Document:

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                                                                    EXHIBIT 10yy

                         FPIC Capital STATUTORY TRUST II

                           FPIC Insurance Group, Inc.

                             SUBSCRIPTION AGREEMENT

                                  May 15, 2003

     THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among FPIC Capital
Statutory Trust II (the "Trust"), a statutory trust created under the
Connecticut Statutory Trust Act (Chapter 615 of Title 34 of the Connecticut
General Statutes, Section 500, et seq.), FPIC Insurance Group, Inc., a Florida
corporation, with its principal offices located at 225 Water Street, Suite 1400,
Jacksonville, Florida 32202 (the "Company" and, collectively with the Trust, the
"Offerors"), and I-Preferred Term Securities II, Ltd. (the "Purchaser").

                                    RECITALS:

     A.   The Trust desires to issue 15,000 of its Floating Rate Capital
Securities (the "Capital Securities"), liquidation amount $1,000.00 per Capital
Security, representing an undivided beneficial interest in the assets of the
Trust (the "Offering"), to be issued pursuant to an Amended and Restated
Declaration of Trust (the "Declaration") by and among the Company, U.S. Bank
National Association ("U.S. Bank"), the administrators named therein, and the
holders (as defined therein), which Capital Securities are to be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the terms of a Guarantee Agreement between
the Company and U.S. Bank, as trustee (the "Guarantee"); and

     B.     The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale by the Trust to the Company of its
common securities, and will be used by the Trust to purchase an equivalent
amount of Floating Rate Junior Subordinated Deferrable Interest Debentures of
the Company (the "Debentures") to be issued by the Company pursuant to an
indenture to be executed by the Company and U.S. Bank, as trustee (the
"Indenture"); and

     C.     In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE 1

                     PURCHASE AND SALE OF CAPITAL SECURITIES

     1.1    Upon the execution of this Agreement, the Purchaser hereby agrees to
purchase from the Trust 15,000 Capital Securities at a price equal to $1,000.00
per Capital Security (the "Purchase Price") and the Trust agrees to sell such
Capital Securities to the Purchaser for said Purchase Price. The rights and
preferences of the Capital Securities are set forth in the Declaration. The
Purchase Price is payable in immediately available funds on May 15, 2003, or
<PAGE>

such other business day as may be designated by the Purchaser, but in no event
later than May 22, 2003 (the "Closing Date"). The Offerors shall provide the
Purchaser wire transfer instructions no later than 1 day following the date
hereof.

     1.2    The certificate for the Capital Securities shall be delivered by the
Trust on the Closing Date to the Purchaser or its designee.

     1.3    The Placement Agreement, dated April 25, 2003 (the "Placement
Agreement"), among the Offerors and the Placement Agents identified therein
includes certain representations and warranties, covenants and conditions to
closing and certain other matters governing the Offering. The Placement
Agreement is hereby incorporated by reference into this Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agents and
the Purchaser under the Placement Agreement and shall be entitled to enforce the
obligations of the Offerors under such Placement Agreement as fully as if the
Purchaser were a party to such Placement Agreement.

                                   ARTICLE 2

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     2.1    The Purchaser understands and acknowledges that neither the Capital
Securities, the Debentures nor the Guarantee have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any other
applicable securities laws, are being offered for sale by the Trust in
transactions not requiring registration under the Securities Act, and may not be
offered, sold, pledged or otherwise transferred by the Purchaser except in
compliance with the registration requirements of the Securities Act or any other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.

     2.2    The Purchaser represents, warrants and certifies that (i) it is not
a "U.S. person" as such term is defined in Rule 902 under the Securities Act,
(ii) it is not acquiring the Capital Securities for the account or benefit of
any such U.S. person, (iii) the offer and sale of Capital Securities to the
Purchaser constitutes an "offshore transaction" under Regulation S of the
Securities Act, and (iv) it will not engage in hedging transactions with regard
to the Capital Securities unless such transactions are conducted in compliance
with the Securities Act and the Purchaser agrees to the legends and transfer
restrictions set forth on the Capital Securities certificate.

     2.3    The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment, and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
under Rule 144A or any other exemption from registration available under the
Securities Act or any other applicable securities law.

     2.4    The Purchaser represents and warrants that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties specified herein,

                                       2
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and to consummate the transactions contemplated herein and it has full right and
power to subscribe for Capital Securities and perform its obligations pursuant
to this Agreement.

     2.5    The Purchaser, a Cayman Islands Company whose business includes
issuance of certain notes and acquiring the Capital Securities and other similar
securities, represents and warrants that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of purchasing the Capital Securities, has had the opportunity to ask
questions of, and receive answers and request additional information from, the
Offerors and is aware that it may be required to bear the economic risk of an
investment in the Capital Securities.

     2.6    The Purchaser represents and warrants that no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required for the performance by the Purchaser of its obligations under this
Agreement or to consummate the transactions contemplated herein.

     2.7    The Purchaser represents and warrants that this Agreement has been
duly authorized, executed and delivered by the Purchaser.

     2.8    The Purchaser represents and warrants that (i) the Purchaser is not
in violation or default of any term of its Memorandum of Association or Articles
of Association, of any provision of any mortgage, indenture, agreement,
instrument or contract to which it is a party or by which it is bound or of any
judgment, decree, order, writ or, to its knowledge, any statute, rule or
regulation applicable to the Purchaser which would prevent the Purchaser from
performing any material obligation set forth in this Agreement; and (ii) the
execution, delivery and performance of and compliance with this Agreement, and
the consummation of the transactions contemplated herein, will not, with or
without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term,
or the suspension, revocation, impairment, forfeiture or non-renewal of any
permit, license, authorization or approval applicable to the Purchaser, its
business or operations or any of its assets or properties which would prevent
the Purchaser from performing any material obligations set forth in this
Agreement.

     2.9    The Purchaser represents and warrants that the Purchaser is an
exempted company with limited liability duly incorporated, validly existing and
in good standing under the laws of the jurisdiction where it is organized, with
full power and authority to perform its obligations under this Agreement.

     2.10   The Purchaser understands and acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that, if any of the
acknowledgments, representations, warranties or agreements deemed to have been
made by it by its purchase of the Capital Securities are no longer accurate, it
shall promptly notify the Company.

     2.11   The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.

                                       3
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                                   ARTICLE 3

                                  MISCELLANEOUS

     3.1    Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:

            To the Offerors:

            FPIC Insurance Group, Inc.
            225 Water Street, Suite 1400
            Jacksonville, Florida 32202
            Attention:  Kim D. Thorpe
            Fax:  904-633-9579

            To the Purchaser:

            I-Preferred Term Securities II, Ltd.
            c/o Maples Finance Limited
            P.O. Box 1093 GT
            Queensgate House
            South Church Street
            George Town, Grand Cayman
            Cayman Islands
            Attention: The Directors
            Fax: 345-945-7100

            Unless otherwise expressly provided herein, notices shall be deemed
to have been given on the date of mailing, except notice of change of address,
which shall be deemed to have been given when received.

     3.2    This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.

     3.3    Upon the execution and delivery of this Agreement by the Purchaser,
this Agreement shall become a binding obligation of the Purchaser with respect
to the purchase of Capital Securities as herein provided.

     3.4    NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN

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ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

     3.5    The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.

     3.6    This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.

     3.7    In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Offerors' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.

                     SIGNATURES APPEAR ON THE FOLLOWING PAGE

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     IN WITNESS WHEREOF, I have set my hand the day and year first written
above.

I-PREFERRED TERM SECURITIES II, LTD.

By:    /s/ Hellen Allen
   --------------------------------

Name:  Helen Allen
     ------------------------------

Title:
      -----------------------------

     IN WITNESS WHEREOF, this Agreement is agreed to and accepted as of the day
and year first written above.

                                         FPIC INSURANCE GROUP, INC.

                                         By:        /s/ Kim D. Thorpe
                                                -------------------------------

                                         Name:        Kim D. Thorpe
                                                -------------------------------

                                         Title: Exec. VP and CFO
                                                -------------------------------

                                         FPIC CAPITAL STATUTORY TRUST II

                                         By:        /s/ Roberta Goes Cown
                                                -------------------------------

                                         Name:        Roberta Goes Cown
                                                -------------------------------

                                         Title:   Administrator

                                       6<PAGE>

            =========================================================
                                                      EXHIBIT 10 (zz)

                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  by and among

                         U.S. BANK NATIONAL ASSOCIATION,
                            AS INSTITUTIONAL TRUSTEE,

                           FPIC INSURANCE GROUP, INC.,
                                   AS SPONSOR,

                                       AND
               KIM D. THORPE, ROBERTA GOES COWN AND PAMELA D. DEYO
                               AS ADMINISTRATORS,

                            DATED AS OF MAY 15, 2003

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

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<TABLE>
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                                              TABLE OF CONTENTS
                                                                                                       PAGE

<S>                                                                                                     <C>
ARTICLE I.     INTERPRETATION AND DEFINITIONS............................................................1
    Section 1.1.   Definitions...........................................................................1

ARTICLE II.    ORGANIZATION..............................................................................8
    Section 2.1.   Name..................................................................................8
    Section 2.2.   Office................................................................................8
    Section 2.3.   Purpose...............................................................................8
    Section 2.4.   Authority.............................................................................8
    Section 2.5.   Title to Property of the Trust........................................................9
    Section 2.6.   Powers and Duties of the Institutional Trustee and the Administrators.................9
    Section 2.7.   Prohibition of Actions by the Trust and the Institutional Trustee....................13
    Section 2.8.   Powers and Duties of the Institutional Trustee.......................................14
    Section 2.9.   Certain Duties and Responsibilities of the Institutional Trustee and Administrators..15
    Section 2.10.  Certain Rights of Institutional Trustee..............................................17
    Section 2.11.  Execution of Documents...............................................................19
    Section 2.12.  Not Responsible for Recitals or Issuance of Securities...............................19
    Section 2.13.  Duration of Trust....................................................................19
    Section 2.14.  Mergers..............................................................................19

ARTICLE III.   SPONSOR..................................................................................21
    Section 3.1.   Sponsor's Purchase of Common Securities..............................................21
    Section 3.2.   Responsibilities of the Sponsor......................................................21
    Section 3.3.   Expenses.............................................................................21
    Section 3.4.   Right to Proceed.....................................................................22

ARTICLE IV.    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS.................................................22
    Section 4.1.   Institutional Trustee; Eligibility...................................................22
    Section 4.2.   Administrators.......................................................................23
    Section 4.3.   Appointment, Removal and Resignation of Institutional Trustee and Administrators.....23
    Section 4.4.   Institutional Trustee Vacancies......................................................24
    Section 4.5.   Effect of Vacancies..................................................................25
    Section 4.6.   Meetings of the Institutional Trustee and the Administrators.........................25
    Section 4.7.   Delegation of Power..................................................................25
    Section 4.8.   Conversion, Consolidation or Succession to Business..................................25

ARTICLE V.     DISTRIBUTIONS............................................................................26
    Section 5.1.   Distributions........................................................................26

ARTICLE VI.    ISSUANCE OF SECURITIES...................................................................26
    Section 6.1.   General Provisions Regarding Securities..............................................26
</TABLE>

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<TABLE>
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<S>                                                                                                     <C>
    Section 6.2.   Paying Agent, Transfer Agent and Registrar...........................................27
    Section 6.3.   Form and Dating......................................................................27
    Section 6.4.   Mutilated, Destroyed, Lost or Stolen Certificates....................................28
    Section 6.5.   Temporary Securities.................................................................28
    Section 6.6.   Cancellation.........................................................................28
    Section 6.7.   Rights of Holders; Waivers of Past Defaults..........................................29

ARTICLE VII.   DISSOLUTION AND TERMINATION OF TRUST.....................................................30
    Section 7.1.   Dissolution and Termination of Trust.................................................30

ARTICLE VIII.  TRANSFER OF INTERESTS....................................................................31
    Section 8.1.   General..............................................................................31
    Section 8.2.   Transfer Procedures and Restrictions.................................................32
    Section 8.3.   Deemed Security Holders..............................................................35

ARTICLE IX.    LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS........35
    Section 9.1.   Liability............................................................................35
    Section 9.2.   Exculpation..........................................................................35
    Section 9.3.   Fiduciary Duty.......................................................................36
    Section 9.4.   Indemnification......................................................................36
    Section 9.5.   Outside Businesses...................................................................39
    Section 9.6.   Compensation; Fee....................................................................39

ARTICLE X.     TAX AND ACCOUNTING.......................................................................39
    Section 10.1.  Fiscal Year..........................................................................39
    Section 10.2.  Certain Accounting Matters...........................................................40
    Section 10.3.  Banking..............................................................................40
    Section 10.4.  Withholding..........................................................................40
    Section 10.5.  Intention of the Parties.............................................................41

ARTICLE XI.    AMENDMENTS AND MEETINGS..................................................................41
    Section 11.1.  Amendments...........................................................................41
    Section 11.2.  Meetings of the Holders of Securities; Action by Written Consent.....................42

ARTICLE XII.   REPRESENTATIONS OF INSTITUTIONAL TRUSTEE.................................................44
    Section 12.1.  Representations and Warranties of Institutional Trustee..............................44

ARTICLE XIII.  MISCELLANEOUS............................................................................44
    Section 13.1.  Notices..............................................................................44
    Section 13.2.  Governing Law........................................................................45
    Section 13.3.  Intention of the Parties.............................................................46
    Section 13.4.  Headings.............................................................................46
    Section 13.5.  Successors and Assigns...............................................................46
    Section 13.6.  Partial Enforceability...............................................................46
    Section 13.7.  Counterparts.........................................................................46

                                                        ii

</TABLE>

<PAGE>

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

                                      iii

<PAGE>

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                         FPIC CAPITAL STATUTORY TRUST II

                                  MAY 15, 2003

     AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of May 15, 2003, 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 FPIC Capital 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 April 17, 2003 (the "ORIGINAL DECLARATION"), and a Certificate
of Trust filed with the Secretary of the State of the State of Connecticut on
April 17, 2003, 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;

<PAGE>

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

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

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

     "ADDITIONAL INTEREST" has the meaning set forth in the Indenture.

     "ADDITIONAL SUMS" 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 Kim D. Thorpe, Roberta Goes Cown and Pamela
D. Deyo, 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.

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<PAGE>

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

     "CERTIFICATE" means any certificate evidencing Securities.

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

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

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

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

     "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 FPIC Insurance Group, Inc., a Florida corporation,
in its capacity as issuer of the Debentures under the Indenture.

     "DEBENTURE TRUSTEE" means U.S. Bank 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 2033 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 2(a) of Annex
I.

     "DIRECT ACTION" has the meaning set forth in Section 2.8(d).

                                       3
<PAGE>

     "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) August 15, 2003, the
rate per annum of 5.41125%, and for the period beginning on (and including)
August 15, 2003, and thereafter, the Coupon Rate.

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

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

     (b)    default by the Trust in the payment of any Optional 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.

     "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.

                                       4
<PAGE>

     "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.

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

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

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

     "INVESTMENT COMPANY EVENT" has the meaning set forth in paragraph 4(a) of
Annex I.

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

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

     "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 2(a) of Annex I.

     "OFFICERS' CERTIFICATES" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person, and, with respect to the
Administrators, a certificate signed by at least two Administrators. 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 individual signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;

                                       5
<PAGE>

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

     (c)    a statement that each such individual signing the Officers'
Certificate has made such examination or investigation as, in such individual's
opinion, is necessary to enable such individual 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.

     "OPTIONAL REDEMPTION DATE" has the meaning set forth in paragraph 4(a) of
Annex I.

     "OPTIONAL REDEMPTION PRICE" has the meaning set forth in paragraph 4(a) 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/DISTRIBUTION NOTICE" has the meaning set forth in paragraph
4(e) of Annex I.

     "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.

                                       6
<PAGE>

     "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 FPIC Insurance Group, Inc., a Florida 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.

     "SUBSIDIARY" means with respect to any Person, (a) 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, (b) 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 (c) 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.

     "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

                                       7
<PAGE>

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 2(a) of Annex I.

     "TRANSFER AGENT" has the meaning set forth in Section 6.2.

     "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 "FPIC Capital 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 U.S. Bank 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

                                       8
<PAGE>

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.

     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 and
            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;

                                       9
<PAGE>

                        (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

                        (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;

                                       10
<PAGE>

                        (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 the 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.

     (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 (A) to
cause the Trust to fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes or (B) 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.

                                       11
<PAGE>

     (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.

     (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.

                                       12
<PAGE>

     (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.

                                       13
<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, 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 that arise 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

                                       14
<PAGE>

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:

                   (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 the Institutional Trustee or
such Administrator shall have reasonable grounds to believe that repayment of
such funds or adequate protection against such risk of liability is not
reasonably assured to the Institutional Trustee or such Administrator. 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

                                       15
<PAGE>

liability for the Institutional Trustee's or such Administrator's own negligent
act, the Institutional Trustee's or such Administrator's own negligent failure
to act, or the Institutional Trustee's or such Administrator's 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 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

                                       16
<PAGE>

     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
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

                                       17
<PAGE>

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 (that has not been cured or waived pursuant to Section 6.7), 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
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;

                                       18
<PAGE>

     (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 body, except as
described in Sections 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:

                                       19
<PAGE>

                   (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 a 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;

                                       20
<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

                                       21
<PAGE>

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

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

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

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

                                  ARTICLE IV.

                    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

     SECTION 4.1.  INSTITUTIONAL TRUSTEE; ELIGIBILITY.

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

                   (i)     not be an Affiliate of the Sponsor;

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

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

                                       22
<PAGE>

     (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 eiminate 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 U.S. Bank National
Association.

     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 Kim D. Thorpe, Roberta Goes Cown and Pamela D. Deyo.
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

                                       23
<PAGE>

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 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

                                       24
<PAGE>

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 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

                                       25
<PAGE>

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, to the extent funds are available for that
purpose, 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.

     (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

                                       26
<PAGE>

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 they 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 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

                                       27
<PAGE>

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 $100,000.00 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.

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<PAGE>

     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 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, subject to the provisions hereof, 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 under the Indenture or any Indenture Event of Default, except a
default or Indenture Event of Default in the payment of

                                       29
<PAGE>

principal or interest (unless such default or Indenture 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 under the Indenture or an Indenture 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 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 May 15, 2038, 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

                                       30
<PAGE>

     may be) upon (A) the filing of a certificate of dissolution or its
     equivalent with respect to the Sponsor, and (B)(I) 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 (II) 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, 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;

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

                   (vi)    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

                   (vii)   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 the 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.

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<PAGE>

     (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
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 Institutional 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:

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<PAGE>

            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

                                       33
<PAGE>

     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 $100,000.00 (100 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 $100,000.00
     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.

            THIS SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF TREASURY
     REGULATIONS SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND
     WITHHOLDING TAX PURPOSES.

            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.

     (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.

                                       34
<PAGE>

     (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 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

                                       35
<PAGE>

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 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

                                       36
<PAGE>

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 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

                                       37
<PAGE>

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 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

                                       38
<PAGE>

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.

     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.

                               TAX AND 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.

                                       39
<PAGE>

     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, if any,
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 Sponsor in the United States, as `United
States' is defined in Section 7701(a)(9) of the Code (or at the principal office
of the Trust if the Sponsor has no such principal office in the United States),
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, if any, 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

                                       40
<PAGE>

any authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any 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.

     SECTION 10.5. 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.

                                  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.

                                       41
<PAGE>

     (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)    Sections 9.1(b) and 9.1(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.

     (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), (iii) or (iv) 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

                                       42
<PAGE>

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 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

                                       43
<PAGE>

     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);

     (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):

                                       44
<PAGE>

            FPIC Capital Statutory Trust II
            c/o FPIC Insurance Group, Inc.
            225 Water Street, Suite 1400
            Jacksonville, Florida 32202
            Attention: Kim D. Thorpe
            Telecopy: 904-633-9579

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):

            U.S. Bank National Association
            225 Asylum Street, Goodwin Square
            Hartford, Connecticut  06103
            Attention: Vice President, Corporate Trust Services
            Telecopy: 860-244-1889

            With a copy to:

            U.S. Bank National Association
            1 Federal Street
            Boston, Massachusetts  02110
            Attention: Paul D. Allen, Corporate Trust Services
            Telecopy: 617-603-6665

     (b)    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):

            FPIC Insurance Group, Inc.
            225 Water Street, Suite 1400
            Jacksonville, Florida 32202
            Attention:  Kim D. Thorpe
            Telecopy:  904-633-9579

     (c)    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

                                       45
<PAGE>

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

                                       46
<PAGE>

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

                            U.S. BANK NATIONAL ASSOCIATION,
                            as Institutional Trustee

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

                            FPIC Insurance Group, Inc., as Sponsor

                            By:      /s/ John R. Byers
                               --------------------------------------
                                  Name:  John R. Byers
                                  Title:  President and Chief Executive Officer

                            FPIC Capital STATUTORY TRUST II

                            By:      /s/ Kim D. Thorpe
                               --------------------------------------
                                  Kim D. Thorpe
                                  Administrator

                            By:     /s/ Roberta Goes Cown
                               --------------------------------------
                                  Roberta Goes Cown
                                  Administrator

                            By:    /s/ Pamela D. Deyo
                               --------------------------------------
                                  Pamela D. Deyo
                                  Administrator

                                       47
<PAGE>

                                     ANNEX I

                               TERMS OF SECURITIES

            Pursuant to Section 6.1 of the Amended and Restated Declaration of
Trust, dated as of May 15, 2003 (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)    15,000 Floating Rate Capital Securities of FPIC Capital Statutory
Trust II (the "Trust"), with an aggregate stated liquidation amount with respect
to the assets of the Trust of fifteen million dollars ($15,000,000.00) 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)    464 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) August 15, 2003 at a rate per annum of 5.41125% and shall bear
interest for each successive period beginning on (and including) August 15,
2003, 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 4.10% (the "COUPON RATE"); PROVIDED, HOWEVER, that prior to May 15,
2008, the Coupon Rate shall not exceed 12.50%, 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 will bear
interest thereon compounded quarterly at the applicable Distribution Rate (to
the extent permitted by law). Distributions, as used herein, include cash
distributions, any such compounded distributions and any Additional Sums payable
on the Debentures unless otherwise noted. 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 the
Distribution 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

                                      I-1
<PAGE>

the same force and effect as if made on the date such payment was originally
payable. The amount of the Distribution payable for any Distribution Period will
be calculated by applying the Distribution Rate to the stated liquidation 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 amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward)).

     "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 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.

                                      I-2
<PAGE>

     The Interest 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.

     "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.

     "INTEREST RATE" means for the period beginning on (and including) the date
of original issuance and ending on (but excluding) August 15, 2003 the rate per
annum of 5.41125% and for each Distribution Period thereafter, the Coupon Rate.

     "MATURITY DATE" means May 15, 2033.

            (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 August 15, November 15, February 15 and May 15 of each year,
commencing on August 15, 2003 (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, during which Extension Period no interest shall be due and payable.
During any Extension Period, interest will continue to accrue on the Debentures,
and interest on such accrued interest will accrue at an annual rate equal to the
Distribution Rate in effect for each such Extension Period, compounded quarterly
(from the date such interest would have been payable were it not for the
Extension Period, to the extent permitted by law (such interest referred to
herein as "Additional Interest") 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, that during any such Extension
Period, the Debenture Issuer shall not, and shall not permit any Affiliate of
the Debenture Issuer controlled by the Debenture Issuer 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 Debenture Issuer's or such
Affiliates' capital stock (other than payments of dividends or distributions to
the Debenture Issuer or an Affiliate of the Debenture Issuer controlled by 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 of the Debenture Issuer controlled by the Debenture Issuer 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 or any
Affiliate of the Debenture Issuer controlled by 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 of such Affiliate (or securities convertible
into or exercisable for such capital stock) as

                                      I-3
<PAGE>

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 an
Affiliate of the Debenture Issuer controlled by the Debenture Issuer) for any
class or series of the Debenture Issuer's capital stock (or in the case of an
Affiliate of the Debenture Issuer controlled by the Debenture Issuer, any class
or series of such Affiliate'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 (or in the case of indebtedness of an Affiliate of the
Debenture Issuer controlled by the Debenture Issuer, of any class or series of
such Affiliate's indebtedness for any class or series of such Affiliate's
capital stock), (c) the purchase of fractional interests in shares of the
Debenture Issuer's capital stock (or the capital stock of an Affiliate of the
Debenture Issuer controlled by the Debenture Issuer) 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. During any
Extension Period, Distributions on the Securities shall be deferred for a period
equal to the Extension Period. 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.

            (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

                                      I-4
<PAGE>

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 contributions to Holders in liquidation of the
Trust (such amount being, the "Liquidation Distribution"), unless in connection
with such Liquidation, the Debentures in an 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) 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.

     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 the Trust, to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.

                                      I-5
<PAGE>

     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 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, (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 May 15, 2033. 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 May 15, 2008, at the Optional 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.

     "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.

     "OPTIONAL REDEMPTION DATE" shall mean the date fixed for the redemption of
Capital Securities, which shall be February 15, May 15, August 15 or November 15
on or after May 15, 2008.

                                      I-6
<PAGE>

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

     "SPECIAL EVENT" means a Tax Event or an Investment Company Event.

     "SPECIAL REDEMPTION DATE" means a date on which a Special Event redemption
occurs, which shall be any February 15, May 15, August 15 or November 15.

     "SPECIAL REDEMPTION PRICE" means (i) 107.5% of the principal amount of the
Debentures being redeemed on a Special Redemption Date that occurs before May
15, 2008, and (ii) 100% of the principal amount of the Debentures being redeemed
on a Special Redemption Date that occurs on May 15, 2008 or after, plus, in each
case, accrued and unpaid interest on such Debentures to the Special Redemption
Date.

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

                                      I-7
<PAGE>

            (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
     Optional 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 Optional
     Redemption Date or the Special 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 Optional Redemption Price or Special Redemption
     Price specified in paragraph 4(a), but without interest on such Optional
     Redemption Price or Special Redemption Price. If any date fixed for
     redemption of Securities is not a Business Day, then payment of any such
     Optional 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 Optional 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 will continue to accrue at the
     Distribution Rate from the original Optional Redemption Date or Special
     Redemption Date to the actual date of payment, in which case the actual

                                      I-8
<PAGE>

     payment date will be considered the date fixed for redemption for purposes
     of calculating the Optional 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

                                       I-9
<PAGE>

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

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

     A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Event of Default hereunder. Any required approval or direction of
Holders of the Capital Securities may be given at a separate meeting of Holders
of the Capital Securities convened for such purpose, at a meeting of all of the
Holders of the Securities in the Trust or pursuant to written consent. The
Institutional Trustee will cause a notice of any meeting at which Holders of the
Capital Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of the Capital Securities. Each such notice will include a statement
setting forth the following information (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such

                                      I-10
<PAGE>

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 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) waiving any past default and its
consequences that is waivable under the Indenture, or (iii) exercising 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

                                      I-11
<PAGE>

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.

     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.

                                      I-12
<PAGE>

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

     10.    ACCEPTANCE OF GUARANTEE AND INDENTURE. Each Holder of the Capital
Securities and the Common Securities, by the acceptance of such Securities,
agrees to the provisions of the Guarantee, including the subordination
provisions therein and to the provisions of the Indenture.

                                      I-13

<PAGE>

     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-14

<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

                                     A-1-1

<PAGE>

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 $100,000.00 (100 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 $100,000.00 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.

     THIS SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF TREASURY
REGULATIONS SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND WITHHOLDING
TAX PURPOSES.

     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                15,000 Capital Securities

                                  May 15, 2003

             Certificate Evidencing Floating Rate Capital Securities

                                       of

                         FPIC Capital Statutory Trust II

               (liquidation amount $1,000.00 per Capital Security)

         FPIC Capital 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 May 15, 2003, among I-Preferred Term Securities II,
Ltd., I-Preferred Term Securities II, Inc. and The Bank of New

                                     A-1-2
<PAGE>

York, is the registered owner of capital 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
Capital Securities represented hereby are issued pursuant to, and the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of May 15, 2003, among Kim D. Thorpe, Roberta Goes Cown and Pamela D. Deyo,
as Administrators, U.S. Bank National Association, as Institutional Trustee,
FPIC Insurance Group, 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 Sponsor at its principal place
of business.

     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.

                                        FPIC Capital STATUTORY TRUST II

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

                          CERTIFICATE OF AUTHENTICATION

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

                                        U.S. BANK 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 5.41125% beginning on (and including) the date of original
issuance and ending on (but excluding) August 15, 2003 and at an annual rate for
each successive period beginning on (and including) August 15, 2003, 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 4.10% (the "Coupon Rate");
provided, however, that prior to May 15, 2008, the Coupon Rate shall not exceed
12.50%, 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 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
cash distributions and any such compounded distributions and any Additional Sums
payable on the Debentures unless otherwise noted. 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 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 amount of the Distribution
payable for any Distribution Period will be calculated by applying the
Distribution Rate to the stated liquidation 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 such 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

                                     A-1-5
<PAGE>

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.

     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 August 15, November 15, February 15
and May 15 of each year, commencing on August 15, 2003. 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
extending the interest payment period for up to 20 consecutive quarterly periods
(each an "Extension Period") at any time and from time to time on the
Debentures, subject to the conditions described below, during which Extension
Period no interest shall be due and payable. During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such accrued
interest will accrue at an annual rate equal to the Distribution Rate in effect
for each such Extension Period, compounded quarterly from the date such interest
would have been payable were it not for the Extension Period, to the extent
permitted by law (such interest referred to herein as "Additional Interest"). 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. During any Extension Period, Distributions on the Capital Securities
shall be deferred for a period equal to the Extension Period. 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

                                     A-1-6
<PAGE>

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-1-7
<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-1-8
<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.

     THIS COMMON SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF TREASURY
REGULATIONS SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND WITHHOLDING
TAX PURPOSES.

        Certificate Number C-1                   464 Common Securities

                                  May 15, 2003

             Certificate Evidencing Floating Rate Common Securities

                                       of

                         FPIC Capital Statutory Trust II

     FPIC Capital Statutory Trust II, a statutory trust created under the laws
of the State of Connecticut (the "Trust"), hereby certifies that FPIC Insurance
Group, 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"). Subject to the Declaration (as defined below), the
Common Securities are transferable on the books and records of the Trust in
person or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer. The Common Securities represented
hereby are issued pursuant to, and the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities shall in all respects be subject to, the provisions of the Amended
and Restated Declaration of Trust of the Trust dated as of May 15, 2003, among
Kim D. Thorpe, Roberta Goes Cown and Pamela D. Deyo, as Administrators, U.S.
Bank National Association, as Institutional Trustee, FPIC Insurance Group, 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, when 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.

                                     A-2-1
<PAGE>

     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.

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

                                   FPIC Capital STATUTORY TRUST II

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

                                     A-2-2
<PAGE>

                      [FORM OF REVERSE OF COMMON SECURITY]

     Distributions payable on each Common Security will be payable at an annual
rate equal to 5.41125% beginning on (and including) the date of original
issuance and ending on (but excluding) August 15, 2003 and at an annual rate for
each successive period beginning on (and including) August 15, 2003, 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 4.10% (the "Coupon Rate");
provided, however, that prior to May 15, 2008, the Coupon Rate shall not exceed
12.50%, 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 will bear interest
thereon compounded quarterly at the Distribution Rate (to the extent permitted
by applicable law). The term "Distributions" as used herein includes cash
distributions and any such compounded distributions and any Additional Sums
payable on the Debentures unless otherwise noted. 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 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 amount of the Distribution
payable for any Distribution Period will be calculated by applying the
Distribution Rate to the stated liquidation 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

                                     A-2-3
<PAGE>

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.

     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 August 15, November 15, February 15 and May 15
of each year, commencing on August 15, 2003. 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 extending the
interest payment period for up to 20 consecutive quarterly periods (each an
"Extension Period") at any time and from time to time on the Debentures, subject
to the conditions described below, during which Extension Period no interest
shall be due and payable. During any Extension Period, interest will continue to
accrue on the Debentures, and interest on such accrued interest will accrue at
an annual rate equal to the Distribution Rate in effect for each such Extension
Period, compounded quarterly from the date such interest would have been payable
were it not for the Extension Period, to the extent permitted by law (such
interest referred to herein as "Additional Interest"). 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. During any
Extension Period, Distributions on the Common Securities shall be deferred for a
period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Common Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Common 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.

                                     A-2-4
<PAGE>

The Trust's funds available for Distribution to the Holders of the Common
Securities will be limited to payments received from the Debenture Issuer.

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

                                     A-2-5
<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 Guarantee2

------------------
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-2-6
<PAGE>

                                    EXHIBIT B

                          SPECIMEN OF INITIAL DEBENTURE

<PAGE>

                                    EXHIBIT C

                               PLACEMENT AGREEMENT

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