Document:

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                                                                     EXHIBIT 4.2

                        AMERICAN PHYSICIANS CAPITAL, INC.

                                    as Issuer

                                    INDENTURE

                            Dated as of May 22, 2003

                            WILMINGTON TRUST COMPANY

                                   as Trustee

           FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2033
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                                TABLE OF CONTENTS

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<S>                                                                                                                    <C>
ARTICLE I DEFINITIONS ..................................................................................................1
            SECTION 1.01   Definitions..................................................................................1
ARTICLE II DEBT SECURITIES..............................................................................................9
            SECTION 2.01   Authentication and Dating....................................................................9
            SECTION 2.02   Form of Trustee's Certificate of Authentication..............................................9
            SECTION 2.03   Form and Denomination of Debt Securities.....................................................9
            SECTION 2.04   Execution of Debt Securities................................................................10
            SECTION 2.05   Exchange and Registration of Transfer of Debt Securities....................................10
            SECTION 2.06   Mutilated, Destroyed, Lost or Stolen Debt Securities........................................13
            SECTION 2.07   Temporary Debt Securities...................................................................14
            SECTION 2.08   Payment of Interest.........................................................................14
            SECTION 2.09   Cancellation of Debt Securities Paid, etc...................................................16
            SECTION 2.10   Computation of Interest.....................................................................16
            SECTION 2.11   Extension of Interest Payment Period........................................................18
            SECTION 2.12   CUSIP Numbers...............................................................................18
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY........................................................................19
            SECTION 3.01   Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities.........19
            SECTION 3.02   Offices for Notices and Payments, etc.......................................................20
            SECTION 3.03   Appointments to Fill Vacancies in Trustee's Office..........................................20
            SECTION 3.04   Provision as to Paying Agent................................................................20
            SECTION 3.05   Certificate to Trustee......................................................................21
            SECTION 3.06   Additional Interest.........................................................................21
            SECTION 3.07   Compliance with Consolidation Provisions....................................................22
            SECTION 3.08   Limitation on Dividends.....................................................................22
            SECTION 3.09   Covenants as to the Trust...................................................................23
ARTICLE IV LISTS ......................................................................................................23
            SECTION 4.01   Securityholders' Lists......................................................................23
            SECTION 4.02   Preservation and Disclosure of Lists........................................................23
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS..................................................................25
            SECTION 5.01   Events of Default...........................................................................25
            SECTION 5.02   Payment of Debt Securities on Default; Suit Therefor........................................27
            SECTION 5.03   Application of Moneys Collected by Trustee..................................................28
            SECTION 5.04   Proceedings by Securityholders..............................................................28
            SECTION 5.05   Proceedings by Trustee......................................................................29
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<S>                                                                                                                   <C>
            SECTION 5.06   Remedies Cumulative and Continuing..........................................................29
            SECTION 5.07   Direction of Proceedings and Waiver of Defaults by Majority of Securityholders..............29
            SECTION 5.08   Notice of Defaults..........................................................................30
            SECTION 5.09   Undertaking to Pay Costs....................................................................31
ARTICLE VI CONCERNING THE TRUSTEE......................................................................................31
            SECTION 6.01   Duties and Responsibilities of Trustee......................................................31
            SECTION 6.02   Reliance on Documents, Opinions, etc........................................................32
            SECTION 6.03   No Responsibility for Recitals, etc.........................................................33
            SECTION 6.04   Trustee, Authenticating Agent, Paying Agents, Transfer Agents
                           or Registrar May Own Debt Securities........................................................33
            SECTION 6.05   Moneys to be Held in Trust..................................................................34
            SECTION 6.06   Compensation and Expenses of Trustee........................................................34
            SECTION 6.07   Officers' Certificate as Evidence...........................................................35
            SECTION 6.08   Eligibility of Trustee......................................................................35
            SECTION 6.09   Resignation or Removal of Trustee...........................................................35
            SECTION 6.10   Acceptance by Successor Trustee.............................................................37
            SECTION 6.11   Succession by Merger, etc...................................................................37
            SECTION 6.12   Authenticating Agents.......................................................................38
ARTICLE VII CONCERNING THE SECURITYHOLDERS.............................................................................39
            SECTION 7.01   Action by Securityholders...................................................................39
            SECTION 7.02   Proof of Execution by Securityholders.......................................................39
            SECTION 7.03   Who Are Deemed Absolute Owners..............................................................40
            SECTION 7.04   Debt Securities Owned by Company Deemed Not Outstanding.....................................40
            SECTION 7.05   Revocation of Consents; Future Holders Bound................................................40
ARTICLE VIII SECURITYHOLDERS' MEETINGS.................................................................................41
            SECTION 8.01   Purposes of Meetings........................................................................41
            SECTION 8.02   Call of Meetings by Trustee.................................................................41
            SECTION 8.03   Call of Meetings by Company or Securityholders..............................................42
            SECTION 8.04   Qualifications for Voting...................................................................42
            SECTION 8.05   Regulations.................................................................................42
            SECTION 8.06   Voting......................................................................................43
            SECTION 8.07   Quorum; Actions.............................................................................43
ARTICLE IX SUPPLEMENTAL INDENTURES.....................................................................................44
            SECTION 9.01   Supplemental Indentures without Consent of Securityholders..................................44
            SECTION 9.02   Supplemental Indentures with Consent of Securityholders.....................................45
            SECTION 9.03   Effect of Supplemental Indentures...........................................................46
            SECTION 9.04   Notation on Debt Securities.................................................................46
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<S>                                                                                                                   <C>
            SECTION 9.05   Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee.................47
ARTICLE X REDEMPTION OF SECURITIES.....................................................................................47
            SECTION 10.01  Optional Redemption.........................................................................47
            SECTION 10.02  Special Event Redemption....................................................................47
            SECTION 10.03  Notice of Redemption; Selection of Debt Securities..........................................47
            SECTION 10.04  Payment of Debt Securities Called for Redemption............................................48
ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE...........................................................49
            SECTION 11.01  Company May Consolidate, etc., on Certain Terms.............................................49
            SECTION 11.02  Successor Entity to be Substituted..........................................................49
            SECTION 11.03  Opinion of Counsel to be Given to Trustee...................................................50
ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE....................................................................50
            SECTION 12.01  Discharge of Indenture......................................................................50
            SECTION 12.02  Deposited Moneys to be Held in Trust by Trustee.............................................51
            SECTION 12.03  Paying Agent to Repay Moneys Held...........................................................51
            SECTION 12.04  Return of Unclaimed Moneys..................................................................51
ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................................51
            SECTION 13.01  Indenture and Debt Securities Solely Corporate Obligations..................................51
ARTICLE XIV MISCELLANEOUS PROVISIONS...................................................................................52
            SECTION 14.01  Successors..................................................................................52
            SECTION 14.02  Official Acts by Successor Entity...........................................................52
            SECTION 14.03  Surrender of Company Powers.................................................................52
            SECTION 14.04  Addresses for Notices, etc..................................................................52
            SECTION 14.05  Governing Law...............................................................................53
            SECTION 14.06  Evidence of Compliance with Conditions Precedent............................................53
            SECTION 14.07  Business Day Convention.....................................................................53
            SECTION 14.08  Table of Contents, Headings, etc............................................................53
            SECTION 14.09  Execution in Counterparts...................................................................54
            SECTION 14.10  Separability................................................................................54
            SECTION 14.11  Assignment..................................................................................54
            SECTION 14.12  Acknowledgment of Rights....................................................................54
ARTICLE XV SUBORDINATION OF DEBT SECURITIES............................................................................55
            SECTION 15.01  Agreement to Subordinate....................................................................55
            SECTION 15.02  Default on Senior Indebtedness..............................................................55
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<S>                                                                                                                   <C>
            SECTION 15.03  Liquidation; Dissolution; Bankruptcy........................................................55
            SECTION 15.04  Subrogation.................................................................................57
            SECTION 15.05  Trustee to Effectuate Subordination.........................................................57
            SECTION 15.06  Notice by the Company.......................................................................58
            SECTION 15.07  Rights of the Trustee; Holders of Senior Indebtedness.......................................58
            SECTION 15.08  Subordination May Not Be Impaired...........................................................59
EXHIBITS
            EXHIBIT A   Form of Debt Security
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                  THIS INDENTURE, dated as of May 22, 2003, between American
Physicians Capital, Inc., an insurance holding company incorporated in Michigan
(hereinafter sometimes called the "Company"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee (hereinafter sometimes called the
"Trustee").

                              W I T N E S S E T H :

                  WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issuance of its Floating Rate Junior Subordinated Debt
Securities due 2033 (the "Debt Securities") under this Indenture and to provide,
among other things, for the execution and authentication, delivery and
administration thereof, the Company has duly authorized the execution of this
Indenture.

                  NOW, THEREFORE, in consideration of the premises, and the
purchase of the Debt Securities by the holders thereof, the Company covenants
and agrees with the Trustee for the equal and proportionate benefit of the
respective holders from time to time of the Debt Securities as follows:

                                   ARTICLE I
                                   DEFINITIONS

                  SECTION 1.01 Definitions.

                  The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.01. All accounting terms
used herein and not expressly defined shall have the meanings assigned to such
terms in accordance with generally accepted accounting principles and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted in the United States at the time of any computation. The
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.

                  "Additional Interest" has the meaning set forth in Section
3.06.

                  "Additional Provisions" has the meaning set forth in Section
15.01.

                  "Administrative Action" has the meaning specified within the
definition of "Tax Event" in this Section 1.01.

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

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

                  "Board of Directors" means the board of directors or the
executive committee or any other duly authorized designated officers of the
Company.
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                  "Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.

                  "Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in Wilmington, Delaware, The City of
New York or East Lansing, Michigan are permitted or required by law or executive
order to close.

                  "Calculation Agent" means the Person identified as "Trustee"
in the first paragraph hereof with respect to the Debt Securities and the
Institutional Trustee with respect to the Trust Securities.

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

                  "Capital Securities Guarantee" means the guarantee agreement
that the Company will enter into with Wilmington Trust Company or other Persons
that operates directly or indirectly for the benefit of holders of Capital
Securities of the Trust.

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

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

                  "Company" means American Physicians Capital, Inc., an
insurance holding company incorporated in Michigan, and, subject to the
provisions of Article XI, shall include its successors and assigns.

                  "Comparable Treasury Issue" means, with respect to the Special
Redemption Date, the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three months after
May 23, 2008, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.

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                  "Comparable Treasury Price" means, with respect to the Special
Redemption Date, (a) the average of three Reference Treasury Dealer Quotations
for the Special Redemption Date received by the Quotation Agent, after excluding
the highest and lowest of five Reference Treasury Dealer Quotations so received,
or (b) if the Quotation Agent receives fewer than five such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.

                  "Debt Security" or "Debt Securities" has the meaning stated in
the first recital of this Indenture.

                  "Debt Security Register" has the meaning specified in Section
2.05.

                  "Declaration" means the Amended and Restated Declaration of
Trust of the Trust, dated as of May 22, 2003, as amended or supplemented from
time to time.

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

                  "Defaulted Interest" has the meaning set forth in Section
2.08.

                  "Deferred Interest" has the meaning set forth in Section 2.11.

                  "Event of Default" means any event specified in Section 5.01,
which has continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.

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

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

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

                  "Interest Payment Date" means February 23, May 23, August 23
and November 23 of each year, commencing on August 23, 2003, subject to Section
14.07.

                  "Interest Period" has the meaning set forth in Section 2.08.

                  "Interest Rate" means, with respect to any Interest Period, a
per annum rate of interest equal to LIBOR, as determined on the LIBOR
Determination Date for such Interest Period, plus 4.20%; provided, however, that
the Interest Rate for any Interest Period prior to the Interest Period
commencing on the Interest Payment Date in May 2008 may not exceed 12.5% per
annum; provided, further, that the Interest Rate for any Interest Period may not
exceed the highest rate permitted by New York law, as the same may be modified
by United States law of general application.

                  "Investment Company Event" means the receipt by the Company
and the Institutional Trustee for the benefit of the Trust of an Opinion of
Counsel experienced in such

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

                  "LIBOR" means the London Interbank Offered Rate for
three-month U.S. Dollar deposits in Europe as determined by the Calculation
Agent according to Section 2.10(b).

                  "LIBOR Banking Day" has the meaning set forth in Section
2.10(b)(i).

                  "LIBOR Business Day" has the meaning set forth in Section
2.10(b)(i).

                  "LIBOR Determination Date" has the meaning set forth in
Section 2.10(b)(i).

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

                  "Maturity Date" means May 23, 2033, subject to Section 14.07.

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President or any Vice President,
and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee. Each such certificate shall
include the statements provided for in Section 14.06 if and to the extent
required by the provisions of such Section.

                  "Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company, or who may
be other counsel reasonably satisfactory to the Trustee. Each such opinion shall
include the statements provided for in Section 14.06 if and to the extent
required by the provisions of such Section.

                  The term "outstanding," when used with reference to Debt
Securities, subject to the provisions of Section 7.04, means, as of any
particular time, all Debt Securities authenticated and delivered by the Trustee
or the Authenticating Agent under this Indenture, except

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

                  (b) Debt Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any Paying Agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent); provided, that, if such Debt Securities, or
portions thereof, are to be redeemed prior to maturity thereof, notice of such
redemption shall have been given as provided in Articles X and XIV or provision
satisfactory to the Trustee shall have been made for giving such notice; and

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                  (c) Debt Securities paid pursuant to Section 2.06 or in lieu
of or in substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.06 unless proof
satisfactory to the Company and the Trustee is presented that any such Debt
Securities are held by bona fide holders in due course.

                  "Optional Redemption Date" has the meaning set forth in
Section 10.01.

                  "Optional Redemption Price" means an amount in cash equal to
100% of the principal amount of the Debt Securities being redeemed plus unpaid
interest accrued on such Debt Securities to the Optional Redemption Date or, in
the case of a redemption due to the occurrence of a Special Event, to the
Special Redemption Date if the Special Redemption Date is on or after May 23,
2008.

                  "Paying Agent" has the meaning set forth in Section 3.04(e).

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

                  "Predecessor Security" of any particular Debt Security means
every previous Debt Security evidencing all or a portion of the same debt as
that evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 2.06 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.

                  "Primary Treasury Dealer" means a primary United States
Government securities dealer in The City of New York.

                  "Principal Office of the Trustee" means the office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which at all times shall be located within the United
States and at the time of the execution of this Indenture shall be Rodney Square
North, 1100 North Market Street, Wilmington, DE 19890-0001.

                  "Quotation Agent" means Citigroup Global Markets Inc. and its
successors; provided, however, that if the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor another Primary Treasury
Dealer.

                  "Reference Banks" has the meaning set forth in Section
2.10(b)(ii).

                  "Reference Treasury Dealer" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Trustee after
consultation with the Company.

                  "Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and the Special Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding the
Special Redemption Date.

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                  "Remaining Life" means the period from the Special Redemption
Date through May 23, 2008.

                  "Resale Restriction Termination Date" means, with respect to
any Debt Security, the date which is the later of (i) two years (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act of 1933, as
amended) after the later of (y) the date of original issuance of such Debt
Security and (z) the last date on which the Company or any Affiliate (as defined
in Rule 405 under the Securities Act of 1933, as amended) of the Company was the
holder of such Debt Security (or any predecessor thereto) and (ii) such later
date, if any, as may be required by any subsequent change in applicable law.

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

                  "Securityholder," "holder of Debt Securities" or other similar
terms, means any Person in whose name at the time a particular Debt Security is
registered on the Debt Security Register.

                  "Senior Indebtedness" means, with respect to the Company, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company,
(ii) all capital lease obligations of the Company, (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business), (iv) all obligations of the Company
for the reimbursement of any letter of credit, any banker's acceptance, any
security purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement, any obligation under options
or any similar credit or other transaction, (v) all obligations of the type
referred to in clauses (i) through (iv) above of other Persons for the payment
of which the Company is responsible or liable as obligor, guarantor or otherwise
and (vi) all obligations of the type referred to in clauses (i) through (v)
above of other Persons secured by any lien on any property or asset of the
Company (whether or not such obligation is assumed by the Company), whether
incurred on or prior to the date of this Indenture or thereafter incurred,
unless it is provided in the instrument creating or evidencing the same or
pursuant to which the same is outstanding that such obligations are not superior
or are pari passu in right of payment to the Debt Securities; provided, however,
that Senior Indebtedness shall not include (A) any debt securities issued to any
trust other than the Trust (or a trustee of such trust) that is a financing
vehicle of the Company (a "financing entity"), in connection with the issuance
by such financing entity of equity or other securities in transactions
substantially similar in structure to the transactions

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contemplated hereunder and in the Declaration or (B) any guarantees of the
Company in respect of the equity or other securities of any financing entity
referred to in clause (A) above.

                  "Special Event" means either a Tax Event or an Investment
Company Event, or both.

                  "Special Redemption Date" has the meaning set forth in Section
10.02.

                  "Special Redemption Price" means, with respect to the
redemption of any Debt Security following a Special Event, an amount in cash
equal to (1) if the Special Redemption Date is before May 23, 2008, the greater
of (a) 100% of the outstanding principal amount thereof or (b) as determined by
the Quotation Agent, the sum of the present value of the principal amount
payable as part of the Optional Redemption Price with respect to a redemption as
of May 23, 2008, together with the present value of interest payments calculated
at a fixed per annum rate of interest equal to 7.60% over the Remaining Life of
such Debt Security, discounted to the Special Redemption Date on a quarterly
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 2.0%, plus, in the case of either (a) or (b), unpaid interest
accrued on such Debt Security to the Special Redemption Date and (2) if the
Special Redemption Date is on or after May 23, 2008, the Optional Redemption
Price for the Special Redemption Date.

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

                  "Tax Event" means the receipt by the Company and the
Institutional Trustee for the benefit of 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, regulatory procedure, notice or announcement (an
"Administrative Action")) or judicial decision interpreting or applying such
laws or regulations, regardless of whether such Administrative Action or
judicial decision is issued to or in connection with a proceeding involving the
Company or the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debt Securities, 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

                                       7
<PAGE>
with respect to income received or accrued on the Debt Securities; (ii) interest
payable by the Company on the Debt Securities is not, or within 90 days of the
date of such opinion, will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes; or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to or otherwise
required to pay, or required to withhold from distributions to holders of Trust
Securities, more than a de minimis amount of other taxes (including withholding
taxes), duties, assessments or other governmental charges.

                  "Treasury Rate" means, with respect to the Special Redemption
Price, (i) the yield, under the heading which represents the average for the
week immediately prior to the third Business Day immediately preceding the
Special Redemption Date, appearing in the most recently published statistical
release designated H.15 (519) or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (provided that if no maturity is
within three months before or after the Remaining Life, then the yields for the
two published maturities most closely corresponding to the Remaining Life shall
be determined and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
immediately prior to the third Business Day immediately preceding the Special
Redemption Date or does not contain such yields, the rate per annum equal to the
quarterly equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
the Special Redemption Date.

                  "Trust" means APCapital Trust II, the Delaware statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debt Securities under this
Indenture, of which the Company is the sponsor.

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

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

                  "Trustee" means the Person identified as "Trustee" in the
first paragraph hereof, and, subject to the provisions of Article VI hereof,
shall also include its successors and assigns as Trustee hereunder.

                  "United States" means the United States of America and the
District of Columbia.

                  "U.S. Person" has the meaning given to United States Person as
set forth in Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.

                                       8
<PAGE>
                                   ARTICLE II
                                 DEBT SECURITIES

                  SECTION 2.01 Authentication and Dating.

                  Upon the execution and delivery of this Indenture, or from
time to time thereafter, Debt Securities in an aggregate principal amount not in
excess of $15,464,000 may be executed and delivered by the Company to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery said Debt Securities to or upon the written order of
the Company, signed by its Chairman of the Board of Directors, Vice Chairman,
President or Chief Financial Officer or one of its Vice Presidents, without any
further action by the Company hereunder. In authenticating such Debt Securities,
and accepting the additional responsibilities under this Indenture in relation
to such Debt Securities, the Trustee shall be entitled to receive, and (subject
to Section 6.01) shall be fully protected in relying upon a copy of any Board
Resolution or Board Resolutions relating thereto and, if applicable, an
appropriate record of any action taken pursuant to such resolution, in each case
certified by the Secretary or an Assistant Secretary or other officers with
appropriate delegated authority of the Company as the case may be.

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

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

                  SECTION 2.02 Form of Trustee's Certificate of Authentication.

                  The Trustee's certificate of authentication on all Debt
Securities shall be in substantially the following form:

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

                                        Wilmington Trust Company,
                                              not in its individual capacity
                                              but solely as trustee

                                        By: ________________________________
                                              Authorized Officer

                  SECTION 2.03 Form and Denomination of Debt Securities.

                  The Debt Securities shall be substantially in the form of
Exhibit A hereto. The Debt Securities shall be in registered, certificated form
without coupons and in minimum denominations of $100,000 and any multiple of
$1,000 in excess thereof. The Debt Securities

                                       9
<PAGE>
shall be numbered, lettered, or otherwise distinguished in such manner or in
accordance with such plans as the officers executing the same may determine with
the approval of the Trustee as evidenced by the execution and authentication
thereof.

                  SECTION 2.04 Execution of Debt Securities.

                  The Debt Securities shall be signed in the name and on behalf
of the Company by the manual or facsimile signature of its Chairman of the Board
of Directors, Vice Chairman, President or Chief Financial Officer or one of its
Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, under its
corporate seal (if legally required) which may be affixed thereto or printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise, and which
need not be attested. Only such Debt Securities as shall bear thereon a
certificate of authentication substantially in the form herein before recited,
executed by the Trustee or the Authenticating Agent by the manual signature of
an authorized officer, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee or the
Authenticating Agent upon any Debt Security executed by the Company shall be
conclusive evidence that the Debt Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.

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

                  Every Debt Security shall be dated the date of its
authentication.

                  SECTION 2.05 Exchange and Registration of Transfer of Debt
Securities.

                  The Company shall cause to be kept, at the office or agency
maintained for the purpose of registration of transfer and for exchange as
provided in Section 3.02, a register (the "Debt Security Register") for the Debt
Securities issued hereunder in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration and transfer of
all Debt Securities as provided in this Article II. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.

                  Debt Securities to be exchanged may be surrendered at the
Principal Office of the Trustee or at any office or agency to be maintained by
the Company for such purpose as provided in Section 3.02, and the Company shall
execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in
exchange therefor, the Debt Security or Debt Securities which the Securityholder
making the exchange shall be entitled to receive. Upon due presentment for
registration of transfer of any Debt Security at the Principal Office of the
Trustee or at any office or agency of

                                       10
<PAGE>
the Company maintained for such purpose as provided in Section 3.02, the Company
shall execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in the
name of the transferee or transferees, a new Debt Security for a like aggregate
principal amount. Registration or registration of transfer of any Debt Security
by the Trustee or by any agent of the Company appointed pursuant to Section
3.02, and delivery of such Debt Security, shall be deemed to complete the
registration or registration of transfer of such Debt Security.

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

                  No service charge shall be made for any exchange or
registration of transfer of Debt Securities, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax, fee or other governmental
charge that may be imposed in connection therewith other than exchanges pursuant
to Section 2.07, Section 9.04 or Section 10.04 not involving any transfer.

                  The Company or the Trustee shall not be required to exchange
or register a transfer of any Debt Security for a period of 15 days immediately
preceding the date of selection of Debt Securities for redemption.

                  Notwithstanding the foregoing, Debt Securities may not be
transferred prior to the Resale Restriction Termination Date except in
compliance with the legend set forth below, unless otherwise determined by the
Company in accordance with applicable law, which legend shall be placed on each
Debt Security:

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS. 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. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (I) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR

                                       11
<PAGE>
THERETO) AND (II) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT
CHANGE IN APPLICABLE LAW, ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS DEFINED IN RULE 144A, THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A) (1), (2), (3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR PARTICIPATION FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND
SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED STATES PURSUANT TO
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

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

                                       12
<PAGE>
TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE
MAY BE, 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 AND HOLDING
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.

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

                  THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

                  SECTION 2.06 Mutilated, Destroyed, Lost or Stolen Debt
Securities.

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

                  The Trustee may authenticate any such substituted Debt
Security and deliver the same upon the written request or authorization of any
officer of the Company. Upon the issuance of any substituted Debt Security, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Debt Security which has matured or is

                                       13
<PAGE>
about to mature or has been called for redemption in full shall become mutilated
or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debt Security) if the
applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless
and, in case of destruction, loss or theft, evidence satisfactory to the Company
and to the Trustee of the destruction, loss or theft of such Security and of the
ownership thereof.

                  Every substituted Debt Security issued pursuant to the
provisions of this Section 2.06 by virtue of the fact that any such Debt
Security is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security shall be found at any time, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Debt
Securities duly issued hereunder. All Debt Securities shall be held and owned
upon the express condition that, to the extent permitted by applicable law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

                  SECTION 2.07 Temporary Debt Securities.

                  Pending the preparation of definitive Debt Securities, the
Company may execute and the Trustee shall authenticate and make available for
delivery temporary Debt Securities that are typed, printed or lithographed.
Temporary Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay, the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities
may be surrendered in exchange therefor, at the Principal Office of the Trustee
or at any office or agency maintained by the Company for such purpose as
provided in Section 3.02, and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such exchange shall be made by the Company at its own expense and without any
charge therefor except that in case of any such exchange involving a
registration of transfer the Company may require payment of a sum sufficient to
cover any tax, fee or other governmental charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Debt
Securities authenticated and delivered hereunder.

                  SECTION 2.08 Payment of Interest.

                  Each Debt Security will bear interest at the then applicable
Interest Rate (i) in the case of the initial Interest Period, for the period
from, and including, the date of original issuance

                                       14
<PAGE>
of such Debt Security to, but excluding, the initial Interest Payment Date and
(ii) thereafter, for the period from, and including, the first day following the
end of the preceding Interest Period to, but excluding, the related Interest
Payment Date or, in the case of the last Interest Period, the related Optional
Redemption Date, Special Redemption Date or Maturity Date, as applicable (each
such period, an "Interest Period"), on the principal thereof, on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on Deferred Interest and on any overdue installment of interest
(including Defaulted Interest), payable (subject to the provisions of Article
XII) on each Interest Payment Date. Interest and any Deferred Interest on any
Debt Security that is payable, and is punctually paid or duly provided for by
the Company, on any Interest Payment Date shall be paid to the Person in whose
name such Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the regular record date for such interest installment,
except that interest and any Deferred Interest payable on the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
shall be paid to the Person to whom principal is paid. In case (i) the Maturity
Date of any Debt Security or (ii) any Debt Security or portion thereof is called
for redemption and the related Optional Redemption Date or the Special
Redemption Date, as the case may be, is subsequent to the regular record date
with respect to any Interest Payment Date and either on or prior to such
Interest Payment Date, interest on such Debt Security will be paid upon
presentation and surrender of such Debt Security.

                  Any interest on any Debt Security, other than Deferred
Interest, that is payable, but is not punctually paid or duly provided for by
the Company, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the holder on the relevant regular record
date by virtue of having been such holder, and such Defaulted Interest shall be
paid by the Company to the Persons in whose names such Debt Securities (or their
respective Predecessor Securities) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Debt
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements reasonably satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as provided
in this paragraph. Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest, which shall not be more than fifteen nor
less than ten days prior to the date of the proposed payment and not less than
ten days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record date therefor
to be mailed, first class postage prepaid, to each Securityholder at his or her
address as it appears in the Debt Security Register, not less than ten days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Debt Securities (or their respective Predecessor Securities) are registered
on such special record date and thereafter the Company shall have no further
payment obligation in respect of the Defaulted Interest.

                                       15
<PAGE>
                  Any interest scheduled to become payable on an Interest
Payment Date occurring during an Extension Period shall not be Defaulted
Interest and shall be payable on such other date as may be specified in the
terms of such Debt Securities.

                  The term "regular record date", as used in this Section, shall
mean the fifteenth day prior to the applicable Interest Payment Date, whether or
not such day is a Business Day.

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

                  SECTION 2.09 Cancellation of Debt Securities Paid, etc.

                  All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if surrendered to the
Company or any Paying Agent, be surrendered to the Trustee and promptly canceled
by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be
promptly canceled by it, and no Debt Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. All
Debt Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debt Securities unless the
Company otherwise directs the Trustee in writing, in which case the Trustee
shall dispose of such Debt Securities as directed by the Company. If the Company
shall acquire any of the Debt Securities, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debt Securities unless and until the same are surrendered to the Trustee for
cancellation.

                  SECTION 2.10 Computation of Interest.

                  (a) The amount of interest payable for any Interest Period
will be computed on the basis of a 360-day year and the actual number of days
elapsed in such Interest Period; provided, however, that if the Special
Redemption Date is before May 23, 2008, the amounts payable pursuant to this
Indenture shall be calculated as set forth in the definition of Special
Redemption Price.

                  (b) LIBOR shall be determined by the Calculation Agent for
each Interest Period in accordance with the following provisions:

                           (i) On the second LIBOR Business Day (provided, that
         on such day commercial banks are open for business (including dealings
         in foreign currency deposits) in London (a "LIBOR Banking Day"), and
         otherwise the next preceding LIBOR Business Day that is also a LIBOR
         Banking Day) prior to March 1, June 1, September 1 or December 1, as
         the case may be, immediately succeeding the commencement of such
         Interest Period (or, in the case of the first Interest Period, on May
         20, 2003) (each such day, a "LIBOR Determination Date"), LIBOR shall
         equal the rate, as obtained by the Calculation Agent, for three-month
         U.S. Dollar deposits in Europe, which appears on Telerate (as defined
         in the International Swaps and Derivatives Association, Inc. 2000
         Interest Rate and Currency Exchange Definitions) page 3750 or such
         other page as may replace such page 3750, as of 11:00 a.m. (London
         time) on such LIBOR Determination

                                       16
<PAGE>
         Date, as reported by Bloomberg Financial Markets Commodities News or
         any successor service ("Telerate Page 3750"). "LIBOR Business Day"
         means any day that is not a Saturday, Sunday or other day on which
         commercial banking institutions in The City of New York or Wilmington,
         Delaware are authorized or obligated by law or executive order to be
         closed. If such rate is superseded on Telerate Page 3750 by a corrected
         rate before 12:00 noon (London time) on such LIBOR Determination Date,
         the corrected rate as so substituted will be LIBOR for such LIBOR
         Determination Date.

                           (ii) If, on such LIBOR Determination Date, such rate
         does not appear on Telerate Page 3750, the Calculation Agent shall
         determine the arithmetic mean of the offered quotations of the
         Reference Banks to leading banks in the London interbank market for
         three-month U.S. Dollar deposits in Europe (in an amount determined by
         the Calculation Agent) by reference to requests for quotations as of
         approximately 11:00 a.m. (London time) on such LIBOR Determination Date
         made by the Calculation Agent to the Reference Banks. If, on such LIBOR
         Determination Date, at least two of the Reference Banks provide such
         quotations, LIBOR shall equal the arithmetic mean of such quotations.
         If, on such LIBOR Determination Date, only one or none of the Reference
         Banks provide such a quotation, LIBOR shall be deemed to be the
         arithmetic mean of the offered quotations that at least two leading
         banks in The City of New York (as selected by the Calculation Agent)
         are quoting on such LIBOR Determination Date for three-month U.S.
         Dollar deposits in Europe at approximately 11:00 a.m. (London time) (in
         an amount determined by the Calculation Agent). As used herein,
         "Reference Banks" means four major banks in the London interbank market
         selected by the Calculation Agent.

                           (iii) If the Calculation Agent is required but is
         unable to determine a rate in accordance with at least one of the
         procedures provided above, LIBOR for such Interest Period shall be
         LIBOR in effect for the immediately preceding Interest Period.

                  (c) All percentages resulting from any calculations on the
Debt 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).

                  (d) On each LIBOR Determination Date, the Calculation Agent
shall notify, in writing, the Company and the Paying Agent of the applicable
Interest Rate that applies to the related Interest Period. The Calculation Agent
shall, upon the request of a holder of any Debt Securities, inform such holder
of the Interest Rate that applies to the related Interest Period. All
calculations made by the Calculation Agent in the absence of manifest error
shall be conclusive for all purposes and binding on the Company and the holders
of the Debt Securities. The Paying Agent shall be entitled to rely on
information received from the Calculation Agent or the Company as to the
applicable Interest Rate. The Company shall, from time to time, provide any
necessary information to the Paying Agent relating to any original issue
discount and interest on the Debt Securities that is included in any payment and
reportable for taxable income calculation purposes.

                                       17
<PAGE>
                  SECTION 2.11 Extension of Interest Payment Period.

So long as no Event of Default has occurred and is continuing, the Company shall
have the right, from time to time and without causing an Event of Default, to
defer payments of interest on the Debt Securities by extending the interest
payment period on the Debt Securities at any time and from time to time during
the term of the Debt Securities, for up to 20 consecutive quarterly periods
(each such extended interest payment period, together with all previous and
further consecutive extensions thereof, is referred to herein as an "Extension
Period"). No Extension Period may end on a date other than an Interest Payment
Date or extend beyond the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be. During any Extension Period,
interest will continue to accrue on the Debt Securities, and interest on such
accrued interest (such accrued interest and interest thereon referred to herein
as "Deferred Interest") will accrue at an annual rate equal to the Interest Rate
applicable during such Extension Period, compounded quarterly from the date such
Deferred Interest would have been payable were it not for the Extension Period,
to the extent permitted by applicable law. No interest or Deferred Interest
(except any Additional Interest that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof. At the end of any
Extension Period, the Company shall pay all Deferred Interest then accrued and
unpaid on the Debt Securities; provided, however, that during any Extension
Period, the Company shall be subject to the restrictions set forth in Section
3.08. Prior to the termination of any Extension Period, the Company may further
extend such Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
Period) shall exceed 20 consecutive quarterly periods. Upon the termination of
any Extension Period and upon the payment of all Deferred Interest, the Company
may commence a new Extension Period, subject to the foregoing requirements. The
Company must give the Trustee notice of its election to begin or extend an
Extension Period at least one Business Day prior to the earlier of (i) the next
succeeding date on which interest on the Debt Securities would have been payable
except for the election to begin or extend an Extension Period or (ii) the date
such interest is payable, but in any event not later than the related regular
record date. The Trustee shall give notice of the Company's election to begin or
extend an Extension Period to the Securityholders.

                  SECTION 2.12 CUSIP Numbers.

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

                                       18
<PAGE>
                                  ARTICLE III
                       PARTICULAR COVENANTS OF THE COMPANY

                  SECTION 3.01 Payment of Principal, Premium and Interest;
Agreed Treatment of the Debt Securities.

                  (a) The Company covenants and agrees that it will duly and
punctually pay or cause to be paid all payments due in respect of the Debt
Securities at the place, at the respective times and in the manner provided in
this Indenture and the Debt Securities. Payment of the principal of and premium,
if any, and interest on the Debt Securities due on the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
will be made by the Company in immediately available funds against presentation
and surrender of such Debt Securities. At the option of the Company, each
installment of interest on the Debt Securities due on an Interest Payment Date
other than the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be, may be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities entitled thereto
as they appear on the Debt Security Register or (ii) by wire transfer of
immediately available funds to any account with a banking institution located in
the United States designated by such holders to the Paying Agent no later than
the related record date. Notwithstanding anything to the contrary contained in
this Indenture or any Debt Security, if the Trust or the trustee of the Trust is
the holder of any Debt Security, then all payments in respect of such Debt
Security shall be made by the Company in immediately available funds when due.

                  (b) The Company will treat the Debt Securities as
indebtedness, and the interest payable in respect of such Debt Securities as
interest, for all U.S. federal income tax purposes. All payments in respect of
such Debt Securities will be made free and clear of U.S. withholding tax to any
beneficial owner thereof that has provided an Internal Revenue Service Form W-8
BEN (or any substitute or successor form) establishing its non-U.S. status for
U.S. federal income tax purposes.

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

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

                                       19
<PAGE>
                  SECTION 3.02 Offices for Notices and Payments, etc.

                  So long as any of the Debt Securities remain outstanding, the
Company will maintain in Wilmington, Delaware or in East Lansing, Michigan an
office or agency where the Debt Securities may be presented for payment, an
office or agency where the Debt Securities may be presented for registration of
transfer and for exchange as provided in this Indenture and an office or agency
where notices and demands to or upon the Company in respect of the Debt
Securities or of this Indenture may be served. The Company will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. Until otherwise designated from time to time by the
Company in a notice to the Trustee, or specified as contemplated by Section
2.05, such office or agency for all of the above purposes shall be the Principal
Office of the Trustee. In case the Company shall fail to maintain any such
office or agency in Wilmington, Delaware or in East Lansing, Michigan, or shall
fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Principal Office of the Trustee.

                  In addition to any such office or agency, the Company may from
time to time designate one or more offices or agencies outside Wilmington,
Delaware or East Lansing, Michigan where the Debt Securities may be presented
for registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in Wilmington, Delaware or in
East Lansing, Michigan for the purposes above mentioned. The Company will give
to the Trustee prompt written notice of any such designation or rescission
thereof.

                  SECTION 3.03 Appointments to Fill Vacancies in Trustee's
Office.

                  The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 6.09, a
Trustee, so that there shall at all times be a Trustee hereunder.

                  SECTION 3.04 Provision as to Paying Agent.

                  (a) If the Company shall appoint a Paying Agent other than the
Trustee, it will cause such Paying Agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provision of this Section 3.04,

                           (i) that it will hold all sums held by it as such
         agent for the payment of all payments due in respect of the Debt
         Securities (whether such sums have been paid to it by the Company or by
         any other obligor on the Debt Securities) in trust for the benefit of
         the holders of the Debt Securities;

                           (ii) that it will give the Trustee prompt written
         notice of any failure by the Company (or by any other obligor on the
         Debt Securities) to make any payment in respect of the Debt Securities
         when the same shall be due and payable; and

                                       20
<PAGE>
                           (iii) that it will, at any time during the
         continuance of any Event of Default, upon the written request of the
         Trustee, forthwith pay to the Trustee all sums so held in trust by such
         Paying Agent.

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

                  Whenever the Company shall have one or more Paying Agents for
the Debt Securities, it will, on or prior to each due date of the payments in
respect of the Debt Securities, deposit with a Paying Agent a sum sufficient to
pay all payments so becoming due, such sum to be held in trust for the benefit
of the Persons entitled thereto and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee in writing of its action or
failure to act.

                  (c) Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge with respect to the Debt Securities, or for any other
reason, pay, or direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or any such Paying Agent, such sums to be held by the
Trustee upon the same terms and conditions herein contained.

                  (d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
3.04 is subject to Sections 12.03 and 12.04.

                  (e) The Company hereby initially appoints the Trustee to act
as paying agent for the Debt Securities (the "Paying Agent").

                  SECTION 3.05 Certificate to Trustee.

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

                  SECTION 3.06 Additional Interest.

                  If and for so long as the Trust is the holder of all Debt
Securities and is subject to or otherwise required to pay (or is required to
withhold from distributions to holders of Trust Securities) any additional taxes
(including withholding taxes), duties, assessments or other governmental charges
as a result of a Tax Event, the Company will pay such additional amounts

                                       21
<PAGE>
(the "Additional Interest") on the Debt Securities or the Trust Securities, as
the case may be, as shall be required so that the net amounts received and
retained by the holders of Debt Securities or Trust Securities, as the case may
be, after payment of all taxes (including withholding taxes), duties,
assessments or other governmental charges, will be equal to the amounts that
such holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed.

                  Whenever in this Indenture or the Debt Securities there is a
reference in any context to the payment of principal of or premium, if any, or
interest on the Debt Securities, such mention shall be deemed to include mention
of payments of the Additional Interest provided for in this Section to the
extent that, in such context, Additional Interest is, was or would be payable in
respect thereof pursuant to the provisions of this Section and express mention
of the payment of Additional Interest (if applicable) in any provisions hereof
shall not be construed as excluding Additional Interest in those provisions
hereof where such express mention is not made, provided, however, that,
notwithstanding anything to the contrary contained in this Indenture or any Debt
Security, the deferral of the payment of interest during an Extension Period
pursuant to Section 2.11 shall not defer the payment of any Additional Interest
that may be due and payable.

                  SECTION 3.07 Compliance with Consolidation Provisions.

                  The Company will not, while any of the Debt Securities remain
outstanding, consolidate with, or merge into, any other Person, or merge into
itself, or sell, convey, transfer or otherwise dispose of all or substantially
all of its property and assets to any other Person unless the provisions of
Article XI hereof are complied with.

                  SECTION 3.08 Limitation on Dividends.

                  If (i) there shall have occurred and be continuing an Event of
Default, (ii) the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (iii) the Company shall
have given notice of its election to defer payments of interest on the Debt
Securities by extending the interest payment period as provided herein and such
period, or any extension thereof, shall have commenced and be continuing, then
the Company may not (A) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock, (B) make any payment of principal of or premium, if
any, or interest on or repay, repurchase or redeem any debt securities of the
Company that rank in all respects pari passu with or junior in interest to the
Debt Securities or (C) make any payment under any guarantees of the Company that
rank in all respects pari passu with or junior in interest to the Capital
Securities Guarantee (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company (I) 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, (II)
in connection with a dividend reinvestment or stockholder stock purchase plan or
(III) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the occurrence
of (i), (ii) or (iii) above, (b) as a result of any exchange or conversion of
any class or series of the

                                       22
<PAGE>
Company's capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or series
of the Company's indebtedness for any class or series of the Company's capital
stock, (c) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholder's rights plan, or the issuance of
rights, stock or other property under any stockholder's 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 in interest to such stock or (f) any payments under the Capital
Securities Guarantee).

                  SECTION 3.09 Covenants as to the Trust.

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

                                   ARTICLE IV
                                      LISTS

                  SECTION 4.01 Securityholders' Lists.

                  The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee:

                  (a) on each regular record date for an Interest Payment Date,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Securityholders of the Debt Securities as of such record date;
and

                  (b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; except that no such lists need be furnished under this
Section 4.01 so long as the Trustee is in possession thereof by reason of its
acting as Debt Security registrar.

                  SECTION 4.02 Preservation and Disclosure of Lists.

                  (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debt Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in

                                       23
<PAGE>
the capacity of Debt Securities registrar (if so acting) hereunder. The Trustee
may destroy any list furnished to it as provided in Section 4.01 upon receipt of
a new list so furnished.

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

                           (i) afford such applicants access to the information
         preserved at the time by the Trustee in accordance with the provisions
         of subsection (a) of this Section 4.02, or

                           (ii) inform such applicants as to the approximate
         number of holders of Debt Securities whose names and addresses appear
         in the information preserved at the time by the Trustee in accordance
         with the provisions of subsection (a) of this Section 4.02, and as to
         the approximate cost of mailing to such Securityholders the form of
         proxy or other communication, if any, specified in such application.

                  If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of Debt Securities whose name and
address appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission, if
permitted or required by applicable law, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
all Debt Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If said
Commission, as permitted or required by applicable law, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, said Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

                  (c) Each and every holder of Debt Securities, by receiving and
holding the same, agrees with the Company and the Trustee that none of the
Company, the Trustee or any Paying Agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
holders of Debt Securities in accordance with the provisions of

                                       24
<PAGE>
subsection (b) of this Section 4.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).

                                   ARTICLE V
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

                  SECTION 5.01 Events of Default.

                  The following events shall be "Events of Default" with respect
to Debt Securities:

                  (a) the Company defaults in the payment of any interest upon
any Debt Security when it becomes due and payable, and continuance of such
default for a period of 30 days; for the avoidance of doubt, an extension of any
interest payment period by the Company in accordance with Section 2.11 of this
Indenture shall not constitute a default under this clause 5.01(a); or

                  (b) the Company defaults in the payment of all or any part of
the principal of (or premium, if any, on) any Debt Securities as and when the
same shall become due and payable, whether at maturity, upon redemption, by
acceleration of maturity pursuant to Section 5.01 of this Indenture or
otherwise; or

                  (c) the Company defaults in the performance of, or breaches,
any of its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this
Indenture (other than a covenant or agreement a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the holders of not less than 25% in aggregate
principal amount of the outstanding Debt 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) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoints a receiver, liquidator, assignee, custodian,
trustee, sequestrator or other similar official of the Company or for any
substantial part of its property, or orders the winding-up or liquidation of its
affairs and such decree, appointment or order shall remain unstayed and in
effect for a period of 90 consecutive days; or

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

                                       25
<PAGE>
                  (f) the Trust shall have voluntarily or involuntarily
liquidated, dissolved, wound-up its business or otherwise terminated its
existence except in connection with (1) the distribution of the Debt Securities
to holders of the Trust Securities in liquidation of their interests in the
Trust, (2) the redemption of all of the outstanding Trust Securities or (3)
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration.

                  If an Event of Default specified under clause (a), (b) or (c)
of this Section 5.01 occurs and is continuing with respect to the Debt
Securities, then, in each and every such case, either the Trustee or the holders
of not less than 25% in aggregate principal amount of the Debt Securities then
outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Securityholders), may declare the entire principal of the Debt
Securities and any premium and interest accrued, but unpaid, thereon to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default specified under clause (d),
(e) or (f) of this Section 5.01 occurs, then, in each and every such case, the
entire principal amount of the Debt Securities and any premium and interest
accrued, but unpaid, thereon shall ipso facto become immediately due and payable
without further action.

                  The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Debt Securities shall
have become due by acceleration, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debt
Securities and all payments in respect of the Debt Securities which shall have
become due otherwise than by acceleration (with interest upon all such payments
and Deferred Interest, to the extent permitted by law) and such amount as shall
be sufficient to cover reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and all
other amounts due to the Trustee pursuant to Section 6.06, if any, and (ii) all
Events of Default under this Indenture, other than the non-payment of the
payments in respect of Debt Securities which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then, in each and every such case, the holders of a majority in
aggregate principal amount of the Debt Securities then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults and rescind and
annul such acceleration and its consequences, but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon; provided, however, that if the Debt
Securities are held by the Trust or a trustee of the Trust, such waiver or
rescission and annulment shall not be effective until the holders of a majority
in aggregate liquidation amount of the outstanding Capital Securities of the
Trust shall have consented to such waiver or rescission and annulment.

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

                                       26
<PAGE>
                  SECTION 5.02 Payment of Debt Securities on Default; Suit
Therefor.

                  The Company covenants that upon the occurrence of an Event of
Default pursuant to clause (a) or (b) of Section 5.01 and upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Debt Securities, the whole amount that then shall have become due and
payable on all Debt Securities, including Deferred Interest accrued on the Debt
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any other
amounts due to the Trustee under Section 6.06. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt Securities and collect in the manner provided by
law out of the property of the Company or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.

                  In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Debt
Securities under Bankruptcy Law, or in case a receiver or trustee shall have
been appointed for the property of the Company or such other obligor, or in the
case of any other similar judicial proceedings relative to the Company or other
obligor upon the Debt Securities, or to the creditors or property of the Company
or such other obligor, the Trustee, irrespective of whether the principal of the
Debt Securities shall then be due and payable as therein expressed or by
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 5.02, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Debt Securities and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all other amounts due to the Trustee under Section 6.06) and of
the Securityholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Debt Securities, or to the creditors or property of
the Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Debt Securities in any
election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person performing
similar functions in comparable proceedings, and to collect and receive any
moneys or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and expenses; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Securityholders to make such payments to the Trustee,
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
amounts due to the Trustee under Section 6.06.

                                       27
<PAGE>
                  Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debt Securities or the rights of any holder thereof or
to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.

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

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

                  SECTION 5.03 Application of Moneys Collected by Trustee.

                  Any moneys collected by the Trustee shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Debt Securities in respect of
which moneys have been collected, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:

                  First: To the payment of costs and expenses incurred by, and
reasonable fees of, the Trustee, its agents, attorneys and counsel, and of all
other amounts due to the Trustee under Section 6.06;

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

                  Third: To the payment of the amounts then due and unpaid in
respect of Debt Securities, in respect of which or for the benefit of which
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due in respect of such Debt Securities; and

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

                  SECTION 5.04 Proceedings by Securityholders.

                  No holder of any Debt Security shall have any right to
institute any suit, action or proceeding for any remedy hereunder, unless such
holder previously shall have given to the Trustee written notice of an Event of
Default with respect to the Debt Securities and unless the holders of not less
than 25% in aggregate principal amount of the Debt Securities then outstanding
shall have given the Trustee a written request to institute such action, suit or
proceeding and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred thereby,
and the Trustee for 60 days after

                                       28
<PAGE>
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding; provided, that no holder of Debt
Securities shall have any right to prejudice the rights of any other holder of
Debt Securities, obtain priority or preference over any other such holder or
enforce any right under this Indenture except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Debt Securities.

                  Notwithstanding any other provisions in this Indenture, the
right of any holder of any Debt Security to receive payment of the principal of
and premium, if any, and interest on such Debt Security when due, or to
institute suit for the enforcement of any such payment, shall not be impaired or
affected without the consent of such holder. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

                  SECTION 5.05 Proceedings by Trustee.

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

                  SECTION 5.06 Remedies Cumulative and Continuing.

                  Except as otherwise provided in Section 2.06, all powers and
remedies given by this Article V to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Debt Securities, and no delay or
omission of the Trustee or of any holder of any of the Debt Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.

                  SECTION 5.07 Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders.

                  The holders of a majority in aggregate principal amount of the
Debt Securities affected at the time outstanding and, if the Debt Securities are
held by the Trust or a trustee of the Trust, the holders of a majority in
aggregate liquidation amount of the outstanding Capital Securities of the Trust
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to such Debt Securities; provided,
however, that if the Debt Securities

                                       29
<PAGE>
are held by the Trust or a trustee of the Trust, such time, method and place or
such exercise, as the case may be, may not be so directed until the holders of a
majority in aggregate liquidation amount of the outstanding Capital Securities
of the Trust shall have directed such time, method and place or such exercise,
as the case may be; provided, further, that (subject to the provisions of
Section 6.01) the Trustee shall have the right to decline to follow any such
direction if the Trustee shall determine that the action so directed would be
unjustly prejudicial to the holders not taking part in such direction or if the
Trustee being advised by counsel determines that the action or proceeding so
directed may not lawfully be taken or if a Responsible Officer of the Trustee
shall determine that the action or proceedings so directed would involve the
Trustee in personal liability. Prior to any declaration of acceleration, or ipso
facto acceleration, of the maturity of the Debt Securities, the holders of a
majority in aggregate principal amount of the Debt Securities at the time
outstanding may on behalf of the holders of all of the Debt Securities waive (or
modify any previously granted waiver of) any past Default or Event of Default
and its consequences, except a default (a) in the payment of principal of or
premium, if any, or interest on any of the Debt Securities, (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debt Security affected, or (c) in respect of the
covenants contained in Section 3.09; provided, however, that if the Debt
Securities are held by the Trust or a trustee of the Trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in aggregate liquidation amount of the outstanding Capital Securities
of the Trust shall have consented to such waiver or modification to such waiver;
provided, further, that if the consent of the holder of each outstanding Debt
Security is required, such waiver or modification to such waiver shall not be
effective until each holder of the outstanding Capital Securities of the Trust
shall have consented to such waiver or modification to such waiver. Upon any
such waiver or modification to such waiver, the Default or Event of Default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debt Securities shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver or modification to such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Whenever any Default or Event of Default hereunder shall have been waived as
permitted by this Section, said Default or Event of Default shall for all
purposes of the Debt Securities and this Indenture be deemed to have been cured
and to be not continuing.

                  SECTION 5.08 Notice of Defaults.

                  The Trustee shall, within 90 days after a Responsible Officer
of the Trustee shall have actual knowledge or received written notice of the
occurrence of a default with respect to the Debt Securities, mail to all
Securityholders, as the names and addresses of such holders appear upon the Debt
Security Register, notice of all defaults with respect to the Debt Securities
known to the Trustee, unless such defaults shall have been cured before the
giving of such notice (the term "default" for the purpose of this Section is
hereby defined to be any event specified in Section 5.01, not including periods
of grace, if any, provided for therein); provided, that, except in the case of
default in the payment of the principal of or premium, if any, or interest on
any of the Debt Securities, the Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders.

                                       30
<PAGE>
                  SECTION 5.09 Undertaking to Pay Costs.

                  All parties to this Indenture agree, and each holder of any
Debt Security by such holder's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the outstanding Debt Securities (or, if such Debt
Securities are held by the Trust or a trustee of the Trust, more than 10% in
liquidation amount of the outstanding Capital Securities),to any suit instituted
by any Securityholder for the enforcement of the payment of the principal of or
premium, if any, or interest on any Debt Security against the Company on or
after the same shall have become due and payable or to any suit instituted in
accordance with Section 14.12.

                                   ARTICLE VI
                             CONCERNING THE TRUSTEE

                  SECTION 6.01 Duties and Responsibilities of Trustee.

                  With respect to the holders of Debt Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has not
been cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

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

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

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

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

                                       31
<PAGE>
         or opinions which by any provision hereof are specifically required to
         be furnished to the Trustee, the Trustee shall be under a duty to
         examine the same to determine whether or not they conform on their face
         to the requirements of this Indenture;

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

                  (c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture; and

                  (d) the Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Debt Securities unless either
(1) a Responsible Officer shall have actual knowledge of such Default or Event
of Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or any other obligor on the Debt
Securities or by any holder of the Debt Securities, except that the Trustee
shall be deemed to have knowledge of any Event of Default pursuant to Sections
5.01(a) or 5.01(b) hereof (other than an Event of Default resulting from the
default in the payment of Additional Interest, or resulting from the default in
the payment of any premium payable upon a redemption of the Debt Securities
following a Special Event, in each case if the Trustee does not have actual
knowledge or written notice that such payment is due and payable).

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

                  SECTION 6.02 Reliance on Documents, Opinions, etc.

                  Except as otherwise provided in Section 6.01:

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

                  (b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;

                  (c) the Trustee may consult with counsel of its selection and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;

                                       32
<PAGE>

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

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

            (f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, coupon or other paper or document, unless requested in writing to do
so by the holders of a majority in aggregate principal amount of the outstanding
Debt Securities affected thereby; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; and

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

            SECTION 6.03 No Responsibility for Recitals, etc.

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

            SECTION 6.04 Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities.

            The Trustee, any Authenticating Agent, any Paying Agent, any
transfer agent or any Debt Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Debt Securities with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
transfer agent or Debt Security registrar.

                                       33
<PAGE>
            SECTION 6.05 Moneys to be Held in Trust.

            Subject to the provisions of Section 12.04, all moneys received by
the Trustee or any Paying Agent shall, until used or applied as herein provided,
be held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any Paying Agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys, if any, shall be paid from time to time to
the Company upon the written order of the Company, signed by the Chairman of the
Board of Directors, the President, the Chief Operating Officer, a Vice
President, the Treasurer or an Assistant Treasurer of the Company.

            SECTION 6.06 Compensation and Expenses of Trustee.

            The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as shall be agreed
to in writing between the Company and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its written
request for all documented reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance that arises from its
negligence, willful misconduct or bad faith. The Company also covenants to
indemnify each of the Trustee (including in its individual capacity) and any
predecessor Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any and all loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee),
except to the extent such loss, damage, claim, liability or expense results from
the negligence, willful misconduct or bad faith of such indemnitee, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in the premises. The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
documented expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a lien
prior to that of the Debt Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Debt Securities.

            Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in clause (d), (e) or (f) of
Section 5.01, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.

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

                                       34
<PAGE>
            SECTION 6.07 Officers' Certificate as Evidence.

            Except as otherwise provided in Sections 6.01 and 6.02, whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence,
willful misconduct or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence, willful misconduct
or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken or omitted by it under the provisions of this Indenture
upon the faith thereof.

            SECTION 6.08 Eligibility of Trustee.

            The Trustee hereunder shall at all times be a U.S. Person that is a
banking corporation or national association organized and doing business under
the laws of the United States of America or any state thereof or of the District
of Columbia and authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000) and subject to supervision or examination by federal, state, or
District of Columbia authority. If such corporation or national association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
national association shall be deemed to be its combined capital and surplus as
set forth in its most recent records of condition so published.

            The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee, notwithstanding that such corporation or national association shall be
otherwise eligible and qualified under this Article.

            In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.09.

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

            SECTION 6.09 Resignation or Removal of Trustee.

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

                                       35
<PAGE>
such notice of resignation to the affected Securityholders, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee, or any Securityholder who has been a bona fide holder of a
Debt Security or Debt Securities for at least six months may, subject to the
provisions of Section 5.09, on behalf of himself or herself and all others
similarly situated, petition any such court for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor Trustee.

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

                 (i) the Trustee shall fail to comply with the provisions of the
      last paragraph of Section 6.08 after written request therefor by the
      Company or by any Securityholder who has been a bona fide holder of a Debt
      Security or Debt Securities for at least six months;

                 (ii) the Trustee shall cease to be eligible in accordance with
      the provisions of Section 6.08 and shall fail to resign after written
      request therefor by the Company or by any such Securityholder; or

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

then, in any such case, the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and have accepted appointment within 30 days of the occurrence of any of (i),
(ii) or (iii) above, any Securityholder who has been a bona fide holder of a
Debt Security or Debt Securities for at least six months may, on behalf of
himself or herself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
Trustee.

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

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

                                       36
<PAGE>
            SECTION 6.10 Acceptance by Successor Trustee.

            Any successor Trustee appointed as provided in Section 6.09 shall
execute, acknowledge and deliver to the Company and to its predecessor Trustee
an indenture supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all of the rights, powers, trusts
and duties of the retiring Trustee shall be vested in the successor Trustee, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to the Debt Securities of its predecessor hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written request of the Company or of the successor Trustee, the Trustee
ceasing to act shall, upon payment of the amounts then due it pursuant to the
provisions of Section 6.06, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers of the Trustee so ceasing to
act and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder. Upon request of any
such successor Trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
6.06.

            No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible and qualified under the provisions of Section 6.08.

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

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

            SECTION 6.11 Succession by Merger, etc.

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

            In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Debt Securities shall have been
authenticated but not delivered, any

                                       37
<PAGE>
such successor to the Trustee may adopt the certificate of authentication of any
predecessor Trustee, and deliver such Debt Securities so authenticated; and in
case at that time any of the Debt Securities shall not have been authenticated,
any successor to the Trustee may authenticate such Debt Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Debt Securities or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Debt Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.

            SECTION 6.12 Authenticating Agents.

            There may be one or more Authenticating Agents appointed by the
Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Debt Securities
issued upon exchange or registration of transfer thereof as fully to all intents
and purposes as though any such Authenticating Agent had been expressly
authorized to authenticate and deliver Debt Securities; provided, however, that
the Trustee shall not have any liability to the Company for any acts or
omissions of the Authenticating Agent with respect to the authentication and
delivery of Debt Securities. Any such Authenticating Agent shall at all times be
a corporation organized and doing business under the laws of the United States
or of any state thereof or of the District of Columbia authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of at
least $50,000,000 and being 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 the requirements of such
authority, then for the purposes of this Section the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect herein specified in this Section.

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

            Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent with respect to the Debt
Securities by giving written notice of termination to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent eligible under
this Section, shall give written notice of such appointment to the Company and
shall mail notice of such appointment to all holders of Debt Securities as the
names and addresses of such holders appear on the Debt

                                       38
<PAGE>
Security Register. Any successor Authenticating Agent, upon acceptance of its
appointment hereunder, shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent herein.

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

                                  ARTICLE VII
                         CONCERNING THE SECURITYHOLDERS

            SECTION 7.01 Action by Securityholders.

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

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

            SECTION 7.02 Proof of Execution by Securityholders.

            Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of
the execution of any instrument by a Securityholder or such Securityholder's
agent or proxy shall be sufficient if made in accordance with such reasonable
rules and regulations as may be prescribed by the

                                       39
<PAGE>
Trustee or in such manner as shall be satisfactory to the Trustee. The ownership
of Debt Securities shall be proved by the Debt Security Register or by a
certificate of the Debt Security registrar. The Trustee may require such
additional proof of any matter referred to in this Section as it shall deem
necessary.

            The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.

            SECTION 7.03 Who Are Deemed Absolute Owners.

            Prior to due presentment for registration of transfer of any Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and any Debt Security registrar may deem the Person in whose
name such Debt Security shall be registered upon the Debt Security Register to
be, and may treat such Person as, the absolute owner of such Debt Security
(whether or not such Debt Security shall be overdue) for the purpose of
receiving payment of or on account of the principal of and premium, if any, and
interest on such Debt Security and for all other purposes; and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being or upon
such holder's order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Debt Security.

            SECTION 7.04 Debt Securities Owned by Company Deemed Not
Outstanding.

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

            SECTION 7.05 Revocation of Consents; Future Holders Bound.

            At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of

                                       40
<PAGE>
an applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which is shown
by the evidence to be included in the Debt Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Debt Security (or so far as
concerns the principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security, and of any Debt Security issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.

                                  ARTICLE VIII
                            SECURITYHOLDERS' MEETINGS

            SECTION 8.01 Purposes of Meetings.

            A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the following
purposes:

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

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

            (c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or

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

            SECTION 8.02 Call of Meetings by Trustee.

            The Trustee may at any time call a meeting of Securityholders to
take any action specified in Section 8.01, to be held at such time and at such
place in The City of New York, the Borough of Manhattan, or Wilmington,
Delaware, as the Trustee shall determine. Notice of every meeting of the
Securityholders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
to holders of Debt Securities affected at their addresses as they shall appear
on the Debt Securities Register. Such notice shall be mailed not less than 20
nor more than 180 days prior to the date fixed for the meeting.

                                       41
<PAGE>
            SECTION 8.03 Call of Meetings by Company or Securityholders.

            In case at any time the Company pursuant to a Board Resolution, or
the holders of at least 10% in aggregate principal amount of the Debt
Securities, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in East Lansing, Michigan for such meeting and may call
such meeting to take any action authorized in Section 8.01, by mailing notice
thereof as provided in Section 8.02.

            SECTION 8.04 Qualifications for Voting.

            To be entitled to vote at any meeting of Securityholders a Person
shall be (a) a holder of one or more Debt Securities or (b) a Person appointed
by an instrument in writing as proxy by a holder of one or more Debt Securities.
The only Persons who shall be entitled to be present or to speak at any meeting
of Securityholders shall be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

            SECTION 8.05 Regulations.

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

            The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.

            Subject to the provisions of Section 7.04, at any meeting each
holder of Debt Securities with respect to which such meeting is being held or
proxy therefor shall be entitled to one vote for each $1,000 principal amount of
Debt Securities held or represented by such holder; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Debt Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debt Securities held by such chairman or instruments in writing as
aforesaid duly designating such chairman as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

                                       42
<PAGE>
            SECTION 8.06 Voting.

            The vote upon any resolution submitted to any meeting of holders of
Debt Securities with respect to which such meeting is being held shall be by
written ballots on which shall be subscribed the signatures of such holders or
of their representatives by proxy and the serial number or numbers of the Debt
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.02. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.

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

            SECTION 8.07 Quorum; Actions.

            The Persons entitled to vote a majority in aggregate principal
amount of the Debt Securities then outstanding shall constitute a quorum for a
meeting of Securityholders; provided, however, that if any action is to be taken
at such meeting with respect to a consent, waiver, request, demand, notice,
authorization, direction or other action which may be given by the holders of
not less than a specified percentage in aggregate principal amount of the Debt
Securities then outstanding, the Persons holding or representing such specified
percentage in aggregate principal amount of the Debt Securities then outstanding
will constitute a quorum. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Securityholders, be dissolved. In any other case, the meeting may be
adjourned for a period of not less than 10 days as determined by the permanent
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the permanent
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 8.02, except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the aggregate principal amount of the Debt
Securities then outstanding which shall constitute a quorum.

            Except as limited by the proviso in the first paragraph of Section
9.02, any resolution presented to a meeting or adjourned meeting duly reconvened
at which a quorum is present as aforesaid may be adopted by the affirmative vote
of the holders of a majority in

                                       43
<PAGE>
aggregate principal amount of the Debt Securities then outstanding; provided,
however, that, except as limited by the proviso in the first paragraph of
Section 9.02, any resolution with respect to any consent, waiver, request,
demand, notice, authorization, direction or other action that this Indenture
expressly provides may be given by the holders of not less than a specified
percentage in outstanding principal amount of the Debt Securities may be adopted
at a meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid only by the affirmative vote of the holders of not less
than such specified percentage in aggregate principal amount of the Debt
Securities then outstanding.

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

                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

            SECTION 9.01 Supplemental Indentures without Consent of
Securityholders.

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

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

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

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

            (d) to add to, delete from, or revise the terms of Debt Securities,
including, without limitation, any terms relating to the issuance, exchange,
registration or transfer of Debt Securities, including to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities, as required by Section 2.05 (for purposes of assuring

                                       44
<PAGE>
that no registration of Debt Securities is required under the Securities Act of
1933, as amended), provided, that any such action shall not adversely affect the
interests of the holders of the Debt Securities then outstanding (it being
understood, for purposes of this proviso, that transfer restrictions on Debt
Securities substantially similar to those applicable to Capital Securities shall
not be deemed to adversely affect the holders of the Debt Securities);

            (e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 6.10;

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

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

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

            Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debt Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.

            SECTION 9.02 Supplemental Indentures with Consent of
Securityholders.

            With the consent (evidenced as provided in Section 7.01) of the
holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding affected by such supplemental indenture, the Company, when
authorized by a Board Resolution, and the Trustee may from time to time and at
any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debt Securities;
provided, however, that no such supplemental indenture shall, without the
consent of the holders of each Debt Security then outstanding and affected
thereby, (i) change the Maturity Date of any Debt Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate (or manner
of calculation of the rate) or extend the time of payment of interest thereon,
or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of this Indenture and such Debt
Security) or increase the aggregate principal amount of Debt Securities then
outstanding, or change any of the redemption provisions, or make the principal
thereof or any interest or premium thereon payable in any coin or currency other
than

                                       45
<PAGE>
United States Dollars, or impair or affect the right of any Securityholder to
institute suit for payment thereof, or (ii) reduce the aforesaid percentage of
Debt Securities the holders of which are required to consent to any such
supplemental indenture; and provided, further, that if the Debt Securities are
held by the Trust or the trustee of the Trust, such supplemental indenture shall
not be effective until the holders of a majority in aggregate liquidation amount
of the outstanding Capital Securities shall have consented to such supplemental
indenture; provided, further, that if the consent of the Securityholder of each
outstanding Debt Security is required, such supplemental indenture shall not be
effective until each holder of the outstanding Capital Securities shall have
consented to such supplemental indenture.

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

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

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

            SECTION 9.03 Effect of Supplemental Indentures.

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

            SECTION 9.04 Notation on Debt Securities.

            Debt Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article IX may
bear a notation as to any matter provided for in such supplemental indenture. If
the Company or the Trustee shall so determine, new Debt Securities so modified
as to conform, in the opinion of the Board of

                                       46
<PAGE>
Directors of the Company, to any modification of this Indenture contained in any
such supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee or the Authenticating Agent and delivered in
exchange for the Debt Securities then outstanding.

            SECTION 9.05 Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee.

            The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall, in addition to the documents required by Section 14.06, receive an
Officers' Certificate as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article IX. The
Trustee shall also receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article IX is authorized or
permitted by, and conforms to, the terms of this Article IX and that it is
proper for the Trustee under the provisions of this Article IX to join in the
execution thereof.

                                   ARTICLE X
                            REDEMPTION OF SECURITIES

            SECTION 10.01 Optional Redemption.

            The Company shall have the right to redeem the Debt Securities, in
whole or (provided that all accrued and unpaid interest has been paid on all
Debt Securities for all Interest Periods terminating on or prior to such date)
from time to time in part, on any Interest Payment Date on or after May 23, 2008
(each, an "Optional Redemption Date"), at the Optional Redemption Price.

            SECTION 10.02 Special Event Redemption.

            If a Special Event shall occur and be continuing, the Company shall
have the right to redeem the Debt Securities, in whole but not in part, at any
time within 90 days following the occurrence of such Special Event (the "Special
Redemption Date"), at the Special Redemption Price. In the event that the
Special Redemption Date falls on a day prior to the LIBOR Determination Date for
any Interest Period commencing on or after May 23, 2008, then the Company shall
be required to pay to Securityholders, on the Business Day following such LIBOR
Determination Date, any additional amount of interest that would have been
payable on the Special Redemption Date had the amount of interest determined on
such LIBOR Determination Date been known on the first day of such Interest
Period.

            SECTION 10.03 Notice of Redemption; Selection of Debt Securities.

            In case the Company shall desire to exercise the right to redeem
all, or, as the case may be, any part of the Debt Securities, it shall fix a
date for redemption and shall mail, or cause the Trustee to mail (at the expense
of the Company), a notice of such redemption at least 30 and not more than 60
days prior to the date fixed for redemption to the holders of Debt Securities so
to be redeemed as a whole or in part at their last addresses as the same appear
on the Debt Security Register. Such mailing shall be by first class mail. The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the

                                       47
<PAGE>
holder receives such notice. In any case, failure to give such notice by mail or
any defect in the notice to the holder of any Debt Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debt Security.

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

            Prior to 10:00 a.m., New York City time, on the Optional Redemption
Date or the Special Redemption Date specified in the notice of redemption given
as provided in this Section, the Company will deposit with the Trustee or with
one or more Paying Agents an amount of money sufficient to redeem on such date
all the Debt Securities so called for redemption at the applicable price
therefor, together with unpaid interest accrued to such date.

            The Company will give the Trustee notice not less than 45 nor more
than 60 days prior to the date fixed for redemption as to the price at which the
Debt Securities are to be redeemed and the aggregate principal amount of Debt
Securities to be redeemed and the Trustee shall select, in such manner as in its
sole discretion it shall deem appropriate and fair, the Debt Securities or
portions thereof (in integral multiples of $1,000) to be redeemed.

            SECTION 10.04 Payment of Debt Securities Called for Redemption.

            If notice of redemption has been given as provided in Section 10.03,
the Debt Securities or portions of Debt Securities with respect to which such
notice has been given shall become due and payable on the related Optional
Redemption Date or Special Redemption Date (as the case may be) and at the place
or places stated in such notice at the applicable price therefor, together with
unpaid interest accrued thereon to said Optional Redemption Date or the Special
Redemption Date (as the case may be), and on and after said Optional Redemption
Date or the Special Redemption Date (as the case may be) (unless the Company
shall default in the payment of such Debt Securities at the redemption price,
together with unpaid interest accrued thereon to said date) interest on the Debt
Securities or portions of Debt Securities so called for redemption shall cease
to accrue. On presentation and surrender of such Debt Securities at a place of
payment specified in said notice, such Debt Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable price
therefor, together with unpaid interest accrued thereon to said Optional
Redemption Date or the Special Redemption Date (as the case may be).

                                       48
<PAGE>
            Upon presentation of any Debt Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of authorized denominations in principal amount
equal to the unredeemed portion of the Debt Security so presented.

                                   ARTICLE XI
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

            SECTION 11.01 Company May Consolidate, etc., on Certain Terms.

            Nothing contained in this Indenture or in the Debt Securities shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of all or substantially all of the property or
capital stock of the Company or its successor or successors to any other
corporation (whether or not affiliated with the Company, or its successor or
successors) authorized to acquire and operate the same; provided, however, that
the Company hereby covenants and agrees that (i) upon any such consolidation,
merger (where the Company is not the surviving corporation), sale, conveyance,
transfer or other disposition, the successor entity shall be a corporation
organized and existing under the laws of the United States or any state thereof
or the District of Columbia (unless such corporation has agreed to make all
payments due in respect of the Debt Securities or, if outstanding, the Trust
Securities and the Capital Securities Guarantee without withholding or deduction
for, or on account of, any taxes, duties, assessments or other governmental
charges under the laws or regulations of the jurisdiction of organization or
residence (for tax purposes) of such corporation or any political subdivision or
taxing authority thereof or therein unless required by applicable law, in which
case such corporation shall have agreed to pay such additional amounts as shall
be required so that the net amounts received and retained by the holders of such
Debt Securities or Trust Securities, as the case may be, after payment of all
taxes (including withholding taxes), duties, assessments or other governmental
charges, will be equal to the amounts that such holders would have received and
retained had no such taxes (including withholding taxes), duties, assessments or
other governmental charges been imposed) and such corporation expressly assumes
all of the obligations of the Company under the Debt Securities, this Indenture,
the Capital Securities Guarantee and the Declaration and (ii) after giving
effect to any such consolidation, merger, sale, conveyance, transfer or other
disposition, no Default or Event of Default shall have occurred and be
continuing.

            SECTION 11.02 Successor Entity to be Substituted.

            In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition contemplated in Section 11.01 and upon the
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and reasonably satisfactory in form to the Trustee, of
the due and punctual payment of the principal of and premium, if any, and
interest on all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor corporation shall succeed
to and be substituted for the Company, with

                                       49
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the same effect as if it had been named herein as the Company, and thereupon the
predecessor entity shall be relieved of any further liability or obligation
hereunder or upon the Debt Securities. Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor corporation instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Debt Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee or the Authenticating
Agent for authentication, and any Debt Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee or
the Authenticating Agent for that purpose. All the Debt Securities so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debt Securities theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Debt Securities had been issued at
the date of the execution hereof.

            SECTION 11.03 Opinion of Counsel to be Given to Trustee.

            The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall receive, in addition to the Opinion of Counsel required by Section 9.05,
an Opinion of Counsel as conclusive evidence that any consolidation, merger,
sale, conveyance, transfer or other disposition, and any assumption, permitted
or required by the terms of this Article XI complies with the provisions of this
Article XI.

                                  ARTICLE XII
                     SATISFACTION AND DISCHARGE OF INDENTURE

            SECTION 12.01 Discharge of Indenture.

            When (a) the Company shall deliver to the Trustee for cancellation
all Debt Securities theretofore authenticated (other than any Debt Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.06) and not theretofore canceled, or
(b) all the Debt Securities not theretofore canceled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee, in trust, funds,
which shall be immediately due and payable, sufficient to pay at maturity or
upon redemption, as the case may be, all of the Debt Securities (other than any
Debt Securities which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.06) not theretofore canceled
or delivered to the Trustee for cancellation, including principal and premium,
if any, and interest due or to become due to the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, but
excluding, however, the amount of any moneys for the payment of principal of and
premium, if any, or interest on the Debt Securities (1) theretofore repaid to
the Company in accordance with the provisions of Section 12.04, or (2) paid to
any state or to the District of Columbia pursuant to its unclaimed property or
similar laws, and if in the case of either clause (a) or (b) above the Company
shall also pay or cause to be paid all other sums

                                       50
<PAGE>
payable hereunder by the Company, then this Indenture shall cease to be of
further effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02,
3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt
Securities shall mature or are redeemed, as the case may be, and are paid in
full. Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and the Trustee,
on demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with, and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture,
provided, however, that the Company hereby agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Debt Securities.

            SECTION 12.02 Deposited Moneys to be Held in Trust by Trustee.

            Subject to the provisions of Section 12.04, all moneys deposited
with the Trustee pursuant to Section 12.01 shall be held in trust and applied by
it to the payment, either directly or through any Paying Agent (including the
Company if acting as its own Paying Agent), to the holders of the particular
Debt Securities for the payment of which such moneys have been deposited with
the Trustee, of all sums due and to become due thereon for principal, premium,
if any, and interest.

            SECTION 12.03 Paying Agent to Repay Moneys Held.

            Upon the satisfaction and discharge of this Indenture, all moneys
then held by any Paying Agent of the Debt Securities (other than the Trustee)
shall, upon demand of the Company, be repaid to the Company or paid to the
Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

            SECTION 12.04 Return of Unclaimed Moneys.

            Any moneys deposited with or paid to the Trustee or any Paying Agent
for payment of the principal of and premium, if any, or interest on Debt
Securities and not applied but remaining unclaimed by the holders of Debt
Securities for two years after the date upon which such principal, premium, if
any, or interest, as the case may be, shall have become due and payable, shall
be repaid to the Company by the Trustee or such Paying Agent on written demand;
and the holder of any of the Debt Securities shall thereafter look only to the
Company for any payment which such holder may be entitled to collect and all
liability of the Trustee or such Paying Agent with respect to such moneys shall
thereupon cease.

                                  ARTICLE XIII
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

            SECTION 13.01 Indenture and Debt Securities Solely Corporate
Obligations.

            No recourse for the payment of the principal of or premium, if any,
or interest on any Debt Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture

                                       51
<PAGE>
or in any supplemental indenture, or in any such Debt Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer, director, employee or agent, as such, past,
present or future, of the Company or of any predecessor or successor corporation
of the Company, either directly or through the Company or any successor
corporation of the Company, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of the Debt Securities.

                                  ARTICLE XIV
                            MISCELLANEOUS PROVISIONS

            SECTION 14.01 Successors.

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

            SECTION 14.02 Official Acts by Successor Entity.

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

            SECTION 14.03 Surrender of Company Powers.

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

            SECTION 14.04 Addresses for Notices, etc.

            Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the
Securityholders on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee for such purpose) to the Company at 1301 N. Hagadorn Road, East Lansing,
Michigan 48823, Attention: Frank H. Freund. Any notice, direction, request or
demand by any Securityholder or the Company to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the office of Wilmington Trust Company at Rodney Square
North, 1100 North Market Street, Wilmington, DE 19890-0001, Attention: Corporate
Trust Administration.

                                       52

<PAGE>
            SECTION 14.05 Governing Law.

            This Indenture and the Debt Securities shall each be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles of said State other than Section 5-1401 of
the New York General Obligations Law.

            SECTION 14.06 Evidence of Compliance with Conditions Precedent.

            Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion of
the signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with (except that no such Opinion of Counsel is
required to be furnished to the Trustee in connection with the authentication
and issuance of Debt Securities issued on the date of this Indenture).

            Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (except certificates delivered pursuant to
Section 3.05) shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.

            SECTION 14.07 Business Day Convention.

            Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and additional interest will
accrue for each day that such payment is delayed as a result thereof. If the
Maturity Date, any Optional Redemption Date or the Special Redemption Date falls
on a day that is not a Business Day, then the principal, premium, if any, and/or
interest payable on such date will be paid on the next succeeding Business Day,
and no additional interest will accrue in respect of such payment made on such
next succeeding Business Day.

            SECTION 14.08 Table of Contents, Headings, etc.

            The table of contents and the titles and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.

                                       53
<PAGE>
            SECTION 14.09 Execution in Counterparts.

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

            SECTION 14.10 Separability.

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

            SECTION 14.11 Assignment.

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

            SECTION 14.12 Acknowledgment of Rights.

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

                                       54
<PAGE>
                                   ARTICLE XV
                        SUBORDINATION OF DEBT SECURITIES

            SECTION 15.01 Agreement to Subordinate.

            The Company covenants and agrees, and each holder of Debt Securities
issued hereunder and under any supplemental indenture (the "Additional
Provisions") by such holder's acceptance thereof likewise covenants and agrees,
that all Debt Securities shall be issued subject to the provisions of this
Article XV; and each holder of a Debt Security, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.

            The payment by the Company of the payments due on all Debt
Securities issued hereunder and under any Additional Provisions shall, to the
extent and in the manner hereinafter set forth, be subordinated and junior in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
incurred.

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

            SECTION 15.02 Default on Senior Indebtedness.

            In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
in respect of any Senior Indebtedness of the Company following any applicable
grace period, or in the event that the maturity of any Senior Indebtedness of
the Company has been accelerated because of a default, and such acceleration has
not been rescinded or canceled and such Senior Indebtedness has not been paid in
full, then, in either case, no payment shall be made by the Company with respect
to the payments due on the Debt Securities.

            In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section, such payment shall, subject to Section 15.06, be held
in trust for the benefit of, and shall be paid over or delivered to, the holders
of Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or trustee) notify the Trustee in writing within 90 days of such
payment of the amounts then due and owing on the Senior Indebtedness and only
the amounts specified in such notice to the Trustee shall be paid to the holders
of Senior Indebtedness.

            SECTION 15.03 Liquidation; Dissolution; Bankruptcy.

            Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in

                                       55
<PAGE>
money in accordance with its terms, before any payment is made by the Company in
respect of the Debt Securities; and upon any such dissolution, winding-up,
liquidation or reorganization, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Securityholders or the Trustee would be entitled to
receive from the Company, except for the provisions of this Article XV, shall be
paid by the Company, or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Securityholders or by the Trustee under this Indenture if received by them or
it, directly to the holders of Senior Indebtedness of the Company (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Securityholders.

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

            For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer or other
disposition of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XI of
this Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XI of this Indenture. Nothing in Section 15.02 or
in this Section shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.06 of this Indenture.

                                       56
<PAGE>
            SECTION 15.04 Subrogation.

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

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

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

            SECTION 15.05 Trustee to Effectuate Subordination.

            Each Securityholder, by such Securityholder's acceptance thereof,
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.

                                       57
<PAGE>
            SECTION 15.06 Notice by the Company.

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

            The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely upon the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Indebtedness of the Company (or a trustee or representative on behalf of
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such holder
or holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

            SECTION 15.07 Rights of the Trustee; Holders of Senior Indebtedness.

            The Trustee, in its individual capacity, shall be entitled to all
the rights set forth in this Article XV in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture or any Additional Provisions shall
deprive the Trustee of any of its rights as such holder.

            With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture or any Additional Provisions against

                                       58
<PAGE>
the Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to
the holders of such Senior Indebtedness and, subject to the provisions of
Article VI of this Indenture, the Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall pay over or deliver to Securityholders, the
Company or any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article XV or otherwise.

            Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.

            SECTION 15.08 Subordination May Not Be Impaired.

            No right of any present or future holder of any Senior Indebtedness
of the Company to enforce the subordination of the Debt Securities provided in
this Article XV shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company, or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company,
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.

            Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination of the Debt Securities provided
in this Article XV or the obligations hereunder of the holders of the Debt
Securities to the holders of such Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend
or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (c) release
any Person liable in any manner for the collection of such Senior Indebtedness;
and (d) exercise or refrain from exercising any rights against the Company or
any other Person.

                                       59
<PAGE>
            Wilmington Trust Company, in its capacity as Trustee, hereby accepts
the trusts in this Indenture declared and provided, upon the terms and
conditions herein above set forth.

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

                                     AMERICAN PHYSICIANS CAPITAL, INC.

                                     By: /s/ Frank H. Freund
                                         --------------------------------------
                                         Name:  Frank H. Freund
                                         Title: Chief Financial Officer

                                     WILMINGTON TRUST COMPANY,
                                           as Trustee

                                     By: /s/ Donald F. MacKelcan
                                         --------------------------------------
                                         Name:  Donald F. MacKelcan
                                         Title: Vice President

                                       60
<PAGE>
                                                                       EXHIBIT A

                              FORM OF DEBT SECURITY

                           [FORM OF FACE OF SECURITY]

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS. 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. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (I) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (II) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (A) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE

                                      A-1
<PAGE>
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

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

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

            THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE

                                      A-2
<PAGE>
SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

            Floating Rate Junior Subordinated Debt Security due 2033
                                       of
                        AMERICAN PHYSICIANS CAPITAL, INC.

            American Physicians Capital, Inc., an insurance holding company
incorporated in Michigan (the "Company", which term includes any successor
permitted under the Indenture (as defined herein)), for value received, promises
to pay to Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for APCapital Trust II, a Delaware statutory trust, or
registered assigns, the principal amount of FIFTEEN MILLION FOUR HUNDRED AND
SIXTY-FOUR THOUSAND ($15,464,000) Dollars on May 23, 2033 (the "Maturity Date")
(or any Optional Redemption Date or the Special Redemption Date, each as defined
herein, or any earlier date of acceleration of the maturity of this Debt
Security), and to pay interest on the outstanding principal amount of this Debt
Security from May 22, 2003, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on February 23, May 23,
August 23 and November 23 of each year, commencing on August 23, 2003 (each, an
"Interest Payment Date"), at a floating rate per annum, which, with respect to
any Interest Period (as defined in the Indenture), will be equal to LIBOR (as
defined in the Indenture), as determined on the LIBOR Determination Date (as
defined in the Indenture) for such Interest Period, plus 4.20% (the "Interest
Rate") (provided that the Interest Rate for any Interest Period prior to the
Interest Period commencing on the Interest Payment Date in May 2008 may not
exceed 12.5% per annum; and provided, further, that the Interest Rate for any
Interest Period may not exceed the highest rate permitted by New York law, as
the same may be modified by United States law of general application) until the
principal hereof shall have been paid or duly provided for, and on any overdue
principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at an annual rate equal to the then applicable Interest Rate,
compounded quarterly. The amount of interest payable for any Interest Period
shall be computed on the basis of a 360-day year and the actual number of days
elapsed in such Interest Period; provided, however, that if the Special
Redemption Date (as defined herein) is before May 23, 2008, the amounts so
payable shall be calculated as set forth in the definition of the Special
Redemption Price.

            The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Debt Security (or one or more
Predecessor Securities, as defined in the Indenture) is registered at the close
of business on the "regular record date" for such interest installment, which
shall be the fifteenth day prior to such Interest Payment Date, whether or not
such day is a Business Day (as defined herein). Any such interest installment
(other than Deferred Interest (as defined herein)) not punctually paid or duly
provided for shall forthwith cease to be payable to

                                      A-3
<PAGE>
the holders on such regular record date and may be paid to the Person in whose
name this Debt Security (or one or more Predecessor Securities) is registered at
the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
holders of the Debt Securities not less than 10 days prior to such special
record date, all as more fully provided in the Indenture.

            Payment of the principal of and premium, if any, and interest on
this Debt Security due on the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, shall be made in immediately
available funds against presentation and surrender of this Debt Security at the
office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware, or at the office or agency of any other Paying Agent appointed by the
Company maintained for that purpose in Wilmington, Delaware or East Lansing,
Michigan. Payment of interest on this Debt Security due on any Interest Payment
Date other than the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be, shall be made at the option of the Company
by check mailed to the holder thereof at such address as shall appear in the
Debt Security Register or by wire transfer of immediately available funds to an
account appropriately designated by the holder hereof. Notwithstanding the
foregoing, so long as the holder of this Debt Security is the Institutional
Trustee, payment of the principal of and premium, if any, and interest on this
Debt Security shall be made in immediately available funds when due at such
place and to such account as may be designated by the Institutional Trustee. All
payments in respect of this Debt Security shall be payable in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts.

            Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and additional interest will
accrue for each day that such payment is delayed as a result thereof. If the
Maturity Date, any Optional Redemption Date or the Special Redemption Date falls
on a day that is not a Business Day, then the principal, premium, if any, and/or
interest payable on such date will be paid on the next succeeding Business Day,
and no additional interest will accrue in respect of such payment made on such
next succeeding Business Day.

            So long as no Event of Default has occurred and is continuing, the
Company shall have the right, from time to time and without causing an Event of
Default, to defer payments of interest on the Debt Securities by extending the
interest payment period on the Debt Securities at any time and from time to time
during the term of the Debt Securities, for up to 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and further consecutive extensions thereof, is referred to herein as an
"Extension Period"). No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. During any
Extension Period, interest will continue to accrue on the Debt Securities, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as "Deferred Interest") will accrue at an annual rate equal
to the Interest Rate applicable during such Extension Period, compounded
quarterly from the date such Deferred Interest would have been payable were it
not for the Extension Period, to the extent permitted by applicable law. No

                                      A-4
<PAGE>
interest or Deferred Interest (except any Additional Interest (as defined in the
Indenture) that may be due and payable) shall be due and payable during an
Extension Period, except at the end thereof. At the end of any Extension Period,
the Company shall pay all Deferred Interest then accrued and unpaid on the Debt
Securities; provided, however, that during any Extension Period, the Company may
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or (ii) make any payment of principal of or premium or interest on
or repay, repurchase or redeem any debt securities of the Company that rank in
all respects pari passu with or junior in interest to the Debt Securities (other
than (a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company (A) 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, (B) in connection with a dividend
reinvestment or stockholder stock purchase plan or (C) in connection with the
issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to such Extension Period, (b) as a result of any
exchange or conversion of any class or series of the Company's capital stock (or
any capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock or of any class or series of the Company's indebtedness
for any class or series of the Company's capital stock, (c) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's 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 or (f)
any payments under the Capital Securities Guarantee). Prior to the termination
of any Extension Period, the Company may further extend such Extension Period,
provided, that no Extension Period (including all previous and further
consecutive extensions that are part of such Extension Period) shall exceed 20
consecutive quarterly periods. Upon the termination of any Extension Period and
upon the payment of all Deferred Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements. The Company must give
the Trustee notice of its election to begin or extend an Extension Period at
least one Business Day prior to the earlier of (i) the next succeeding date on
which interest on the Debt Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date such interest
is payable, but in any event not later than the related regular record date.

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

                                      A-5
<PAGE>
Indebtedness, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions.

            The Company waives diligence, presentment, demand for payment,
notice of nonpayment, notice of protest, and all other demands and notices.

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

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

                                      A-6
<PAGE>
            IN WITNESS WHEREOF, the Company has duly executed this certificate.

                                          AMERICAN PHYSICIANS CAPITAL, INC.

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

Dated: May 22, 2003

                          CERTIFICATE OF AUTHENTICATION

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

                                          WILMINGTON TRUST COMPANY,
                                            not in its individual capacity but
                                            solely as the Trustee

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

Dated: May 22, 2003

                                      A-7
<PAGE>
                          [FORM OF REVERSE OF SECURITY]

            This Debt Security is one of a duly authorized series of debt
securities of the Company (collectively, the "Debt Securities"), all issued or
to be issued pursuant to an Indenture (the "Indenture"), dated as of May 22,
2003, duly executed and delivered between the Company and Wilmington Trust
Company, as Trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debt Securities of which this Debt
Security is a part.

            Upon the occurrence and continuation of a Tax Event or an Investment
Company Event (each, a "Special Event"), the Company shall have the right to
redeem this Debt Security, at its option, in whole with all other Debt
Securities but not in part, at any time, within 90 days following the occurrence
of such Special Event (the "Special Redemption Date"), as the case may be, at
the Special Redemption Price (as defined herein). In the event that the Special
Redemption Date falls on a day prior to the LIBOR Determination Date for any
Interest Period commencing on or after May 23, 2008, then the Company shall be
required to pay to Securityholders, on the Business Day following such LIBOR
Determination Date, any additional amount of interest that would have been
payable on the Special Redemption Date had the amount of interest determined on
such LIBOR Determination Date been known on the first day of such Interest
Period.

            The Company shall also have the right to redeem this Debt Security
at its option, in whole or (provided that all accrued and unpaid interest has
been paid on all Debt Securities for all Interest Periods terminating on or
prior to such date) from time to time in part, on any Interest Payment Date on
or after May 23, 2008 (each, an "Optional Redemption Date"), at the Optional
Redemption Price (as defined herein).

            Any redemption pursuant to the preceding two paragraphs will be made
upon not less than 30 days' nor more than 60 days' prior written notice. If the
Debt Securities are only partially redeemed by the Company, the Debt Securities
will be redeemed pro rata or by any other method utilized by the Trustee. In the
event of redemption of this Debt Security in part only, a new Debt Security or
Debt Securities for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.

            "Comparable Treasury Issue" means, with respect to the Special
Redemption Date, the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three months after
May 23, 2008, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.

                                      A-8
<PAGE>
            "Comparable Treasury Price" means, with respect to the Special
Redemption Date, (a) the average of three Reference Treasury Dealer Quotations
(as defined herein) for the Special Redemption Date received by the Quotation
Agent, after excluding the highest and lowest of five such Reference Treasury
Dealer Quotations so received, or (b) if the Quotation Agent receives fewer than
five such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.

            "Optional Redemption Price" means an amount in cash equal to 100% of
the principal amount of this Debt Security being redeemed plus unpaid interest
accrued thereon to the Optional Redemption Date or, in the case of a redemption
due to the occurrence of a Special Event, to the Special Redemption Date if the
Special Redemption Date is on or after May 23, 2008.

            "Primary Treasury Dealer" means a primary United States Government
securities dealer in The City of New York.

            "Quotation Agent" means Citigroup Global Markets Inc. and its
successors; provided, however, that if the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor another Primary Treasury
Dealer.

            "Reference Treasury Dealer" means (i) the Quotation Agent and (ii)
any other Primary Treasury Dealer selected by the Trustee after consultation
with the Company.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Special Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding the
Special Redemption Date.

            "Remaining Life" means the period from the Special Redemption Date
through May 23, 2008.

            "Special Redemption Price" means an amount in cash equal to (1) if
the Special Redemption Date is before May 23, 2008, the greater of (a) 100% of
the principal amount of this Debt Security or (b) as determined by the Quotation
Agent, the sum of the present value of the principal amount payable as part of
the Optional Redemption Price with respect to a redemption as of May 23, 2008,
together with the present value of interest payments calculated at a fixed per
annum rate of interest equal to 7.60% over the Remaining Life of this Debt
Security, discounted to the Special Redemption Date on a quarterly basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined herein) plus 2.0%, plus, in the case of either (a) or (b),
unpaid interest accrued thereon to the Special Redemption Date and (2) if the
Special Redemption Date is on or after May 23, 2008, the Optional Redemption
Price for the Special Redemption Date.

            "Treasury Rate" means, with respect to the Special Redemption Price,
(i) the yield, under the heading which represents the average for the week
immediately prior to the third Business Day immediately preceding the Special
Redemption Date, appearing in the most

                                      A-9
<PAGE>
recently published statistical release designated H.15 (519) or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life
(provided that if no maturity is within three months before or after the
Remaining Life, then the yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week immediately prior to the third
Business Day immediately preceding the Special Redemption Date or does not
contain such yields, the rate per annum equal to the quarterly equivalent yield
to maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for the Special Redemption Date.

            In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and, in certain cases, shall ipso facto become, due and payable, and
upon any such declaration of acceleration shall become due and payable, in each
case, in the manner, with the effect and subject to the conditions provided in
the Indenture.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Debt Securities at the time outstanding affected thereby, as
specified in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Debt Securities; provided, however,
that no such supplemental indenture shall, among other things, without the
consent of the holders of each Debt Security then outstanding and affected
thereby (i) change the Maturity Date of any Debt Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate (or manner
of calculation of the rate) or extend the time of payment of interest thereon,
or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of the Indenture and such Debt
Security) or increase the aggregate principal amount of Debt Securities then
outstanding, or change any of the redemption provisions, or make the principal
thereof or any interest or premium thereon payable in any coin or currency other
than United States Dollars, or impair or affect the right of any holder to
institute suit for payment thereof, or (ii) reduce the aforesaid percentage of
Debt Securities the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding, on behalf of the holders of all the Debt Securities, to
waive any past default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture, and its consequences,
except (a) a default in payments due in respect of any of the Debt Securities,
(b) in respect of covenants or provisions of the Indenture which cannot be
modified or amended without the consent of the holder of each Debt Security
affected, or (c) in respect of the covenants of the Company relating to its
ownership of Common Securities of the Trust. Any such consent or waiver by the
holder of this Debt Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon

                                      A-10
<PAGE>
all future holders and owners of this Debt Security and of any Debt Security
issued in exchange herefor or in place hereof (whether by registration of
transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Debt Security.

            No reference herein to the Indenture and no provision of this Debt
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to make all payments due in
respect of this Debt Security at the time and place and at the rate and in the
money herein prescribed.

            As provided in the Indenture and subject to certain limitations
herein and therein set forth, this Debt Security is transferable by the holder
hereof on the Debt Security Register (as defined in the Indenture) of the
Company, upon surrender of this Debt Security for registration of transfer at
the office or agency of the Trustee in Wilmington, Delaware, or at any other
office or agency of the Company in Wilmington, Delaware or East Lansing,
Michigan, accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Debt Securities of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such registration of transfer, but the Company or
the Trustee may require payment of a sum sufficient to cover any tax, fee or
other governmental charge payable in relation thereto as specified in the
Indenture.

            Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Debt Security shall be
overdue and notwithstanding any notice of ownership or writing hereon) for the
purpose of receiving payment of the principal of and premium, if any, and
interest on this Debt Security and for all other purposes, and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary.

            As provided in the Indenture and subject to certain limitations
herein and therein set forth, Debt Securities are exchangeable for a like
aggregate principal amount of Debt Securities of different authorized
denominations, as requested by the holder surrendering the same.

            The Debt Securities are issuable only in registered certificated
form without coupons.

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

                                      A-11
<PAGE>
            All terms used but not defined in this Debt Security shall have the
meanings assigned to them in the Indenture.

            THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

                                      A-12<PAGE>
                                                                    EXHIBIT 10.1

                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  BY AND AMONG

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

                       AMERICAN PHYSICIANS CAPITAL, INC.,

                                   AS SPONSOR,

                                       AND
                    WILLIAM B. CHEESEMAN AND FRANK H. FREUND,
                               AS ADMINISTRATORS,

                            DATED AS OF MAY 15, 2003
<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                                        Page
                                                                                                                        ----

<S>       <C>                                                                                                          <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 ...........................................................................        9
         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>

<PAGE>
<TABLE>
<S>                          <C>                                                                                         <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 .......................................................................       46
         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

</TABLE>

                                       ii
<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

                  AMERICAN PHYSICIANS CAPITAL STATUTORY TRUST I

                                  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 American Physicians Capital Statutory Trust I (the "Trust"), a
statutory trust under the Statutory Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of April 15, 2003 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of the State of the State of
Connecticut on April 15, 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 William B. Cheeseman and Frank H. Freund,
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.

                                       2
<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 American Physicians Capital, Inc., a Michigan
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 American Physicians Capital, Inc., a Michigan 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 Securities" has the meaning set forth in the Indenture.

      "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 "American Physicians Capital
Statutory Trust I," 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.

                                       8
<PAGE>
      SECTION 2.4. AUTHORITY. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by the
Institutional Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Institutional Trustee acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Institutional Trustee to bind the Trust. Persons dealing with the Trust
are entitled to rely conclusively on the power and authority of the
Institutional Trustee as set forth in this Declaration. The Administrators shall
have only those ministerial duties set forth herein with respect to
accomplishing the purposes of the Trust and are not intended to be trustees or
fiduciaries with respect to the Trust or the Holders. The Institutional Trustee
shall have the right, but shall not be obligated except as provided in Section
2.6, to perform those duties assigned to the Administrators.

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

      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;

                                       9
<PAGE>
                  (E) the consent to the appointment of a Paying Agent, Transfer
            Agent and Registrar in accordance with this Declaration, which
            consent shall not be unreasonably withheld or delayed;

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

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

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

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

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

                  (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;

                                       10
<PAGE>
                  (F) the sending of notices of default and other information
            regarding the Securities and the Debentures to the Holders in
            accordance with this Declaration;

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

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

                                       11
<PAGE>
Trustee shall, at the sole cost and expense of the Trust, defend all claims and
demands of all Persons at any time claiming any lien on any of the Trust
Property adverse to the interest of the Trust or the Holders in their capacity
as Holders.

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

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

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

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

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

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

      (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.

                                       12
<PAGE>
      (g) Legal title to all Trust Property shall be vested at all times in the
Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee and the Administrators for the benefit
of the Trust in accordance with this Declaration.

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

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

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

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

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

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

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

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

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

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

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

                                       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 eliminate such interest
or resign, to the extent and in the manner provided by, and subject to this
Declaration.

      (d) The initial Institutional Trustee shall be 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 William B. Cheeseman and Frank H. Freund. 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.

                                       28
<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.

                                       31
<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:

                                       32
<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 0, 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 0 (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 9.4 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 9.4.

                                   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) Except as provided in Section 11.1(d), (e) or (g), 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 Common Securities shall
have consented to such amendment.

      (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

                                       42
<PAGE>
matter on which Holders of such class of Securities are entitled to act under
the terms of this Declaration or the terms of the Securities. The Administrators
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrators one or more calls
in a writing stating that the signing Holders of the Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of the Securities calling a meeting shall specify in
writing the Certificates held by the Holders of the Securities exercising the
right to call a meeting and only those Securities represented by such
Certificates shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.

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

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

                                       43
<PAGE>
      Holders of the Securities, waiver of any such notice, action by consent
      without a meeting, the establishment of a record date, quorum
      requirements, voting in person or by proxy or any other matter with
      respect to the exercise of any such right to vote; provided, however, that
      each meeting shall be conducted in the United States (as that term is
      defined in Treasury Regulations section 301.7701-7).

                                  ARTICLE XII.

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

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

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

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

      (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:

                                       44
<PAGE>
      (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):

                  American Physicians Capital Statutory Trust I
                  c/o American Physicians Capital, Inc.
                  1301 N. Hagadorn Road
                  East Lansing, Michigan 48823
                  Attention:  Frank H. Freund
                  Telecopy:  517-351-7866

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):

                  American Physicians Capital, Inc.
                  1301 N. Hagadorn Road
                  East Lansing, Michigan 48823
                  Attention:  Frank H. Freund
                  Telecopy:  517-351-7866

      (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.

                                       45
<PAGE>
      SECTION 13.2. GOVERNING LAW. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
law of the State of Connecticut and all rights and remedies shall be governed by
such laws without regard to the principles of conflict of laws of the State of
Connecticut or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Connecticut; provided, however,
that there shall not be applicable to the Trust, the Institutional Trustee or
this Declaration any provision of the laws (statutory or common) of the State of
Connecticut pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (d) fees or other sums payable to trustees, officers,
agents or employees of a trust, (e) the allocation of receipts and expenditures
to income or principal, or (f) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets.

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

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

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

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

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

                     SIGNATURES APPEAR ON THE FOLLOWING PAGE

                                       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:_____________________________________
                                          Name:
                                          Title:

                                 AMERICAN PHYSICIANS CAPITAL, INC., AS SPONSOR

                                 By:_____________________________________
                                          Name:
                                          Title:

                                 AMERICAN PHYSICIANS CAPITAL STATUTORY TRUST I

                                 By:_____________________________________
                                          William B. Cheeseman
                                          Administrator

                                 By:_____________________________________
                                          Frank H. Freund
                                          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 American Physicians
Capital Statutory Trust I (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 a Subsidiary of 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 Subsidiary of the
Debenture Issuer in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Debenture Issuer or of such Subsidiary (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the

                                      I-3
<PAGE>
applicable Extension Period, (b) as a result of any exchange or conversion of
any class or series of the Debenture Issuer's capital stock (or any capital
stock of a Subsidiary of the Debenture Issuer) for any class or series of the
Debenture Issuer's capital stock (or in the case of a Subsidiary of the
Debenture Issuer, any class or series of such Subsidiary'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 a Subsidiary of the Debenture Issuer, of any class or series of such
Subsidiary's indebtedness for any class or series of such Subsidiary's capital
stock), (c) the purchase of fractional interests in shares of the Debenture
Issuer's capital stock (or the capital stock of a Subsidiary of 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 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

                                      I-4
<PAGE>
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 August 15, November 15, February 15 or May 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 August 15, November 15, February 15 or May 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 Special Redemption Date, as
      applicable. 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

                  AMERICAN PHYSICIANS CAPITAL STATUTORY TRUST I

               (LIQUIDATION AMOUNT $1,000.00 PER CAPITAL SECURITY)

      American Physicians Capital Statutory Trust I, 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,

                                     A-1-2
<PAGE>
2003, among I-Preferred Term Securities II, Ltd., I-Preferred Term Securities
II, Inc. and The Bank of New 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 William B.
Cheeseman and Frank H. Freund, as Administrators, U.S. Bank National
Association, as Institutional Trustee, American Physicians Capital, 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.

                                   AMERICAN PHYSICIANS CAPITAL STATUTORY TRUST I

                                   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 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. The Trust's funds available for Distribution to the
Holders of the Common Securities will be

                                     A-1-6
<PAGE>
limited to payments received from the Debenture Issuer. The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to the Guarantee.

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

                                     A-1-7

<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

                  AMERICAN PHYSICIANS CAPITAL STATUTORY TRUST I

        American Physicians Capital Statutory Trust I, a statutory trust created
under the laws of the State of Connecticut (the "Trust"), hereby certifies that
American Physicians Capital, 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 William B. Cheeseman and Frank H. Freund, as Administrators, U.S. Bank
National Association, as Institutional Trustee, American Physicians Capital,
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.

                                            AMERICAN PHYSICIANS CAPITAL
                                            STATUTORY TRUST I

                                            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 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

                                     A-2-4
<PAGE>
funds available for Distribution to the Holders of the 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 Guarantee(2)

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

                                     A-2-6
<PAGE>
                                    EXHIBIT B

                          SPECIMEN OF INITIAL DEBENTURE
<PAGE>
                                    EXHIBIT C

                               PLACEMENT AGREEMENT

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