steven G. Fauth

         /s/ Francis M. Colalucci
--------------------------------------------
Administrative Trustee
Name:  Francis M. Colalucci
</TABLE>
                                            Amended and Restated Trust Agreement

                                       46
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.

                                  TOWER GROUP, INC..
                                  as Depositor

                                  By:
                                       ----------------------------------------
                                        Name:  Michael H. Lee
                                        Title: President and Chief Executive
                                               Officer

<TABLE>
<S>                                                     <C>
JPMORGAN CHASE RANK, not in its individual              CHASE MANHATTAN BANK USA, NATIONAL
capacity but solely as                                  ASSOCIATION, as Delaware Trustee
Property Trustee

By:      /s/ Donna Edmundson                            By:
    ----------------------------------------                ------------------------------------
     Name: Donna Edmundson                                  Name:  Diane P. Ledger
     Title:   Vice President                                Title: Assistant Vice President

    ----------------------------------------                ------------------------------------
     Administrative Trustee                                 Administrative Trustee
     Name:  Michael H. Lee                                  Name: Steven G. Fauth

    ----------------------------------------
     Administrative Trustee
     Name:  Francis M. Colalucci
</TABLE>
                                            Amended and Restated Trust Agreement

                                       47
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.

                                 TOWER GROUP, INC..
                                 as Depositor

                                 By:
                                      ----------------------------------------
                                       Name:  Michael H. Lee
                                       Title: President and Chief Executive
                                              Officer

<TABLE>
<S>                                                    <C>
JPMORGAN CHASE RANK, not in its individual             CHASE MANHATTAN BANK USA, NATIONAL
capacity but solely as                                 ASSOCIATION, as Delaware Trustee
Property Trustee

By:                                                     By:      /s/ Diane P. Ledger
    ----------------------------------------                ---------------------------------------
    Name:  Donna Edmundson                                  Name:  Diane P. Ledger
    Title: Vice President                                   Title: Assistant Vice President

    ----------------------------------------                ---------------------------------------
     Administrative Trustee                                 Administrative Trustee
     Name:  Michael H. Lee                                  Name:  Steven G. Fauth

    ----------------------------------------
     Administrative Trustee
     Name:  Francis M. Colalucci
</TABLE>
                                            Amended and Restated Trust Agreement

                                       48<PAGE>
                                                                   EXHIBIT 10.14

                                                                  EXECUTION COPY

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

                          JUNIOR SUBORDINATED INDENTURE

                                     between

                                tower group, inc.

                                       and

                              JPMORGAN CHASE BANK,
                                   as Trustee

                         Dated as of September 30, 2003

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

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

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                          Page
                                                ARTICLE I
                         DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

<S>                 <C>                                                                                    <C>
SECTION 1.1.        Definitions..............................................................................1

SECTION 1.2.        Compliance Certificate and Opinions.....................................................10

SECTION 1.3.        Forms of Documents Delivered to Trustee.................................................10

SECTION 1.4.        Acts of Holders.........................................................................11

SECTION 1.5.        Notices, Etc. to Trustee and Company....................................................13

SECTION 1.6.        Notice to Holders; Waiver...............................................................13

SECTION 1.7.        Effect of Headings and Table of Contents................................................14

SECTION 1.8.        Successors and Assigns..................................................................14

SECTION 1.9.        Separability Clause.....................................................................14

SECTION 1.10.       Benefits of Indenture...................................................................14

SECTION 1.11.       Governing Law...........................................................................14

SECTION 1.12.       Submission to Jurisdiction..............................................................14

SECTION 1.13.       Non-Business Days.......................................................................15

                                                ARTICLE II
                                              SECURITY FORMS

SECTION 2.1.        Form of Security........................................................................15

SECTION 2.2.        Restricted Legend.......................................................................20

SECTION 2.3.        Form of Trustee's Certificate of Authentication.........................................23

SECTION 2.4.        Temporary Securities....................................................................23

SECTION 2.5.        Definitive Securities...................................................................23

                                               ARTICLE III
                                              THE SECURITIES

SECTION 3.1.        Payment of Principal and Interest.......................................................24

SECTION 3.2.        Denominations...........................................................................25

SECTION 3.3.        Execution, Authentication, Delivery and Dating..........................................26

SECTION 3.4.        Global Securities.......................................................................27

SECTION 3.5.        Registration, Transfer and Exchange Generally...........................................29

SECTION 3.6.        Mutilated, Destroyed, Lost and Stolen Securities........................................30

SECTION 3.7.        Persons Deemed Owners...................................................................30
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SECTION 3.8.        Cancellation............................................................................30

SECTION 3.9.        Deferrals of Interest Payment Dates.....................................................31

SECTION 3.10.       Right of Set-Off........................................................................32

SECTION 3.11.       Agreed Tax Treatment....................................................................32

SECTION 3.12.       CUSIP Numbers...........................................................................32

                                                ARTICLE IV
                                        SATISFACTION AND DISCHARGE

SECTION 4.1.        Satisfaction and Discharge of Indenture.................................................32

SECTION 4.2.        Application of Trust Money..............................................................34

                                                ARTICLE V
                                                 REMEDIES

SECTION 5.1.        Events of Default.......................................................................34

SECTION 5.2.        Acceleration of Maturity; Rescission and Annulment......................................35

SECTION 5.3.        Collection of Indebtedness and Suits for Enforcement by Trustee.........................36

SECTION 5.4.        Trustee May File Proofs of Claim........................................................37

SECTION 5.5.        Trustee May Enforce Claim Without Possession of Securities..............................37

SECTION 5.6.        Application of Money Collected..........................................................37

SECTION 5.7.        Limitation on Suits.....................................................................38

SECTION 5.8.        Unconditional Right of Holders to Receive Principal, Premium, if any, and
                    Interest; Direct Action by Holders of Preferred Securities..............................38

SECTION 5.9.        Restoration of Rights and Remedies......................................................39

SECTION 5.10.       Rights and Remedies Cumulative..........................................................39

SECTION 5.11.       Delay or Omission Not Waiver............................................................39

SECTION 5.12.       Control by Holders......................................................................39

SECTION 5.13.       Waiver of Past Defaults.................................................................40

SECTION 5.14.       Undertaking for Costs...................................................................40

SECTION 5.15.       Waiver of Usury, Stay or Extension Laws.................................................40

                                                ARTICLE VI
                                               THE TRUSTEE

SECTION 6.1.        Corporate Trustee Required..............................................................41

SECTION 6.2.        Certain Duties and Responsibilities.....................................................41

SECTION 6.3.        Notice of Defaults......................................................................43

SECTION 6.4.        Certain Rights of Trustee...............................................................43
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<S>                                                                                                       <C>
SECTION 6.5.        May Hold Securities.....................................................................45

SECTION 6.6.        Compensation; Reimbursement; Indemnity..................................................45

SECTION 6.7.        Resignation and Removal; Appointment of Successor.......................................46

SECTION 6.8.        Acceptance of Appointment by Successor..................................................47

SECTION 6.9.        Merger, Conversion, Consolidation or Succession to Business.............................47

SECTION 6.10.       Not Responsible for Recitals or Issuance of Securities..................................48

SECTION 6.11.       Appointment of Authenticating Agent.....................................................48

                                               ARTICLE VII
                            HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1.        Company to Furnish Trustee Names and Addresses of Holders...............................49

SECTION 7.2.        Preservation of Information, Communications to Holders..................................50

SECTION 7.3.        Reports by Company......................................................................50

                                               ARTICLE VIII
                           CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1.        Company May Consolidate, Etc., Only on Certain Terms....................................51

SECTION 8.2.        Successor Company Substituted...........................................................52

                                                ARTICLE IX
                                         SUPPLEMENTAL INDENTURES

SECTION 9.1.        Supplemental Indentures without Consent of Holders......................................52

SECTION 9.2.        Supplemental Indentures with Consent of Holders.........................................53

SECTION 9.3.        Execution of Supplemental Indentures....................................................54

SECTION 9.4.        Effect of Supplemental Indentures.......................................................54

SECTION 9.5.        Reference in Securities to Supplemental Indentures......................................54

                                                ARTICLE X
                                                COVENANTS

SECTION 10.1.       Payment of Principal, Premium, if any, and Interest.....................................54

SECTION 10.2.       Money for Security Payments to be Held in Trust.........................................55

SECTION 10.3.       Statement as to Compliance..............................................................56

SECTION 10.4.       Calculation Agent.......................................................................56

SECTION 10.5.       Additional Tax Sums.....................................................................57

SECTION 10.6.       Additional Covenants....................................................................57

SECTION 10.7.       Waiver of Covenants.....................................................................58

SECTION 10.8.       Treatment of Securities.................................................................58
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                                                ARTICLE XI
                                         REDEMPTION OF SECURITIES

SECTION 11.1.       Optional Redemption.....................................................................58

SECTION 11.2.       Special Event Redemption................................................................59

SECTION 11.3.       Election to Redeem; Notice to Trustee...................................................59

SECTION 11.4.       Selection of Securities to be Redeemed..................................................59

SECTION 11.5.       Notice of Redemption....................................................................60

SECTION 11.6.       Deposit of Redemption Price.............................................................61

SECTION 11.7.       Payment of Securities Called for Redemption.............................................61

                                               ARTICLE XII
                                       SUBORDINATION OF SECURITIES

SECTION 12.1.       Securities Subordinate to Senior Debt...................................................61

SECTION 12.2.       No Payment When Senior Debt in Default; Payment Over of Proceeds Upon
                    Dissolution, Etc........................................................................61

SECTION 12.3.       Payment Permitted If No Default.........................................................63

SECTION 12.4.       Subrogation to Rights of Holders of Senior Debt.........................................63

SECTION 12.5.       Provisions Solely to Define Relative Rights.............................................64

SECTION 12.6.       Trustee to Effectuate Subordination.....................................................64

SECTION 12.7.       No Waiver of Subordination Provisions...................................................64

SECTION 12.8.       Notice to Trustee.......................................................................65

SECTION 12.9.       Reliance on Judicial Order or Certificate of Liquidating Agent..........................65

SECTION 12.10.      Trustee Not Fiduciary for Holders of Senior Debt........................................66

SECTION 12.11.      Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights............66

SECTION 12.12.      Article Applicable to Paying Agents.....................................................66
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SCHEDULES

<S>                          <C>
Schedule A          -        Determination of LIBOR

Exhibit A           -        Form of Officer's Financial Certificate

</TABLE>

                                      -v-

<PAGE>

         JUNIOR SUBORDINATED INDENTURE, dated as of September 30, 2003, between
TOWER GROUP, INC., a Delaware corporation (the "Company"), and JPMORGAN CHASE
BANK, a New York banking corporation, as Trustee (in such capacity, the
"Trustee").

                             RECITALS OF THE COMPANY

         WHEREAS, the Company has duty authorized the execution and delivery of
this Indenture to provide for the issuance of its unsecured junior subordinated
deferrable interest notes (the "Securities") issued to evidence loans made to
the Company of the proceeds from the issuance by Tower Group Statutory Trust II,
a Delaware statutory trust (the "Trust"), of undivided preferred beneficial
interests in the assets of the Trust (the "Preferred Securities") and undivided
common beneficial interests in the assets of the Trust (the "Common Securities"
and, collectively with the Preferred Securities, the "Trust Securities"), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered; and

         WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.

         NOW, THEREFORE, this Indenture Witnesseth:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:

                                   ARTICLE I.

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         SECTION 1.1. Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

         (a) the terms defined in this Article I have the meanings assigned to
them in this Article I;

         (b) the words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";

         (c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;

         (d) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture;

         (e) the words "hereby", "herein", "hereof' and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;

                                       1
<PAGE>

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

         (g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.

         "Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.

         "Administrative Trustee" means, with respect to the Trust, a Person
identified as an "Administrative Trustee" in the Trust Agreement, solely in its
capacity as Administrative Trustee of the Trust under the Trust Agreement and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Administrative Trustee appointed as therein provided.

         "Additional Interest" means the interest, if any, that shall accrue on
any amounts payable on the Securities, the payment of which has not been made on
the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security, in each case to the
extent legally enforceable.

         "Additional Tax Sums" has the meaning specified in Section 10.5.

         "Additional Taxes" means taxes, duties or other governmental charges
imposed on the Trust as a result of a Tax Event (which, for the sake of clarity,
does not include amounts required to be deducted or withheld by the Trust from
payments made by the Trust to or for the benefit of the Holder of, or any Person
that acquires a beneficial interest in, the Securities).

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Applicable Accounting Principles" means accounting practices
prescribed or permitted by the National Association of Insurance Commissioners
and, with respect to the Company's subsidiary insurance companies, the
applicable insurance department of the state of domicile of such insurance
subsidiary, and in each case, applied consistently throughout the periods
involved.

         "Applicable Depository Procedures" means, with respect to any transfer
or transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.

         "Applicable Insurance Regulatory Authority" means the Superintendent of
the New York State Insurance Department or, if at any time after the execution
of this Indenture any such entity is not existing and performing the duties now
assigned to it, any successor body performing similar duties or functions.

                                       2
<PAGE>

         "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.11 to act on behalf of the Trustee to authenticate the
Securities.

         "Bankruptcy Code" means Title 11 of the United States Code or any
successor statute(s) thereto, or any similar federal or state law for the relief
of debtors, in each case as amended from time to time.

         "Board of Directors" means the board of directors of the Company or any
duly authorized committee of that board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.

         "Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee is closed for business.

         "Calculation Agent" has the meaning specified in Section 10.4.

         "Common Securities" has the meaning specified in the first recital of
this Indenture.

         "Common Stock" means the common stock, par value $.01 per share, of the
Company.

         "Company" means the Person named as the "Company" in the first
paragraph of this indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

         "Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, its Vice Chairman of the Board of Directors, its Chief Executive
Officer, President or a Vice President, and by its Chief Financial Officer, its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.

         "Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of this Indenture is located at 600 Travis, Suite 1150,
Houston, Texas, 77002 Attention: Institutional Trust Services.

         "Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person, whether currently existing or hereafter
incurred and whether or not contingent and without duplication, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or other accrued liabilities arising in the ordinary
course of business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of this
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise; and (viii) any renewals, extensions, refundings, amendments or
modifications of any obligation of the type referred to in clauses (i) through
(vii).

                                       3
<PAGE>

         "Defaulted Interest" has the meaning specified in Section 3.1.

         "Delaware Trustee" means, with respect to the Trust, the Person
identified as the "Delaware Trustee" in the Trust Agreement, solely in its
capacity as Delaware Trustee of the Trust under the Trust Agreement and not in
its individual capacity, or its successor in interest in such capacity, or any
successor Delaware Trustee appointed as therein provided.

         "Depositary" means an organization registered as a clearing agency
under the Exchange Act that is designated as Depositary by the Company or any
successor thereto. DTC will be the initial Depositary.

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

         "Distributions" means amounts payable in respect of the Trust
Securities as provided in the Trust Agreement and referred to therein as
"Distributions."

         "Dollar" or "$" means the currency of the United States of America
that, as at the time of payment is legal tender for the payment of public and
private debts.

         "DTC" means The Depository Trust Company, a New York corporation.

         "Event of Default" has the meaning specified in Section 5.1.

         "Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.

         "Expiration Date" has the meaning specified in Section 1.4.

         "Extension Period" has the meaning specified in Section 3.9.

         "GAAP" means United States generally accepted accounting principles,
consistently applied, from time to time in effect.

         "Global Security" means a Security that evidences all or part of the
Securities, the ownership and transfers of which shall be made through book
entries by a Depositary.

                                       4
<PAGE>

         "Government Obligation" means (a) any security that is (i) a direct
obligation of the United States of America of which the full faith and credit of
the United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof and (b) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any
Government Obligation that is specified in clause (a) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any Government Obligation
that is so specified and held, provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.

         "Guarantee Agreement" means the Guarantee Agreement executed by the
Company and JPMorgan Chase Bank, as Guarantee Trustee, contemporaneously with
the execution and delivery of this Indenture, for the benefit of the holders of
the Preferred Securities, as modified, amended or supplemented from time to
time.

         "Holder" means a Person in whose name a Security is registered in the
Securities Register.

         "Indenture" means this instrument as originally executed or as it may
from time to time be amended or supplemented by one or more amendments or
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.

         "Interest Payment Date" means March 31, June 30, September 30 and
December 31 of each year, commencing on December 31, 2003, during the term of
this Indenture.

         "Investment Company Act" means the Investment Company Act of 1940 or
any successor statute thereto, in each case as amended from time to time.

         "Investment Company Event" means the receipt by the Company 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 (including any announced
prospective change) or a written change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or, within
ninety (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 Securities.

         "LIBOR" has the meaning specified in Schedule A.

         "LIBOR Business Day" has the meaning specified in Schedule A.

         "LIBOR Determination Date" has the meaning specified in Schedule A.

                                       5
<PAGE>

         "Liquidation Amount" has the meaning specified in the Trust Agreement.

         "Maturity," when used with respect to any Security, means the date on
which the principal of such Security or any installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise,

         "Notice of Default" means a written notice of the kind specified in
Section 5.1(c).

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President, and by the Chief Financial Officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company and delivered to the Trustee.

         "Operative Documents" means the Trust Agreement, the Indenture, the
Purchase Agreement, the Guarantee Agreement and the Securities.

         "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or any Affiliate of the Company.

         "Optional Redemption Price" has the meaning set forth in Section 11.1.

         "Original Issue Date" means the date of original issuance of each
Security.

         "Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

                  (i) Securities theretofore canceled by the Trustee or
         delivered to the Trustee for cancellation;

                  (ii) Securities for whose payment or redemption money in the
         necessary amount has been theretofore deposited with the Trustee or any
         Paying Agent (other than the Company) in trust or set aside and
         segregated in trust by the Company (if the Company shall act as its own
         Paying Agent) for the Holders of such Securities; provided, that, if
         such Securities are to be redeemed, notice of such redemption has been
         duly given pursuant to this Indenture or provision therefor
         satisfactory to the Trustee has been made; and

                  (iii) Securities that have been paid or in substitution for or
         in lieu of which other Securities have been authenticated and delivered
         pursuant to the provisions of this Indenture, unless proof satisfactory
         to the Trustee is presented that any such Securities are held by
         Holders in whose hands such Securities are valid, binding and legal
         obligations of the Company;

provided, that, in determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
Notwithstanding anything herein to the contrary, Securities initially issued to
the Trust that are owned by the Trust shall be deemed to be Outstanding
notwithstanding the ownership by the Company or an Affiliate of any beneficial
interest in the Trust.

                                       6
<PAGE>

         "Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or any premium or interest on, or other amounts
in respect of, any Securities on behalf of the Company.

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

         "Place of Payment" means, with respect to the Securities, the Corporate
Trust Office of the Trustee.

         "Preferred Securities" has the meaning specified in the first recital
of this Indenture.

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.

         "Proceeding" has the meaning specified in Section 12.2.

         "Property Trustee" means the Person identified as the "Property
Trustee" in the Trust Agreement, solely in its capacity as Property Trustee of
the Trust under the Trust Agreement and not in its individual capacity, or its
successor in interest in such capacity, or any successor Property Trustee
appointed as therein provided.

         "Purchase Agreement" means the agreement, dated as of the date hereof,
between the Company and the Trust and Dekania CDO I, Ltd.

         "Redemption Date" means, when used with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.

         "Redemption Price" means, when used with respect to any Security to be
redeemed, in whole or in part, the Special Redemption Price or the Optional
Redemption Price as applicable, at which such Security or portion thereof is to
be redeemed as fixed by or pursuant to this Indenture.

                                       7
<PAGE>

         "Reference Banks" has the meaning specified in Schedule A.

         "Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities means the date that is fifteen (15) days
preceding such Interest Payment Date (whether or not a Business Day).

         "Responsible Officer" means, when used with respect to the Trustee, the
officer in the Institutional Trust Services department of the Trustee having
direct responsibility for the administration of this Indenture.

         "Rights Plan" means a plan of the Company providing for the issuance by
the Company to all holders of its Common Stock of rights entitling the holders
thereof to subscribe for or purchase shares of any class or series of capital
stock of the Company which rights (i) are deemed to be transferred with such
shares of such Common Stock and (ii) are also issued in respect of future
issuances of such Common Stock, in each case until the occurrence of a specified
event or events.

         "Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.

         "Securities Act" means the Securities Act of 1933 or any successor
statute thereto, in each case as amended from time to time.

         "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.

         "Senior Debt" means the principal of and any premium and interest on
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company, whether or not such
claim for post-petition interest is allowed in such proceeding) all Debt of the
Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, that such
obligations are not superior in right of payment to the Securities issued under
this Indenture; provided, however, that if the Company is subject to the
regulation and supervision of any Applicable Insurance Regulatory Authority, the
Company shall have received the approval of each appropriate Applicable
Insurance Regulatory Authority prior to issuing any such obligation if then
required; and provided further, that Senior Debt shall not be deemed to include
any other debt securities and guarantees in respect of such debt securities
issued to any trust other than the Trust (or a trustee of any such trust),
partnership or other entity affiliated with the Company that is a financing
vehicle of the Company (a "financing entity") in connection with the issuance by
such financing entity of equity securities or other securities that are treated
as equity capital for regulatory capital purposes guaranteed by the Company
pursuant to an instrument that ranks pari passu with or junior in right of
payment to this Indenture, including, without limitation, the floating rate
junior subordinated deferrable interest debentures issued by the Company in the
principal amount of $10,310,000 (which debentures and the Securities issued
hereunder shall rank pari passu in all respects) on May 15, 2003 to Tower Group
Statutory Trust II in connection with the issuance by such trust of floating
rate capital securities in the aggregate amount of $10,000,000 on May 15, 2003.
For greater certainty, the term Senior Debt includes, without limiting the
generality of the foregoing, that certain Credit Agreement dated as of February
21, 2003 by and between the Company and The CIT Group/Equipment Financing, Inc.

                                       8
<PAGE>

         "Special Event" means the occurrence of an Investment Company Event or
a Tax Event.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.1.

         "Special Redemption Price" has the meaning set forth in Section 11.2.

         "Stated Maturity" means September 30, 2033.

         "Statutory Financial Statements" means all financial statements of the
Company's subsidiary insurance companies for each relevant period, each prepared
in accordance with Applicable Accounting Principles.

         "Subsidiary" means a Person more than fifty percent (50%) of the
outstanding voting stock or other voting interests of which is owned, directly
or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For purposes of this definition,
"voting stock" means stock that ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.

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

         "Trust" has the meaning specified in the first recital of this
Indenture.

         "Trust Agreement" means the Amended and Restated Trust Agreement
executed and delivered by the Company, the Property Trustee, Chase Manhattan
Bank USA, National Association, as Delaware Trustee and the Administrative
Trustees named therein, contemporaneously with the execution and delivery of
this Indenture, for the benefit of the holders of the Trust Securities, as
amended or supplemented from time to time.

                                       9
<PAGE>

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument, solely in its capacity as such and not in its
individual capacity, until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and, thereafter, "Trustee" shall
mean or include each Person who is then a Trustee hereunder.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
and as in effect on the date as of this Indenture.

         "Trust Securities" has the meaning specified in the first recital of
this Indenture.

         SECTION 1.2. Compliance Certificate and Opinions.

         (a) Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitutes a condition precedent), if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

         (b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
provided pursuant to Section 10.3) shall include:

                  (i) a statement by each individual signing such certificate or
         opinion that such individual has read such covenant or condition and
         the definitions herein relating thereto;

                  (ii) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions of
         such individual contained in such certificate or opinion are based;

                  (iii) a statement that, in the opinion of such individual, he
         or she has made such examination or investigation as is necessary to
         enable him or her to express an informed opinion as to whether or not
         such covenant or condition has been complied with; and

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

         SECTION 1.3. Forms of Documents Delivered to Trustee.

         (a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

                                       10
<PAGE>

         (b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or after reasonable
inquiry should know, that the certificate or opinion or representations with
respect to matters upon which his or her certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or after reasonable inquiry should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.

         (c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

         (d) Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally received in the corrected form and, irrespective of the date or dates
of the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Without limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to the benefits of
this Indenture equally and ratably with all other Outstanding Securities.

         SECTION 1.4. Acts of Holders.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
thereof duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
(including any appointment of an agent) is or are delivered to the Trustee, and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section 1.4.

                                       11
<PAGE>

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.

         (c) The ownership of Securities shall be proved by the Securities
Register.

         (d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

         (e) Without limiting the foregoing, a Holder entitled to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

         (f) Except as set forth in paragraph (g) of this Section 1.4, the
Company may set any day as a record date for the purpose of determining the
Holders of Outstanding Securities entitled to give, make or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given, made or taken by Holders of
Securities. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain holders
after such record date; provided, that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date (as defined
in Section 1.4(h)) by Holders of the requisite principal amount of Outstanding
Securities on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect). Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Trustee in writing and to each Holder of Securities in the
manner set forth in Section 1.6.

         (g) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration or
rescission or annulment thereof referred to in Section 5.2, (iii) any request to
institute proceedings referred to in Section 5.7(b) or (iv) any direction
referred to in Section 5.12. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided, that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities on such record date. Nothing in this paragraph
shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect). Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 1.6.

                                       12
<PAGE>

         (h) With respect to any record date set pursuant to paragraph (f) or
(g) of this Section 1.4, the party hereto that sets such record date may
designate any day as the "Expiration Date" and from time to time may change the
Expiration Date to any earlier or later day; provided, that no such change shall
be effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 1.4, the party hereto that set such record date shall be deemed
to have initially designated the ninetieth (90th) day after such record date as
the Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the one hundred eightieth (180th) day after
the applicable record date.

         SECTION 1.5. Notices, Etc. to Trustee and Company.

         Any request, demand, authorization, direction, notice, consent, waiver,
Act of Holders, or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:

         (a) the Trustee by any Holder, any holder of Preferred Securities or
the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Trustee at its
Corporate Trust Office, or

         (b) the Company by the Trustee, any Holder or any holder of Preferred
Securities shall be sufficient for every purpose hereunder if in writing and
mailed, first class, postage prepaid, to the Company addressed to it at 120
Broadway, 14th Floor, New York, New York, 10271 or at any other address
previously furnished in writing to the Trustee by the Company.

         SECTION 1.6. Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class, postage prepaid, to each Holder affected
by such event to the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail service or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

                                       13
<PAGE>

         SECTION 1.7. Effect of Headings and Table of Contents.

         The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction of this Indenture.

         SECTION 1.8. Successors and Assigns.

         This Indenture shall be binding upon and shall inure to the benefit of
any successor to the Company and the Trustee, including any successor by
operation of law. Except in connection with a transaction involving the Company
that is permitted under Article VIII and pursuant to which the assignee agrees
in writing to perform the Company's obligations hereunder, the Company shall not
assign its obligations hereunder.

         SECTION 1.9. Separability Clause.

         If any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and there shall be deemed substituted for the provision at issue a valid, legal
and enforceable provision as similar as possible to the provision at issue.

         SECTION 1.10. Benefits of Indenture.

         Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Securities and, to the
extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.2 and 10.7,
the holders of Preferred Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

         SECTION 1.11. Governing Law.

         This Indenture and the rights and obligations of each of the Holders,
the Company and the Trustee shall be construed and enforced in accordance with
and governed by the laws of the State of New York without reference to its
conflict of laws provisions (other than Section 5-1401 of the General
Obligations Law).

         SECTION 1.12. Submission to Jurisdiction.

         ANY LEGAL, ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS INDENTURE MAY BE BROUGHT IN OR REMOVED TO THE
COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE
SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS
INDENTURE, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND
COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS INDENTURE.

                                       14
<PAGE>

         SECTION 1.13. Non-Business Days.

         If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest, premium, if any, or
principal or other amounts in respect of such Security shall not be made on such
date, but shall be made on the next succeeding Business Day (and no interest
shall accrue in respect of the amounts whose payment is so delayed for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day falls 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 Interest Payment Date or
Redemption Date or at the Stated Maturity.

                                   ARTICLE II

                                 SECURITY FORMS

         SECTION 2.1. Form of Security.

         Any Security issued hereunder shall be in substantially the following
form:

                                TOWER GROUP, INC.

                 Floating Rate Junior Subordinated Note due 2033

No.                                                              $ 10,310,000
    --------------------

         Tower Group, Inc., a corporation organized and existing under the laws
of Delaware (hereinafter called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ______________, or registered assigns, the principal sum of
Ten Million Three Hundred Ten Thousand Dollars ($10,310,000) [if the Security is
a Global Security, then insert-- or such other principal amount represented
hereby as may be set forth in the records of the Securities Registrar
hereinafter referred to in accordance with the Indenture] on September 30, 2033.
The Company further promises to pay interest on said principal sum from
September 30, 2003, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December 31
of each year, commencing December 31, 2003, or if any such day is not a Business
Day, on the next succeeding Business Day (and no interest shall accrue in
respect of the amounts whose payment is so delayed for the period from and after
such Interest Payment Date until such next succeeding Business Day), except
that, if such Business Day falls 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 Interest Payment Date, at the
fixed rate equal to 7.5% through the interest payment date in September 2008 and
thereafter at a variable rate equal to LIBOR plus 4.00% per annum, together with
Additional Tax Sums, if any, as provided in Section 10.5 of the Indenture, until
the principal hereof is paid or duly provided for or made available for payment;
provided, further, that any overdue principal, premium, if any, or Additional
Tax Sums and any overdue installment of interest shall bear Additional Interest
at the fixed rate equal to 7.5% through the interest payment date in September
2008 and thereafter at a variable rate equal to LIBOR plus 4.00% per annum (to
the extent that the payment of such interest shall be legally enforceable),
compounded quarterly, from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand.

                                       15
<PAGE>

         The amount of interest payable shall be computed on the basis of a
360-day year and the actual number of days elapsed in the relevant interest
period. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than
ten (10) days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.

         So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of this Security, to defer the payment of interest on this Security for a period
of up to twenty (20) consecutive quarterly interest payment periods (each such
period, an "Extension Period"), during which Extension Period(s), no interest
shall be due and payable (except any Additional Tax Sums that may be due and
payable). No Extension Period shall end on a date other than an Interest Payment
Date, and no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security. No interest shall be due and payable during an
Extension Period (except any Additional Tax Sums that may be due and payable),
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 (to the extent payment of such interest would be legally enforceable)
at the fixed rate equal to 7.5% through the interest payment date in September
2008 and thereafter at a variable rate equal to LIBOR plus 4.00% per annum,
compounded quarterly, from the dates on which amounts would have otherwise been
due and payable until paid or made available for payment. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
this Security, together with such Additional Interest. Prior to the termination
of any such Extension Period, the Company may further defer the payment of
interest; provided, that (i) all such previous and further extensions comprising
such Extension Period do not exceed twenty (20) quarterly interest payment
periods, (ii) no Extension Period shall end on a date other than an Interest
Payment Date and (iii) no Extension Period shall extend beyond the Stated
Maturity of the principal of this Security. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period; provided, that (i) such Extension Period does
not exceed twenty (20) quarterly interest payment periods, (ii) no Extension
Period shall end on a date other than an Interest Payment Date and (iii) no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security. The Company shall give the Holder of this Security and the
Trustee written notice of its election to begin any such Extension Period at
least one Business Day prior to the next succeeding Interest Payment Date on
which interest on this Security would be payable but for such deferral or, so
long as this Security is held by the Trust, at least one Business Day prior to
the earlier of (i) the next succeeding date on which Distributions on the
Preferred Securities of Tower Group Statutory Trust II would be payable but for
such deferral and (ii) the date on which the Property Trustee of such Trust is
required to give notice to any securities exchange or other applicable
self-regulatory organization or to holders of such Preferred Securities of the
record date for the payment of such Distributions.

                                       16
<PAGE>

         During any such Extension Period, the Company 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 Company's capital stock or (ii)
make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to this Security (other than
(a) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with (1) any employment contract, benefit plan or
other similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, (2) a dividend reinvestment or stockholder
stock purchase plan and (3) the issuance of capital stock of the Company (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 an exchange or conversion of any class or
series of the Company's capital stock (or any capital stock of a Subsidiary of
the Company) for any class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the purchase of fractional interests in shares of
the Company'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 Rights Plan, the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto or (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).

         Payment of principal of, premium, if any, and interest on this Security
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payments of principal, premium, if any, and interest due at the Maturity of this
Security shall be made at the Place of Payment upon surrender of such Securities
to the Paying Agent, and payments of interest shall be made, subject to such
surrender where applicable, by wire transfer at such place and to such account
at a banking institution in the United States as may be designated in writing to
the Paying Agent at least ten (10) Business Days prior to the date for payment
by the Person entitled thereto unless proper written transfer instructions have
not been received by the relevant record date, in which case such payments shall
be made by check mailed to the address of such Person as such address shall
appear in the Security Register. Notwithstanding the foregoing, so long as the
Holder of this Security is the Property Trustee, the payment of the principal of
(and premium, if any) and interest (including any overdue installment of
interest and Additional Tax Sums, if any) on this Security will be made at such
place and to such account as may be designated by the Property Trustee.

                                       17
<PAGE>

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

         Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

                          [FORM OF REVERSE OF SECURITY]

         This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued under the Junior Subordinated Indenture, dated
as of September 30, 2003 (the "Indenture"), between the Company and JPMorgan
Chase Bank, as Trustee (in such capacity, the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Debt, the Holders of the Securities and the
holders of the Preferred Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered.

         All terms used in this Security that are defined in the Indenture or in
the Amended and Restated Trust Agreement, dated as of September 30, 2003 (as
modified, amended or supplemented from time to time, the "Trust Agreement"),
relating to the lower Group Statutory Trust II (the "Trust") among the Company,
as Depositor, the Trustees named therein and the holders from time to time of
the Trust Securities issued pursuant thereto, shall have the meanings assigned
to them in the Indenture or the Trust Agreement, as the case may be.

         The Company may, on any Interest Payment Date, at its option, upon not
less than thirty (10) days' nor more than sixty (60) days' written notice to the
Holders of the Securities (unless a shorter notice period shall be satisfactory
to the Trustee) on or after September 30, 2008 and subject to the terms and
conditions of Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time at a Redemption Price equal to one hundred
percent (100%) of the principal amount hereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, through
but excluding the date fixed as the Redemption Date; provided, that the Company
shall have received the prior approval of any Applicable Insurance Regulatory
Authority then required.

                                       18
<PAGE>

         In addition, upon the occurrence and during the continuation of a
Special Event, the Company may, at its option, upon not less than thirty (30)
days' nor more than sixty (60) days' written notice to the Holders of the
Securities (unless a shorter notice period shall be satisfactory to the
Trustee), redeem this Security, in whole but not in part, subject to the terms
and conditions of Article XI of the Indenture at a Redemption Price equal to one
hundred seven and one half percent (107.5%) of the principal amount hereof,
together, in the case of any such redemption, with accrued interest, including
any Additional Interest, through but excluding the date fixed as the Redemption
Date; provided, that the Company shall have received the prior approval of any
Applicable Insurance Regulatory Authority then required.

         In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof. If less than all the
Securities are to be redeemed, the particular Securities to be redeemed shall be
selected not more than sixty (60) days prior to the Redemption Date by the
Trustee from the Outstanding Securities not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of a portion of the principal amount of any
Security.

         The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities, on behalf of the
Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest, including any Additional Interest, on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar and duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Securities, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

                                       19
<PAGE>

         The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

         The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that, for United States federal, state and
local tax purposes, it is intended that this Security constitute indebtedness.

         This Security shall be construed and enforced in accordance with and
governed by the laws of the State of New York, without reference to its conflict
of laws provisions (other than Section 5-1401 of the General Obligations Law).

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed on this __ day of _______, 20__.

                           TOWER GROUP, INC.

                           By:
                              ----------------------------------------------
                              Name:  Michael H. Lee
                              Title: President and Chief Executive Officer

         SECTION 2.2. Restricted Legend.

         (a) Any Security issued hereunder shall bear a legend in substantially
the following form:

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

                                       20
<PAGE>

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

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
         IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH SECURITIES, AND ANY
         INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
         THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
         EACH PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF
         THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
         SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE
         SECURITIES ACT.

         THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR
         THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED,
         RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) TO A
         PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
         INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
         IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN
         INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
         (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
         ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
         "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
         OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
         OF THE SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
         STATEMENT UNDER THE SECURITIES ACT OR (V) PURSUANT TO AN EXEMPTION FROM
         THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
         SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
         APPLICABLE JURISDICTION AND, IN THE CASE OF (III) OR (V), SUBJECT TO
         THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF COUNSEL AND OTHER
         INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER WILL NOTIFY ANY
         PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED
         TO IN (A) ABOVE.

                                       21
<PAGE>

         THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
         HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. ANY
         ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK
         HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 AND
         MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF
         NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
         DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST
         ON SUCH SECURITIES, OR ANY INTEREST THEREIN, ANT) SUCH PURPORTED
         TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
         SECURITIES.

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

         THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
         STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE
         FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC")."

         (b) The above legends shall not be removed from any Security unless
there is delivered to the Company satisfactory evidence, which may include an
opinion of counsel, as may be reasonably required to ensure that any future
transfers thereof may be made without restriction under or violation of the
provisions of the Securities Act and other applicable law. Upon provision of
such satisfactory evidence, the Company shall execute and deliver to the
Trustee, and the Trustee shall deliver, upon receipt of a Company Order
directing it to do so, a Security that does not bear the legend.

                                       22
<PAGE>

         SECTION 2.3. Form of Trustee's Certificate of Authentication.

         The Trustee's certificates of authentication shall be in substantially
the following form:

         This is one of the Securities designated therein referred to in the
within-mentioned Indenture.

Dated:

                                  JPMORGAN CHASE BANK, as Trustee

                                  By:
                                       ---------------------------------------
                                                 Authorized signatory

         SECTION 2.4. Temporary Securities.

         (a) Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities that are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.

         (b) If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of any authorized denominations having the same Original Issue Date and Stated
Maturity and having the same terms as such temporary Securities. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.

         SECTION 2.5. Definitive Securities.

         The Securities issued on the Original Issue Date shall be in definitive
form. The definitive Securities shall be printed, lithographed or engraved, or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

                                       23
<PAGE>

                                  ARTICLE III

                                 THE SECURITIES

         SECTION 3.1. Payment of Principal and Interest.

         (a) The unpaid principal amount of the Securities shall bear interest
at the fixed rate equal to 7.5% through the interest payment date in September
2008 and thereafter at a variable rate equal to LIBOR plus 4.00% per annum until
paid or duly provided for, such interest to accrue from the Original Issue Date
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, and any overdue principal, premium, if any, or Additional Tax
Sums and any overdue installment of interest shall bear Additional Interest at
the rate equal to the fixed rate equal to 7.5% through the interest payment date
in September 2008 and thereafter at a variable rate equal to LIBOR plus 4.00%
per annum compounded quarterly from the dates such amounts are due until they
are paid or funds for the payment thereof are made available for payment.

         (b) Interest and Additional Interest on any Security that is payable,
and is punctually paid or duly provided for, on any interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, except that interest and any Additional Interest payable on
the Stated Maturity (or any date of principal repayment upon early maturity) of
the principal of a Security or on a Redemption Date shall be paid to the Person
to whom principal is paid. The initial payment of interest on any Security that
is issued between a Regular Record Date and the related Interest Payment Date
shall be payable as provided in such Security.

         (c) Any interest on any Security that is due and payable, but is not
timely paid or duly provided for, on any Interest Payment Date for Securities
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in paragraph (i) or (ii) below:

                  (i) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities (or their
         respective Predecessor Securities) are registered at the close of
         business on a Special Record Date for the payment of such Defaulted
         Interest (a "Special Record Date"), which shall be fixed in the
         following manner. At least thirty (30) days prior to the date of the
         proposed payment, the Company shall notify the Trustee in writing of
         the amount of Defaulted Interest proposed to be paid on each Security
         and the date of the proposed payment, and at the same time the Company
         shall deposit with the Trustee an amount of money equal to the
         aggregate amount proposed to be paid in respect of such Defaulted
         Interest or shall make arrangements satisfactory to the Trustee for
         such deposit prior to the date of the proposed payment, such money when
         deposited to be held in trust for the benefit of the Persons entitled
         to such Defaulted Interest. Thereupon the Trustee shall fix a Special
         Record Date for the payment of such Defaulted Interest, which shall be
         not more than fifteen (15) days and not less than ten (10) days prior
         to the date of the proposed payment and not less than ten (10) days
         after the receipt by the Trustee of the notice of the proposed payment.
         The Trustee shall promptly notify the Company of such Special Record
         Date and, in the name and at the expense of the Company, shall cause
         notice of the proposed payment of such Defaulted Interest and the
         Special Record Date therefor to be mailed, first class, postage
         prepaid, to each Holder of a Security at the address of such Holder as
         it appears in the Securities Register not less than ten (10) days prior
         to such Special Record Date. Notice of the proposed payment of such
         Defaulted Interest and the Special Record Date therefor having been so
         mailed, such Defaulted Interest shall be paid to the Persons in whose
         names the Securities (or their respective Predecessor Securities) are
         registered on such Special Record Date; or

                                       24
<PAGE>

                  (ii) The Company may make payment of any Defaulted Interest in
         any other lawful manner not inconsistent with the requirements of any
         securities exchange on which the Securities may be listed and, upon
         such notice as may be required by such exchange (or by the Trustee if
         the Securities are not listed), if, after notice given by the Company
         to the Trustee of the proposed payment pursuant to this clause, such
         payment shall be deemed practicable by the Trustee.

         (d) Payments of interest on the Securities shall include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Securities shall be computed and paid on the basis of a 360-day
year and the actual number of days elapsed in the relevant interest period.

         (e) Payment of principal of, premium, if any, and interest on the
Securities shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal, premium, if any, and interest due at the
Maturity of such Securities shall be made at the Place of Payment upon surrender
of such Securities to the Paying Agent and payments of interest shall be made
subject to such surrender where applicable, by wire transfer at such place and
to such account at a banking institution in the United States as may be
designated in writing to the Paying Agent at least ten (10) Business Days prior
to the date for payment by the Person entitled thereto unless proper written
transfer instructions have not been received by the relevant record date, in
which case such payments shall be made by check mailed to the address of such
Person as such address shall appear in the Security Register. Notwithstanding
the foregoing, so long as the holder of this Security is the Property Trustee,
the payment of the principal of (and premium, if any) and interest (including
any overdue installment of interest and Additional Tax Sums, if any) on this
Security will be made at such place and to such account as may be designated by
the Property Trustee.

         (f) Subject to the foregoing provisions of this Section 3.1, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, that were carried by such other Security.

         SECTION 3.2. Denominations.

         The Securities shall be in registered form without coupons and shall be
issuable in minimum denominations of $100,000 and any integral multiple of
$1,000 in excess thereof.

                                       25
<PAGE>

         SECTION 3.3. Execution, Authentication, Delivery and Dating.

         (a) At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities in an aggregate principal
amount (including all then Outstanding Securities) not in excess of Ten Million
Three Hundred Ten Thousand Dollars ($10,310,000) executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon:

                  (i) a copy of any Board Resolution relating thereto; and

                  (ii) an Opinion of Counsel stating that: (1) such Securities,
         when authenticated and delivered by the Trustee and issued by the
         Company in the manner and subject to any conditions specified in such
         Opinion of Counsel, will constitute, and the Indenture constitutes,
         valid and legally binding obligations of the Company, each enforceable
         in accordance with its terms, subject to bankruptcy, insolvency,
         fraudulent transfer, reorganization, moratorium and similar laws of
         general applicability relating to or affecting creditors' rights and to
         general equity principles; (2) the Securities have been duly
         authorized, executed and delivered by the Company and have been
         delivered to the Trustee for authentication in accordance with this
         Indenture; (3) the Securities are not required to be registered under
         the Securities Act; and (4) the Indenture is not required to be
         qualified under the Trust Indenture Act.

         (b) The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents. The signature of any of
these officers on the Securities may be manual or facsimile. Securities bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.

         (c) No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.8, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

         (d) Each Security shall be dated the date of its authentication.

                                       26
<PAGE>

         SECTION 3.4. Global Securities.

         (a) Upon the election of the Holder after the Original Issue Date,
which election need not be in writing, the Securities owned by such Holder shall
be issued in the form of one or more Global Securities registered in the name of
the Depositary or its nominee. Each Global Security issued under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

         (b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee and the Company in
writing that such Depositary is no longer willing or able to properly discharge
its responsibilities as Depositary with respect to such Global Security, and no
qualified successor is appointed by the Company within ninety (90) days of
receipt by the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no successor is appointed
by the Company within ninety (90) days after obtaining knowledge of such event,
(iii) the Company executes and delivers to the Trustee a Company Order stating
that the Company elects to terminate the book-entry system through the
Depositary or (iv) an Event of Default shall have occurred and be continuing.
Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv)
above, the Trustee shall notify the Depositary and instruct the Depositary to
notify all owners of beneficial interests in such Global Security of the
occurrence of such event and of the availability of Securities to such owners of
beneficial interests requesting the same. The Trustee may conclusively rely, and
be protected in relying, upon the written identification of the owners of
beneficial interests furnished by the Depositary, and shall not be liable for
any delay resulting from a delay by the Depositary. Upon the issuance of such
Securities and the registration in the Securities Register of such Securities in
the names of the Holders of the beneficial interests therein, the Trustees shall
recognize such holders of beneficial interests as Holders.

         (c) If any Global Security is to be exchanged for other Securities or
canceled in part, or if another Security is to be exchanged in whole or in part
for a beneficial interest in any Global Security, then either (i) such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article III or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Securities Registrar,
whereupon the Trustee, in accordance with the Applicable Depository Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration
instructions, the Company shall execute and the Trustee shall authenticate and
deliver any Securities issuable in exchange for such Global Security (or any
portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.

                                       27
<PAGE>

         (d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.

         (e) Securities distributed to holders of Book-Entry Preferred
Securities (as defined in the applicable Trust Agreement) upon the dissolution
of the Trust shall be distributed in the form of one or more Global Securities
registered in the name of a Depositary or its nominee, and deposited with the
Securities Registrar, as custodian for such Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Securities represented thereby (or such other accounts as they may
direct). Securities distributed to holders of Preferred Securities other than
Book-Entry Preferred Securities upon the dissolution of the Trust shall not be
issued in the form of a Global Security or any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.

         (f) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Depository
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Depositary Participants. The Securities Registrar and the Trustee shall be
entitled to deal with the Depositary for all purposes of this Indenture relating
to a Global Security (including the payment of principal and interest thereon
and the giving of instructions or directions by owners of beneficial interests
therein and the giving of notices) as the sole Holder of the Security and shall
have no obligations to the owners of beneficial interests therein. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.

         (g) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Depositary Participants.

         (h) No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such Global Security for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by a
Depositary or impair, as between a Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Security.

                                       28
<PAGE>

         SECTION 3.5. Registration, Transfer and Exchange Generally.

         (a) The Trustee shall cause to be kept at the Corporate Trust Office a
register (the "Securities Register") in which the registrar and transfer agent
with respect to the Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Securities and of transfers and exchanges of Securities. The Trustee shall at
all times also be the Securities Registrar. The provisions of Article VI shall
apply to the Trustee in its role as Securities Registrar.

         (b) Subject to compliance with Section 2.2(b), upon surrender for
registration of transfer of any Security at the offices or agencies of the
Company designated for that purpose the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations of like
tenor and aggregate principal amount.

         (c) At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations, of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.

         (d) All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.

         (e) Every Security presented or surrendered for transfer or exchange
shall (if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.

         (f) No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.

         (g) Neither the Company nor the Trustee shall be required pursuant to
the provisions of this Section 3.5(g): (i) to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business
fifteen (15) days before the day of selection for redemption of Securities
pursuant to Article XI and ending at the close of business on the day of mailing
of the notice of redemption or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.

         (h) The Company shall designate an office or offices or agency or
agencies where Securities may be surrendered for registration or transfer or
exchange. The Company initially designates the Corporate Trust Office as its
office and agency for such purposes. The Company shall give prompt written
notice to the Trustee and to the Holders of any change in the location of any
such office or agency.

                                       29
<PAGE>

         SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.

         (a) If any mutilated Security is surrendered to the Trustee together
with such security or indemnity as may be required by the Trustee to save the
Company and the Trustee harmless, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of like tenor
and aggregate principal amount and bearing a number not contemporaneously
outstanding.

         (b) If there shall be delivered to the Trustee (i) evidence to its
satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by it to save each of the Company and
the Trustee harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and aggregate principal amount as such
destroyed, lost or stolen Security, and bearing a number not contemporaneously
outstanding.

         (c) If any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

         (d) Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

         (e) Every new Security issued pursuant to this Section 3.6 in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

         (f) The provisions of this Section 3.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

         SECTION 3.7. Persons Deemed Owners.

         The Company, the Trustee and any agent of the Company or the Trustee
shall treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
interest on such Security and for all other purposes whatsoever, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

         SECTION 3.8. Cancellation.

         All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it,
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Company may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section 3.8,
except as expressly permitted by this Indenture. All canceled Securities shall
be retained by the Trustee in accordance with its customary practices.

                                       30
<PAGE>

         SECTION 3.9. Deferrals of Interest Payment Dates.

         (a) So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Security, to defer the payment of interest on the Securities for a period
of up to twenty (20) consecutive quarterly interest payment periods (each such
period, an "Extension Period"), during which Extension Period(s), the Company
shall have the right to make no payments or partial payments of interest on any
Interest Payment Date (except any Additional Tax Sums that otherwise may be due
and payable). No Extension Period shall end on a date other than an Interest
Payment Date and no Extension Period shall extend beyond the Stated Maturity of
the principal of the Securities. No 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 (to the extent payment of such interest would be
legally enforceable) at the rate equal to fixed rate equal to 7.5% through the
interest payment date in September 2008 and thereafter at a variable rate equal
to LIBOR plus 4.00% per annum compounded quarterly, from the dates on which
amounts would have otherwise been due and payable until paid or until funds for
the payment thereof have been made available for payment. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
the Securities together with such Additional Interest. Prior to the termination
of any such Extension Period, the Company may extend such Extension Period and
further defer the payment of interest; provided, that (i) all such previous and
further extensions comprising such Extension Period do not exceed twenty (20)
quarterly interest payment periods, (ii) no Extension Period shall end on a date
other than an Interest Payment Date and (iii) no Extension Period shall extend
beyond the Stated Maturity of the principal of the Securities. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period; provided, that (i)
such Extension Period does not exceed twenty (20) quarterly interest payment
periods, (ii) no Extension Period shall end on a date other than an Interest
Payment Date and (iii) no Extension Period shall extend beyond the Stated
Maturity of the principal of the Securities. The Company shall give the Holders
of the Securities and the Trustee written notice of its election to begin any
such Extension Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on the Securities would be payable but
for such deferral or, so long as any Securities are held by the Trust, at least
one Business Day prior to the earlier of (i) the next succeeding date on which
Distributions on the Preferred Securities of such Trust would be payable but for
such deferral and (ii) the date on which the Property Trustee of such Trust is
required to give notice to any securities exchange or other applicable
self-regulatory organization or to holders of such Preferred Securities of the
record date for the payment of such Distributions.

                                       31
<PAGE>

         (b) In connection with any such Extension Period, the Company shall be
subject to the restrictions set forth in Section 10.6(a).

         SECTION 3.10. Right of Set-Off.

         Notwithstanding anything to the contrary herein, the Company shall have
the right to set off any payment it is otherwise required to make in respect of
any Security to the extent the Company has theretofore made, or is concurrently
on the date of such payment making, a payment under the Guarantee Agreement
relating to such Security or to a holder of Preferred Securities pursuant to an
action undertaken under Section 5.8 of this Indenture.

         SECTION 3.11. Agreed Tax Treatment.

         Each Security issued hereunder shall provide that the Company and, by
its acceptance or acquisition of a Security or a beneficial interest therein,
the Holder of, and any Person that acquires a direct or indirect beneficial
interest in, such Security, intend and agree to treat such Security as
indebtedness of the Company for United States Federal, state and local tax
purposes and to treat the Preferred Securities (including but not limited to all
payments and proceeds with respect to the Preferred Securities) as an undivided
beneficial ownership interest in the Securities (and any other Trust property)
(and payments and proceeds therefrom, respectively) for United States Federal,
state and local tax purposes. The provisions of this Indenture shall be
interpreted to further this intention and agreement of the parties.

         SECTION 3.12. CUSIP Numbers.

         The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption and other similar or related materials as a convenience to
Holders; provided, that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

         SECTION 4.1. Satisfaction and Discharge of Indenture.

         This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

         (a) either

                                       32
<PAGE>

                  (i) all Securities theretofore authenticated and delivered
         (other than (A) Securities that have been mutilated, destroyed, lost or
         stolen and that have been replaced or paid as provided in Section 3.6,
         and (B) Securities for whose payment money has theretofore been
         deposited in trust or segregated and held in trust by the Company and
         thereafter repaid to the Company or discharged from such trust as
         provided in Section 10.2) have been delivered to the Trustee for
         cancellation; or

                  (ii) all such Securities not theretofore delivered to the
         Trustee for cancellation

                  (A)      have become due and payable, or

                  (B)      will become due and payable at their Stated Maturity
                           within one year of the date of deposit, or

                  (C)      are to be called for redemption within one year under
                           arrangements satisfactory to the Trustee for the
                           giving of notice of redemption by the Trustee in the
                           name, and at the expense, of the Company,

         and the Company, in the case of subclause (ii)(A), (B) or (C) above,
         has deposited or caused to be deposited with the Trustee as trust funds
         in trust for such purpose (x) an amount in the currency or currencies
         in which the Securities are payable, (y) Government Obligations which
         through the scheduled payment of principal and interest in respect
         thereof in accordance with their terms will provide, not later than the
         due date of any payment, money in an amount or (z) a combination
         thereof, in each case sufficient, in the opinion of a nationally
         recognized firm of independent public accountants expressed in a
         written certification thereof delivered to the Trustee, to pay and
         discharge the entire indebtedness on such Securities not theretofore
         delivered to the Trustee for cancellation, for principal and any
         premium and interest (including any Additional Interest) to the date of
         such deposit (in the case of Securities that have become due and
         payable) or to the Stated Maturity (or any date of principal repayment
         upon early maturity) or Redemption Date, as the case may be;

         (b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

         (c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6, the obligations of
the Company to any Authenticating Agent under Section 6.11 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and Section
10.2(e) shall survive.

                                       33
<PAGE>

         SECTION 4.2. Application of Trust Money.

         Subject to the provisions of Section 10.2(e), all money deposited with
the Trustee pursuant to Section 4.1 shall be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities and this Indenture,
to the payment in accordance with Section 3.1, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest (including any Additional Interest) for the payment of
which such money or obligations have been deposited with or received by the
Trustee. Moneys held by the Trustee under this Section 4.2 shall not be subject
to the claims of holders of Senior Debt under Article XII.

                                   ARTICLE V

                                    REMEDIES

         SECTION 5.1. Events of Default.

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

         (a) default in the payment of any interest upon any Security, including
any Additional Interest in respect thereof, when it becomes due and payable, and
continuance of such default for a period of thirty (30) days (subject to the
deferral of any due date in the case of an Extension Period); or

         (b) default in the payment of the principal of or any premium on any
Security at its Maturity; or

         (c) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture and continuance of such default or breach for a
period of thirty (30) days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least twenty five percent (25%) in aggregate principal
amount of the Outstanding Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder;

         (d) the entry by a court having jurisdiction in the premises of a
decree or order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of sixty (60) consecutive days;

                                       34
<PAGE>

         (e) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it, or the filing by the Company of
a petition or answer or consent seeking reorganization or relief under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due and its willingness to be adjudicated
a bankrupt or insolvent, or the taking of corporate action by the Company in
furtherance of any such action; or

         (f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence, except
in connection with (1) the distribution of the Securities to holders of the
Preferred Securities in liquidation of their interests in the Trust, (2) the
redemption of all of the outstanding Preferred Securities or (3) certain
mergers, consolidations or amalgamations, each as and to the extent permitted by
the Trust Agreement.

         SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.

         (a) If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than twenty five percent (25%)
in aggregate principal amount of the Outstanding Securities may declare the
principal amount of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders),
provided, that if, upon an Event of Default, the Trustee or the Holders of not
less than twenty five percent (25%) in principal amount of the Outstanding
Securities fail to declare the principal of all the Outstanding Securities to be
immediately due and payable, the holders of at least twenty five percent (25%)
in aggregate Liquidation Amount of the Preferred Securities then outstanding
shall have the right to make such declaration by a notice in writing to the
Property Trustee, the Company and the Trustee; and upon any such declaration the
principal amount of and the accrued interest (including any Additional Interest)
on all the Securities shall become immediately due and payable.

         (b) At any time after such a declaration of acceleration with respect
to Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this
Article V, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Indenture Trustee, or the
holders of a majority in aggregate Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Company and the
Trustee, may rescind and annul such declaration and its consequences if

                  (i) the Company has paid or deposited with the Trustee a sum
         sufficient to pay:

                  (A)      all overdue installments of interest on all
                           Securities,

                  (B)      any accrued Additional Interest on all Securities,

                                       35
<PAGE>

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

                  (D)      all sums paid or advanced by the Trustee hereunder
                           and the reasonable compensation, expenses,
                           disbursements and advances of the Trustee, the
                           Property Trustee and their agents and counsel; and

                  (ii) all Events of Default with respect to Securities, other
         than the non-payment of the principal of Securities that has become due
         solely by such acceleration, have been cured or waived as provided in
         Section 5.13;

provided, that if the Holders of such Securities fail to annul such declaration
and waive such default, the holders of not less than a majority in aggregate
Liquidation Amount of the Preferred Securities then outstanding shall also have
the right to rescind and annul such declaration and its consequences by written
notice to the Property Trustee, the Company and the Trustee, subject to the
satisfaction of the conditions set forth in paragraph (b) of this Section 5.2.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.

         SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.

         (a) The Company covenants that if:

                  (i) default is made in the payment of any installment of
         interest (including any Additional Interest) on any Security when such
         interest becomes due and payable and such default continues for a
         period of thirty (30) days, or

                  (ii) default is made in the payment of the principal of and
         any premium on any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any premium and interest (including any
Additional Interest) and, in addition thereto, all amounts owing the Trustee
under Section 6.6.

         (b) If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.

         (c) If an Event of Default with respect to Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

                                       36
<PAGE>

         SECTION 5.4. Trustee May File Proofs of Claim.

         In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or similar judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized hereunder in order to have claims of the Holders and the Trustee
allowed in any such proceeding. In particular, the Trustee shall be authorized
to collect and receive any moneys or other property payable or deliverable on
any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to first pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6.

         SECTION 5.5. Trustee May Enforce Claim Without Possession of
Securities.

         All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, subject to
Article XII and after provision for the payment of all the amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

         SECTION 5.6. Application of Money Collected.

         Any money or property collected or to be applied by the Trustee with
respect to the Securities pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or property on account of principal or any premium or
interest (including any Additional Interest), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

         FIRST: To the payment of all amounts due the Trustee, any predecessor
Trustee and other Persons under Section 6.6;

         SECOND: To the payment of all Senior Debt of the Company if and to the
extent required by Article XII;

         THIRD: Subject to Article XII, to the payment of the amounts then due
and unpaid upon the Securities for principal and any premium and interest
(including any Additional Interest) in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities for
principal and any premium and interest (including any Additional Interest),
respectively; and

                                       37
<PAGE>

         FOURTH: The balance, if any, to the Person or Persons entitled thereto.

         SECTION 5.7. Limitation on Suits.

         Subject to Section 5.8, no Holder of any Securities shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a custodian, receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:

         (a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities;

         (b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

         (c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

         (d) the Trustee after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding for sixty (60) days; and

         (e) no direction inconsistent with such written request has been given
to the Trustee during such sixty (60) day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities:

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.

         SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium, if any, and Interest; Direct Action by Holders of Preferred Securities.

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium on such Security at its
Maturity and payment of interest (including any Additional Interest) on such
Security when due and payable and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder. Any registered holder of the Preferred Securities shall have the right,
upon the occurrence of an Event of Default described in Section 5.1(a) or
Section 5.1(b), to institute a suit directly against the Company for enforcement
of payment to such holder of principal of and any premium and interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities held by
such holder.

                                       38
<PAGE>

         SECTION 5.9. Restoration of Rights and Remedies.

         If the Trustee, any Holder or any holder of Preferred Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preferred Securities, then and in every such case the Company, the Trustee, such
Holders and such bolder of Preferred Securities 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
Trustee, such Holder and such holder of Preferred Securities shall continue as
though no such proceeding had been instituted.

         SECTION 5.10. Rights and Remedies Cumulative.

         Except as otherwise provided in Section 3.6(f), no right or remedy
herein conferred upon or reserved to the Trustee or the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

         SECTION 5.11. Delay or Omission Not Waiver.

         No delay or omission of the Trustee, any Holder of any Securities or
any holder of any Preferred Security to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article V or by law to the Trustee or to the Holders and
the right and remedy given to the holders of Preferred Securities by Section 5.8
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee, the Holders or the holders of Preferred Securities, as the case may
be.

         SECTION 5.12. Control by Holders.

         The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities (or, as the case may be, the holders of a majority
in aggregate Liquidation Amount of Preferred Securities) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided, that:

         (a) such direction shall not be in conflict with any rule of law or
with this Indenture,

         (b) the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction, and

         (c) subject to the provisions of Section 6.2, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, reasonably determine that the
proceeding so directed would be unjustly prejudicial to the Holders not joining
in any such direction or would involve the Trustee in personal liability.

                                       39
<PAGE>

         SECTION 5.13. Waiver of Past Defaults.

         (a) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities or the holders of not less than a majority
in aggregate Liquidation Amount of the Preferred Securities may waive any past
Event of Default hereunder and its consequences except an Event of Default:

                  (i) in the payment of the principal of or any premium or
         interest (including any Additional Interest) on any Security (unless
         such Event of Default has been cured and the Company has paid to or
         deposited with the Trustee a sum sufficient to pay all installments of
         interest (including any Additional Interest) due and past due and all
         principal of and any premium on all Securities due otherwise than by
         acceleration), or

                  (ii) in respect of a covenant or provision hereof that under
         Article IX cannot be modified or amended without the consent of each
         Holder of any Outstanding Security.

         (b) Any such waiver shall be deemed to be on behalf of the Holders of
all the Securities or, in the case of a waiver by holders of Preferred
Securities issued by such Trust, by all holders of Preferred Securities.

         (c) Upon any such waiver, such Event of Default shall cease to exist
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon.

         SECTION 5.14. Undertaking for Costs.

         All parties to this Indenture agree, and each Holder of any Security by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.14 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than ten percent (10%) in aggregate principal amount of
the Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or any premium on the Security
after the Stated Maturity or any interest (including any Additional Interest) on
any Security after it is due and payable.

         SECTION 5.15. Waiver of Usury, Stay or Extension Laws.

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                       40
<PAGE>

                                   ARTICLE VI

                                   THE TRUSTEE

         SECTION 6.1. Corporate Trustee Required.

         There shall at all times be a Trustee hereunder with respect to the
Securities. The Trustee shall be a corporation organized and doing business
under the laws of the United States or of any state thereof, authorized to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or state
authority and having an office within the United States. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then, for the purposes
of this Section 6.1, 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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.1, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VI.

         SECTION 6.2. Certain Duties and Responsibilities.

         Except during the continuance of an Event of Default:

                  (i) the Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in this Indenture, and no
         implied covenants or obligations shall be read into this Indenture
         against the Trustee; and

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

         (b) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall, prior to the receipt of directions, if any, from
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities (or, if applicable, from the holders of at least a
majority in aggregate Liquidation Amount of Preferred Securities), exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in its exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.

                                       41
<PAGE>

         (c) Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.2. To the extent that, at law or in
equity, the Trustee has duties and liabilities relating to the Holders, the
Trustee shall not be liable to any Holder or any holder of Preferred Securities
for the Trustee's good faith reliance on the provisions of this Indenture. The
provisions of this Indenture, to the extent that they restrict the duties and
liabilities of the Trustee otherwise existing at law or in equity, are agreed by
the Company and the Holders and the holders of Preferred Securities to replace
such other duties and liabilities of the Trustee.

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

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

                  (ii) the 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 at least a majority in aggregate
         principal amount of the Outstanding Securities (or, as the case may be,
         the holders of a majority in aggregate Liquidation Amount of Preferred
         Securities) relating to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee under this
         Indenture; and

                  (iii) the Trustee shall be under no liability for interest on
         any money received by it hereunder except as otherwise agreed in
         writing with the Company and money held by the Trustee in trust
         hereunder need not be segregated from other funds except to the extent
         required by law.

         (e) If at any time the Trustee hereunder is not the same Person as the
Property Trustee under the Trust Agreement:

                  (i) whenever a reference is made herein to the dissolution,
         termination or liquidation of the Trust, the Trustee shall be entitled
         to assume that no such dissolution, termination, or liquidation has
         occurred so long as the Securities are or continue to be registered in
         the name of such Property Trustee, and the Trustee shall be charged
         with notice or knowledge of such dissolution, termination or
         liquidation only upon written notice thereof given to the Trustee by
         the Depositor under the Trust Agreement; and

                  (ii) the Trustee shall not be charged with notice or knowledge
         that any Person is a holder of Preferred Securities or Common
         Securities issued by the Trust or whether any group of holders of
         Preferred Securities constitutes any specified percentage of all
         outstanding Preferred Securities for any purpose under this Indenture,
         unless and until the Trustee is furnished with a list of holders by
         such Property Trustee and the aggregate Liquidation Amount of the
         Preferred Securities then outstanding. The Trustee may conclusively
         rely and shall be protected in relying on such list.

                                       42
<PAGE>

         (f) Notwithstanding Section 1.10, the Trustee shall not, and shall not
be deemed to, owe any fiduciary duty to the holders of any of the Trust
Securities issued by the Trust and shall not be liable to any such holder (other
than for the willful misconduct or negligence of the Trustee) if the Trustee in
good faith (i) pays over or distributes to a registered Holder of the Securities
or to the Company or to any other Person, cash, property or securities to which
such holders of such Trust Securities shall be entitled or (ii) takes any action
or omits to take any action at the request of the Holder of such Securities.
Nothing in this paragraph shall affect the obligation of any other such Person
to hold such payment for the benefit of and to pay such amount over to, such
holders of Preferred Securities or Common Securities or their representatives.

         SECTION 6.3. Notice of Defaults.

         Within ninety (90) days after the occurrence of any default actually
known to the Trustee, the Trustee shall give the Holders notice of such default
unless such default shall have been cured or waived; provided, that except in
the case of a default in the payment of the principal of or any premium or
interest on any Securities, the Trustee shall be fully protected in withholding
the notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determines that withholding the notice is in the interest of holders
of Securities; and provided, further, that in the case of any default of the
character specified in Section 5.1(c), no such notice to Holders shall be given
until at least thirty (30) days after the occurrence thereof. For the purpose of
this Section 6.3, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default.

         SECTION 6.4. Certain Rights of Trustee.

         Subject to the provisions of Section 6.2:

         (a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting in good faith and in accordance with the terms
hereof upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;

         (b) if (i) in performing its duties under this Indenture the Trustee is
required to decide between alternative courses of action, (ii) in construing any
of the provisions of this Indenture the Trustee finds ambiguous or inconsistent
with any other provisions contained herein or (iii) the Trustee is unsure of the
application of any provision of this Indenture, then, except as to any matter as
to which the Holders, are entitled to decide under the terms of this Indenture,
the Trustee shall deliver a notice to the Company requesting the Company's
written instruction as to the course of action to be taken and the Trustee shall
take such action, or refrain from taking such action, as the Trustee shall be
instructed in writing to take, or to refrain from taking, by the Company;
provided, that if the Trustee does not receive such instructions from the
Company within ten Business Days after it has delivered such notice or such
reasonably shorter period of time set forth in such notice the Trustee may, but
shall be under no duty to, take such action, or refrain from taking such action,
as the Trustee shall deem advisable and in the best interests of the Holders, in
which event the Trustee shall have no liability except for its own negligence,
bad faith or willful misconduct;

                                       43
<PAGE>

         (c) any request or direction of the Company shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board
of Directors may be sufficiently evidenced by a Board Resolution;

         (d) the Trustee may consult with counsel (which counsel may be counsel
to the Trustee, the Company or any of its Affiliates, and may include any of its
employees) and the advice of such counsel or any Opinion of 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;

         (e) the "Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders or any holder of Preferred Securities pursuant to this
Indenture, unless such Holders (or such holders of Preferred Securities) shall
have offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses (including reasonable attorneys' fees and expenses)
and liabilities that might be incurred by it in compliance with such request or
direction, including reasonable advances as tray be requested by the Trustee;

         (f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
note or other paper or document, but the Trustee in its discretion may make such
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;

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

         (h) whenever in the administration of this Indenture the Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action with respect to enforcing any remedy or
right hereunder, the Trustees (i) may request instructions from the Holders
(which instructions may only be given by the Holders of the same aggregate
principal amount of Outstanding Securities as would be entitled to direct the
Trustee under this Indenture in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such action until such
instructions are received and (iii) shall be protected in acting in accordance
with such instructions;

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

                                       44
<PAGE>

         (j) without prejudice to any other rights available to the Trustee
under applicable law, when the Trustee incurs expenses or renders services in
connection with any bankruptcy, insolvency or other proceeding referred to in
clauses (d) or (e) of the definition of Event of Default, such expenses
(including legal fees and expenses of its agents and counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy laws or law relating to creditors rights
generally;

         (k) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate addressing such matter, which,
upon receipt of such request, shall be promptly delivered by the Company;

         (l) the Trustee shall not be charged with knowledge of any Event of
Default unless either (i) a Responsible Officer of the Trustee shall have actual
knowledge or (ii) the Trustee shall have received notice thereof from the
Company or a Holder; and

         (m) in the event that the Trustee is also acting as Paying Agent,
Authenticating Agent or Securities Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VI shall also be
afforded such Paying Agent, Authenticating Agent, or Securities Registrar.

         SECTION 6.5. May Hold Securities.

         The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Securities Registrar or such other agent.

         SECTION 6.6. Compensation; Reimbursement; Indemnity.

         (a) The Company agrees

                  (i) to pay to the Trustee from time to time reasonable
         compensation for all services rendered by it hereunder in such amounts
         as the Company and the Trustee 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);

                  (ii) to reimburse the Trustee upon its request for all
         reasonable expenses, disbursements and advances incurred or made by the
         Trustee in accordance with any provision of this Indenture (including
         the reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as may be attributable to its negligence, bad faith or willful
         misconduct; and

                  (iii) to the fullest extent permitted by applicable law, to
         indemnify the Trustee and its Affiliates, and their officers,
         directors, shareholders, agents, representatives and employees for, and
         to hold them harmless against, any loss, damage, liability, tax (other
         than income, franchise or other taxes imposed on amounts paid pursuant
         to (i) or (ii) hereof), penalty, expense or claim of any kind or nature
         whatsoever incurred without negligence, bad faith or willful misconduct
         on its part arising out of or in connection with the acceptance or
         administration of this trust or the performance of the Trustee's duties
         hereunder, including the costs and expenses of defending itself against
         any claim or liability in connection with the exercise or performance
         of any of its powers or duties hereunder.

                                       45
<PAGE>

         (b) To secure the Company's payment obligations in this Section 6.6,
the Company hereby grants and pledges to the Trustee and the Trustee shall have
a lien prior to the Securities on all money or property held or collected by the
Trustee, other than money or property held in trust to pay principal and
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.

         (c) The obligations of the Company under this Section 6.6 shall survive
the satisfaction and discharge of this Indenture and the earlier resignation or
removal of the Trustee.

         (d) In no event shall the Trustee be liable for any indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.

         (e) In no event shall the Trustee be liable for any failure or delay in
the performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, not, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Indenture.

         SECTION 6.7. Resignation and Removal; Appointment of Successor.

         (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.8.

         (b) The Trustee may resign at any time by giving written notice thereof
to the Company.

         (c) Unless an Event of Default shall have occurred and be continuing,
the Trustee may be removed at any time by the Company by a Board Resolution. If
an Event of Default shall have occurred and be continuing, the Trustee may be
removed by Act of the Holders of a majority in aggregate principal amount of the
Outstanding Securities, delivered to the Trustee and to the Company.

         (d) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any reason, at
a time when no Event of Default shall have occurred and be continuing, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee, and
such successor Trustee and the retiring Trustee shall comply with the applicable
requirements of Section 6.8. If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, at a time when an Event of Default shall have occurred and be
continuing, the Holders, by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities, shall promptly appoint a
successor Trustee, and such successor Trustee and the retiring Trustee shall
comply with the applicable requirements of Section 6.8. If no successor Trustee
shall have been so appointed by the Company or the Holders and accepted
appointment within sixty (60) days after the giving of a notice of resignation
by the Trustee or the removal of the Trustee in the manner required by Section
6.8, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of such Holder and all others similarly situated, and any
resigning Trustee may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

                                       46
<PAGE>

         (e) The Company shall give notice to all Holders in the manner provided
in Section 1.6 of each resignation and each removal of the Trustee and each
appointment of a successor Trustee. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.

         SECTION 6.8. Acceptance of Appointment by Successor.

         (a) In case of the appointment hereunder of a successor Trustee, each
successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee, but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.

         (b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) of this Section 6.8.

         (c) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article VI.

         SECTION 6.9. Merger, Conversion, Consolidation or Succession to
Business.

         Any Person into which the 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 Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided, that such Person shall be otherwise qualified and eligible
under this Article VI. In case any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation or as otherwise provided above in this Section 6.9
to such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated, and in case any Securities shall not have been
authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor Trustee or in the name of such successor
Trustee, and in all cases the certificate of authentication shall have the full
force which it is provided anywhere in the Securities or in this Indenture that
the certificate of the Trustee shall have.

                                       47
<PAGE>

         SECTION 6.10. Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.

         SECTION 6.11. Appointment of Authenticating Agent.

         (a) The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities, which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.6, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, or of any State or Territory thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or state authority. If such Authenticating
Agent publishes reports of condition at least annually pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 6.11 the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 6.11, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.11.

         (b) Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to all or substantially all of the corporate
trust business of an Authenticating Agent shall be the successor Authenticating
Agent hereunder, provided such Person shall be otherwise eligible under this
Section 6.11, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.

                                       48
<PAGE>

         (c) An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.11, the Trustee may appoint a successor
Authenticating Agent eligible under the provisions of this Section 6.11, which
shall be acceptable to the Company, and shall give notice of such appointment to
all Holders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent.

         (d) The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.11 in such
amounts as the Company and the Authenticating Agent shall agree from time to
time.

         (e) If an appointment of an Authenticating Agent is made pursuant to
this Section 6.11, the Securities may have endorsed thereon, in addition to the
Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:

This is one of the Securities designated therein referred to in the within
mentioned Indenture.

Dated.

                           JPMORGAN CHASE BANK, not in its individual
                           capacity, but solely as Trustee

                           ------------------------------------------
                           Authenticating Agent

                           By:
                                -------------------------------------
                                Authorized signatory

                                  ARTICLE VII

                HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY

         SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.

         The Company will furnish or cause to be furnished to the Trustee:

         (a) semiannually, on or before June 30 and December 31 of each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of a date not more than fifteen (15) days prior to
the delivery thereof, and

                                       49
<PAGE>

         (b) at such other times as the Trustee may request in writing, within
thirty (30) days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than fifteen (15) days prior to
the time such list is furnished,

in each case to the extent such information is in the possession or control of
the Company and has not otherwise been received by the Trustee in its capacity
as Securities Registrar.

         SECTION 7.2. Preservation of Information, Communications to Holders.

         (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

         (b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.

         (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.

         SECTION 7.3. Reports by Company.

         (a) The Company shall furnish to the Holders and to prospective
purchasers of Securities, upon their request, the information required to be
furnished pursuant to Rule 144A(d)(4) under the Securities Act. The Company
shall furnish to the Trustee and, so long as the Property Trustee holds any of
the Securities, the Company shall furnish to the Property Trustee, Statutory
Financial Statements promptly following their filing with the Applicable
Insurance Regulatory Authority. The delivery requirement set forth in the
preceding sentence may be satisfied by compliance with Section 7.3(b) hereof.

         (b) The Company shall furnish to each of (i) the Trustee, (ii) the
Holders and to subsequent holders of Securities, (iii) Dekania Capital
Management, LLC (at 1818 Market Street, 28th Floor, Philadelphia, Pennsylvania
10196, or such other address as designated by Dekania Capital Management, LLC)
and (iv) any beneficial owner of the Securities reasonably identified to the
Company (which identification may be made either by such beneficial owner or by
Dekania Capital Management, LLC), a duly completed and executed certificate
substantially and substantively in the form attached hereto as Exhibit A,
including the financial statements referenced in such Exhibit, which certificate
and financial statements shall be so furnished by the Company not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
each fiscal year of the Company and not later than ninety (90) days after the
end of each fiscal year of the Company.

                                       50
<PAGE>

         (c) If the Company intends to file its annual and quarterly information
with the Securities and Exchange Commission (the "Commission") in electronic
form pursuant to Regulation S-T of the Commission using the Commission's
Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system, the Company
shall notify the Trustee in the manner prescribed herein of each such annual and
quarterly filing. The Trustee is hereby authorized and directed to access the
EDGAR system for purposes of retrieving the financial information so filed.
Compliance with the foregoing shall constitute delivery by the Company of its
financial statements to the Trustee in compliance with the provisions of Section
314(a) of the Trust Indenture Act, if applicable. The Trustee shall have no duty
to search for or obtain any electronic or other filings that the Company makes
with the Commission, regardless of whether such filings are periodic,
supplemental or otherwise. Delivery of reports, information and documents to the
Trustee pursuant to this Section 7.3(c) shall be solely for purposes of
compliance with this Section 7.3(c) and, if applicable, with Section 314(a) of
the Trust Indenture Act. The Trustee's receipt of such reports, information and
documents shall not constitute notice to it of the content thereof or any matter
determinable from the content thereof, including the Company's compliance with
any of its covenants hereunder, as to which the Trustee is entitled to rely upon
Officers' Certificates.

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.

         The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:

         (a) if the Company shall consolidate with or merge into another Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the entity formed by such consolidation or into which
the Company is merged or the Person that acquires by conveyance or transfer, or
that leases, the properties and assets of the Company substantially as an
entirety shall be an entity organized and existing under the laws of the United
States of America or any State or Territory thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the Trustee, the
due and punctual payment of the principal of and any premium and interest
(including any Additional Interest) on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed;

         (b) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
constitute an Event of Default, shall have happened and be continuing; and

         (c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, any such supplemental indenture comply with
this Article VIII and that all conditions precedent herein provided for relating
to such transaction have been complied with; and the Trustee may rely upon such
Officers' Certificate and Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 8.1.

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<PAGE>

         SECTION 8.2. Successor Company Substituted.

         (a) Upon any consolidation or merger by the Company with or into any
other Person, or any conveyance, transfer or lease by the Company of its
properties and assets substantially as an entirety to any Person in accordance
with Section 8.1 and the execution and delivery to the Trustee of the
supplemental indenture described in Section 8.1(a), the successor entity formed
by such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor Person had been named as the Company
herein; and in the event of any such conveyance or transfer, following the
execution and delivery of such supplemental indenture, the Company shall be
discharged from all obligations and covenants under the Indenture and the
Securities.

         (b) Such Successor Person may cause to be executed, and may issue
either in its own name or in the name of the Company, any or all of the
Securities issuable hereunder that theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities that previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication, and
any Securities that such successor Person thereafter shall cause to be executed
and delivered to the Trustee on its behalf. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture.

         (c) In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form may be made in the Securities
thereafter to be issued as may be appropriate to reflect such occurrence.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

         SECTION 9.1. Supplemental Indentures without Consent of Holders.

         Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form reasonably satisfactory
to the Trustee, for any of the following purposes:

         (a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or

         (b) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein, or
to make or amend any other provisions with respect to matters or questions
arising under this Indenture, which shall not be inconsistent with the other
provisions of this Indenture, provided, that such action pursuant to this clause
(b) shall not adversely affect in any material respect the interests of any
Holders or the holders of the Preferred Securities; or

                                       52
<PAGE>

         (c) to add to the covenants, restrictions or obligations of the Company
or to add to the Events of Default, provided, that such action pursuant to this
clause (c) shall not adversely affect in any material respect the interests of
any Holders or the holders of the Preferred Securities; or

         (d) to modify, eliminate or add to any provisions of the Indenture or
the Securities to such extent as shall be necessary to ensure that the
Securities are treated as indebtedness of the Company for United States Federal
income tax purposes, provided, that such action pursuant to this clause (d)
shall not adversely affect in any material respect the interests of any Holders
or the holders of the Preferred Securities.

         SECTION 9.2. Supplemental Indentures with Consent of Holders.

         (a) With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security,

                  (i) change the Stated Maturity of the principal or any premium
         of any Security or change the date of payment of any installment of
         interest (including any Additional Interest) on any Security, or reduce
         the principal amount thereof or the rate of interest thereon or any
         premium payable upon the redemption thereof or change the place of
         payment where, or the coin or currency in which, any Security or
         interest thereon is payable, or restrict or impair the right to
         institute suit for the enforcement of any such payment on or after such
         date, or

                  (ii) reduce the percentage in aggregate principal amount of
         the Outstanding Securities, the consent of whose holders is required
         for any such supplemental indenture, or the consent of whose Holders is
         required for any waiver of compliance with any provision of this
         Indenture or of defaults hereunder and their consequences provided for
         in this Indenture, or

                  (iii) modify any of the provisions of this Section 9.2,
         Section 5.13 or Section 10.7, except to increase any percentage in
         aggregate principal amount of the Outstanding Securities, the consent
         of whose Holders is required for any reason, or to provide that certain
         other provisions of this Indenture cannot be modified or waived without
         the consent of the Holder of each Security;

provided, further, that, so long as any Preferred Securities remain outstanding,
no amendment under this Section 9.2 shall be effective until the holders of a
majority in Liquidation Amount of the Preferred Securities shall have consented
to such amendment; provided, further, that if the consent of the Holder of each
Outstanding Security is required for any amendment under this Indenture, such
amendment shall not be effective until the holder of each Outstanding Preferred
Security shall have consented to such amendment.

                                       53
<PAGE>

         (b) It shall not be necessary for any Act of Holders under this Section
9.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

         SECTION 9.3. Execution of Supplemental Indentures.

         In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in conclusively relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent herein provided for relating to such action have been
complied with. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that affects the Trustee's own rights, duties,
indemnities or immunities under this Indenture or otherwise. Copies of the final
form of each supplemental indenture shall be delivered by the Trustee at the
expense of the Company to each Holder, and, if the Trustee is the Property
Trustee, to each holder of Preferred Securities, promptly after the execution
thereof

         SECTION 9.4. Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities and every holder of Preferred Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

         SECTION 9.5. Reference in Securities to Supplemental Indentures.

         Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.

                                   ARTICLE X

                                    COVENANTS

         SECTION 10.1. Payment of Principal, Premium, if any, and Interest.

         The Company covenants and agrees for the benefit of the Holders of the
Securities that it will duly and punctually pay the principal of and any premium
and interest (including any Additional Interest) on the Securities in accordance
with the terms of the Securities and this Indenture. As of the date of this
Indenture, the Company represents that it has no present intention to exercise
its right under Section 2.11, to defer payments of interest on the Securities.

                                       54
<PAGE>

         SECTION 10.2. Money for Security Payments to be Held in Trust.

         (a) If the Company shall at any time act as its own Paying Agent with
respect to the Securities, it will, on or before each due date of the principal
of and any premium or interest (including any Additional Interest) on the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest
(including Additional Interest) so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee in writing of its failure so to act.

         (b) Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of or
any premium or interest (including any Additional Interest) on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided in the Trust Indenture Act and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its failure so to act.

         (c) The Company will cause each Paying Agent for the Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section 10.2, that such Paying Agent will (i) comply with the provisions of
this Indenture and the Trust Indenture Act applicable to it as a Paying Agent
and (ii) during the continuance of any default by the Company (or any other
obligor upon the Securities) in the making of any payment in respect of the
Securities, upon the written request of the Trustee, forthwith pay to the
Trustee all sums held in trust by such Paying Agent for payment in respect of
the Securities.

         (d) The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

         (e) Any money deposited with the Trustee or any Paying Agent, or then
held by the Company in trust for the payment of the principal of and any premium
or interest (including any Additional Interest) on any Security and remaining
unclaimed for two years after such principal and any premium or interest has
become due and payable shall (unless otherwise required by mandatory provision
of applicable escheat or abandoned or unclaimed property law) be paid on Company
Request to the Company, or (if then held by the Company) shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than thirty (30) days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

                                       55
<PAGE>

         SECTION 10.3. Statement as to Compliance.

         The Company shall deliver to the Trustee, within one hundred and twenty
(120) days after the end of each fiscal year of the Company ending after the
date hereof, an Officers' Certificate covering the preceding calendar year,
stating whether or not to the knowledge of the signers thereof the Company is in
default in the performance or observance of any off the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder), and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.

         SECTION 10.4. Calculation Agent.

         (a) The Company hereby agrees that for so long as any of the Securities
remain Outstanding, there will at all times be an agent appointed to calculate
LIBOR in respect of each Interest Payment Date in accordance with the terms of
Schedule A (the "Calculation Agent"). The Company has initially appointed the
Property Trustee as Calculation Agent for purposes of determining LIBOR for each
Interest Payment Date. The Calculation Agent may be removed by the Company at
any time. So long as the Property Trustee holds any of the Securities, the
Calculation Agent shall be the Property Trustee, except as described in the
immediately preceding sentence. If the Calculation Agent is unable or unwilling
to act as such or is removed by the Company, the Company will promptly appoint
as a replacement Calculation Agent the London office of a leading bank which is
engaged in transactions in Eurodollar deposits in the international Eurodollar
market and which does not control or is not controlled by or under common
control with the Company or its Affiliates. The Calculation Agent may not resign
its duties without a successor having been duly appointed.

         (b) The Calculation Agent shall be required to agree that, as soon as
possible after 11:00 a.m. (London time) on each LIBOR Determination Date (as
defined in Schedule A), but in no event later than 11:00 a.m. (London time) on
the Business Day immediately following each LIBOR Determination Date, the
Calculation Agent will calculate the interest rate (the Interest Payment shall
be rounded to the nearest cent, with half a cent being rounded upwards) for the
related Interest Payment Date, and will communicate such rate and amount to the
Company, the Trustee, each Paying Agent and the Depositary. The Calculation
Agent will also specify to the Company the quotations upon which the foregoing
rates and amounts are based and, in any event, the Calculation Agent shall
notify the Company before 5:00 p.m. (London time) on each LIBOR Determination
Date that either: (i) it has determined or is in the process of determining the
foregoing rates and amounts or (ii) it has not determined and is not in the
process of determining the foregoing rates and amounts, together with its
reasons therefor. The Calculation Agent's determination of the foregoing rates
and amounts for any Interest Payment Date will (in the absence of manifest
error) be final and binding upon all parties. For the sole purpose of
calculating the interest rate for the Securities, "Business Day" shall be
defined as any day on which dealings in deposits in Dollars are transacted in
the London interbank market.

                                       56
<PAGE>

         SECTION 10.5. Additional Tax Sums.

         So long as no Event of Default has occurred and is continuing, if (a)
the Trust is the Holder of all of the Outstanding Securities and (b) a Tax Event
described in clause (i) or (iii) in the definition of Tax Event in Section 1.1
hereof has occurred and is continuing, the Company shall pay to the Trust (and
its permitted successors or assigns under the related Trust Agreement) for so
long as the Trust (or its permitted successor or assignee) is the registered
holder of the Outstanding Securities, such amounts as may be necessary in order
that the amount of Distributions (including any Additional Interest Amount (as
defined in the Trust Agreement)) then due and payable by the Trust on the
Preferred Securities and Common Securities that at any time remain outstanding
in accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes arising from such Tax Event (additional such amounts payable by
the Company to the Trust, the "Additional Tax Sums"). Whenever in this Indenture
or the Securities there is a reference in any context to the payment of
principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Tax Sums provided for in this
Section 10.5 to the extent that, in such context, Additional Tax Sums are, were
or would be payable in respect thereof pursuant to the provisions of this
Section 10.5 and express mention of the payment of Additional Tax Sums (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Tax Sums in those provisions hereof where such express mention is not
made; provided, that the deferral of the payment of interest pursuant to Section
3.9 on the Securities shall not defer the payment of any Additional Tax Sums
that may be due and payable.

         SECTION 10.6. Additional Covenants.

         (a) The Company covenants and agrees with each Holder of Securities
that if an Event of Default shall have occurred and be continuing or the Company
shall have given notice of its election to begin an Extension Period with
respect to the Securities or such Extension Period, or any extension thereof,
shall be continuing, it shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of the Company's capital stock, or (ii) make any
payment of principal of or any interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Securities (other than (A)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any 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 Company (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 an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (C) the purchase of fractional interests
in shares of the Company'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 Rights Plan, the
issuance of rights, stock or other property under any Rights Plan or the
redemption or repurchase of rights pursuant thereto or (F) 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).

                                       57
<PAGE>

         (b) The Company also covenants with each Holder of Securities (i) to
hold, directly or indirectly, one hundred percent (100%) of the Common
Securities of the Trust, provided, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities, (ii)
as holder of such Common Securities, not to voluntarily dissolve, wind-up or
liquidate the Trust other than (A) in connection with a distribution of the
Securities to the holders of the Preferred Securities in liquidation of the
Trust or (B) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable commercial
efforts, consistent with the terms and provisions of the Trust Agreement, to
cause the Trust to continue to be taxable as a grantor trust and not as a
corporation for United States Federal income tax purposes.

         SECTION 10.7. Waiver of Covenants.

         The Company may omit in any particular instance to comply with any
covenant or condition contained in Section 10.6 if, before or after the time for
such compliance, the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities shall, by Act of such Holders, and at least
a majority of the aggregate Liquidation Amount of the Preferred Securities then
outstanding, by consent of such holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company in respect of any such covenant or condition shall
remain in full force and effect.

         SECTION 10.8. Treatment of Securities.

         The Company will treat the Securities as indebtedness, and the amounts,
other than payments of principal, payable in respect of the principal amount of
such Securities as interest, for all U.S. federal income tax purposes. All
payments in respect of the Securities will be made free and clear of U.S.
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W-9 or W-8BEN (or any substitute or successor form)
establishing its U.S. or non-U.S. status for U.S. federal income tax purposes,
or any other applicable form establishing a complete exemption from U.S.
withholding tax.

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

         SECTION 11.1. Optional Redemption.

         The Company may, at its option, on any Interest Payment Date, on or
after September 30, 2008, redeem the Securities in whole at any time or in part
from time to time, at a Redemption Price equal to one hundred percent (100%) of
the principal amount thereof (or of the redeemed portion thereof, as
applicable), together, in the case of any such redemption, with accrued
interest, including any Additional Interest, through but excluding the date
fixed as the Redemption Date (the "Optional Redemption Price"); provided, that
the Company shall have received the prior approval of any Applicable Insurance
Regulatory Authorities with respect to such redemption if then required.

                                       58
<PAGE>

         SECTION 11.2. Special Event Redemption.

         Prior to September 30, 2003, upon the occurrence and during the
continuation of a Special Event, the Company may, at its option, redeem the
Securities, in whole but not in part, at a Redemption Price equal to one hundred
seven and one half percent (107.5%) of the principal amount thereof, together,
in the case of any such redemption, with accrued interest, including any
Additional Interest, through but excluding the date fixed as the Redemption Date
(the "Special Redemption Price"), provided, that the Company shall have received
the prior approval of any Applicable Insurance Regulatory Authority with respect
to such redemption if then required.

         SECTION 11.3. Election to Redeem; Notice to Trustee.

         The election of the Company to redeem any Securities, in whole or in
part, shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, not less than
forty-five (45) days and not more than seventy-five (75) days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee and the Property Trustee under the Trust Agreement in writing
of such date and of the principal amount of the Securities to be redeemed and
provide the additional information required to be included in the notice or
notices contemplated by Section 11.5. In the case of any redemption of
Securities, in whole or in part, (a) prior to the expiration of any restriction
on such redemption provided in this Indenture or the Securities or (b) pursuant
to an election of the Company which is subject to a condition specified in this
Indenture or the Securities, the Company shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction or condition.

         SECTION 11.4. Selection of Securities to be Redeemed.

         (a) If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than sixty (60) days prior
to the Redemption Date by the Trustee from the Outstanding Securities not
previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any or each Security, provided, that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.

         (b) The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security that has been or is to be redeemed.

         (c) The provisions of paragraphs (a) and (b) of this Section 11.4 shall
not apply with respect to any redemption affecting only a single Security,
whether such Security is to be redeemed in whole or in part. In the case of any
such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

                                       59
<PAGE>

         SECTION 11.5. Notice of Redemption.

         (a) Notice of redemption shall be given not later than the thirtieth
(30th) day, and not earlier than the sixtieth (60th) day, prior to the
Redemption Date to each Holder of Securities to be redeemed, in whole or in part
(unless a shorter notice shall be satisfactory to the Property Trustee under the
related Trust Agreement).

         (b) With respect to Securities to be redeemed, in whole or in part,
each notice of redemption shall state:

                  (i) the Redemption Date;

                  (ii) the Redemption Price or, if the Redemption Price cannot
         be calculated prior to the time the notice is required to be sent, the
         estimate of the Redemption Price, as calculated by the Company,
         together with a statement that it is an estimate and that the actual
         Redemption Price will be calculated on the fifth Business Day prior to
         the Redemption Date (and if an estimate is provided, a further notice
         shall be sent of the actual Redemption Price on the date that such
         Redemption Price is calculated);

                  (iii) if less than all Outstanding Securities are to be
         redeemed, the identification (and, in the case of partial redemption,
         the respective principal amounts) of the particular Securities to be
         redeemed;

                  (iv) that on the Redemption Date, the Redemption Price will
         become due and payable upon each such Security or portion thereof, and
         that any interest (including any Additional Interest) on such Security
         or such portion, as the case may be, shall cease to accrue on and after
         said date; and

                  (v) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price.

         (c) Notice of redemption of Securities to be redeemed, in whole or in
part, at the election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company
and shall be irrevocable. The notice if mailed in the manner provided above
shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice. In any case, a failure to give such notice by mail
or any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.

                                       60
<PAGE>

         SECTION 11.6. Deposit of Redemption Price.

         Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.5, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.2) an amount of money sufficient to pay
the Redemption Price of, and any accrued interest (including any Additional
Interest) on, all the Securities (or portions thereof) that are to be redeemed
on that date.

         SECTION 11.7. Payment of Securities Called for Redemption.

         (a) If any notice of redemption has been given as provided in Section
11.5, the Securities or portion of Securities with respect to which such notice
has been given shall become due and payable on the date and at the place or
places stated in such notice at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment specified in
such notice, the Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date.

         (b) Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a new Security or Securities, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Security so presented and having the same Original Issue Date,
Stated Maturity and terms.

         (c) If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and any premium on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.

                                  ARTICLE XII

                           SUBORDINATION OF SECURITIES

         SECTION 12.1. Securities Subordinate to Senior Debt.

         The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article XII, the payment of the
principal of and any premium and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Debt.

         SECTION 12.2. No Payment When Senior Debt in Default; Payment Over of
Proceeds Upon Dissolution, Etc.

         (a) In the event and during the continuation of any default by the
Company in the payment of any principal of or any premium or interest on any
Senior Debt (following any grace period, if applicable) when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, upon written notice of such
default to the Company by the holders of such Senior Debt or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of or any premium or interest (including any Additional
Interest) on any of the Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Securities.

                                       61
<PAGE>

         (b) In the event of a bankruptcy, insolvency or other proceeding
described in clause (d) or (e) of the definition of Event of Default (each such
event, if any, herein sometimes referred to as a "Proceeding"), all Senior Debt
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any Holder of
any of the Securities on account thereof. Any payment or distribution, whether
in cash, securities or other property (other than securities of the Company or
any other entity provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness evidenced by the
Securities, to the payment of all Senior Debt at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities shall be paid or delivered
directly to the holders of Senior Debt in accordance with the priorities then
existing among such holders until all Senior Debt (including any interest
thereon accruing after the commencement of any Proceeding) shall have been paid
in full.

         (c) In the event of any Proceeding, after payment in full of all sums
owing with respect to Senior Debt, the Holders of the Securities, together with
the holders of any obligations of the Company ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
and any premium and interest (including any Additional Interest) on the
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or any obligations of the Company ranking junior to the Securities and
such other obligations. If, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other entity
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment) shall be received
by the Trustee or any Holder in contravention of any of the terms hereof and
before all Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt at the time outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Debt remaining
unpaid, to the extent necessary to pay all such Senior Debt (including any
interest thereon accruing after the commencement of any Proceeding) in full. In
the event of the failure of the Trustee or any Holder to endorse or assign any
such payment, distribution or security, each holder of Senior Debt is hereby
irrevocably authorized to endorse or assign the same.

                                       62
<PAGE>

         (d) The Trustee and the Holders, at the expense of the Company, shall
take such reasonable action (including the delivery of this Indenture to an
agent for any holders of Senior Debt or consent to the filing of a financing
statement with respect hereto) as may, in the opinion of counsel designated by
the holders of a majority in principal amount of the Senior Debt at the time
outstanding, be necessary or appropriate to assure the effectiveness of the
subordination effected by these provisions.

         (e) The provisions of this Section 12.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.

         (f) The securing of any obligations of the Company, otherwise ranking
on a parity with the Securities or ranking junior to the Securities, shall not
be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Securities or ranking junior to the
Securities.

         SECTION 12.3. Payment Permitted If No Default.

         Nothing contained in this Article XII or elsewhere in this Indenture or
in any of the Securities shall prevent (a) the Company, at any time, except
during the pendency of the conditions described in paragraph (a) of Section 12.2
or of any Proceeding referred to in Section 12.2, from making payments at any
time of principal of and any premium or interest (including any Additional
Interest) on the Securities or (b) the application by the Trustee of any moneys
deposited with it hereunder to the payment of or on account of the principal of
and any premium or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge (in accordance with
Section 12.8) that such payment would have been prohibited by the provisions of
this Article XII, except as provided in Section 12.8,

         SECTION 12.4. Subrogation to Rights of Holders of Senior Debt.

         Subject to the payment in full of all amounts due or to become due on
all Senior Debt, or the provision for such payment in cash or cash equivalents
or otherwise in a manner satisfactory to the holders of Senior Debt, the Holders
of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article XII (equally and ratably with the holders of all indebtedness of
the Company that by its express terms is subordinated to Senior Debt of the
Company to substantially the same extent as the Securities are subordinated to
the Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights of
the holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of and
any premium and interest (including any Additional Interest) on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article XII, and no payments made
pursuant to the provisions of this Article XII to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.

                                       63
<PAGE>

         SECTION 12.5. Provisions Solely to Define Relative Rights.

         The provisions of this Article XII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article XII or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of and any
premium and interest (including any Additional Interest) on the Securities as
and when the same shall become due and payable in accordance with their terms,
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than their rights in relation to
the holders of Senior Debt or (c) prevent the Trustee or the Holder of any
Security (or to the extent expressly provided herein, the holder of any
Preferred Security) from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article XII,
of the holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.

         SECTION 12.6. Trustee to Effectuate Subordination.

         Each Holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article XII and appoints the Trustee his or her attorney-in-fact for any
and all such purposes.

         SECTION 12.7. No Waiver of Subordination Provisions.

         (a) No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with.

         (b) Without in any way limiting the generality of paragraph (a) of this
Section 12.7, the holders of Senior Debt may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to such Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of such Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding, (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt, (iii) release any Person
liable in any manner for the payment of Senior Debt and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.

                                       64
<PAGE>

         SECTION 12.8. Notice to Trustee.

         (a) The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article XII or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment to or by the Trustee
in respect of the Securities, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or a holder
of Senior Debt or from any trustee, agent or representative therefor; provided,
that if the Trustee shall not have received the notice provided for in this
Section 12.8 at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of and any premium on or interest (including any
Additional Interest) on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.

         (b) The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor)
to establish that such notice has been given by a holder of Senior Debt (or a
trustee, agent, representative or attorney-in-fact therefor). In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article XII, and
if such evidence is not furnished; the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.

         SECTION 12.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.

         Upon any payment or distribution of assets of the Company referred to
in this Article XII, the Trustee and the Holders of the Securities shall be
entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such Proceeding is pending, or a certificate of
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII.

                                       65
<PAGE>

         SECTION 12.10. Trustee Not Fiduciary for Holders of Senior Debt.

         The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not
be liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article XII or otherwise.

         SECTION 12.11. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights.

         The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XII with respect to any Senior Debt that may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.

         SECTION 12.12. Article Applicable to Paying Agents.

         If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article XII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XII in addition to or in place of the Trustee; provided,
that Sections 12.8 and 12.11 shall not apply to the Company or any Affiliate of
the Company if the Company or such Affiliate acts as Paying Agent.

                                     * * * *

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                     * * * *

                                       66

<PAGE>

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

                          TOWER GROUP, INC.,

                          By:    /s/ Michael H. Lee
                               ----------------------------------------------
                               Name:  Michael H. Lee
                               Title: President and Chief Executive Officer

                          JPMORGAN CHASE BANK,
                            not in its individual capacity, but solely as
                            Trustee

                          By:
                               ----------------------------------------------
                               Name: Donna Edmundson
                                   Title:Vice President

                                                   Junior Subordinated Indenture

<PAGE>

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

                            TOWER GROUP, INC.,

                            By:
                                 ---------------------------------------------
                                 Name:  Michael H. Lee
                                 Title: President and Chief Executive Officer

                            JPMORGAN CHASE BANK,
                              not in its individual capacity, but solely as
                              Trustee

                            By:    /s/ Donna Edmundson
                                 ---------------------------------------------
                                 Name:  Donna Edmundson
                                 Title: Vice President

                                                   Junior Subordinated Indenture

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