Document:

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                           NEW SOUTH BANCSHARES, INC.,
                                    as Issuer

                                    INDENTURE

                           Dated as of March 26, 2002

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

        FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES

                                    DUE 2032

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<TABLE>
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                                TABLE OF CONTENTS
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<S>                                                                                          <C>
ARTICLE I. DEFINITIONS....................................................................... 1

     Section 1.1.    Definitions............................................................. 1

ARTICLE II. DEBENTURES....................................................................... 7

     Section 2.1.    Authentication and Dating............................................... 7
     Section 2.2.    Form of Trustee's Certificate of Authentication......................... 8
     Section 2.3.    Form and Denomination of Debentures..................................... 8
     Section 2.4.    Execution of Debentures................................................. 8
     Section 2.5.    Exchange and Registration of Transfer of Debentures..................... 8
     Section 2.6.    Mutilated, Destroyed, Lost or Stolen Debentures.........................10
     Section 2.7.    Temporary Debentures....................................................11
     Section 2.8.    Payment of Interest and Additional Interest.............................11
     Section 2.9.    Cancellation of Debentures Paid, etc....................................13
     Section 2.10.   Computation of Interest.................................................13
     Section 2.11.   Extension of Interest Payment Period....................................14
     Section 2.12.   CUSIP Numbers...........................................................15

ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY.............................................16

     Section 3.1.    Payment of Principal, Premium and Interest; Agreed Treatment of the
                     Debentures..............................................................16
     Section 3.2.    Offices for Notices and Payments, etc...................................16
     Section 3.3.    Appointments to Fill Vacancies in Trustee's Office......................17
     Section 3.4.    Provision as to Paying Agent............................................17
     Section 3.5.    Certificate to Trustee..................................................18
     Section 3.6.    Additional Sums.........................................................18
     Section 3.7.    Compliance with Consolidation Provisions................................18
     Section 3.8.    Limitation on Dividends.................................................18
     Section 3.9.    Covenants as to the Trust...............................................19
     Section 3.10.   Additional Junior Indebtedness..........................................19

ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE................19

     Section 4.1.    Securityholders' Lists..................................................19
     Section 4.2.    Preservation and Disclosure of Lists....................................19

ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT..............20

     Section 5.1.    Events of Default.......................................................20
     Section 5.2.    Payment of Debentures on Default; Suit Therefor.........................22
     Section 5.3.    Application of Moneys Collected by Trustee..............................23
     Section 5.4.    Proceedings by Securityholders..........................................24
     Section 5.5.    Proceedings by Trustee..................................................24
     Section 5.6.    Remedies Cumulative and Continuing; Delay or Omission Not a Waiver......24
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<TABLE>
<S>                                                                                          <C>
     Section 5.7.    Direction of Proceedings and Waiver of Defaults by Majority of
                     Securityholders.........................................................25
     Section 5.8.    Notice of Defaults......................................................25
     Section 5.9.    Undertaking to Pay Costs................................................25

ARTICLE VI. CONCERNING THE TRUSTEE...........................................................26

     Section 6.1.    Duties and Responsibilities of Trustee..................................26
     Section 6.2.    Reliance on Documents, Opinions, etc....................................27
     Section 6.3.    No Responsibility for Recitals, etc.....................................28
     Section 6.4.    Trustee,  Authenticating Agent, Paying Agents, Transfer Agents or
                     Registrar May Own Debentures............................................28
     Section 6.5.    Moneys to be Held in Trust..............................................28
     Section 6.6.    Compensation and Expenses of Trustee....................................28
     Section 6.7.    Officers' Certificate as Evidence.......................................29
     Section 6.8.    Eligibility of Trustee..................................................29
     Section 6.9.    Resignation or Removal of Trustee.......................................29
     Section 6.10.   Acceptance by Successor Trustee.........................................30
     Section 6.11.   Succession by Merger, etc...............................................31
     Section 6.12.   Authenticating Agents...................................................31

ARTICLE VII. CONCERNING THE SECURITYHOLDERS..................................................32

     Section 7.1.    Action by Securityholders...............................................32
     Section 7.2.    Proof of Execution by Securityholders...................................33
     Section 7.3.    Who Are Deemed Absolute Owners..........................................33
     Section 7.4.    Debentures Owned by Company Deemed Not Outstanding......................33
     Section 7.5.    Revocation of Consents; Future Holders Bound............................34

ARTICLE VIII. SECURITYHOLDERS' MEETINGS......................................................34

     Section 8.1.    Purposes of Meetings....................................................34
     Section 8.2.    Call of Meetings by Trustee.............................................34
     Section 8.3.    Call of Meetings by Company or Securityholders..........................34
     Section 8.4.    Qualifications for Voting...............................................35
     Section 8.5.    Regulations.............................................................35
     Section 8.6.    Voting..................................................................35
     Section 8.7.    Quorum; Actions.........................................................35

ARTICLE IX. SUPPLEMENTAL INDENTURES..........................................................36

     Section 9.1.    Supplemental Indentures without Consent of Securityholders..............36
     Section 9.2.    Supplemental Indentures with Consent of Securityholders.................37
     Section 9.3.    Effect of Supplemental Indentures.......................................38
     Section 9.4.    Notation on Debentures..................................................38
     Section 9.5.    Evidence of Compliance of Supplemental Indenture to be Furnished to
                     Trustee.................................................................38

ARTICLE X. REDEMPTION OF SECURITIES..........................................................39

     Section 10.1.   Optional Redemption.....................................................39
     Section 10.2.   Special Event Redemption................................................39
     Section 10.3.   Notice of Redemption; Selection of Debentures...........................39
     Section 10.4.   Payment of Debentures Called for Redemption.............................40
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<TABLE>
<S>                                                                                          <C>
ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE................................40

     Section 11.1.   Company May Consolidate, etc., on Certain Terms.........................40
     Section 11.2.   Successor Entity to be Substituted......................................40
     Section 11.3.   Opinion of Counsel to be Given to Trustee...............................41

ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE.........................................41

     Section 12.1.   Discharge of Indenture..................................................41
     Section 12.2.   Deposited Moneys to be Held in Trust by Trustee.........................41
     Section 12.3.   Paying Agent to Repay Moneys Held.......................................42
     Section 12.4.   Return of Unclaimed Moneys..............................................42

ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS................42

     Section 13.1.   Indenture and Debentures Solely Corporate Obligations...................42

ARTICLE XIV. MISCELLANEOUS PROVISIONS........................................................42

     Section 14.1.   Successors..............................................................42
     Section 14.2.   Official Acts by Successor Entity.......................................42
     Section 14.3.   Surrender of Company Powers.............................................42
     Section 14.4.   Addresses for Notices, etc..............................................42
     Section 14.5.   Governing Law...........................................................43
     Section 14.6.   Evidence of Compliance with Conditions Precedent........................43
     Section 14.7.   Non-Business Days.......................................................43
     Section 14.8.   Table of Contents, Headings, etc........................................43
     Section 14.9.   Execution in Counterparts...............................................43
     Section 14.10.  Separability............................................................44
     Section 14.11.  Assignment..............................................................44
     Section 14.12.  Acknowledgment of Rights................................................44

ARTICLE XV. SUBORDINATION OF DEBENTURES......................................................44

     Section 15.1.   Agreement to Subordinate................................................44
     Section 15.2.   Default on Senior Indebtedness..........................................44
     Section 15.3.   Liquidation, Dissolution, Bankruptcy....................................45
     Section 15.4.   Subrogation.............................................................46
     Section 15.5.   Trustee to Effectuate Subordination.....................................46
     Section 15.6.   Notice by the Company...................................................47
     Section 15.7.   Rights of the Trustee; Holders of Senior Indebtedness...................47
     Section 15.8.   Subordination May Not Be Impaired.......................................48
</TABLE>

Exhibit A    Form of Junior Subordinated Deferrable Interest Debenture

                                      iii

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     THIS INDENTURE, dated as of March 26, 2002, between New South Bancshares,
Inc., a Delaware corporation (the "Company"), and State Street Bank and Trust
                                   -------
Company of Connecticut, National Association, a national banking association
organized under the laws of the United States of America, as debenture trustee
(the "Trustee").
      -------

                                   WITNESSETH:

     WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issuance of its Floating Rate Junior Subordinated Deferrable Interest
Debentures due 2032 (the "Debentures") under this Indenture to provide, among
                          ----------
other things, for the execution and authentication, delivery and administration
thereof, and the Company has duly authorized the execution of this Indenture;
and

     WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms, have been done and performed;

     NOW, THEREFORE, This Indenture Witnesseth:

     In consideration of the premises, and the purchase of the Debentures by the
holders thereof, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective holders from time to time of the
Debentures as follows:

                                   ARTICLE I.
                                   DEFINITIONS
                                   -----------

     Section 1.1. Definitions. The terms defined in this Section 1.1 (except as
                  -----------
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles and the
term "generally accepted accounting principles" means such accounting principles
as are generally accepted in the United States at the time of any computation.
The words "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.

     "Additional Interest" means interest, if any, that shall accrue on any
      -------------------
interest on the Debentures the payment of which has not been made on the
applicable Interest Payment Date and which shall accrue at the Interest Rate,
compounded quarterly (to the extent permitted by law).

     "Additional Junior Indebtedness" means, without duplication and other than
      ------------------------------
the Debentures, any indebtedness, liabilities or obligations of the Company, or
any Subsidiary of the Company, under debt securities (or guarantees in respect
of debt securities) initially issued after the date of this Indenture to any
trust, or a trustee of a trust, partnership or other entity affiliated with the
Company that is, directly or indirectly, a finance subsidiary (as such term is
defined in Rule 3a-5 under the Investment Company Act of 1940) or other
financing vehicle of the Company or any Subsidiary of the Company in connection
with the issuance by that entity of preferred securities or other securities
that are eligible to qualify for Tier 1 capital treatment (or its then
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company (or, if the Company is
not a bank holding company, such guidelines applied to the Company as if the
Company were subject to such guidelines); provided, however, that the inability
                                          --------  -------
of the Company to treat all or any portion of the Additional Junior Indebtedness
as Tier 1 capital shall not disqualify it as Additional Junior Indebtedness if
such inability results from the Company having cumulative preferred stock,
minority interests in consolidated subsidiaries, or any other class of security
or interest which the Federal Reserve now or may hereafter

                                       1

<PAGE>

accord Tier 1 capital treatment (including the Debentures) in excess of the
amount which may qualify for treatment as Tier 1 capital under applicable
capital adequacy guidelines.

     "Additional Sums" has the meaning set forth in Section 3.6.
      ---------------

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

     "Authenticating Agent" means any agent or agents of the Trustee which at
      --------------------
the time shall be appointed and acting pursuant to Section 6.12.

     "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
      --------------
law for the relief of debtors.

     "Board of Directors" means the board of directors or the executive
      ------------------
committee or any other duly authorized designated officers of the Company.

     "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 and delivered to the Trustee.

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

     "Capital Securities" means undivided beneficial interests in the assets of
      ------------------
the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of
--------  -------
Default (as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.

     "Capital Securities Guarantee" means the guarantee agreement that the
      ----------------------------
Company enters into with State Street Bank and Trust Company of Connecticut,
National Association, as guarantee trustee, or other Persons that operates
directly or indirectly for the benefit of holders of Capital Securities of the
Trust.

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

                                       2

<PAGE>

adequacy guidelines; provided further, however, that the distribution of
                     -------- -------  -------
Debentures in connection with the liquidation of the Trust shall not in and of
itself constitute a Capital Treatment Event unless such liquidation shall have
occurred in connection with a Tax Event or an Investment Company Event.

     "Certificate" means a certificate signed by any one of the principal
      -----------
executive officer, the principal financial officer or the principal accounting
officer of the Company.

     "Common Securities" means undivided beneficial interests in the assets of
      -----------------
the Trust which rank pari passu with Capital Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of
--------  -------
Default (as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.

     "Company" means New South Bancshares, Inc., a Delaware corporation, and,
      -------
subject to the provisions of Article XI, shall include its successors and
assigns.

     "Coupon Rate" has the meaning set forth in Section 2.8.
      -----------

     "Debenture" or "Debentures" has the meaning stated in the first recital of
      ---------      ----------
this Indenture.

     "Debenture Register" has the meaning specified in Section 2.5.
      ------------------

     "Declaration" means the Amended and Restated Declaration of Trust of the
      -----------
Trust, as amended or supplemented from time to time.

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

     "Defaulted Interest" has the meaning set forth in Section 2.8.
      ------------------

     "Distribution Period" has the meaning set forth in Section 2.8.
      -------------------

     "Determination Date" has the meaning set forth in Section 2.10.
      ------------------

     "Event of Default" means any event specified in Section 5.1, continued for
      ----------------
the period of time, if any, and after the giving of the notice, if any, therein
designated.

     "Extension Period" has the meaning set forth in Section 2.11.
      ----------------

     "Federal Reserve" means the Board of Governors of the Federal Reserve
      ---------------
System and any successor federal agency that is primarily responsible for
regulating the activities of bank holding companies.

     "Indenture" means this instrument as originally executed or, if amended or
      ---------
supplemented as herein provided, as so amended or supplemented, or both.

     "Institutional Trustee" has the meaning set forth in the Declaration.
      ---------------------

     "Interest Payment Date" means each March 26, June 26, September 26 and
      ---------------------
December 26 during the term of this Indenture.

                                       3

<PAGE>

     "Interest Rate" means for the period beginning on (and including) the date
      -------------
of original issuance and ending on (but excluding) June 26, 2002 the rate per
annum of 5.59% and for each Distribution Period thereafter, the Coupon Rate.

     "Investment Company Event" means the receipt by the Company and the Trust
      ------------------------
of an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Trust is
or, within 90 days of the date of such opinion will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Debentures.

     "Liquidation Amount" means the stated amount of $1,000.00 per Trust
      ------------------
Security.

     "Maturity Date" means March 26, 2032.
      -------------

     "Officers' Certificate" means a certificate signed by the Chairman of the
      ---------------------
Board, the Chief Executive Officer, the Vice Chairman, the President, any
Managing Director or any Vice President, and by the Treasurer, an Assistant
Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 14.6 if and to
the extent required by the provisions of such Section.

     "Opinion of Counsel" means an opinion in writing signed by legal counsel,
      ------------------
who may be an employee of or counsel to the Company, or may be other counsel
reasonably satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 14.6 if and to the extent required by the
provisions of such Section.

     "OTS" means the Office of Thrift Supervision and any successor federal
      ---
agency that is primarily responsible for regulating the activities of savings
and loan holding companies.

     The term "outstanding," when used with reference to Debentures, means,
               -----------
subject to the provisions of Section 7.4, as of any particular time, all
Debentures authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except:

     (a) Debentures theretofore canceled by the Trustee or the Authenticating
Agent or delivered to the Trustee for cancellation;

     (b) Debentures, or portions thereof, for the payment or redemption of which
moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that, if such Debentures, or portions
                   --------  -------
thereof, are to be redeemed prior to maturity thereof, notice of such redemption
shall have been given as provided in Section 10.3 or provision satisfactory to
the Trustee shall have been made for giving such notice; and

     (c) Debentures paid pursuant to Section 2.6 or in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.6 unless proof satisfactory to the
Company and the Trustee is presented that any such Debentures are held by bona
fide holders in due course.

                                       4

<PAGE>

     "Person" means any individual, corporation, limited liability company,
      ------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

     "Predecessor Security" of any particular Debenture means every previous
      --------------------
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for purposes of this definition, any Debenture
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.

     "Principal Office of the Trustee," or other similar term, means the office
      -------------------------------
of the Trustee, at which at any particular time its corporate trust business
shall be principally administered, which at the time of the execution of this
Indenture shall be 225 Asylum Street, Goodwin Square, Hartford, Connecticut
06103.

     "Redemption Date" has the meaning set forth in Section 10.1.
      ---------------

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

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

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

     "Securityholder," "holder of Debentures," or other similar terms, means any
      --------------
Person in whose name at the time a particular Debenture is registered on the
register kept by the Company or the Trustee for that purpose in accordance with
the terms hereof.

     "Senior Indebtedness" means, with respect to the Company, (i) the
      -------------------
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company;
(ii) all capital lease obligations of the Company; (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company
under any title retention agreement; (iv) all obligations of the Company for the
reimbursement of any letter of credit, any banker's acceptance, any security
purchase facility, any repurchase agreement or similar arrangement, any interest
rate swap, any other hedging arrangement, any obligation under options or any
similar credit or other transaction; (v) all obligations of the type referred to
in clauses (i) through (iv) above of other Persons for the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise; and (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other Persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), whether incurred on
or prior to the date of this Indenture or thereafter incurred. Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (1) any Additional Junior
Indebtedness, (2) Debentures issued pursuant to this Indenture and guarantees in
respect of such Debentures, (3) trade accounts payable of the Company arising in
the ordinary course of business (such trade accounts payable being pari passu in
right of payment to the Debentures), or (4) obligations with respect to which
(a) in the instrument creating or evidencing the same or pursuant to

                                       5

<PAGE>

which the same is outstanding, it is provided that such obligations are pari
passu, junior or otherwise not superior in right of payment to the Debentures
and (b) the Company, prior to the issuance thereof, has notified (and, if then
required under the applicable guidelines of the regulating entity, has received
approval from) the Federal Reserve (if the Company is a bank holding company) or
the OTS (if the Company is a savings and loan holding company). Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
subordination provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.

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

     "Special Redemption Date" has the meaning set forth in Section 10.2.
      -----------------------

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

     "Subsidiary" means with respect to any Person, (i) any corporation at least
      ----------
a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of the outstanding partnership or
similar interests of which shall at the time be owned by such Person, or by one
or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries and (iii) any limited partnership of which such Person or any of
its Subsidiaries is a general partner. For the purposes of this definition,
"voting stock" means shares, interests, participations or other equivalents in
the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of
such Person, other than shares, interests, participations or other equivalents
having such power only by reason of the occurrence of a contingency.

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

     "3-Month LIBOR" has the meaning set forth in Section 2.10.
      -------------

     "Telerate Page 3750" has the meaning set forth in Section 2.10.
      ------------------

                                       6

<PAGE>

     "Trust" shall mean New South Statutory Trust II, a Connecticut statutory
      -----
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debentures under this Indenture,
of which the Company is the sponsor.

     "Trust Securities" means Common Securities and Capital Securities of the
      ----------------
Trust.

     "Trustee" means State Street Bank and Trust Company of Connecticut,
      -------
National Association, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder.

                                   ARTICLE II.
                                   DEBENTURES
                                   ----------

     Section 2.1. Authentication and Dating. Upon the execution and delivery of
                  -------------------------
this Indenture, or from time to time thereafter, Debentures in an aggregate
principal amount not in excess of $16,495,000.00 may be executed and delivered
by the Company to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Debentures to or
upon the written order of the Company, signed by its Chairman of the Board of
Directors, Chief Executive Officer, Vice Chairman, the President, one of its
Managing Directors or one of its Vice Presidents without any further action by
the Company hereunder. In authenticating such Debentures, and accepting the
additional responsibilities under this Indenture in relation to such Debentures,
the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon:

     (a) a copy of any Board Resolution or Board Resolutions relating thereto
and, if applicable, an appropriate record of any action taken pursuant to such
resolution, in each case certified by the Secretary or an Assistant Secretary of
the Company, as the case may be; and

     (b) an Opinion of Counsel prepared in accordance with Section 14.6 which
shall also state:

               (1) that such Debentures, when authenticated and delivered by the
          Trustee and issued by the Company in each case in the manner and
          subject to any conditions specified in such Opinion of Counsel, will
          constitute valid and legally binding obligations of the Company,
          subject to or limited by applicable bankruptcy, insolvency,
          reorganization, conservatorship, receivership, moratorium and other
          statutory or decisional laws relating to or affecting creditors'
          rights or the reorganization of financial institutions (including,
          without limitation, preference and fraudulent conveyance or transfer
          laws), heretofore or hereafter enacted or in effect, affecting the
          rights of creditors generally; and

               (2) that all laws and requirements in respect of the execution
          and delivery by the Company of the Debentures have been complied with
          and that authentication and delivery of the Debentures by the Trustee
          will not violate the terms of this Indenture.

     The Trustee shall have the right to decline to authenticate and deliver any
Debentures under this Section if the Trustee, being advised in writing by
counsel, determines that such action may not lawfully be taken or if a
Responsible Officer of the Trustee in good faith shall determine that such
action would expose the Trustee to personal liability to existing holders.

     The definitive Debentures shall be typed, printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Debentures, as evidenced by their
execution of such Debentures.

                                       7

<PAGE>

     Section 2.2. Form of Trustee's Certificate of Authentication. The Trustee's
                  -----------------------------------------------
certificate of authentication on all Debentures shall be in substantially the
following form:

     This is one of the Debentures referred to in the within-mentioned
Indenture.

     State Street Bank and Trust Company of Connecticut, National Association,
as Trustee

     By
       ---------------------------------------------------
     Authorized Signer

     Section 2.3. Form and Denomination of Debentures. The Debentures shall be
                  -----------------------------------
substantially in the form of Exhibit A attached hereto. The Debentures shall be
in registered, certificated form without coupons and in minimum denominations of
$500,000.00 and any multiple of $1,000.00 in excess thereof. Any attempted
transfer of the Debentures in a block having an aggregate principal amount of
less than $500,000.00 shall be deemed to be voided and of no legal effect
whatsoever. Any such purported transferee shall be deemed not to be a holder of
such Debentures for any purpose, including, but not limited to the receipt of
payments on such Debentures, and such purported transferee shall be deemed to
have no interest whatsoever in such Debentures. The Debentures shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance
with such plans as the officers executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.

     Section 2.4. Execution of Debentures. The Debentures shall be signed in the
                  -----------------------
name and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board of Directors, Chief Executive Officer, Vice Chairman,
President, one of its Managing Directors or one of its Executive Vice
Presidents, Senior Vice Presidents or Vice Presidents. Only such Debentures as
shall bear thereon a certificate of authentication substantially in the form
herein before recited, executed by the Trustee or the Authenticating Agent by
the manual signature of an authorized signer, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by
the Trustee or the Authenticating Agent upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.

     In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company, such Debentures nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Debentures had not ceased to be such officer of the Company; and any Debenture
may be signed on behalf of the Company by such Persons as, at the actual date of
the execution of such Debenture, shall be the proper officers of the Company,
although at the date of the execution of this Indenture any such person was not
such an officer.

     Every Debenture shall be dated the date of its authentication.

     Section 2.5. Exchange and Registration of Transfer of Debentures. The
                  ---------------------------------------------------
Company shall cause to be kept, at the office or agency maintained for the
purpose of registration of transfer and for exchange as provided in Section 3.2,
a register (the "Debenture Register") for the Debentures issued hereunder in
                 ------------------
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration and transfer of all Debentures as in this
Article II provided. The Debenture Register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time.

                                       8

<PAGE>

     Debentures to be exchanged may be surrendered at the Principal Office of
the Trustee or at any office or agency to be maintained by the Company for such
purpose as provided in Section 3.2, and the Company shall execute, the Company
or the Trustee shall register and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange therefor the Debenture
or Debentures which the Securityholder making the exchange shall be entitled to
receive. Upon due presentment for registration of transfer of any Debenture at
the Principal Office of the Trustee or at any office or agency of the Company
maintained for such purpose as provided in Section 3.2, the Company shall
execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in the
name of the transferee or transferees a new Debenture for a like aggregate
principal amount. Registration or registration of transfer of any Debenture by
the Trustee or by any agent of the Company appointed pursuant to Section 3.2,
and delivery of such Debenture, shall be deemed to complete the registration or
registration of transfer of such Debenture.

     All Debentures presented for registration of transfer or for exchange or
payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by the holder or his
attorney duly authorized in writing.

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

     The Company or the Trustee shall not be required to exchange or register a
transfer of any Debenture for a period of 15 days next preceding the date of
selection of Debentures for redemption.

     Notwithstanding anything herein to the contrary, Debentures may not be
transferred except in compliance with the restricted securities legend set forth
below, unless otherwise determined by the Company, upon the advice of counsel
expert in securities law, in accordance with applicable law:

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

                                       9

<PAGE>

SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.

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

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

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

     Section 2.6. Mutilated, Destroyed, Lost or Stolen Debentures. In case any
                  -----------------------------------------------
Debenture shall become mutilated or be destroyed, lost or stolen, the Company
shall execute, and upon its written request the Trustee shall authenticate and
deliver, a new Debenture bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and the Trustee evidence to their satisfaction
of the destruction, loss or theft of such Debenture and of the ownership
thereof.

                                       10

<PAGE>

     The Trustee may authenticate any such substituted Debenture and deliver the
same upon the written request or authorization of any officer of the Company.
Upon the issuance of any substituted Debenture, 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 connected therewith.
In case any Debenture which has matured or is about to mature or has been called
for redemption in full shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and
the Trustee such security or indemnity as may be required by them to save each
of them harmless and, in case of destruction, loss or theft, evidence
satisfactory to the Company and to the Trustee of the destruction, loss or theft
of such Debenture and of the ownership thereof.

     Every substituted Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder. All
Debentures shall be held and owned upon the express condition that, to the
extent permitted by applicable law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

     Section 2.7. Temporary Debentures. Pending the preparation of definitive
                  --------------------
Debentures, the Company may execute and the Trustee shall authenticate and make
available for delivery temporary Debentures that are typed, printed or
lithographed. Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the definitive Debentures in lieu
of which they are issued but with such omissions, insertions and variations as
may be appropriate for temporary Debentures, all as may be determined by the
Company. Every such temporary Debenture shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Debentures. Without
unreasonable delay the Company will execute and deliver to the Trustee or the
Authenticating Agent definitive Debentures and thereupon any or all temporary
Debentures may be surrendered in exchange therefor, at the principal corporate
trust office of the Trustee or at any office or agency maintained by the Company
for such purpose as provided in Section 3.2, and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in
exchange for such temporary Debentures a like aggregate principal amount of such
definitive Debentures. Such exchange shall be made by the Company at its own
expense and without any charge therefor except that in case of any such exchange
involving a registration of transfer the Company may require payment of a sum
sufficient to cover any tax, fee or other governmental charge that may be
imposed in relation thereto. Until so exchanged, the temporary Debentures shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debentures authenticated and delivered hereunder.

     Section 2.8. Payment of Interest and Additional Interest. Interest at the
                  -------------------------------------------
Interest Rate and any Additional Interest on any Debenture that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date for
Debentures shall be paid to the Person in whose name said Debenture (or one or
more Predecessor Securities) is registered at the close of business on the
regular record date for such interest installment except that interest and any
Additional Interest payable on the Maturity Date shall be paid to the Person to
whom principal is paid. In the event that any Debenture or portion thereof is
called for redemption and the redemption date is subsequent to a regular record
date with respect to any

                                       11

<PAGE>

Interest Payment Date and prior to such Interest Payment Date, interest on such
Debenture will be paid upon presentation and surrender of such Debenture.

     Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding) June 26,
2002 at a rate per annum of 5.59%, and shall bear interest for each successive
period beginning on (and including) June 26, 2002, and each succeeding Interest
Payment Date, and ending on (but excluding) the next succeeding Interest Payment
Date (each, a "Distribution Period") at a rate per annum equal to the 3-Month
               -------------------
LIBOR, determined as described in Section 2.10, plus 3.60% (the "Coupon Rate");
                                                                 -----------
provided, however, that prior to March 26, 2007, the Coupon Rate shall not
--------  -------
exceed 11.00%, applied to the principal amount thereof, until the principal
thereof becomes due and payable, and on any overdue principal and to the extent
that payment of such interest is enforceable under applicable law (without
duplication) on any overdue installment of interest at the Interest Rate
compounded quarterly. Interest shall be payable (subject to any relevant
Extension Period) quarterly in arrears on each Interest Payment Date with the
first installment of interest to be paid on June 26, 2002.

     Any interest on any Debenture, including Additional Interest, that is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (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 shall be paid by the
Company to the Persons in whose names such Debentures (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in writing at least
25 days prior to the date of the proposed payment of the amount of Defaulted
Interest proposed to be paid on each such Debenture 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 as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall not
be more than 15 nor less than 10 days prior to the date of the proposed payment
and not less than 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 Securityholder
at its address as it appears in the Debenture Register, not less than 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 mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Debentures (or their respective Predecessor Securities) are registered on
such special record date and shall be no longer payable.

     The Company may make payment of any Defaulted Interest on any Debentures in
any other lawful manner after notice given by the Company to the Trustee of the
proposed payment method; provided, however, the Trustee in its sole discretion
                         --------  -------
deems such payment method to be practical.

     Any interest scheduled to become payable on an Interest Payment Date
occurring during an Extension Period shall not be Defaulted Interest and shall
be payable on such other date as may be specified in the terms of such
Debentures.

     The term "regular record date" as used in this Section shall mean the close
of business on the 15th day next preceding the applicable Interest Payment Date.

                                       12

<PAGE>

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

     Section 2.9. Cancellation of Debentures Paid, etc. All Debentures
                  ------------------------------------
surrendered for the purpose of payment, redemption, exchange or registration of
transfer, shall, if surrendered to the Company or any paying agent, be
surrendered to the Trustee and promptly canceled by it, or, if surrendered to
the Trustee or any Authenticating Agent, shall be promptly canceled by it, and
no Debentures shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture. All Debentures canceled by any
Authenticating Agent shall be delivered to the Trustee. The Trustee shall
destroy all canceled Debentures unless the Company otherwise directs the Trustee
in writing. If the Company shall acquire any of the Debentures, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
surrendered to the Trustee for cancellation.

     Section 2.10. Computation of Interest. The amount of interest payable for
                   -----------------------
the Distribution Period commencing on June 26, 2002 and each succeeding
Distribution Period will be calculated by applying the Interest Rate to the
principal amount outstanding at the commencement of the Distribution Period and
multiplying each such amount by the actual number of days in the Distribution
Period concerned divided by 360. In the event that any date on which interest is
payable on the Debentures is not a Business Day, then payment of interest
payable on such date shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. All percentages resulting from any calculations on the
Debentures will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% or .09876545 being rounded to 9.87655% or .0987655, and
all dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward)).

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

          (1) the rate (expressed as a percentage per annum) for U.S. dollar
     deposits having a three-month maturity that appears on Telerate Page 3750
     as of 11:00 a.m. (London time) on the related Determination Date (as
     defined below). "Telerate Page 3750" means the display designated as "Page
     3750" on the Dow Jones Telerate Service or such other page as may replace
     Page 3750 on that service or such other service or services as may be
     nominated by the British Bankers' Association as the information vendor for
     the purpose of displaying London interbank offered rates for U.S. dollar
     deposits;

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

          (3) if fewer than two such quotations are provided as requested in
     clause (2) above, the Trustee will request four major New York City banks
     to provide such banks' offered quotations (expressed as percentages per
     annum) to leading European banks for loans in U.S.

                                       13

<PAGE>

     dollars as of 11:00 a.m. (London time) on such Determination Date. If at
     least two such quotations are provided, 3-Month LIBOR will be the
     arithmetic mean of such quotations; and

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

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

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

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

     (d) The Trustee shall notify the Company, the Institutional Trustee and any
securities exchange or interdealer quotation system on which the Capital
Securities are listed, of the Coupon Rate and the Determination Date for each
Distribution Period, in each case as soon as practicable after the determination
thereof but in no event later than the thirtieth (30th) day of the relevant
Distribution Period. Failure to notify the Company, the Institutional Trustee or
any securities exchange or interdealer quotation system, or any defect in said
notice, shall not affect the obligation of the Company to make payment on the
Debentures at the applicable Coupon Rate. Any error in the calculation of the
Coupon Rate by the Trustee may be corrected at any time by notice delivered as
above provided. Upon the request of a holder of a Debenture, the Trustee shall
provide the Coupon Rate then in effect and, if determined, the Coupon Rate for
the next Distribution Period.

     (e) Subject to the corrective rights set forth above, all certificates,
communications, opinions, determinations, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of the provisions relating
to the payment and calculation of interest on the Debentures and distributions
on the Capital Securities by the Trustee or the Institutional Trustee will (in
the absence of willful default, bad faith and manifest error) be final,
conclusive and binding on the Trust, the Company and all of the holders of the
Debentures and the Capital Securities, and no liability shall (in the absence of
willful default, bad faith or manifest error) attach to the Trustee or the
Institutional Trustee in connection with the exercise or non-exercise by either
of them or their respective powers, duties and discretion.

     Section 2.11. Extension of Interest Payment Period. So long as no Event of
                   ------------------------------------
Default has occurred and is continuing, the Company shall have the right, from
time to time, and without causing an Event of Default, to defer payments of
interest on the Debentures by extending the interest payment period on the
Debentures at any time and from time to time during the term of the Debentures,
for up to 20 consecutive quarterly periods (each such extended interest payment
period, an "Extension Period"), during which Extension Period no interest
            ----------------
(including Additional Interest) shall be due and payable. No Extension Period
may end on a date other than an Interest Payment Date. At the end of any such
Extension Period the Company shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
                                                            --------  -------
that no Extension Period may extend beyond the Maturity Date; provided further,
                                                              -------- -------
however, that during any such Extension Period, the Company shall not and shall
-------
not permit any Affiliate to (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 or such

                                       14

<PAGE>

Affiliate's capital stock (other than payments of dividends or distributions to
the Company) or make any guarantee payments with respect to the foregoing or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company or any Affiliate
that rank pari passu in all respects with or junior in interest to the
Debentures (other than, with respect to clauses (i) or (ii) above, (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 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 any 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
stockholders' rights plan, or the issuance of rights, stock or other property
under any stockholders' rights plan, or the redemption or repurchase of rights
pursuant thereto, (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional shares issued in connection therewith, or
(f) payments under the Capital Securities Guarantee). Prior to the termination
of any Extension Period, the Company may further extend such period, provided
that such period together with all such previous and further consecutive
extensions thereof shall not exceed 20 consecutive quarterly periods, or extend
beyond the Maturity Date. Upon the termination of any Extension Period and upon
the payment of all accrued and unpaid interest and Additional Interest, the
Company may commence a new Extension Period, subject to the foregoing
requirements. No interest or Additional Interest shall be due and payable during
an Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest to the extent permitted by applicable law. The
Company must give the Trustee notice of its election to begin or extend such
Extension Period at least 5 Business Days prior to the earlier of (i) the date
interest on the Debentures would have been payable except for the election to
begin or extend such Extension Period or (ii) the date such interest is payable,
but in any event not less than 5 Business Days prior to such record date. The
Trustee shall give notice of the Company's election to begin a new Extension
Period to the Securityholders.

     Section 2.12. CUSIP Numbers. The Company in issuing the Debentures may use
                   -------------
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption as a convenience to Securityholders;
provided, however, that any such notice may state that no representation is made
--------  -------
as to the correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee in writing of any change in the
CUSIP numbers.

                                       15

<PAGE>

                                  ARTICLE III.
                       PARTICULAR COVENANTS OF THE COMPANY
                       -----------------------------------

     Section 3.1. Payment of Principal, Premium and Interest; Agreed Treatment
                  ------------------------------------------------------------
of the Debentures.
-----------------

     (a) The Company covenants and agrees that it will duly and punctually pay
or cause to be paid the principal of and premium, if any, and interest and any
Additional Interest on the Debentures at the place, at the respective times and
in the manner provided in this Indenture and the Debentures. Each installment of
interest on the Debentures may be paid (i) by mailing checks for such interest
payable to the order of the holders of Debentures entitled thereto as they
appear on the registry books of the Company if a request for a wire transfer has
not been received by the Company or (ii) by wire transfer to any account with a
banking institution located in the United States designated in writing by such
Person to the paying agent no later than the related record date.
Notwithstanding the foregoing, so long as the holder of this Debenture is the
Institutional Trustee, the payment of the principal of and interest on this
Debenture will be made in immediately available funds at such place and to such
account as may be designated by the Institutional Trustee.

     (b) The Company will treat the Debentures as indebtedness, and the amounts
payable in respect of the principal amount of such Debentures as interest, for
all United States federal income tax purposes. All payments in respect of such
Debentures will be made free and clear of United States withholding tax to any
beneficial owner thereof that has provided an Internal Revenue Service Form W8
BEN (or any substitute or successor form) establishing its non-United States
status for United States federal income tax purposes.

     (c) As of the date of this Indenture, the Company has no present intention
to exercise its right under Section 2.11 to defer payments of interest on the
Debentures by commencing an Extension Period.

     (d) As of the date of this Indenture, the Company believes that the
likelihood that it would exercise its right under Section 2.11 to defer payments
of interest on the Debentures by commencing an Extension Period at any time
during which the Debentures are outstanding is remote because of the
restrictions that would be imposed on the Company's ability to declare or pay
dividends or distributions on, or to redeem, purchase or make a liquidation
payment with respect to, any of its outstanding equity and on the Company's
ability to make any payments of principal of or interest on, or repurchase or
redeem, any of its debt securities that rank pari passu in all respects with (or
junior in interest to) the Debentures.

     Section 3.2. Offices for Notices and Payments, etc. So long as any of the
                  -------------------------------------
Debentures remain outstanding, the Company will maintain in Hartford,
Connecticut, an office or agency where the Debentures may be presented for
payment, an office or agency where the Debentures may be presented for
registration of transfer and for exchange as in this Indenture provided and an
office or agency where notices and demands to or upon the Company in respect of
the Debentures or of this Indenture may be served. The Company will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. Until otherwise designated from time to time by the
Company in a notice to the Trustee, or specified as contemplated by Section 2.5,
such office or agency for all of the above purposes shall be the office or
agency of the Trustee. In case the Company shall fail to maintain any such
office or agency in Hartford, Connecticut, or shall fail to give such notice of
the location or of any change in the location thereof, presentations and demands
may be made and notices may be served at the Principal Office of the Trustee.

     In addition to any such office or agency, the Company may from time to time
designate one or more offices or agencies outside Hartford, Connecticut, where
the Debentures may be presented for

                                       16

<PAGE>

registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
                                             --------  -------
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in Hartford, Connecticut, for
the purposes above mentioned. The Company will give to the Trustee prompt
written notice of any such designation or rescission thereof.

     Section 3.3. Appointments to Fill Vacancies in Trustee's Office. The
                  --------------------------------------------------
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.9, a Trustee, so that there
shall at all times be a Trustee hereunder.

     Section 3.4. Provision as to Paying Agent.
                  ----------------------------

     (a) If the Company shall appoint a paying agent other than the Trustee, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provision of
this Section 3.4,

          (1) that it will hold all sums held by it as such agent for the
          payment of the principal of and premium, if any, or interest, if any,
          on the Debentures (whether such sums have been paid to it by the
          Company or by any other obligor on the Debentures) in trust for the
          benefit of the holders of the Debentures;

          (2) that it will give the Trustee prompt written notice of any failure
          by the Company (or by any other obligor on the Debentures) to make any
          payment of the principal of and premium, if any, or interest, if any,
          on the Debentures when the same shall be due and payable; and

          (3) that it will, at any time during the continuance of any Event of
          Default, upon the written request of the Trustee, forthwith pay to the
          Trustee all sums so held in trust by such paying agent.

     (b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of and premium, if any, or interest, if any, on
the Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee in writing of any failure
to take such action and of any failure by the Company (or by any other obligor
under the Debentures) to make any payment of the principal of and premium, if
any, or interest, if any, on the Debentures when the same shall become due and
payable.

     Whenever the Company shall have one or more paying agents for the
Debentures, it will, on or prior to each due date of the principal of and
premium, if any, or interest, if any, on the Debentures, deposit with a paying
agent a sum sufficient to pay the principal, premium or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless such paying agent is the Trustee) the Company shall promptly
notify the Trustee in writing of its action or failure to act.

     (c) Anything in this Section 3.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debentures, or for any other reason, pay, or
direct any paying agent to pay to the Trustee all sums held in trust by the
Company or any such paying agent, such sums to be held by the Trustee upon the
trusts herein contained.

     (d) Anything in this Section 3.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.4 is subject to
Sections 12.3 and 12.4.

                                       17

<PAGE>

     Section 3.5. Certificate to Trustee. The Company will deliver to the
                  ----------------------
Trustee on or before 120 days after the end of each fiscal year, so long as
Debentures are outstanding hereunder, a Certificate stating that in the course
of the performance by the signers of their duties as officers of the Company
they would normally have knowledge of any default during such fiscal year by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature and status thereof.

     Section 3.6. Additional Sums. If and for so long as the Trust is the holder
                  ---------------
of all Debentures and the Trust is required to pay any additional taxes, duties,
assessments or other governmental charges as a result of a Tax Event, the
Company will pay such additional amounts ("Additional Sums") on the Debentures
                                           ---------------
as shall be required so that the net amounts received and retained by the Trust
after paying taxes, duties, assessments or other governmental charges will be
equal to the amounts the Trust would have received if no such taxes, duties,
assessments or other governmental charges had been imposed. Whenever in this
Indenture or the Debentures there is a reference in any context to the payment
of principal of or interest on the Debentures, such mention shall be deemed to
include mention of payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made; provided, however,
                                                          --------  -------
that the deferral of the payment of interest during an Extension Period pursuant
to Section 2.11 shall not defer the payment of any Additional Sums that may be
due and payable.

     Section 3.7. Compliance with Consolidation Provisions. The Company will
                  ----------------------------------------
not, while any of the Debentures remain outstanding, consolidate with, or merge
into, or merge into itself, or sell or convey all or substantially all of its
property to any other Person unless the provisions of Article XI hereof are
complied with.

     Section 3.8. Limitation on Dividends. If Debentures are initially issued to
                  -----------------------
the Trust or a trustee of such trust in connection with the issuance of Trust
Securities by the Trust (regardless of whether Debentures continue to be held by
such Trust) and (i) there shall have occurred and be continuing an Event of
Default, (ii) the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee, or (iii) the Company shall
have given notice of its election to defer payments of interest on the
Debentures by extending the interest payment period as provided herein and such
period, or any extension thereof, shall be continuing, then the Company shall
not, and shall not allow any Affiliate of the Company to, (x) 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 its
Affiliates' capital stock (other than payments of dividends or distributions to
the Company) or make any guarantee payments with respect to the foregoing or (y)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company or any Affiliate that
rank pari passu in all respects with or junior in interest to the Debentures
(other than, with respect to clauses (x) and (y) above, (1) 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 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, if any, (2) as a result of any 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, (3) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or

                                       18

<PAGE>

exchange provisions of such capital stock or the security being converted or
exchanged, (4) any declaration of a dividend in connection with any
stockholders' rights plan, or the issuance of rights, stock or other property
under any stockholders' rights plan, or the redemption or repurchase of rights
pursuant thereto, (5) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional shares issued in connection therewith, or
(6) payments under the Capital Securities Guarantee).

     Section 3.9. Covenants as to the Trust. For so long as the Trust Securities
                  -------------------------
remain outstanding, the Company shall maintain 100% ownership of the Common
Securities; provided, however, that any permitted successor of the Company under
            --------  -------
this Indenture may succeed to the Company's ownership of such Common Securities.
The Company, as owner of the Common Securities, shall, except in connection with
a distribution of Debentures to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, cause the
Trust (a) to remain a statutory trust, (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes, and
(c) to cause each holder of Trust Securities to be treated as owning an
undivided beneficial interest in the Debentures.

     Section 3.10. Additional Junior Indebtedness. The Company shall not, and it
                   ------------------------------
shall not cause or permit any Subsidiary of the Company to, incur, issue or be
obligated on any Additional Junior Indebtedness, either directly or indirectly,
by way of guarantee, suretyship or otherwise, other than: (i) Additional Junior
Indebtedness that, by its terms, is expressly stated to be either junior and
subordinate or pari passu in all respects to the Debentures, and (ii) Additional
Junior Indebtedness of which the Company has notified (and, if then required
under the applicable guidelines of the regulating entity, has received approval
from) the Federal Reserve, if the Company is a bank holding company, or the OTS,
if the Company is a savings and loan holding company.

                                   ARTICLE IV.
                       SECURITYHOLDERS' LISTS AND REPORTS
                       ----------------------------------
                         BY THE COMPANY AND THE TRUSTEE
                         ------------------------------

     Section 4.1. Securityholders' Lists. The Company covenants and agrees that
                  ----------------------
it will furnish or caused to be furnished to the Trustee:

     (a) on each regular record date for the Debentures, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Securityholders of the Debentures as of such record date; and

     (b) at such other times as the Trustee may request in writing, within 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 15 days prior to the time such list
is furnished;

except that no such lists need be furnished under this Section 4.1 so long as
the Trustee is in possession thereof by reason of its acting as Debenture
registrar.

     Section 4.2. Preservation and Disclosure of Lists.
                  ------------------------------------

     (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures (1) contained in the most recent list furnished to it as provided in
Section 4.1 or (2) received by it in the capacity of Debentures registrar

                                       19

<PAGE>

(if so acting) hereunder. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.

     (b) In case three or more holders of Debentures (hereinafter referred to as
"applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period of
at least 6 months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Debentures with respect to their rights under this Indenture or under such
Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within 5 Business Days after the receipt of such application, at its election,
either:

          (1) afford such applicants access to the information preserved at the
          time by the Trustee in accordance with the provisions of subsection
          (a) of this Section 4.2, or

          (2) inform such applicants as to the approximate number of holders of
          Debentures whose names and addresses appear in the information
          preserved at the time by the Trustee in accordance with the provisions
          of subsection (a) of this Section 4.2, and as to the approximate cost
          of mailing to such Securityholders the form of proxy or other
          communication, if any, specified in such application.

     If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2 a copy of the form of proxy or other
communication which is specified in such request with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such applicants and file
with the Securities and Exchange Commission, if permitted or required by
applicable law, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of all Debentures, as the case
may be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If said Commission, as permitted or required
by applicable law, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, said Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.

     (c) Each and every holder of Debentures, by receiving and holding the same,
agrees with Company and the Trustee that neither the Company nor the Trustee nor
any paying agent shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the holders of Debentures in
accordance with the provisions of subsection (b) of this Section 4.2, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under said subsection (b).

                                   ARTICLE V.
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                   -------------------------------------------
                            UPON AN EVENT OF DEFAULT
                            ------------------------

     Section 5.1. Events of Default. "Event of Default," wherever used herein,
                  -----------------
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or

                                       20

<PAGE>

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 Company defaults in the payment of any interest upon any Debenture
when it becomes due and payable, and fails to cure such default for a period of
30 days; provided, however, that a valid extension of an interest payment period
         --------  -------
by the Company in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this purpose; or

     (b) the Company defaults in the payment of all or any part of the principal
of (or premium, if any, on) any Debentures as and when the same shall become due
and payable either at maturity, upon redemption, by declaration of acceleration
or otherwise; or

     (c) the Company defaults in the performance of, or breaches, any of its
covenants or agreements in this Indenture or in the terms of the Debentures
established as contemplated in this Indenture (other than a covenant or
agreement a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or breach for
a period of 60 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 25% in aggregate principal amount of the outstanding Debentures, a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or

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

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

     (f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of the Debentures to holders of such Trust
Securities in liquidation of their interests in the Trust, (ii) the redemption
of all of the outstanding Trust Securities or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration.

     If an Event of Default occurs and is continuing with respect to the
Debentures, then, and in each and every such case, unless the principal of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by Securityholders), may declare the entire principal of the
Debentures and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.

     The foregoing provisions, however, are subject to the condition that if, at
any time after the principal of the Debentures shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the

                                       21

<PAGE>

Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures and the principal of
and premium, if any, on the Debentures which shall have become due otherwise
than by acceleration (with interest upon such principal and premium, if any, and
Additional Interest) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other amounts due to the Trustee pursuant
to Section 6.6, and if any and all Events of Default under this Indenture, other
than the non-payment of the principal of or premium, if any, on Debentures which
shall have become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein -- then and in every such case the holders
of a majority in aggregate principal amount of the Debentures then outstanding,
by written notice to the Company and to the Trustee, may waive all defaults and
rescind and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.

     In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Trustee and the holders of the Debentures shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the holders of the Debentures shall
continue as though no such proceeding had been taken.

     Section 5.2. Payment of Debentures on Default; Suit Therefor. The Company
                  -----------------------------------------------
covenants that upon the occurrence of an Event of Default pursuant to Section
5.1(a) or Section 5.1(b) then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures the whole
amount that then shall have become due and payable on all Debentures for
principal and premium, if any, or interest, or both, as the case may be, with
Additional Interest accrued on the Debentures (to the extent that payment of
such interest is enforceable under applicable law and, if the Debentures are
held by the Trust or a trustee of such Trust, without duplication of any other
amounts paid by the Trust or a trustee in respect thereof); and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including a reasonable compensation to the Trustee, its
agents, attorneys and counsel, and any other amounts due to the Trustee under
Section 6.6. In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other obligor on such
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on such Debentures wherever situated the moneys
adjudged or decreed to be payable.

     In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Debentures under
Bankruptcy Law, or in case a receiver or trustee shall have been appointed for
the property of the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other obligor upon the
Debentures, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration of
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 5.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise,

     (i)  to file and prove a claim or claims for the whole amount of principal
          and interest owing and unpaid in respect of the Debentures and, in
          case of any judicial proceedings,

                                       22

<PAGE>

     (ii) to file such proofs of claim and other papers or documents as may be
          necessary or advisable in order to have the claims of the Trustee
          (including any claim for reasonable compensation to the Trustee and
          each predecessor Trustee, and their respective agents, attorneys and
          counsel, and for reimbursement of all other amounts due to the Trustee
          under Section 6.6), and of the Securityholders allowed in such
          judicial proceedings relative to the Company or any other obligor on
          the Debentures, or to the creditors or property of the Company or such
          other obligor, unless prohibited by applicable law and regulations, to
          vote on behalf of the holders of the Debentures in any election of a
          trustee or a standby trustee in arrangement, reorganization,
          liquidation or other bankruptcy or insolvency proceedings or Person
          performing similar functions in comparable proceedings,

     (iii) to collect and receive any moneys or other property payable or
          deliverable on any such claims, and

     (iv) to distribute the same after the deduction of its charges and
          expenses.

Any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Securityholders 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 Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
amounts due to the Trustee under Section 6.6.

     Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.

     All rights of action and of asserting claims under this Indenture, or under
any of the Debentures, may be enforced by the Trustee without the possession of
any of the Debentures, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders of the
Debentures.

     In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Debentures, and it shall not be necessary to make any holders of
the Debentures parties to any such proceedings.

     Section 5.3. Application of Moneys Collected by Trustee. Any moneys
                  ------------------------------------------
collected by the Trustee pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Debentures in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:

     First: To the payment of costs and expenses incurred by, and reasonable
fees of, the Trustee, its agents, attorneys and counsel, and of all other
amounts due to the Trustee under Section 6.6;

     Second: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XV;

                                       23

<PAGE>

     Third: To the payment of the amounts then due and unpaid upon Debentures
for principal (and premium, if any), and interest on the Debentures, in respect
of which or for the benefit of which money has been collected, ratably, without
preference or priority of any kind, according to the amounts due on such
Debentures for principal (and premium, if any) and interest, respectively; and

     Fourth: The balance, if any, to the Company.

     Section 5.4. Proceedings by Securityholders. No holder of any Debenture
                  ------------------------------
shall have any right to institute any suit, action or proceeding for any remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default with respect to the Debentures and unless the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding shall have given the Trustee a written request to institute
such action, suit or proceeding and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred thereby, and the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding.

     Notwithstanding any other provisions in this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal of, premium,
if any, and interest, on such Debenture when due, or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the
consent of such holder and by accepting a Debenture hereunder it is expressly
understood, intended and covenanted by the taker and holder of every Debenture
with every other such taker and holder and the Trustee, that no one or more
holders of Debentures shall have any right in any manner whatsoever by virtue or
by availing itself of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other Debentures, or to obtain or
seek to obtain priority over or preference to any other such holder, or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Debentures. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

     Section 5.5. Proceedings by Trustee. In case of an Event of Default
                  ----------------------
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

     Section 5.6. Remedies Cumulative and Continuing; Delay or Omission Not a
                  -----------------------------------------------------------
Waiver. Except as otherwise provided in Section 2.6, all powers and remedies
------
given by this Article V to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any other
powers and remedies available to the Trustee or the holders of the Debentures,
by judicial proceedings or otherwise, to enforce the performance or observance
of the covenants and agreements contained in this Indenture or otherwise
established with respect to the Debentures, and no delay or omission of the
Trustee or of any holder of any of the Debentures to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to the provisions of Section
5.4, every power and remedy given by this Article V or by law to the Trustee or
to the Securityholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Securityholders.

     No delay or omission of the Trustee or any Securityholder 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

                                       24

<PAGE>

such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Trustee or to any Securityholder may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee (in accordance with its duties under Section 6.1 hereof) or by such
holder, as the case may be.

     Section 5.7. Direction of Proceedings and Waiver of Defaults by Majority of
                  --------------------------------------------------------------
Securityholders. The holders of a majority in aggregate principal amount of the
---------------
Debentures affected (voting as one class) at the time outstanding 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 with respect to such Debentures; provided, however, that (subject to
                                             --------  -------
the provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee shall determine that the action so
directed would be unjustly prejudicial to the holders not taking part in such
direction or if the Trustee being advised by counsel determines that the action
or proceeding so directed may not lawfully be taken or if a Responsible Officer
of the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability.

     The holders of a majority in aggregate principal amount of the Debentures
at the time outstanding may on behalf of the holders of all of the Debentures
waive (or modify any previously granted waiver of) any past default or Event of
Default, and its consequences, except a default (a) in the payment of principal
of, premium, if any, or interest on any of the Debentures, (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debenture affected, or (c) in respect of the
covenants contained in Section 3.9; provided, however, that if the Debentures
                                    --------  -------
are held by the Trust or a trustee of such trust, such waiver or modification to
such waiver shall not be effective until the holders of a majority in
Liquidation Amount of Trust Securities of the Trust shall have consented to such
waiver or modification to such waiver, provided, further, that if the consent of
                                       --------  -------
the holder of each outstanding Debenture is required, such waiver shall not be
effective until each holder of the Trust Securities of the Trust shall have
consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Trustee and the holders of the Debentures shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section, said default or Event of Default
shall for all purposes of the Debentures and this Indenture be deemed to have
been cured and to be not continuing.

     Section 5.8. Notice of Defaults. The Trustee shall, within 90 days after
                  ------------------
the actual knowledge by a Responsible Officer of the Trustee of the occurrence
of a default with respect to the Debentures, mail to all Securityholders, as the
names and addresses of such holders appear upon the Debenture Register, notice
of all defaults with respect to the Debentures known to the Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 5.8 being hereby defined to be the
events specified in clauses (a), (b), (c), (d), (e) and (f) of Section 5.1, not
including periods of grace, if any, provided for therein); provided, however,
                                                           --------  -------
that, except in the case of default in the payment of the principal of, premium,
if any, or interest on any of the Debentures, the Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Trustee
in good faith determines that the withholding of such notice is in the interests
of the Securityholders.

     Section 5.9. Undertaking to Pay Costs. All parties to this Indenture agree,
                  ------------------------
and each holder of any Debenture by his 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

                                       25

<PAGE>

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; provided, however, that the
                                                    --------  -------
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the Debentures outstanding, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of (or premium, if any) or
interest on any Debenture against the Company on or after the same shall have
become due and payable.

                                   ARTICLE VI.
                             CONCERNING THE TRUSTEE
                             ----------------------

     Section 6.1. Duties and Responsibilities of Trustee. With respect to the
                  --------------------------------------
holders of Debentures issued hereunder, the Trustee, prior to the occurrence of
an Event of Default with respect to the Debentures and after the curing or
waiving of all Events of Default which may have occurred, with respect to the
Debentures, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants shall be read
into this Indenture against the Trustee. In case an Event of Default with
respect to the Debentures has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

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

     (a) prior to the occurrence of an Event of Default with respect to
Debentures and after the curing or waiving of all Events of Default which may
have occurred

          (1) the duties and obligations of the Trustee with respect to
          Debentures shall be determined solely by the express provisions of
          this Indenture, and the Trustee shall not be liable except for the
          performance of such duties and obligations with respect to the
          Debentures as are specifically set forth in this Indenture, and no
          implied covenants or obligations shall be read into this Indenture
          against the Trustee, and

          (2) in the absence of bad faith on the part of the Trustee, the
          Trustee may conclusively rely, as to the truth of the statements and
          the correctness of the opinions expressed therein, upon any
          certificates or opinions furnished to the Trustee and conforming to
          the requirements of this Indenture; but, in the case of any such
          certificates or opinions which 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 conform to the requirements of this Indenture;

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

     (c) 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
Securityholders pursuant to Section 5.7, relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture.

     None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the

                                       26

<PAGE>

exercise of any of its rights or powers, if there is ground for believing that
the repayment of such funds or liability is not assured to it under the terms of
this Indenture or indemnity satisfactory to the Trustee against such risk is not
reasonably assured to it.

     Section 6.2. Reliance on Documents, Opinions, etc. Except as otherwise
                  ------------------------------------
provided in Section 6.1:

     (a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture 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) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;

     (c) the Trustee may consult with counsel of its selection and any advice or
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 accordance with such advice or Opinion of Counsel;

     (d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders, pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;

     (e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default with respect to the Debentures (that has not been cured or
waived) to exercise with respect to Debentures such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;

     (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, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of not less than a majority in aggregate principal amount of the
outstanding Debentures affected thereby; provided, however, that if the payment
                                         --------  -------
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expense or liability as a condition to so
proceeding;

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

     (h) with the exceptions of defaults under Sections 5.1(a) or 5.1(b), the
Trustee shall not be charged with knowledge of any Default or Event of Default
with respect to the Debentures unless a

                                       27

<PAGE>

written notice of such Default or Event of Default shall have been given to the
Trustee by the Company or any other obligor on the Debentures or by any holder
of the Debentures.

     Section 6.3. No Responsibility for Recitals, etc. The recitals contained
                  -----------------------------------
herein and in the Debentures (except in the certificate of authentication of the
Trustee or the Authenticating Agent) shall be taken as the statements of the
Company, and the Trustee and the Authenticating Agent assume no responsibility
for the correctness of the same. The Trustee and the Authenticating Agent make
no representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee and the Authenticating Agent shall not be accountable
for the use or application by the Company of any Debentures or the proceeds of
any Debentures authenticated and delivered by the Trustee or the Authenticating
Agent in conformity with the provisions of this Indenture.

     Section 6.4. Trustee, Authenticating Agent, Paying Agents, Transfer Agents
                  -------------------------------------------------------------
or Registrar May Own Debentures. The Trustee or any Authenticating Agent or any
-------------------------------
paying agent or any transfer agent or any Debenture registrar, in its individual
or any other capacity, may become the owner or pledgee of Debentures with the
same rights it would have if it were not Trustee, Authenticating Agent, paying
agent, transfer agent or Debenture registrar.

     Section 6.5. Moneys to be Held in Trust. Subject to the provisions of
                  --------------------------
Section 12.4, all moneys received by the Trustee or any paying agent shall,
until used or applied as herein provided, be held in trust for the purpose for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee and any paying agent shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company. So long as no Event of Default shall have
occurred and be continuing, all interest allowed on any such moneys shall be
paid from time to time upon the written order of the Company, signed by the
Chairman of the Board of Directors, the Chief Executive Officer, the President,
a Managing Director, a Vice President the Treasurer or an Assistant Treasurer of
the Company.

     Section 6.6. Compensation and Expenses of Trustee. The Company covenants
                  ------------------------------------
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed to in writing between the
Company and the Trustee (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or willful misconduct. The Company also covenants to
indemnify each of the Trustee or any predecessor Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any and
all loss, damage, claim, liability or expense including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or willful
misconduct on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability. The obligations of the
Company under this Section 6.6 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Debentures upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
benefit of the holders of particular Debentures.

     Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d), Section 5.1(e)
or Section 5.1(f), the expenses (including the reasonable charges

                                       28

<PAGE>

and expenses of its counsel) and the compensation for the services are intended
to constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

     The provisions of this Section shall survive the resignation or removal of
the Trustee and the defeasance or other termination of this Indenture.

     Notwithstanding anything in this Indenture or any Debenture to the
contrary, the Trustee shall have no obligation whatsoever to advance funds to
pay any principal of or interest on or other amounts with respect to the
Debentures or otherwise advance funds to or on behalf of the Company.

     Section 6.7. Officers' Certificate as Evidence. Except as otherwise
                  ---------------------------------
provided in Sections 6.1 and 6.2, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or willful misconduct
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or willful misconduct on the part of the Trustee,
shall be full warrant to the Trustee for any action taken or omitted by it under
the provisions of this Indenture upon the faith thereof.

     Section 6.8. Eligibility of Trustee. The Trustee hereunder shall at all
                  ----------------------
times be a corporation organized and doing business under the laws of the United
States of America or any state or territory thereof or of the District of
Columbia or a corporation or other Person authorized under such laws to exercise
corporate trust powers, having (or whose obligations under this Indenture are
guaranteed by an affiliate having) a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000.00) and subject to supervision or examination
by federal, state, territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 6.8 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 records of condition so published.

     The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee.

     In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.8, the Trustee shall resign immediately in
the manner and with the effect specified in Section 6.9.

     If the Trustee has or shall acquire any "conflicting interest" within the
meaning of (S)310(b) of the Trust Indenture Act of 1939, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
described by this Indenture.

     Section 6.9. Resignation or Removal of Trustee
                  ---------------------------------

     (a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign by giving written notice of such resignation to the Company and by
mailing notice thereof, at the Company's expense, to the holders of the
Debentures at their addresses as they shall appear on the Debenture Register.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, executed by
order of its Board of Directors, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed and have accepted appointment within 30
days after the mailing of such notice of resignation to the affected
Securityholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any

                                       29

<PAGE>

Securityholder who has been a bona fide holder of a Debenture or Debentures for
at least six months may, subject to the provisions of Section 5.9, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor Trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor Trustee.

     (b) In case at any time any of the following shall occur --

          (1) the Trustee shall fail to comply with the provisions of Section
          6.8 after written request therefor by the Company or by any
          Securityholder who has been a bona fide holder of a Debenture or
          Debentures for at least 6 months, or

          (2) the Trustee shall cease to be eligible in accordance with the
          provisions of Section 6.8 and shall fail to resign after written
          request therefor by the Company or by any such Securityholder, or

          (3) the Trustee shall become incapable of acting, or shall be adjudged
          a bankrupt or insolvent, or a receiver of the Trustee or of its
          property shall be appointed, or any public officer shall take charge
          or control of the Trustee or of its property or affairs for the
          purpose of rehabilitation, conservation or liquidation,

          then, in any such case, the Company may remove the Trustee and appoint
          a successor Trustee by written instrument, in duplicate, executed by
          order of the Board of Directors, one copy of which instrument shall be
          delivered to the Trustee so removed and one copy to the successor
          Trustee, or, subject to the provisions of Section 5.9, any
          Securityholder who has been a bona fide holder of a Debenture or
          Debentures for at least 6 months may, on behalf of himself and all
          others similarly situated, petition any court of competent
          jurisdiction for the removal of the Trustee and the appointment of a
          successor Trustee. Such court may thereupon, after such notice, if
          any, as it may deem proper and prescribe, remove the Trustee and
          appoint successor Trustee.

     (c) Upon prior written notice to the Company and the Trustee, the holders
of a majority in aggregate principal amount of the Debentures at the time
outstanding may at any time remove the Trustee and nominate a successor Trustee,
which shall be deemed appointed as successor Trustee unless within 10 Business
Days after such nomination the Company objects thereto, in which case, or in the
case of a failure by such holders to nominate a successor Trustee, the Trustee
so removed or any Securityholder, upon the terms and conditions and otherwise as
in subsection (a) of this Section 6.9 provided, may petition any court of
competent jurisdiction for an appointment of a successor.

     (d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 6.10.

     Section 6.10. Acceptance by Successor Trustee. Any successor Trustee
                   -------------------------------
appointed as provided in Section 6.9 shall execute, acknowledge and deliver to
the Company and to its predecessor Trustee an instrument accepting such
appointment hereunder, 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, duties
and obligations with respect to the Debentures of its predecessor hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written request of the Company or of the successor Trustee, the Trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 6.6, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers of the Trustee so ceasing to
act and shall duly assign, transfer and deliver to such successor Trustee all
property and money

                                       30

<PAGE>

held by such retiring Trustee thereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien
upon all property or funds held or collected by such Trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.

     If a successor Trustee is appointed, the Company, the retiring Trustee and
the successor Trustee shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Debentures as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the Trust hereunder by more than
one Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and that
each such Trustee shall be Trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such Trustee.

     No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
under the provisions of Section 6.8.

     In no event shall a retiring Trustee be liable for the acts or omissions of
any successor Trustee hereunder.

     Upon acceptance of appointment by a successor Trustee as provided in this
Section 6.10, the Company shall mail notice of the succession of such Trustee
hereunder to the holders of Debentures at their addresses as they shall appear
on the Debenture Register. If the Company fails to mail such notice within 10
Business Days after the acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Company.

     Section 6.11. Succession by Merger, etc. Any corporation into which the
                   -------------------------
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation 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 such corporation
                                                      --------
shall be otherwise eligible and qualified under this Article.

     In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debentures or in this Indenture provided
that the certificate of the Trustee shall have; provided, however, that the
                                                --------  -------
right to adopt the certificate of authentication of any predecessor Trustee or
authenticate Debentures in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.

     Section 6.12. Authenticating Agents. There may be one or more
                   ---------------------
Authenticating Agents appointed by the Trustee upon the request of the Company
with power to act on its behalf and subject to its direction in the
authentication and delivery of Debentures issued upon exchange or registration
of transfer thereof as fully to all intents and purposes as though any such
Authenticating Agent had been expressly authorized to authenticate and deliver
Debentures; provided, however, that the Trustee shall have no liability to the
            --------  -------
Company for any acts or omissions of the Authenticating Agent with respect to
the

                                       31

<PAGE>

authentication and delivery of Debentures. Any such Authenticating Agent shall
at all times be a corporation organized and doing business under the laws of the
United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $50,000,000.00 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.12 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section.

     Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 6.12 without the execution or filing of
any paper or any further act on the part of the parties hereto or such
Authenticating Agent.

     Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent with respect to the Debentures
by giving written notice of termination 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 any Authenticating Agent shall cease to be eligible under
this Section 6.12, the Trustee may, and upon the request of the Company shall,
promptly appoint a successor Authenticating Agent eligible under this Section
6.12, shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities with respect to the
Debentures of its predecessor hereunder, with like effect as if originally named
as Authenticating Agent herein.

     The Company agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.

                                  ARTICLE VII.
                         CONCERNING THE SECURITYHOLDERS
                         ------------------------------

     Section 7.1. Action by Securityholders. Whenever in this Indenture it is
                  -------------------------
provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action) the fact that at the time of taking any such action the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by such
Securityholders in person or by agent or proxy appointed in writing, or (b) by
the record of such holders of Debentures voting in favor thereof at any meeting
of such Securityholders duly called and held in accordance with the provisions
of Article VIII, or (c) by a combination of such instrument or instruments and
any such record of such a meeting of such Securityholders or (d) by any other
method the Trustee deems satisfactory.

     If the Company shall solicit from the Securityholders any request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, the Company may, at its

                                       32

<PAGE>

option, as evidenced by an Officers' Certificate, fix in advance a record date
for such Debentures for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation of the same may
be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be
Securityholders for the purposes of determining whether Securityholders of the
requisite proportion of outstanding Debentures have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, and for that purpose the
outstanding Debentures shall be computed as of the record date; provided,
                                                                --------
however, that no such authorization, agreement or consent by such
-------
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than 6
months after the record date.

     Section 7.2. Proof of Execution by Securityholders. Subject to the
                  -------------------------------------
provisions of Section 6.1, 6.2 and 8.5, proof of the execution of any instrument
by a Securityholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
ownership of Debentures shall be proved by the Debenture Register or by a
certificate of the Debenture registrar. The Trustee may require such additional
proof of any matter referred to in this Section as it shall deem necessary.

     The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.6.

     Section 7.3. Who Are Deemed Absolute Owners. Prior to due presentment for
                  ------------------------------
registration of transfer of any Debenture, the Company, the Trustee, any
Authenticating Agent, any paying agent, any transfer agent and any Debenture
registrar may deem the Person in whose name such Debenture shall be registered
upon the Debenture Register to be, and may treat him as, the absolute owner of
such Debenture (whether or not such Debenture shall be overdue) for the purpose
of receiving payment of or on account of the principal of, premium, if any, and
interest on such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any Authenticating Agent nor any paying agent nor any
transfer agent nor any Debenture registrar shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being or upon
his order shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Debenture.

     Section 7.4. Debentures Owned by Company Deemed Not Outstanding. In
                  --------------------------------------------------
determining whether the holders of the requisite aggregate principal amount of
Debentures have concurred in any direction, consent or waiver under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any other obligor
on the Debentures shall be disregarded and deemed not to be outstanding for the
purpose of any such determination; provided, however, that for the purposes of
                                   --------  -------
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. Debentures so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 7.4 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Debentures and that the pledgee
is not the Company or any such other obligor or Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.

                                       33

<PAGE>

     Section 7.5. Revocation of Consents; Future Holders Bound. At any time
                  --------------------------------------------
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Debentures specified in this Indenture in connection
with such action, any holder (in cases where no record date has been set
pursuant to Section 7.1) or any holder as of an applicable record date (in cases
where a record date has been set pursuant to Section 7.1) of a Debenture (or any
Debenture issued in whole or in part in exchange or substitution therefor) the
serial number of which is shown by the evidence to be included in the Debentures
the holders of which have consented to such action may, by filing written notice
with the Trustee at the Principal Office of the Trustee and upon proof of
holding as provided in Section 7.2, revoke such action so far as concerns such
Debenture (or so far as concerns the principal amount represented by any
exchanged or substituted Debenture). Except as aforesaid any such action taken
by the holder of any Debenture shall be conclusive and binding upon such holder
and upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange or substitution therefor or on registration of transfer
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture or any Debenture issued in exchange or substitution
therefor.

                                  ARTICLE VIII.
                            SECURITYHOLDERS' MEETINGS
                            -------------------------

     Section 8.1. Purposes of Meetings. A meeting of Securityholders may be
                  --------------------
called at any time and from time to time pursuant to the provisions of this
Article VIII for any of the following purposes:

     (a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default hereunder
and its consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article V;

     (b) to remove the Trustee and nominate a successor trustee pursuant to the
provisions of Article VI;

     (c) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 9.2; or

     (d) to take any other action authorized to be taken by or on behalf of the
holders of any specified aggregate principal amount of such Debentures under any
other provision of this Indenture or under applicable law.

     Section 8.2. Call of Meetings by Trustee. The Trustee may at any time call
                  ---------------------------
a meeting of Securityholders to take any action specified in Section 8.1, to be
held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Securityholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed to holders of Debentures affected at their addresses as
they shall appear on the Debentures Register and, if the Company is not a holder
of Debentures, to the Company. Such notice shall be mailed not less than 20 nor
more than 180 days prior to the date fixed for the meeting.

     Section 8.3. Call of Meetings by Company or Securityholders. In case at any
                  ----------------------------------------------
time the Company pursuant to a Board Resolution, or the holders of at least 10%
in aggregate principal amount of the Debentures, as the case may be, then
outstanding, shall have requested the Trustee to call a meeting of
Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Securityholders may determine the time and the place
for such meeting and may call such meeting to take any action authorized in
Section 8.1, by mailing notice thereof as provided in Section 8.2.

                                       34

<PAGE>

     Section 8.4. Qualifications for Voting. To be entitled to vote at any
                  -------------------------
meeting of Securityholders a Person shall (a) be a holder of one or more
Debentures with respect to which the meeting is being held or (b) a Person
appointed by an instrument in writing as proxy by a holder of one or more such
Debentures. The only Persons who shall be entitled to be present or to speak at
any meeting of Securityholders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.

     Section 8.5. Regulations. Notwithstanding any other provisions of this
                   ----------
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Securityholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

     The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.3, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.

     Subject to the provisions of Section 7.4, at any meeting each holder of
Debentures with respect to which such meeting is being held or proxy therefor
shall be entitled to one vote for each $1,000.00 principal amount of Debentures
held or represented by him; provided, however, that no vote shall be cast or
                            --------  -------
counted at any meeting in respect of any Debenture challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Debentures held
by him or instruments in writing as aforesaid duly designating him as the Person
to vote on behalf of other Securityholders. Any meeting of Securityholders duly
called pursuant to the provisions of Section 8.2 or 8.3 may be adjourned from
time to time by a majority of those present, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.

     Section 8.6. Voting. The vote upon any resolution submitted to any meeting
                  ------
of holders of Debentures with respect to which such meeting is being held shall
be by written ballots on which shall be subscribed the signatures of such
holders or of their representatives by proxy and the serial number or numbers of
the Debentures held or represented by them. The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.2. The record
shall show the serial numbers of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.

     Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

     Section 8.7. Quorum; Actions. The Persons entitled to vote a majority in
                  ---------------
principal amount of the Debentures then outstanding shall constitute a quorum
for a meeting of Securityholders; provided, however, that if any action is to be
                                  --------  -------
taken at such meeting with respect to a consent, waiver, request,

                                       35

<PAGE>

demand, notice, authorization, direction or other action which may be given by
the holders of not less than a specified percentage in principal amount of the
Debentures then outstanding, the Persons holding or representing such specified
percentage in principal amount of the Debentures then outstanding will
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Securityholders, be dissolved. In any other case the meeting may be adjourned
for a period of not less than 10 days as determined by the permanent chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the permanent chairman of
the meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section 8.2,
except that such notice need be given only once not less than 5 days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Debentures then outstanding which
shall constitute a quorum.

     Except as limited by the provisos in the first paragraph of Section 9.2,
any resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote of
the holders of a majority in principal amount of the Debentures then
outstanding; provided, however, that, except as limited by the provisos in the
             --------  -------
first paragraph of Section 9.2, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action which
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in principal amount of the Debentures then outstanding may
be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid only by the affirmative vote of the holders of a
not less than such specified percentage in principal amount of the Debentures
then outstanding.

     Any resolution passed or decision taken at any meeting of holders of
Debentures duly held in accordance with this Section shall be binding on all the
Securityholders, whether or not present or represented at the meeting.

                                   ARTICLE IX.
                             SUPPLEMENTAL INDENTURES
                             -----------------------

     Section 9.1. Supplemental Indentures without Consent of Securityholders.
                  ----------------------------------------------------------
The Company, when authorized by a Board Resolution, and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto, without the consent of the Securityholders, for one or more of the
following purposes:

     (a) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company, pursuant to Article XI
hereof;

     (b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of Debentures as
the Board of Directors shall consider to be for the protection of the holders of
such Debentures, and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions or conditions a
default or an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided,
                                                                 --------
however, that in respect of any such additional covenant restriction or
-------
condition such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;

                                       36

<PAGE>

     (c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture; provided that any such action shall not materially
                              --------
adversely affect the interests of the holders of the Debentures;

     (d) to add to, delete from, or revise the terms of Debentures, including,
without limitation, any terms relating to the issuance, exchange, registration
or transfer of Debentures, including to provide for transfer procedures and
restrictions substantially similar to those applicable to the Capital Securities
as required by Section 2.5 (for purposes of assuring that no registration of
Debentures is required under the Securities Act); provided, however, that any
                                                  --------  -------
such action shall not adversely affect the interests of the holders of the
Debentures then outstanding (it being understood, for purposes of this proviso,
that transfer restrictions on Debentures substantially similar to those that
were applicable to Capital Securities shall not be deemed to materially
adversely affect the holders of the Debentures);

     (e) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Debentures and to add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee;

     (f) to make any change (other than as elsewhere provided in this paragraph)
that does not adversely affect the rights of any Securityholder in any material
respect; or

     (g) to provide for the issuance of and establish the form and terms and
conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or the
Debentures, or to add to the rights of the holders of Debentures.

     The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

     Any supplemental indenture authorized by the provisions of this Section 9.1
may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 9.2.

     Section 9.2. Supplemental Indentures with Consent of Securityholders. With
                  -------------------------------------------------------
the consent (evidenced as provided in Section 7.1) of the holders of not less
than a majority in aggregate principal amount of the Debentures at the time
outstanding affected by such supplemental indenture (voting as a class), the
Company, when authorized by a Board Resolution, and the Trustee may from time to
time and at any time 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 any supplemental
indenture or of modifying in any manner the rights of the holders of the
Debentures; provided, however, that no such supplemental indenture shall without
            --------  -------
the consent of the holders of each Debenture then outstanding and affected
thereby (i) change the fixed maturity of any Debenture, or reduce the principal
amount thereof or any premium thereon, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or make the principal thereof or any interest or premium thereon payable in any
coin or currency other than that provided in the Debentures, or impair or affect
the right of any Securityholder to institute suit for payment thereof or impair
the right of repayment, if any, at the option of the holder, or (ii) reduce the
aforesaid percentage of Debentures the holders of which are required to consent
to any such supplemental indenture; provided
                                    --------

                                       37

<PAGE>

further, however, that if the Debentures are held by a trust or a trustee of
-------  -------
such trust, such supplemental indenture shall not be effective until the holders
of a majority in Liquidation Amount of Trust Securities shall have consented to
such supplemental indenture; provided further, however, that if the consent of
                             -------- -------  -------
the Securityholder of each outstanding Debenture is required, such supplemental
indenture shall not be effective until each holder of the Trust Securities shall
have consented to such supplemental indenture.

     Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

     Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

     Section 9.3. Effect of Supplemental Indentures. Upon the execution of any
                  ---------------------------------
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Debentures shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

     Section 9.4. Notation on Debentures. Debentures authenticated and delivered
                  ----------------------
after the execution of any supplemental indenture pursuant to the provisions of
this Article IX may bear a notation as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so determine, new
Debentures so modified as to conform, in the opinion of the Board of Directors
of the Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee or the Authenticating Agent and delivered in
exchange for the Debentures then outstanding.

     Section 9.5. Evidence of Compliance of Supplemental Indenture to be
                  ------------------------------------------------------
Furnished to Trustee. The Trustee, subject to the provisions of Sections 6.1 and
--------------------
6.2, shall, in addition to the documents required by Section 14.6, receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article IX. The Trustee shall receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article IX is authorized or permitted by, and conforms to, the terms of this
Article IX and that it is proper for the Trustee under the provisions of this
Article IX to join in the execution thereof.

                                       38

<PAGE>

                                   ARTICLE X.
                            REDEMPTION OF SECURITIES
                            ------------------------

     Section 10.1. Optional Redemption. The Company shall have the right
                   -------------------
(subject to the receipt by the Company of prior approval (i) if the Company is a
bank holding company, from the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve or (ii) if the
Company is a savings and loan holding company, from the OTS if then required
under applicable capital guidelines or policies of the OTS), to redeem the
Debentures, in whole or in part, but in all cases in a principal amount with
integral multiples of $1,000.00, on any March 26, June 26, September 26 or
December 26 on or after March 26, 2007 (the "Redemption Date"), at the
                                             ---------------
Redemption Price.

     Section 10.2. Special Event Redemption. If a Special Event shall occur and
                   ------------------------
be continuing, the Company shall have the right (subject to the receipt by the
Company of prior approval (i) if the Company is a bank holding company, from the
Federal Reserve if then required under applicable capital guidelines or policies
of the Federal Reserve or (ii) if the Company is a savings and loan holding
company, from the OTS if then required under applicable capital guidelines or
policies of the OTS) to redeem the Debentures in whole, but not in part, at any
Interest Payment Date, within 120 days following the occurrence of such Special
Event (the "Special Redemption Date") at the Special Redemption Price.
            -----------------------

     Section 10.3. Notice of Redemption; Selection of Debentures. In case the
                   ---------------------------------------------
Company shall desire to exercise the right to redeem all, or, as the case may
be, any part of the Debentures, it shall cause to be mailed a notice of such
redemption at least 30 and not more than 60 days prior to the Redemption Date or
the Special Redemption Date to the holders of Debentures so to be redeemed as a
whole or in part at their last addresses as the same appear on the Debenture
Register. Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Debenture
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Debenture.

     Each such notice of redemption shall specify the CUSIP number, if any, of
the Debentures to be redeemed, the Redemption Date or the Special Redemption
Date, as applicable, the Redemption Price or the Special Redemption Price, as
applicable, at which Debentures are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Debentures, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. If less than all
the Debentures are to be redeemed the notice of redemption shall specify the
numbers of the Debentures to be redeemed. In case the Debentures are to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion thereof will be
issued.

     Prior to 10:00 a.m. New York City time on the Redemption Date or Special
Redemption Date, as applicable, the Company will deposit with the Trustee or
with one or more paying agents an amount of money sufficient to redeem on the
Redemption Date or the Special Redemption Date, as applicable, all the
Debentures so called for redemption at the appropriate Redemption Price or
Special Redemption Price, together with accrued interest to the Redemption Date
or Special Redemption Date, as applicable.

     If all, or less than all, the Debentures are to be redeemed, the Company
will give the Trustee notice not less than 45 nor more than 60 days,
respectively, prior to the Redemption Date or Special Redemption Date, as
applicable, as to the aggregate principal amount of Debentures to be redeemed
and the Trustee shall select, in such manner as in its sole discretion it shall
deem appropriate and fair, the Debentures or portions thereof (in integral
multiples of $1,000.00) to be redeemed.

                                       39

<PAGE>

     Section 10.4. Payment of Debentures Called for Redemption. If notice of
                   -------------------------------------------
redemption has been given as provided in Section 10.3, the Debentures or
portions of Debentures with respect to which such notice has been given shall
become due and payable on the Redemption Date or Special Redemption Date, as
applicable, and at the place or places stated in such notice at the applicable
Redemption Price or Special Redemption Price, together with interest accrued to
the Redemption Date or Special Redemption Date, as applicable, and on and after
said date (unless the Company shall default in the payment of such Debentures at
the Redemption Price or Special Redemption Price, as applicable, together with
interest accrued to said date) interest on the Debentures or portions of
Debentures so called for redemption shall cease to accrue. On presentation and
surrender of such Debentures at a place of payment specified in said notice,
such Debentures or the specified portions thereof shall be paid and redeemed by
the Company at the applicable Redemption Price or Special Redemption Price,
together with interest accrued thereon to the Redemption Date or Special
Redemption Date, as applicable.

     Upon presentation of any Debenture redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Debenture or Debentures
of authorized denominations, in principal amount equal to the unredeemed portion
of the Debenture so presented.

                                   ARTICLE XI.
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
                -------------------------------------------------

     Section 11.1. Company May Consolidate, etc., on Certain Terms. Nothing
                   -----------------------------------------------
contained in this Indenture or in the Debentures shall prevent any consolidation
or merger of the Company with or into any other Person (whether or not
affiliated with the Company) or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance, transfer or other disposition of the property or
capital stock of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other Person (whether or not affiliated
with the Company, or its successor or successors) authorized to acquire and
operate the same; provided, however, that the Company hereby covenants and
                  --------  -------
agrees that, upon any such consolidation, merger (where the Company is not the
surviving corporation), sale, conveyance, transfer or other disposition, the due
and punctual payment of the principal of (and premium, if any) and interest on
all of the Debentures in accordance with their terms, according to their tenor,
and the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be kept or performed by the Company, shall be
expressly assumed by supplemental indenture satisfactory in form to the Trustee
executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the
entity which shall have acquired such property or capital stock.

     Section 11.2. Successor Entity to be Substituted. In case of any such
                   ----------------------------------
consolidation, merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor entity, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or observed by the
Company, such successor entity shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the Company, and
thereupon the predecessor entity shall be relieved of any further liability or
obligation hereunder or upon the Debentures. Such successor entity thereupon may
cause to be signed, and may issue in its own name, any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee or the Authenticating Agent; and, upon the order of
such successor entity instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee or the
Authenticating Agent shall authenticate and deliver any Debentures which
previously shall have been signed and delivered by the officers of the Company,
to the Trustee or the

                                       40

<PAGE>

Authenticating Agent for authentication, and any Debentures which such successor
entity thereafter shall cause to be signed and delivered to the Trustee or the
Authenticating Agent for that purpose. All the Debentures so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof.

     Section 11.3. Opinion of Counsel to be Given to Trustee. The Trustee,
                   -----------------------------------------
subject to the provisions of Sections 6.1 and 6.2, shall receive, in addition to
the Opinion of Counsel required by Section 9.5, an Opinion of Counsel as
conclusive evidence that any consolidation, merger, sale, conveyance, transfer
or other disposition, and any assumption, permitted or required by the terms of
this Article XI complies with the provisions of this Article XI.

                                  ARTICLE XII.
                     SATISFACTION AND DISCHARGE OF INDENTURE
                     ---------------------------------------

     Section 12.1. Discharge of Indenture. When
                   ----------------------

     (a)  the Company shall deliver to the Trustee for cancellation all
          Debentures theretofore authenticated (other than any Debentures which
          shall have been destroyed, lost or stolen and which shall have been
          replaced or paid as provided in Section 2.6) and not theretofore
          canceled, or

     (b)  all the Debentures not theretofore canceled or delivered to the
          Trustee for cancellation shall have become due and payable, or are by
          their terms to become due and payable within 1 year or are to be
          called for redemption within 1 year under arrangements satisfactory to
          the Trustee for the giving of notice of redemption, and the Company
          shall deposit with the Trustee, in trust, funds, which shall be
          immediately due and payable, sufficient to pay at maturity or upon
          redemption all of the Debentures (other than any Debentures which
          shall have been destroyed, lost or stolen and which shall have been
          replaced or paid as provided in Section 2.6) not theretofore canceled
          or delivered to the Trustee for cancellation, including principal and
          premium, if any, and interest due or to become due to such date of
          maturity or redemption date, as the case may be, but excluding,
          however, the amount of any moneys for the payment of principal of, and
          premium, if any, or interest on the Debentures (1) theretofore repaid
          to the Company in accordance with the provisions of Section 12.4, or
          (2) paid to any state or to the District of Columbia pursuant to its
          unclaimed property or similar laws,

and if in the case of either clause (a) or clause (b) the Company shall also pay
or cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect except for the provisions of
Sections 2.5, 2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall
survive until such Debentures shall mature and be paid. Thereafter, Sections 6.6
and 12.4 shall survive, and the Trustee, on demand of the Company accompanied by
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, and at the cost and expense
of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture. The Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Debentures.

     Section 12.2. Deposited Moneys to be Held in Trust by Trustee. Subject to
                   -----------------------------------------------
the provisions of Section 12.4, all moneys deposited with the Trustee pursuant
to Section 12.1 shall be held in trust in a non-interest bearing account and
applied by it to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the holders of the
particular Debentures for

                                       41

<PAGE>

the payment of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal, and premium, if any, and
interest.

     Section 12.3. Paying Agent to Repay Moneys Held. Upon the satisfaction and
                   ---------------------------------
discharge of this Indenture all moneys then held by any paying agent of the
Debentures (other than the Trustee) shall, upon demand of the Company, be repaid
to it or paid to the Trustee, and thereupon such paying agent shall be released
from all further liability with respect to such moneys.

     Section 12.4. Return of Unclaimed Moneys. Any moneys deposited with or paid
                   --------------------------
to the Trustee or any paying agent for payment of the principal of, and premium,
if any, or interest on Debentures and not applied but remaining unclaimed by the
holders of Debentures for 2 years after the date upon which the principal of,
and premium, if any, or interest on such Debentures, as the case may be, shall
have become due and payable, shall, subject to applicable escheatment laws, be
repaid to the Company by the Trustee or such paying agent on written demand; and
the holder of any of the Debentures shall thereafter look only to the Company
for any payment which such holder may be entitled to collect, and all liability
of the Trustee or such paying agent with respect to such moneys shall thereupon
cease.

                                  ARTICLE XIII.
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                    ----------------------------------------
                             OFFICERS AND DIRECTORS
                             ----------------------

     Section 13.1. Indenture and Debentures Solely Corporate Obligations. No
                   -----------------------------------------------------
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture, or in any such
Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, officer or
director, as such, past, present or future, of the Company or of any successor
Person of the Company, either directly or through the Company or any successor
Person of the Company, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Debentures.

                                  ARTICLE XIV.
                            MISCELLANEOUS PROVISIONS
                            ------------------------

     Section 14.1. Successors. All the covenants, stipulations, promises and
                   ----------
agreements of the Company in this Indenture shall bind its successors and
assigns whether so expressed or not.

     Section 14.2. Official Acts by Successor Entity. Any act or proceeding by
                   ---------------------------------
any provision of this Indenture authorized or required to be done or performed
by any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee, officer or
other authorized Person of any entity that shall at the time be the lawful
successor of the Company.

     Section 14.3. Surrender of Company Powers. The Company by instrument in
                   ---------------------------
writing executed by authority of at least 2/3 (two-thirds) of its Board of
Directors and delivered to the Trustee may surrender any of the powers reserved
to the Company and thereupon such power so surrendered shall terminate both as
to the Company, and as to any permitted successor.

     Section 14.4. Addresses for Notices, etc. Any notice, consent, direction,
                   --------------------------
request, authorization, waiver or demand which by any provision of this
Indenture is required or permitted to be

                                       42

<PAGE>

given, made, furnished or served by the Trustee or by the Securityholders on or
to the Company may be given or served in writing by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company, with the Trustee for the
purpose) to the Company, 1900 Crestwood Boulevard, Birmingham, Alabama 35210,
Attention: Richard W. Edwards. Any notice, consent, direction, request,
authorization, waiver or demand by any Securityholder or the Company to or upon
the Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the office of the Trustee, addressed to
the Trustee, 225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103
Attention: Vice President, Corporate Trust Department, with a copy to State
Street Bank and Trust Company, P.O. Box 778, Boston, Massachusetts 02102-0778,
Attention: Paul D. Allen, Corporate Trust Department. Any notice, consent,
direction, request, authorization, waiver or demand on or to any Securityholder
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the address set forth in the Debenture Register.

     Section 14.5. Governing Law. This Indenture and each Debenture shall be
                   -------------
deemed to be a contract made under the law of the State of New York, and for all
purposes shall be governed by and construed in accordance with the law of said
State, without regard to conflict of laws principles thereof.

     Section 14.6. Evidence of Compliance with Conditions Precedent. Upon any
                   ------------------------------------------------
application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that in the opinion of the signers all conditions
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 have been complied with.

     Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not in the opinion of such
person, such condition or covenant has been complied with.

     Section 14.7. Non-Business Days. In any case where the date of payment of
                   -----------------
interest on or principal of the Debentures will be a day that is not a Business
Day, the payment of such interest on or principal of the Debentures need not be
made on such date but may be made on the next succeeding Business Day, except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the original date of payment, and no
interest shall accrue for the period from and after such date.

     Section 14.8. Table of Contents, Headings, etc. The table of contents and
                   --------------------------------
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

     Section 14.9. Execution in Counterparts. This Indenture may be executed in
                   -------------------------
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

                                       43

<PAGE>

     Section 14.10. Separability. In case any one or more of the provisions
                    ------------
contained in this Indenture or in the Debentures shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Indenture or
of such Debentures, but this Indenture and such Debentures shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.

     Section 14.11. Assignment. The Company will have the right at all times to
                    ----------
assign any of its rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company, provided that, in the event of
any such assignment, the Company will remain liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties hereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.

     Section 14.12. Acknowledgment of Rights. The Company agrees that, with
                    ------------------------
respect to any Debentures held by the Trust or the Institutional Trustee of the
Trust, if the Institutional Trustee of the Trust fails to enforce its rights
under this Indenture as the holder of Debentures held as the assets of such
Trust after the holders of a majority in Liquidation Amount of the Capital
Securities of such Trust have so directed such Institutional Trustee, a holder
of record of such Capital Securities may, to the fullest extent permitted by
law, institute legal proceedings directly against the Company to enforce such
Institutional Trustee's rights under this Indenture without first instituting
any legal proceedings against such trustee or any other Person. Notwithstanding
the foregoing, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest (or premium,
if any) or principal on the Debentures on the date such interest (or premium, if
any) or principal is otherwise payable (or in the case of redemption, on the
redemption date), the Company agrees that a holder of record of Capital
Securities of the Trust may directly institute a proceeding against the Company
for enforcement of payment to such holder directly of the principal of (or
premium, if any) or interest on the Debentures having an aggregate principal
amount equal to the aggregate Liquidation Amount of the Capital Securities of
such holder on or after the respective due date specified in the Debentures.

                                   ARTICLE XV.
                           SUBORDINATION OF DEBENTURES
                           ---------------------------

     Section 15.1. Agreement to Subordinate. The Company covenants and agrees,
                   ------------------------
and each holder of Debentures by such Securityholder's acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article XV; and each holder of a Debenture, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.

     The payment by the Company of the principal of, and premium, if any, and
interest on all Debentures shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding at the
date of this Indenture or thereafter incurred; provided, however, that the
                                               --------  -------
Debentures shall rank pari passu in right of payment with the Company's Fixed
Rate Junior Subordinated Deferrable Interest Debentures due June 30, 2028 issued
pursuant to an Indenture dated, June 17, 1998 by and between the Company and
Deutsche Bank (formerly Bankers Trust Company).

     No provision of this Article XV shall prevent the occurrence of any default
or Event of Default hereunder.

     Section 15.2. Default on Senior Indebtedness. In the event and during the
                   ------------------------------
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness of the Company
following any grace period, or in the event that the maturity of

                                       44

<PAGE>

any Senior Indebtedness of the Company has been accelerated because of a default
and such acceleration has not been rescinded or canceled, then, in either case,
no payment shall be made by the Company with respect to the principal (including
redemption) of, or premium, if any, or interest on the Debentures.

     In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.2, such payment shall, subject to Section 15.7, be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.

     Section 15.3. Liquidation, Dissolution, Bankruptcy. Upon any payment by the
                   ------------------------------------
Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due upon all Senior Indebtedness of the Company shall first be paid in
full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company, on account of the principal (and
premium, if any) or interest on the Debentures. Upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, which the Securityholders or the Trustee would be
entitled to receive from the Company, except for the provisions of this Article
XV, shall be paid by the Company, or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Securityholders or by the Trustee under this Indenture if received by
them or it, directly to the holders of Senior Indebtedness (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Securityholders
or to the Trustee.

     In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the benefit of the holders of such Senior Indebtedness.

     For purposes of this Article XV, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XV with respect to
the Debentures to the

                                       45

<PAGE>

payment of all Senior Indebtedness, that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment, and (ii) the rights
of the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XI of this
Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XI of this Indenture. Nothing in Section 15.2 or in
this Section shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.6 of this Indenture.

     Section 15.4. Subrogation. Subject to the payment in full of all Senior
                   -----------
Indebtedness, the Securityholders shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Debentures shall be paid in full. For the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness of
the Company, and the holders of the Debentures be deemed to be a payment or
distribution by the Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article XV are and are intended solely
for the purposes of defining the relative rights of the holders of the
Securities, on the one hand, and the holders of such Senior Indebtedness, on the
other hand.

     Nothing contained in this Article XV or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company, other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XV of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, received
upon the exercise of any such remedy.

     Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
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 XV.

     Section 15.5. Trustee to Effectuate Subordination. Each Securityholder by
                   -----------------------------------
such Securityholder's acceptance thereof authorizes and directs the Trustee on
such Securityholder's behalf to

                                       46

<PAGE>

take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.

     Section 15.6. Notice by the Company. The Company shall give prompt written
                   ---------------------
notice to a Responsible Officer of the Trustee at the Principal Office of the
Trustee of any fact known to the Company that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Debentures pursuant to
the provisions of this Article XV. Notwithstanding the provisions of this
Article XV 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 of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
       --------  -------
provided for in this Section at least 2 Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within 2 Business Days prior to such date.

     The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness (or a
trustee or representative on behalf of such holder), to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder or holders. 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 such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness 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 XV, 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 15.7. Rights of the Trustee; Holders of Senior Indebtedness. The
                   -----------------------------------------------------
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XV in respect of any Senior Indebtedness at any time held by it,
to the same extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.

     With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of such Senior Indebtedness and, subject
to the provisions of Article VI of this Indenture, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver
to Securityholders, the Company or any other Person money or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this Article
XV or otherwise.

     Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.

                                       47

<PAGE>

     Section 15.8. Subordination May Not Be Impaired. No right of any present or
                   ---------------------------------
future holder of any Senior Indebtedness 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 otherwise be charged with.

     Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of such Senior
Indebtedness, 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, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.

                     Signatures appear on the following page

                                       48

<PAGE>

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

                                         NEW SOUTH BANCSHARES, INC.

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

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

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

                                       49

<PAGE>

                      FORM OF JUNIOR SUBORDINATED DEBENTURE

                           [FORM OF FACE OF SECURITY]

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

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

                                     A-1-1

<PAGE>

EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE
WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

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

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

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

         Floating Rate Junior Subordinated Deferrable Interest Debenture

                                       of

                           NEW SOUTH BANCSHARES, INC.

                                 March 26, 2002

     New South Bancshares, Inc., a Delaware corporation (the "Company" which
term includes any successor Person under the Indenture hereinafter referred to),
for value received promises to pay to State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity but solely as
Institutional Trustee for New South Statutory Trust II (the "Holder") or
registered assigns, the principal sum of sixteen million four hundred ninety
five thousand and 00/100 dollars ($16,495,000.00) on March 26, 2032, and to pay
interest on said principal sum from March 26, 2002, or from the most recent
interest payment date (each such date, an "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 26, June 26, September 26 and December 26
of each year commencing June 26, 2002, at an annual rate equal to 5.59%
beginning on (and including) the date of original issuance and ending on (but
excluding) June 26, 2002 and at an annual rate for each successive period
beginning on (and including) June 26, 2002, and each succeeding Interest Payment
Date, and ending on (but excluding) the next succeeding Interest Payment Date
(each a "Distribution Period"), equal to 3-Month LIBOR, determined as described
below, plus 3.60% (the "Coupon Rate"); provided, however, that prior to March
                                       --------  -------
26, 2007, the Coupon Rate shall not exceed 11.00%, applied to the principal
amount hereof, until the principal hereof is paid or duly provided for or made
available for payment, and on any overdue principal and (without duplication) on
any overdue installment of interest at the same rate per annum, compounded
quarterly, from the dates such amounts are due until they are paid or made
available for payment. The amount of interest payable for any period will be
computed on the basis of the actual number of days in the Distribution Period
concerned divided by 360. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then a payment of the interest
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date the payment was originally
payable. The interest installment so payable, and punctually paid or duly

                                     A-1-2

<PAGE>

provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Debenture (or one or more Predecessor
Securities) is registered at the close of business on the regular record date
for such interest installment, which shall be fifteen days prior to the day on
which the relevant Interest Payment Date occurs. Any such interest installment
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such regular record date and may be paid to the Person in whose
name this Debenture (or one or more Predecessor Securities) is registered at the
close of business on a special record date.

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

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

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

     The principal of and interest on this Debenture shall be payable at the
office or agency of the Trustee (or other paying agent appointed by the Company)
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made by check
               --------  -------
mailed to the registered holder at such address as shall appear in the Debenture
Register if a request for a wire transfer by such holder has not been received
by the Company or by wire transfer to an account

                                     A-1-3

<PAGE>

appropriately designated by the holder hereof. Notwithstanding the foregoing, so
long as the holder of this Debenture is the Institutional Trustee, the payment
of the principal of and interest on this Debenture will be made in immediately
available funds at such place and to such account as may be designated by the
Trustee.

     So long as no Event of Default has occurred and is continuing, the Company
shall have the right, from time to time, and without causing an Event of
Default, to defer payments of interest on the Debentures by extending the
interest payment period on the Debentures at any time and from time to time
during the term of the Debentures, for up to 20 consecutive quarterly periods
(each such extended interest payment period, an "Extension Period"), during
which Extension Period no interest (including Additional Interest) shall be due
and payable. No Extension Period may end on a date other than an Interest
Payment Date. At the end of any such Extension Period the Company shall pay all
interest then accrued and unpaid on the Debentures (together with Additional
Interest thereon); provided, however, that no Extension Period may extend beyond
                   --------  -------
the Maturity Date; provided further, however, that during any such Extension
                   -------- -------  -------
Period, the Company shall not and shall not permit any Affiliate to (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 or such Affiliate's
capital stock (other than payments of dividends or distributions to the Company)
or make any guarantee payments with respect to the foregoing or (ii) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company or any Affiliate that rank pari
passu in all respects with or junior in interest to the Debentures (other than,
with respect to clauses (i) and (ii) above, (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the 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 any 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 stockholders' rights plan, or the issuance of
rights, stock or other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant thereto, (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, or (f) payments under the Capital Securities
Guarantee). Prior to the termination of any Extension Period, the Company may
further extend such period, provided that such period together with all such
previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest. The Company must give the Trustee notice of its election to begin or
extend such Extension Period at least 5 Business Days prior to the earlier of
(i) the date interest on the Debentures would have been payable except for the
election to begin such Extension Period or (ii) the date such interest is
payable, but in any event not less than 5 Business Days prior to such record
date.

     The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this

                                     A-1-4

<PAGE>

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

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

     Capitalized terms used and not defined in this Debenture shall have the
meanings assigned in the Indenture dated as of the date of original issuance of
this Debenture between the Trustee and the Company.

                     Signatures appear on the following page

                                     A-1-5

<PAGE>

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

                                         NEW SOUTH BANCSHARES, INC.

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

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

     This is one of the Debentures referred to in the within-mentioned
Indenture.

                                         State Street Bank and Trust Company of
                                         Connecticut,  National Association,
                                         as Trustee

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

                                     A-1-6<PAGE>

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

                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  by and among

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

                           NEW SOUTH BANCSHARES, INC.,
                                   as Sponsor,

                                       and

           LIZABETH R. NICHOLS, RICHARD W. EDWARDS and ROBERT M. COUCH
                               as Administrators,

                           Dated as of March 26, 2002

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

<PAGE>

                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                  <C>
ARTICLE I INTERPRETATION AND DEFINITIONS..............................................................1
     Section 1.1.   Definitions.......................................................................1
                    -----------

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

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

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

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

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

                                       i

<PAGE>

<TABLE>
<S>                                                                                                  <C>
     Section 6.7.   Rights of Holders; Waivers of Past Defaults......................................24
                    -------------------------------------------

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

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

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

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

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

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

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

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

                                       ii

<PAGE>

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                          NEW SOUTH STATUTORY TRUST II

                                 March 26, 2002

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

     WHEREAS, the Institutional Trustee, the Administrators and the Sponsor
established New South Statutory Trust II (the "Trust"), a statutory trust under
                                               -----
the Statutory Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of February 27, 2002 (the "Original Declaration"), and a Certificate of
                                    --------------------
Trust filed with the Secretary of State of the State of Connecticut on February
27, 2002, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain debentures of the Debenture Issuer (as
defined herein);

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

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

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

                                    ARTICLE I

                         INTERPRETATION AND DEFINITIONS

     Section 1.1. Definitions. Unless the context otherwise requires:
                  -----------

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

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

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

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

                                       1

<PAGE>

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

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

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

     "Administrators" means each of Lizabeth R. Nichols, Richard W. Edwards and
      --------------
Robert M. Couch, solely in such Person's capacity as Administrator of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.

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

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

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

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

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

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

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

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

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

     "Certificate" means any certificate evidencing Securities.
      -----------

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

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

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

                                       2

<PAGE>

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

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

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

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

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

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

     "Debenture Issuer" means New South Bancshares, Inc., a Delaware
      ----------------
corporation, in its capacity as issuer of the Debentures under the Indenture.

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

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

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

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

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

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

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

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

     "Distribution Rate" means, for the period beginning on (and including) the
      -----------------
date of original issuance and ending on (but excluding) June 26, 2002, 5.59%,
and for the period beginning on (and including) June 26, 2002 and thereafter,
the Coupon Rate.

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

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

                                       3

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       4

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       5

<PAGE>

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

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

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

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

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

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

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

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

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

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

     "Sponsor" means New South Bancshares, Inc., a Delaware corporation, or any
      -------
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.

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

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

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

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

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

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

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

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

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

                                       6

<PAGE>

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

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

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

                                   ARTICLE II

                                  ORGANIZATION

     Section 2.1. Name. The Trust is named "New South Statutory Trust II," as
                  ----
such name may be modified from time to time by the Administrators following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrators.

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

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

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

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

                                       7

<PAGE>

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

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

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

               (A) the issuance and sale of the Securities;

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

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

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

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

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

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

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

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

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

                                       8

<PAGE>

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

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

               (A) the establishment of the Property Account;

               (B) the receipt of the Debentures;

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

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

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

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

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

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

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

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

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

                                       9

<PAGE>

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

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

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

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

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

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

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

                                       10

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       11

<PAGE>

     Section 2.8. Powers and Duties of the Institutional Trustee.
                  ----------------------------------------------

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

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

     (c) The Institutional Trustee shall:

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

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

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

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

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

                                       12

<PAGE>

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

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

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

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

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

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

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

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

                                       13

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       14

<PAGE>

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

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

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

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

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

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

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

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

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

                                       15

<PAGE>

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

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

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

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

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

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

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

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

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

     Section 2.14. Mergers.
                   -------

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

                                       16

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       17

<PAGE>

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

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

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

                                  ARTICLE III

                                     SPONSOR

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

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

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

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

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

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

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

                                       18

<PAGE>

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

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

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

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

                                   ARTICLE IV

                    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

     Section 4.1. Institutional Trustee; Eligibility.
                  ----------------------------------

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

          (i) not be an Affiliate of the Sponsor;

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

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

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

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

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

                                       19

<PAGE>

     Section 4.2. Administrators. Each Administrator shall be a U.S. Person, 21
                  --------------
years of age or older and authorized to bind the Sponsor. The initial
Administrators shall be Lizabeth R. Nichols, Richard W. Edwards and Robert M.
Couch. There shall at all times be at least one Administrator. Except where a
requirement for action by a specific number of Administrators is expressly set
forth in this Declaration and except with respect to any action the taking of
which is the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator.

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

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

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

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

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

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

                                       20

<PAGE>

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

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

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

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

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

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

                                       21

<PAGE>

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

     Section 4.7. Delegation of Power.
                  -------------------

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

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

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

                                    ARTICLE V

                                  DISTRIBUTIONS

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

                                   ARTICLE VI

                             ISSUANCE OF SECURITIES

     Section 6.1. General Provisions Regarding Securities.
                  ---------------------------------------

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

                                       22

<PAGE>

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

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

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

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

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

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

                                       23

<PAGE>

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

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

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

     If:

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

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

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

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

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

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

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

                                       24

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                       25

<PAGE>

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

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

                                   ARTICLE VII

                      DISSOLUTION AND TERMINATION OF TRUST

     Section 7.1. Dissolution and Termination of Trust.
                  ------------------------------------

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

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

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

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

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

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

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

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

                                       26

<PAGE>

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

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

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

                                  ARTICLE VIII

                              TRANSFER OF INTERESTS

     Section 8.1. General.
                  -------

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

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

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

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

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

                                       27

<PAGE>

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

     Section 8.2. Transfer Procedures and Restrictions.
                  ------------------------------------

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

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

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

                                       28

<PAGE>

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

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

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

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

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

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

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

                                       29

<PAGE>

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

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

                                   ARTICLE IX

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

     Section 9.1. Liability.
                  ---------

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

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

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

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

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

     Section 9.2. Exculpation.
                  -----------

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

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

                                       30

<PAGE>

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

     Section 9.3. Fiduciary Duty.
                  --------------

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

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

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

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

     Section 9.4. Indemnification.
                  ---------------

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

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

                                       31

<PAGE>

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

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

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

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

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

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

                                       32

<PAGE>

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

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

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

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

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

     Section 9.6. Compensation; Fee. The Sponsor agrees:
                  -----------------

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

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

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

                                       33

<PAGE>

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

                                    ARTICLE X

                                   ACCOUNTING

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

     Section 10.2. Certain Accounting Matters.
                   --------------------------

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

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

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

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

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

                                       34

<PAGE>

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

                                   ARTICLE XI

                             AMENDMENTS AND MEETINGS

     Section 11.1. Amendments.
                   ----------

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

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

          (i) the Institutional Trustee shall have first received

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

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

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

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

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

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

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

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

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

                                       35

<PAGE>

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

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

          (i) cure any ambiguity;

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

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

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

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

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

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

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

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

                                       36

<PAGE>

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

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

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

                                  ARTICLE XII

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

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

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

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

                                       37

<PAGE>

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

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

                                  ARTICLE XIII

                                  MISCELLANEOUS

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

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

         New South Statutory Trust II
         c/o New South Bancshares, Inc.
         1900 Crestwood Boulevard
         Birmingham, Alabama  35210
         Attention:  Richard W. Edwards
         Telecopy:  205-951-4092

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

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

         With a copy to:

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

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

         New South Bancshares, Inc.
         1900 Crestwood Boulevard
         Birmingham, Alabama  35210
         Attention:  Richard W. Edwards
         Telecopy:  205-951-4092

                                       38

<PAGE>

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

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

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

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

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

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

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

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

                     Signatures appear on the following page

                                       39

<PAGE>

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

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

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

                                         NEW SOUTH BANCSHARES, INC., as Sponsor

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

                                         NEW SOUTH STATUTORY TRUST II

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

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

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

                                       40

<PAGE>

                                     ANNEX I

                               TERMS OF SECURITIES

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

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

          (a) 16,000 Floating Rate Capital Securities of New South Statutory
Trust II (the "Trust"), with an aggregate stated liquidation amount with respect
to the assets of the Trust of sixteen million and 00/100 dollars
($16,000,000.00) and a stated liquidation amount with respect to the assets of
the Trust of $1,000.00 per Capital Security, are hereby designated for the
purposes of identification only as the "Capital Securities". The Capital
                                        ------------------
Security Certificates evidencing the Capital Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.

          (b) 495 Floating Rate Common Securities of the Trust (the "Common
                                                                     ------
Securities") will be evidenced by Common Security Certificates substantially in
----------
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.

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

          (a) Distributions will be payable on each Security for the period
beginning on (and including) the date of original issuance and ending on (but
excluding) June 26, 2002 at a rate per annum of 5.59% and shall bear interest
for each successive period beginning on (and including) June 26, 2002, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each, a "Distribution Period") at a rate
                                               -------------------
per annum equal to the 3-Month LIBOR, determined as described below, plus 3.60%
(the "Coupon Rate"); provided, however, that prior to March 26, 2007, the Coupon
      -----------    --------  -------
Rate shall not exceed 11.00%, applied to the stated liquidation amount thereof,
such rate being the rate of interest payable on the Debentures to be held by the
Institutional Trustee. Distributions in arrears for more than one quarterly
period will bear interest thereon compounded quarterly at the applicable
Distribution Rate (to the extent permitted by law). A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. In the event that any date on which a Distribution is
payable on the Securities is not a Business Day, then payment of interest
payable on such date shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. The amount of interest payable for any Distribution Period
will be calculated by applying the Coupon Rate to the principal amount
outstanding at the commencement of the Distribution Period and multiplying each
such amount by the actual number of days in the Distribution Period concerned
divided by 360. All percentages resulting from any calculations on the Capital
Securities will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% or .09876545 being rounded to 9.87655% or .0987655, and
all dollar

                                      I-1

<PAGE>

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

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

                                      I-2

<PAGE>

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

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

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

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

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

                                      I-3

<PAGE>

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

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

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

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

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

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

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

                                      I-4

<PAGE>

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

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

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

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

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

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

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

                                      I-5

<PAGE>

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

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

     "Maturity Date" means March 26, 2032.
      -------------

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

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

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

     "Special Redemption Date" means a Redemption Date on which a Special Event
      -----------------------
redemption occurs.

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

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

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

                                      I-6

<PAGE>

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

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

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

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

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

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

                                      I-7

<PAGE>

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

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

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

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

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

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

                                      I-8

<PAGE>

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

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

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

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

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

                                      I-9

<PAGE>

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

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

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

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

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

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

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

                                      I-10

<PAGE>

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

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

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

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

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

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

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

                                      I-11

<PAGE>

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

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

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

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

                                      I-12

<PAGE>

                                   EXHIBIT A-1

                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

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

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

                                     A-1-1

<PAGE>

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

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

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

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

          Certificate Number P-1             16,000 Capital Securities

                                 March 26, 2002

             Certificate Evidencing Floating Rate Capital Securities

                                       of

                          New South Statutory Trust II

               (liquidation amount $1,000.00 per Capital Security)

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

                                     A-1-2

<PAGE>

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

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

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

                       Signatures appear on following page

                                     A-1-3

<PAGE>

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

                                                    NEW SOUTH STATUTORY TRUST II

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

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

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

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

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

                                     A-1-4

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

     Distributions payable on each Capital Security will be payable at an annual
rate equal to 5.59% beginning on (and including) the date of original issuance
and ending on (but excluding) June 26, 2002 and at an annual rate for each
successive period beginning on (and including) June 26, 2002, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 3.60% (the "Coupon Rate");
provided, however, that prior to March 26, 2007, the Coupon Rate shall not
--------- --------
exceed 11.00%, applied to the stated liquidation amount of $1,000.00 per Capital
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than a
quarterly period will bear interest thereon compounded quarterly at the
Distribution Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes payments of Interest and any principal
on the Debentures held by the Institutional Trustee unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. As used herein,
"Determination Date" means the date that is two London Banking Days (i.e., a
business day in which dealings in deposits in U.S. dollars are transacted in the
London interbank market) preceding the commencement of the relevant Distribution
Period. In the event that any date on which a Distribution is payable on this
Capital Security is not a Business Day, then a payment of the Distribution
payable on such date will be made on the next succeeding day which is a Business
Day (and without any Distribution or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date the payment was
originally payable. The amount of interest payable for any Distribution Period
will be calculated by applying the Coupon Rate to the principal amount
outstanding at the commencement of the Distribution Period and multiplying each
such amount by the actual number of days in the Distribution Period concerned
divided by 360.

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

                                     A-1-5

<PAGE>

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

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

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

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

                                     A-1-6

<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

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

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

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

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

     Signature Guarantee:/1/

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

                                     A-1-7

<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

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

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

          Certificate Number C-1                 495 Common Securities

                                 March 26, 2002

             Certificate Evidencing Floating Rate Common Securities

                                       of

                          New South Statutory Trust II

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

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

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

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

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

                                     A-2-1

<PAGE>

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

                                                   NEW SOUTH STATUTORY TRUST II

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

                                     A-2-2

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

     Distributions payable on each Common Security will be identical in amount
to the Distributions payable on each Capital Security, which is at an annual
rate equal to 5.59% beginning on (and including) the date of original issuance
and ending on (but excluding) June 26, 2002 and at an annual rate for each
successive period beginning on (and including) June 26, 2002, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 3.60% (the "Coupon Rate");
provided, however, that prior to March 26, 2007, the Coupon Rate shall not
--------  -------
exceed 11.00%, applied to the stated liquidation amount of $1,000.00 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
period will bear interest thereon compounded at the Distribution Rate (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes payments of Interest and any principal on the Debentures held by the
Institutional Trustee unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. As used herein, "Determination Date" means the date that is
two London Banking Days (i.e., a business day in which dealings in deposits in
U.S. dollars are transacted in the London interbank market) preceding the
commencement of the relevant Distribution Period. In the event that any date on
which a Distribution is payable on this Common Security is not a Business Day,
then a payment of the Distribution payable on such date will be made on the next
succeeding day which is a Business Day (and without any Distribution or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable. The amount of interest payable
for any Distribution Period will be calculated by applying the Coupon Rate to
the principal amount outstanding at the commencement of the Distribution Period
and multiplying each such amount by the actual number of days in the
Distribution Period concerned divided by 360.

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

                                     A-2-3

<PAGE>

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

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

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

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

                                     A-2-4

<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

                                                                           agent
                    ------------------------------------------------------

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

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

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

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

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

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

     Signature Guarantee/2/

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

                                     A-2-5

<PAGE>

                                    EXHIBIT B

                          SPECIMEN OF INITIAL DEBENTURE

                                      B-1

<PAGE>

                                    EXHIBIT C

                               PLACEMENT AGREEMENT

                                      C-1

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