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






                              AMENDED AND RESTATED

                                 TRUST AGREEMENT

                                      among

                        THE BEAR STEARNS COMPANIES INC.,
                                  as Depositor,

                            THE CHASE MANHATTAN BANK,
                              as Property Trustee,

                 CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
                              as Delaware Trustee,

                         THE ADMINISTRATORS NAMED HEREIN

                                       and

                               THE SEVERAL HOLDERS

                            Dated as of May 10, 2001

                         BEAR STEARNS CAPITAL TRUST III






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<PAGE>




                              CROSS-REFERENCE TABLE

    TRUST                                                        TRUST
  INDENTURE                                                    AGREEMENT
 ACT SECTION                                                    SECTION
 -----------                                                   ---------
310 (a)(1)...................................................   8.1
    (a)(2)...................................................   8.1
    (a)(3)...................................................   8.9
    (a)(4)...................................................   Not Applicable

    (b)......................................................   8.8
311 (a)......................................................   8.13
    (b)......................................................   8.13
312 (a)......................................................   5.7
    (b)......................................................   5.7
    (c)......................................................   5.7
313 (a)......................................................   8.14(a), 8.14(b)

    (b)......................................................   Not Applicable

    (c)......................................................   10.8
    (d)......................................................   8.14(c)
314 (a)......................................................   8.15
    (b)......................................................   Not Applicable

    (c)(1)...................................................   8.16
    (c)(2)...................................................   8.16
    (c)(3)...................................................   Not Applicable

    (d)......................................................   Not Applicable

    (e)......................................................   1.1, 8.16
315 (a)......................................................   8.2
    (b)......................................................   8.2, 10.8
    (c)......................................................   8.2
    (d)......................................................   8.2
    (e)......................................................   Not Applicable

316 (a)......................................................   Not Applicable

    (a)(1)(A)................................................   Not Applicable

    (a)(1)(B)................................................   Not Applicable

    (a)(2)...................................................   Not Applicable

    (b)......................................................
    (c)......................................................   6.7
317 (a)(1)...................................................   Not Applicable

    (a)(2)...................................................   Not Applicable

    (b)......................................................   5.9
318 (a)......................................................   10.11


---------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Trust Agreement.

<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----


                                    ARTICLE I

                                  DEFINED TERMS

Section 1.1   Definitions....................................................2


                                   ARTICLE II

                            CONTINUATION OF THE TRUST

Section 2.1   Name..........................................................10
Section 2.2   Office of the Delaware Trustee; Principal Place of Business...10
Section 2.3   Initial Contribution of Trust Property; Organizational
                Expenses....................................................10
Section 2.4   Issuance of the Preferred Securities..........................10
Section 2.5   Issuance of the Common Securities; Subscription and Purchase
                of Debentures...............................................10
Section 2.6   Declaration of Trust; Intention of Parties....................11
Section 2.7   Authorization to Enter into Certain Transactions..............11
Section 2.8   Assets of Trust...............................................15
Section 2.9   Title to Trust Property.......................................15


                                   ARTICLE III

                                 PAYMENT ACCOUNT

Section 3.1   Payment Account...............................................15


                                   ARTICLE IV

                            DISTRIBUTIONS; REDEMPTION

Section 4.1   Distributions.................................................16
Section 4.2   Redemption....................................................16
Section 4.3   Subordination of Common Securities............................18
Section 4.4   Payment Procedures............................................19
Section 4.5   Tax Returns and Reports.......................................19
Section 4.6   Payment of Taxes, Duties, Etc. of the Trust...................19
Section 4.7   Reduction for Payments under Indenture or Pursuant to Direct
                Actions.....................................................20



                                      -i-
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                                    ARTICLE V

                          TRUST SECURITIES CERTIFICATES

Section 5.1   Initial Ownership.............................................20
Section 5.2   The Trust Securities Certificates; Execution and Delivery
                Thereof.....................................................20
Section 5.3   Transfer of Preferred Securities..............................20
Section 5.4   Registration of Transfer and Exchange of Preferred Securities
                Certificates................................................21
Section 5.5   Mutilated, Destroyed, Lost or Stolen Trust Securities
                Certificates................................................22
Section 5.6   Persons Deemed Securityholders................................22
Section 5.7   Access to List of Securityholders' Names and Addresses........22
Section 5.8   Maintenance of Office or Agency for Transfers.................23
Section 5.9   Appointment of Paying Agent...................................23
Section 5.10  Ownership of Common Securities by Depositor...................23
Section 5.11  Book-Entry Interests..........................................23
Section 5.12  Notices to Clearing Agency....................................25
Section 5.13  Procedures for Issuance of Definitive Preferred Securities
                Certificates................................................25
Section 5.14  Rights of Securityholders.....................................25
Section 5.15  CUSIP Numbers.................................................27


                                   ARTICLE VI

                    ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

Section 6.1   Limitations on Voting Rights..................................28
Section 6.2   Notice of Meetings............................................29
Section 6.3   Meetings of Preferred Securityholders.........................29
Section 6.4   Voting Rights.................................................29
Section 6.5   Proxies, Etc..................................................29
Section 6.6   Securityholder Action by Written Consent......................30
Section 6.7   Record Date for Voting and Other Purposes.....................30
Section 6.8   Acts of Securityholders.......................................30
Section 6.9   Inspection of Records.........................................31


                                   ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

Section 7.1   Representations and Warranties of the Property Trustee and
                the Delaware Trustee........................................31
Section 7.2   Representations and Warranties of Depositor...................32



                                      -ii-
<PAGE>



                                  ARTICLE VIII

                         THE TRUSTEES AND ADMINISTRATORS

Section 8.1   Corporate Property Trustee Required; Eligibility of Trustees..33
Section 8.2   Certain Duties and Responsibilities...........................33
Section 8.3   Certain Notices...............................................35
Section 8.4   Certain Rights of Property Trustee............................35
Section 8.5   Not Responsible for Recitals or Issuance of Securities........37
Section 8.6   May Hold Securities...........................................37
Section 8.7   Compensation; Indemnity; Fees.................................37
Section 8.8   Conflicting Interests.........................................38
Section 8.9   Co-Trustees and Separate Trustee..............................39
Section 8.10  Resignation and Removal; Appointment of Successor.............40
Section 8.11  Acceptance of Appointment by Successor........................41
Section 8.12  Merger, Conversion, Consolidation or Succession to Business...42
Section 8.13  Property Trustee May File Proofs of Claim.....................42
Section 8.14  Reports by Property Trustee...................................43
Section 8.15  Reports to the Property Trustee...............................43
Section 8.16  Evidence of Compliance with Conditions Precedent..............43
Section 8.17  Number of Trustees............................................43
Section 8.18  Delegation of Power...........................................43
Section 8.19  Delaware Trustee..............................................44


                                   ARTICLE IX

                       DISSOLUTION, LIQUIDATION AND MERGER

Section 9.1   Dissolution Upon Expiration Date..............................44
Section 9.2   Early Dissolution.............................................44
Section 9.3   Dissolution...................................................45
Section 9.4   Liquidation...................................................45
Section 9.5   Mergers, Consolidations, Conversions, Amalgamations or
                Replacements of the Trust...................................46


                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

Section 10.1  Limitation of Rights of Securityholders to Terminate Trust....47
Section 10.2  Amendment.....................................................47
Section 10.3  Separability..................................................48
Section 10.4  Governing Law.................................................48
Section 10.5  Payments Due on Non-Business Day..............................49
Section 10.6  Successors....................................................49
Section 10.7  Headings......................................................49



                                     -iii-
<PAGE>



Section 10.8  Reports, Notices and Demands..................................49
Section 10.9  Agreement Not to Petition.....................................50
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act........50
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
                Indenture...................................................50
Section 10.12 Counterparts..................................................51



                                      -iv-
<PAGE>



            AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 10, 2001 among
The Bear Stearns Companies Inc., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) The Chase Manhattan Bank, a
banking corporation duly organized and existing under the laws of the State of
New York, as property trustee (in such capacity, the "Property Trustee" and, in
its separate corporate capacity and not in its capacity as Property Trustee, the
"Bank"), (iii) Chase Manhattan Bank USA, National Association (as successor to
Chase Manhattan Bank Delaware), a national banking association that maintains
its principal place of business in Delaware, as Delaware trustee (the "Delaware
Trustee") (the Property Trustee and the Delaware Trustee referred to jointly as
the "Trustees"), (iv) Jeffrey M. Lipman, an individual, Samuel L. Molinaro Jr.,
an individual, and Michael Minikes, an individual, each of whose address is c/o
The Bear Stearns Companies Inc., 245 Park Avenue, New York, New York 10167
(each, an "Administrator" and all collectively, the "Administrators") and (v)
the several Holders, as hereinafter defined.

                              W I T N E S S E T H :
                              - - - - - - - - - -

            WHEREAS, the Depositor, the Property Trustee, Chase Manhattan Bank
Delaware and Kenneth L. Edlow, Samuel L. Molinaro Jr. and William J. Montgoris
(the "Original Administrators") (where applicable) have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
entering into that certain Trust Agreement, dated as of November 4, 1998 (the
"Original Trust Agreement"), and by the execution and filing with the Secretary
of State of the State of Delaware of a Certificate of Trust, filed on November
4, 1998, attached as Exhibit A (the "Original Certificate of Trust");

            WHEREAS, the Original Certificate of Trust was amended on August 3,
2000, by the filing with the Secretary of State of the State of Delaware of a
Certificate of Amendment to reflect that the Delaware Trustee of the Trust is
Chase Manhattan Bank USA, National Association; and

            WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Trust to the Depositor,
(ii) the issuance and sale of the Preferred Securities by the Trust pursuant to
the Underwriting Agreement, (iii) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures, (iv) the
appointment of the Administrators in substitution for the Original
Administrators and (v) the acknowledgement of Chase Manhattan Bank USA, National
Association (as successor to Chase Manhattan Bank Delaware) as Delaware Trustee.

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




<PAGE>



                                   ARTICLE I

                                  DEFINED TERMS

Section 1.1 Definitions. For all purposes of this Trust Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

            (a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;

            (b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

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

            (d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.

            "Act" has the meaning specified in Section 6.8.

            "Additional Amount" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of Additional
Interest, Compounded Interest (each as defined in the Indenture) and Additional
Sums paid by the Depositor on a Like Amount of Debentures for such period.

            "Additional Sums" has the meaning specified in Section 4.08 of the
Indenture.

            "Administrators" has the meaning specified in the preamble to this
Agreement or any successors appointed in accordance with Section 8.10 solely in
such Person's capacity as Administrator of the Trust heretofore created and
continued hereunder and not in such Person's individual capacity.

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

            "Bank" has the meaning specified in the preamble to this Trust
Agreement.

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

            (a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or




                                      -2-
<PAGE>



state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of all or substantially all of its property or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 90 consecutive
days; or

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

            "Bankruptcy Laws" has the meaning specified in Section 10.9.

            "Book-Entry Preferred Securities Certificates" has the meaning
specified in Section 5.11.

            "Business Day" means any day which is not a Saturday or Sunday and
which in The City of New York is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to close or
a day on which the corporate trust office of the Property Trustee or the
Debenture Trustee is closed for business.

            "Certificate Depository Agreement" means a customary letter of
representations among the Trust, the Property Trustee and DTC, as the initial
Clearing Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, as the same may be amended and supplemented from time to time.

            "Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. DTC will be the initial
Clearing Agency.

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

            "Closing Date" means May 10, 2001, which is the date of execution
and delivery of this Trust Agreement, or such other date as may be designated
the Closing Date pursuant to the Underwriting Agreement.

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



                                       -3-
<PAGE>



            "Common Security" means a common undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.

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

            "Corporate Trust Office" means (i) when used with respect to the
Property Trustee, the principal corporate trust office of the Property Trustee
and (ii) when used with respect to the Debenture Trustee, the principal
corporate trust office of the Debenture Trustee.

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

            "Debenture Redemption Date" means, with respect to any Debentures to
be redeemed under the Indenture, the date fixed for redemption under the
Indenture.

            "Debenture Trustee" means The Chase Manhattan Bank, and any
successor thereto under the Indenture.

            "Debentures" means the aggregate principal amount of the Depositor's
7.80% Junior Subordinated Deferrable Interest Debentures due May 15, 2031 issued
pursuant to the Indenture.

            "Definitive Preferred Securities Certificates" means Preferred
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.

            "Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from time
to time.

            "Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust created and continued hereunder, or its successor
in interest in such capacity, or any successor Delaware trustee appointed as
herein provided.

            "Depositor" has the meaning specified in the preamble to this Trust
Agreement.

            "Distribution Date" has the meaning specified in Section 4.1(a).

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

            "DTC" means The Depository Trust Company.

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



                                      -4-
<PAGE>



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

            (a)   the occurrence of a Debenture Event of Default; or

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

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

            (d)   default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in the performance or breach of
which is dealt with in clause (b) or (c) above), and continuation of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Preferred Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

            (e)   the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Existing Indenture" means the Indenture, dated as of January 29,
1997, between the Depositor and The Chase Manhattan Bank, as trustee, as amended
or supplemented from time to time.

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

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

            "Holder" means a Person in whose name a Trust Security or Trust
Securities is registered in the Securities Register; any such Person being a
beneficial owner within the meaning of the Delaware Business Trust Act.

            "Indenture" means the Indenture, dated as of December 16, 1998,
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.

            "Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel to the effect that, as a result of the occurrence of a change
in law or regulation or a change (including any announced proposed change) in
interpretation or application of law or regulation by any legislative body,



                                      -5-
<PAGE>



court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the 1940 Act, which change or
proposed change becomes effective or would become effective, as the case may be,
on or after the date of the issuance of the Preferred Securities of the Trust.

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

            "Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture the proceeds of which will be used to pay the Redemption Price of such
Trust Securities, and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.

            "Liquidation Amount" means the stated amount of $25 per Trust
Security.

            "Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).

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

            "1940 Act" means the Investment Company Act of 1940, as amended.

            "Officers' Certificate" means a certificate signed by the Chairman
of the Board or any Vice Chairman of the Board or the President or any Executive
Vice President or Chief Operating Officer or Chief Financial Officer of the
Depositor and by the Treasurer or an Assistant Treasurer or Controller or the
Secretary or an Assistant Secretary of the Depositor and delivered to the
appropriate Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:

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

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

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

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



                                      -6-
<PAGE>



            "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor (including counsel
who is an employee of the Depositor), who is experienced in matters related to
the substance of the opinion.

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

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

            (a)   Trust Securities theretofore canceled by the Securities
Registrar or delivered to the Securities Registrar for cancellation;

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

            (c)   Trust Securities which have been paid or in exchange for or in
lieu of which other Trust Securities have been executed and delivered pursuant
to Sections 5.4, 5.5, 5.11 and 5.13; provided, however, that in determining
whether the Holders of the requisite Liquidation Amount of the Outstanding
Preferred Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Preferred Securities owned by the
Depositor, any Trustee or any Affiliate of the Depositor or any Trustee shall be
disregarded and deemed not to be Outstanding, except that (a) in determining
whether any Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
that such Trustee knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Preferred Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrators the pledgee's right so to act with respect to
such Preferred Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.

            "Owner" means each Person who is the beneficial owner of a
Book-Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).

            "Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Bank.

            "Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in



                                      -7-
<PAGE>



respect of the Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1 and 4.2.

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

            "Preferred Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.

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

            "Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore created and
continued hereunder, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.

            "Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.

            "Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.

            "Relevant Trustee" shall have the meaning specified in Section 8.10.

            "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.

            "Securityholder" means a Person in whose name a Trust Security or
Trust Securities is registered in the Securities Register; any such Person shall
be a beneficial owner within the meaning of the Delaware Business Trust Act.

            "Special Event" means an Investment Company Event or a Tax Event.

            "Tax Event" means the receipt by the Trust of an Opinion of Counsel
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 or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after
the date of issuance of the Preferred Securities under this Trust Agreement,



                                      -8-
<PAGE>



there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to United
States federal income tax with respect to income received or accrued on the
Debentures, (ii) interest payable by the Depositor on the Debentures is not, or
within 90 days after the date of such Opinion of Counsel, will not be,
deductible by the Depositor, in whole or in part, for United States federal
income tax purposes or (iii) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.

            "Trust" means the Delaware business trust created under the Original
Trust Agreement and continued hereby and identified on the cover page to this
Trust Agreement.

            "Trust Agreement" means this Amended and Restated Trust Agreement,
as the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including for all purposes of this Trust Agreement
and any such modification, amendment or supplement, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this Trust Agreement
and any such modification, amendment or supplement, respectively.

            "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

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

            "Trust Security" means any one of the Common Securities or the
Preferred Securities. The Trust Securities represent undivided beneficial
interests in the Trust Property.

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

            "Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.

            "Underwriters" means the several underwriters listed on Schedule I
of the Underwriting Agreement.

            "Underwriting Agreement" means the Agreement, dated May 10, 2001
among the Trust, the Depositor and Bear, Stearns & Co. Inc., Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Prudential Securities Incorporated, Salomon Smith Barney Inc., UBS
Warburg LLC, Banc One Capital Markets, Inc., Banc of America Securities LLC,
First Union Securities, Inc., J.P. Morgan Securities Inc., Quick & Reilly and
Wells Fargo Van Kasper, LLC, as representatives of the underwriters named
therein.



                                      -9-
<PAGE>



                                   ARTICLE II

                            CONTINUATION OF THE TRUST

            Section 2.1 Name. The Trust continued hereby shall be known as "Bear
Stearns Capital Trust III" as such name may be modified from time to time by the
Administrators following written notice to the Securityholders and the Trustees,
in which name the Property Trustee and the Administrators may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.

            Section 2.2 Office of the Delaware Trustee; Principal Place of
Business. The address of the Delaware Trustee in the State of Delaware is Chase
Manhattan Bank USA, National Association, 1201 Market Street, Wilmington,
Delaware 19801, Attention: Institutional Trust Services, or such other address
in the State of Delaware as the Delaware Trustee may designate by written notice
to the Securityholders and the Depositor. The principal executive office of the
Trust is c/o The Bear Stearns Companies Inc., 245 Park Avenue, New York, New
York 10167.

            Section 2.3 Initial Contribution of Trust Property; Organizational
Expenses. The Trust acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.

            Section 2.4 Issuance of the Preferred Securities. The Depositor, on
behalf of the Trust and pursuant to the Original Trust Agreement, executed and
delivered the Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrator, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Underwriters,
Preferred Securities Certificates, registered in the name of the nominee of the
initial Clearing Agency, in an aggregate amount of 10,500,000 shares of
Preferred Securities having an aggregate Liquidation Amount of $262,500,000
against receipt of an aggregate purchase price for such Preferred Securities of
$262,500,000 ($25 per Preferred Security).

            Section 2.5 Issuance of the Common Securities; Subscription and
Purchase of Debentures. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrator, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Depositor, Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
324,743 shares of Common Securities having an aggregate Liquidation Amount of
$8,118,575 against payment by the Depositor of an aggregate purchase price of
$8,118,575 ($25 per Common Security). Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrator, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in the
name of the Property Trustee and having an aggregate principal amount equal to
$270,618,575 and, in satisfaction of the purchase price for such Debentures, the
Trust shall deliver to the Depositor the sum of $270,618,575 such sum being the
sum of the amounts delivered to the Trust pursuant to (i) the second sentence of
Section 2.4 and (ii) the first sentence of this Section 2.5).



                                      -10-
<PAGE>



            Section 2.6 Declaration of Trust; Intention of Parties. The
exclusive purposes and functions of the Trust are (a) to issue and sell Trust
Securities, (b) to use the proceeds from such sale to acquire the Debentures and
(c) to engage in those activities necessary, convenient or incidental thereto.
The Depositor hereby appoints the Trustees as trustees of the Trust and the
Administrators, to have all the rights, powers and duties to the extent set
forth herein, and the Trustees and the Administrators hereby accept such
appointment. Each of Kenneth L. Edlow and William J. Montgoris are hereby
removed as Administrators of the Trust. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Securityholders. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and, to the fullest extent
permitted by law, shall not be trustees or fiduciaries with respect to the
Trust. The Property Trustee shall have the power (but not the obligation) to
perform those duties assigned to the Administrators. The Delaware Trustee shall
not be entitled to exercise any powers, nor shall the Delaware Trustee have any
of the duties and responsibilities, of the Property Trustee or the
Administrators set forth herein. The Delaware Trustee shall be one of the
Trustees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any assets, or otherwise undertake or permit to be undertaken any
activity that is reasonably likely to cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust. It is the
intention of the parties hereto that the Trust be classified as a grantor trust
for United States federal income tax purposes. The provisions of this Agreement
shall be interpreted to further this intention of the parties.

            Section 2.7 Authorization to Enter into Certain Transactions. (a)
The Trustees and the Administrators shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii) the Trustees and the Administrators shall have the
authority to enter into all transactions and agreements determined by the
Trustees or the Administrators to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees or the Administrators
under this Trust Agreement, 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 Trust Securities;

                  (B) to cause the Trust to enter into, and to execute, deliver
            and perform on behalf of the Trust, the Certificate Depository
            Agreement and such other agreements as may be necessary or desirable
            in connection with the purposes and function of the Trust;

                  (C) assisting in the registration of the Preferred Securities
            under the Securities Act of 1933, as amended, and under state
            securities or blue sky laws, and the qualification of this Trust
            Agreement as a trust indenture under the Trust Indenture Act, as the
            same may be deemed necessary or advisable;



                                      -11-
<PAGE>



                  (D) assisting in the listing, if any, of the Preferred
            Securities upon such national securities exchange or exchanges or
            automated quotation system or systems as shall be determined by the
            Depositor and the registration of the Preferred Securities under the
            Exchange Act, if required by applicable law, and the execution and
            filing of all applications, periodic and other reports and other
            documents pursuant to the foregoing, or the seeking of relief from
            same;

                  (E) the sending of notices (other than notices of default) and
            other information regarding the Trust Securities and the Debentures
            to the Securityholders in accordance with this Trust Agreement;

                  (F) the consent to the appointment of a Paying Agent and
            Securities Registrar in accordance with this Trust Agreement which
            consent shall not be unreasonably withheld;

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

                  (H) the taking of any action incidental to the foregoing as
            the Trustees may from time to time determine is necessary or
            advisable to give effect to the terms of this Trust Agreement for
            the benefit of the Securityholders (without consideration of the
            effect of any such action on any particular Securityholder);

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

                  (J) registering transfer of the Trust Securities in accordance
            with this Trust Agreement;

                  (K) execution and delivery of letters or documents to, or
            instruments with DTC relating to the Preferred Securities;

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

                  (M) unless otherwise required by the Trust Indenture 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 Trust
            Agreement;

                  (N) to establish a record date with respect to all actions to
            be taken hereunder that require a record date be established,
            including and with respect to, for the purposes of Section 316(c) of
            the Trust Indenture Act, Distributions, voting rights, redemptions
            and exchanges, and to issue relevant notices to the Holders of Trust
            Securities as to such actions and applicable record dates; and



                                      -12-
<PAGE>



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

                  (A) the establishment of the Payment 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 Payment Account;


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

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

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

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

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

                  (I) after an Event of Default (other than under paragraph (b),
            (c), (d) or (e) of the definition of such term if such Event of
            Default is by or with respect to the Property Trustee) the taking of
            any action incidental to the foregoing as the Property Trustee may
            from time to time determine is necessary or advisable to give effect
            to the terms of this Trust Agreement and protect and conserve the
            Trust Property for the benefit of the Securityholders (without
            consideration of the effect of any such action on any particular
            Securityholder); and

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



                                      -13-
<PAGE>



            (iii) The Property 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
      2.7(a)(i)(G); and in the event of a conflict between the action of the
      Administrators and the action of the Property Trustee, the action of the
      Property Trustee shall prevail.

            (b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees or the 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 Trustees nor the
Administrators shall, on behalf of the Trust, (i) acquire any investments or
assets other than the Trust Property or engage in any activities not authorized
by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage,
pledge, set-off or otherwise dispose of any of the Trust Property or interests
therein, including to Securityholders, except as expressly provided herein,
(iii) take any action that is reasonably likely to cause the Trust to fail or
cease to qualify as a "grantor trust" for United States federal income tax
purposes, (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 Property Trustee shall 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 Securityholders in their
capacity as Securityholders.

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

            (i)   the preparation and filing by the Trust with the Commission
      and the execution on behalf of the Trust of a "shelf" registration
      statement on the appropriate form, including amendments thereto, to
      register the Preferred Securities, the Guarantee and the Debentures;

            (ii)  the determination of the states in which to take appropriate
      action to qualify or register for sale all or part of the Preferred
      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 Trustees 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 Depositor deems
      necessary or advisable in order to comply with the applicable laws of any
      such states;

            (iii) if the Depositor shall desire, the preparation for filing by
      the Trust and execution on behalf of the Trust of an application to the
      New York Stock Exchange or any other national or international stock
      exchange or the NASDAQ National Market or any other automated quotation
      system for listing, upon notice of issuance, of any Preferred Securities;
      and the preparation for filing by the Trust with the Commission and the
      execution on behalf of the Trust of a registration statement on Form 8-A
      relating to the registration of the Preferred Securities under Section
      12(b) or 12(g) of the Exchange Act, including any amendments thereto; and



                                      -14-
<PAGE>



      filing with such exchange or self-regulatory organization such
      notifications and documents as may be necessary from time to time to
      maintain such listing;

            (iv)  the negotiation of the terms of, and the execution and
      delivery of, the Underwriting Agreement providing for the sale of the
      Preferred Securities; and

            (v)   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 Property Trustee are authorized and directed to conduct
the affairs of the Trust and to operate the Trust so that the Trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act or fail to be classified as a grantor trust for United States federal income
tax purposes and so that the Debentures will be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this regard, the
Property Trustee shall be protected if it shall have conducted the affairs of
the Trust and operated the Trust in accordance with its rights, powers and
duties as specifically set forth in this Trust Agreement. In this connection,
the Administrators, the Property Trustee and the Holder of the Common Securities
are authorized to take any action, not inconsistent with applicable law, the
Certificate of Trust or this Trust Agreement, that any of the Administrators,
Property Trustee and the Holder of the Common Securities determines in its
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the Holders of the
Preferred Securities. The Property Trustee shall not be required to take any
action under this clause (d) unless directed to do so by the Depositor, the
Administrators or (subject to the provisions hereof) by Holders of not less than
a majority in Liquidation Amount of the Trust Securities.

            Section 2.8 Assets of Trust. The assets of the Trust shall consist
of the Trust Property.

            Section 2.9 Title to Trust Property. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Trust and the Securityholders in accordance with this Trust
Agreement.


                                  ARTICLE III

                                 PAYMENT ACCOUNT

            Section 3.1 Payment Account. (a) On or prior to the Closing Date,
the Property Trustee shall establish the Payment Account. The Property Trustee
and any agent of the Property Trustee shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in accordance with
this Trust Agreement. All moneys and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee in the



                                      -15-
<PAGE>



Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.

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


                                   ARTICLE IV

                            DISTRIBUTIONS; REDEMPTION

            Section 4.1 Distributions. (a) Distributions (including
Distributions of Additional Amounts, if applicable) will be made on the Trust
Securities at the rate and on the dates that payments of interest (including
Additional Amounts) are made on the Debentures. Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accumulate from May 10, 2001 and, except in the event (and to the extent)
that the Depositor exercises its right to defer the payment of interest on the
Debentures pursuant to the Indenture, shall be payable quarterly on May 15,
August 15, November 15 and February 15, of each year, commencing on August 15,
2001. If any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution shall be
made on the next succeeding day that is a Business Day, with the same force and
effect as if made on such date (each date on which Distributions are payable in
accordance with this Section 4.1(a), a "Distribution Date"), without any
interest or other payment with respect to any such delay.

            (b)   Assuming payments of interest on the Debentures are made when
due (and before giving effect to any Additional Amounts, if applicable),
Distributions on the Trust Securities shall be payable at a rate of 7.80% per
annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full period shall be computed on the basis of a
360-day year of twelve 30-day months. The amount of Distributions payable for
any period shall include the Additional Amounts, if any.

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

            (d)   Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be the first day of the month in which the relevant Distribution Date
occurs.

            Section 4.2 Redemption. (a) On each Debenture Redemption Date and on
the stated maturity of the Debentures, the Trust will be required to redeem a
Like Amount of Trust Securities at the Redemption Price.



                                      -16-
<PAGE>



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

            (i)   the Redemption Date;

            (ii)  the Redemption Price or if the Redemption Price cannot be
      calculated prior to the time the notice of redemption is required to be
      sent, the manner of calculation thereof;

            (iii) the CUSIP number;

            (iv) if less than all the Outstanding Trust Securities are to be
      redeemed, the identification and the total Liquidation Amount of the
      particular Trust Securities to be redeemed; and

            (v) that on the Redemption Date, the Redemption Price will become
      due and payable upon each such Trust Security to be redeemed and that
      Distributions thereon will cease to accumulate on and after said date.

            (c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.

            (d) If the Property Trustee gives a notice of redemption in respect
of any Preferred Securities, then, by 10:00 a.m., New York City time, on the
Redemption Date, the Depositor shall deposit sufficient funds with the Property
Trustee to pay the Redemption Price. If such deposit has been made, then, by
12:00 noon, New York City time, on the Redemption Date, subject to Section
4.2(c), the Property Trustee will, so long as the Preferred Securities are in
book-entry-only form, irrevocably deposit with the Clearing Agency for the
Preferred Securities funds sufficient to pay the applicable Redemption Price and
will give such Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof. If Preferred Securities are no longer
in book-entry-only form, the Property Trustee, subject to Section 4.2(c), will
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price with respect to such Preferred Securities
to the Holders thereof upon surrender of their Preferred Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution. If notice of redemption shall have been given and funds deposited
as required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price and any unpaid
Distribution payable on or prior to the Redemption Date, but without interest,



                                      -17-
<PAGE>



and such Trust Securities will cease to be outstanding. In the event that any
date on which any Redemption Price is payable is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding 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. In the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or refused and not paid
either by the Trust or by the Depositor pursuant to the Guarantee, Distributions
on such Trust Securities will continue to accumulate, at the then applicable
rate, from the Redemption Date originally established by the Trust for such
Trust Securities to the date such Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.

            (e) Payment of the Redemption Price on the Trust Securities shall be
made to the recordholders thereof as they appear on the Securities Register for
the Trust Securities on a date to be established as the record date for the
distribution by the Administrators, which date shall be not more than 60 days
nor less than 30 days prior to the relevant Redemption Date.

            (f) Subject to Section 4.3(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not less
than 30 nor more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate. Any such proration may be based on the aggregate Liquidation Amount
of Trust Securities held by each Holder and in making any such proration the
Property Trustee may make such adjustments as may be appropriate in order that
only Trust Securities in Liquidation Amount equal to $25 or integral multiples
of $25 in excess thereof shall be redeemed. The Property Trustee shall promptly
notify the Securities Registrar in writing of the Preferred Securities selected
for redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities that has been or is to be
redeemed.

            (g) 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 among the Holders of Trust Securities on the next
Distribution Date.

            Section 4.3 Subordination of Common Securities. (a) Payment of
Distributions (including Additional Amounts, if applicable) on, and the
Redemption Price of, the Trust Securities, as applicable, shall be made, subject
to Section 4.2(f), pro rata among the Common Securities and the Preferred
Securities based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if



                                      -18-
<PAGE>



applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities, for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Preferred Securities then called for
redemption, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions (including Additional Amounts, if applicable) on,
or the Redemption Price of, Preferred Securities then due and payable.

            (b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities has been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.

            Section 4.4 Payment Procedures. Payments of Distributions (including
Additional Amounts, if applicable) in respect of the Preferred Securities shall
be made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Preferred Securities
are held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency in immediately available funds, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable Distribution Dates. Payments
in respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Common Securityholder.

            Section 4.5 Tax Returns and Reports. The Administrators shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrators shall (a) prepare and file (or cause to be prepared and filed)
the appropriate Internal Revenue Service form required to be filed in respect of
the Trust in each taxable year of the Trust and (b) prepare and furnish (or
cause to be prepared and furnished) to each Securityholder the appropriate
Internal Revenue Service form required to be so provided and furnished. The
Administrators shall provide the Depositor and the Property Trustee with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.

            Section 4.6 Payment of Taxes, Duties, Etc. of the Trust. Upon
receipt under the Debentures of Additional Sums and the written direction of any
of the Administrators, the Property Trustee shall promptly pay, solely out of
moneys on deposit pursuant to this Trust Agreement, any taxes, duties or


                                      -19-
<PAGE>



governmental charges of whatsoever nature (other than withholding taxes) imposed
on the Trust by the United States or any other taxing authority.

            Section 4.7 Reduction for Payments under Indenture or Pursuant to
Direct Actions. Any amount payable hereunder to any Holder of Preferred
Securities shall be reduced by the amount of any corresponding payment such
Holder (or an Owner with respect to the Holder's Preferred Securities) has
directly received pursuant to the Indenture or Section 5.14 of this Trust
Agreement.


                                   ARTICLE V

                          TRUST SECURITIES CERTIFICATES

            Section 5.1 Initial Ownership. Upon the creation of the Trust and
the contribution by the Depositor pursuant to Section 2.3 and until the issuance
of the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.

            Section 5.2 The Trust Securities Certificates; Execution and
Delivery Thereof. (a) The Preferred Securities Certificates shall be issued in
minimum denominations of $25 Liquidation Amount and integral multiples thereof,
and the Common Securities Certificates shall be issued in denominations of $25
Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrator and shall be dated their date of execution. Trust
Securities Certificates bearing the manual signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.

            (b) At the Closing Date, the Administrators, or any of them, shall
cause Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 2.4 and 2.5, to be executed on behalf of the Trust and
delivered to or upon the written order of the Depositor, signed by its Chairman
of the Board, any Vice Chairman of the Board, its President, any Executive Vice
President, its Chief Operating Officer, its Chief Financial Officer, its
Treasurer or any Assistant Treasurer or its Controller, without further
corporate action by the Depositor, in authorized denominations.

            Section 5.3 Transfer of Preferred Securities . (a) Preferred
Securities may only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Trust Agreement and in the terms of the
Preferred Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Preferred Security not made in accordance with this
Trust Agreement shall be null and void.



                                      -20-
<PAGE>



            (b) Subject to this Section 5.3, Preferred Securities shall be
freely transferable; provided, however, that no transfer shall be effected
unless such transfer (whether by sale or any other disposition) is comprised of
a block of Preferred Securities having an aggregate Liquidation Amount of not
less than $25. Any transfer, sale or other disposition of Preferred Securities
in a block having a Liquidation Amount of less than $25 shall be deemed to be
void and of no legal effect whatsoever. Any such transferee shall be deemed not
to be the Holder of such Preferred Securities for any purpose, including but not
limited to the receipt of Distributions on such Preferred Securities, and such
transferee shall be deemed to have no interest whatsoever in such Preferred
Securities.

            Section 5.4 Registration of Transfer and Exchange of Preferred
Securities Certificates. The Depositor shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 5.8, a register for the purpose
of registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar. The Securities Registrar shall not be required to register
the transfer or exchange of any Preferred Securities (i) during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Preferred Securities and ending at the close of business
on the day of such mailing or (ii) that have been selected for redemption in
whole or in part, except the unredeemed portion of any Preferred Security
redeemed in part.

            Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.8, the Administrators or any one of them shall execute and the Property
Trustee shall deliver, in the name of the designated transferee or transferees,
one or more new Preferred Securities Certificates in authorized denominations of
a like aggregate Liquidation Amount dated the date of execution by such
Administrator. Subject to Section 5.11, at the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred Securities
Certificates in authorized denominations of the same class and of a like
aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.

            Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each
Preferred Securities Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Property Trustee
or the Securities Registrar in accordance with such Person's customary practice.

            No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.



                                      -21-
<PAGE>



            Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrators such security or indemnity as may be required
by them to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrators, or any one of them, on behalf of the Trust shall execute and
make available for delivery, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrators or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Securities Certificate issued pursuant
to this Section shall constitute conclusive evidence of an undivided beneficial
interest in the Trust Property, as if originally issued, whether or not the
lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.

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

            Section 5.6 Persons Deemed Securityholders. The Trustees, the
Administrators or the Securities Registrar shall treat the Person in whose name
any Trust Securities Certificate shall be registered in the Securities Register
as the owner of such Trust Securities Certificate for the purpose of receiving
Distributions and for all other purposes whatsoever (subject to the record date
provisions hereof), and neither the Trustees nor the Securities Registrar shall
be bound by any notice to the contrary.

            Section 5.7 Access to List of Securityholders' Names and Addresses.
At any time when the Property Trustee is not also acting as the Securities
Registrar, the Depositor shall furnish or cause to be furnished to the Property
Trustee, quarterly not more than five days after May 1, August 1, November 1 and
February 1 of each year beginning with August 1, 2001, and at such other times
as the Property Trustee may request in writing within 30 days after receipt by
the Depositor of any such request, a list, in such form as the Property Trustee
may reasonably require containing all information in the possession or control
of the Depositor, or any Paying Agent or any registrar of the Trust Securities
other than the Property Trustee, as to the names and addresses of the
Securityholders obtained (in the case of each list other than the first list)
since the date as of which the next previous list was furnished. Any such list
may be dated as of a date not more than fifteen days prior to the time such
information is furnished or caused to be furnished, and need not include
information received after such date. The rights of Securityholders to
communicate with other Securityholders with respect to their rights under this
Trust Agreement or under the Trust Securities, and the corresponding obligations
and rights of the Property Trustee, shall be as provided in the Trust Indenture
Act. Each Holder, by receiving and holding a Trust Securities Certificate, and
each Owner shall be deemed to have agreed not to hold the Depositor, the
Property Trustee or the Administrators accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.



                                      -22-
<PAGE>



            Section 5.8 Maintenance of Office or Agency for Transfers. The
Administrators or the Property Trustee shall maintain an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served.
The Administrators initially designate The Chase Manhattan Bank, 450 West 33rd
Street, New York, New York 10001, Attention: Institutional Trust Services, as
the office or agency for such purposes. The Administrators or the Property
Trustee shall give prompt written notice to the Depositor and to the
Securityholders of any change in the location of the Securities Register or any
such office or agency.

            Section 5.9 Appointment of Paying Agent. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrators.
Any Paying Agent shall have the revocable power to withdraw funds from the
Payment Account for the purpose of making the Distributions referred to above.
The Property Trustee may revoke such power and remove the Paying Agent if such
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Trust Agreement in any material
respect. The Paying Agent shall initially be the Bank, and any co-paying agent
chosen by the Bank, and acceptable to the Administrators and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrators, the Property Trustee and the
Depositor. In the event that the Bank shall no longer be the Paying Agent or a
successor Paying Agent shall resign or its authority to act be revoked, the
Administrators shall appoint a successor that is acceptable to the Property
Trustee and the Depositor to act as Paying Agent (which shall be a bank or trust
company). The Administrators shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrators to execute and deliver
to the Trustees an instrument in which such successor Paying Agent or additional
Paying Agent shall agree with the Trustees that as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if any, held by it
for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.2, 8.4 and 8.6 herein shall apply to the Bank also in its role as
Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Trust Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise.

            Section 5.10 Ownership of Common Securities by Depositor. At the
Closing Date, the Depositor shall acquire and retain beneficial and record
ownership of the Common Securities. To the fullest extent permitted by law,
other than transactions permitted by Article XI of the Indenture, any attempted
transfer of the Common Securities shall be void. The Administrators cause the
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS DESCRIBED IN THE TRUST
AGREEMENT (AS DEFINED BELOW)."

            Section 5.11 Book-Entry Interests. (a) So long as Preferred
Securities are eligible for book-entry settlement with the Clearing Agency or
unless otherwise required by law, all Preferred Securities that are so eligible



                                      -23-
<PAGE>



will be represented by one or more fully registered Preferred Securities
Certificates (each a "Book-Entry Preferred Securities Certificate") in global
form to be delivered to the Clearing Agency or its custodian, by, or on behalf
of, the Trust. Such Book-Entry Preferred Securities Certificates shall initially
be registered on the Securities Register in the name of Cede & Co., the nominee
of DTC, and no Owner will receive a Definitive Preferred Securities Certificate
representing such Owner's interests in such Book-Entry Preferred Securities
Certificates, except as provided in Section 5.11(d) below. The transfer and
exchange of beneficial interests in any such Preferred Security in global form
shall be effected through the Clearing Agency in accordance with this Trust
Agreement and the procedures of the Clearing Agency therefor.

            (b) Except as provided in subparagraph (d) of this Section 5.11,
Owners of a Preferred Security in global form shall not be entitled to have
certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form and will not be
considered Holders of such Preferred Securities in global form.

            (c) Any Book-Entry Preferred Securities Certificate may be endorsed
with or have incorporated in the text thereof such legends or recitals or
changes as may be required by the Clearing Agency or any securities exchange,
interdealer quotation system or self-regulatory organization upon which the
Preferred Securities may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Preferred Securities are subject.

            (d) Notwithstanding any other provisions of this Trust Agreement
(other than the provisions set forth in this Section 5.11(d)), a Preferred
Security in global form may not be exchanged in whole or in part for Preferred
Securities registered, and no transfer of a Preferred Security in global form
may be registered, in the name of any Person other than the Clearing Agency or
nominee thereof unless (i) such Clearing Agency (A) has notified the Property
Trustee and the Depositor that it is unwilling or unable to continue as Clearing
Agency for such global Preferred Security and the Depositor on behalf of the
Trust thereupon fails to appoint a successor Clearing Agency within 90 days
after the receipt of such notice or (B) has ceased to be a clearing agency
registered as such under the Exchange Act, (ii) the Depositor in its sole
discretion elects to cause the issuance of the Preferred Securities in
certificated form or (iii) there shall have occurred and be continuing an Event
of Default, or any event which after notice or lapse of time or both would be an
Event of Default under the Trust Agreement, with respect to such global
Preferred Security. Following exchange of a global Preferred Security, or a
portion thereof, for a definitive Preferred Security, no such definitive
Preferred Security, or portion thereof, shall be included in any Book-Entry
Preferred Securities Certificate.

            Unless and until Definitive Preferred Securities Certificates have
been issued to Owners pursuant to Section 5.13:

            (i) the provisions of this Section 5.11(d) shall be in full force
      and effect;

            (ii) the Securities Registrar, the Administrators and the Trustees
      shall be entitled to deal with the Clearing Agency for all purposes of
      this Trust Agreement relating to the Book-Entry Preferred Securities
      Certificates (including the payment of the Liquidation Amount of and



                                      -24-
<PAGE>



      Distributions on the Preferred Securities evidenced by Book-Entry
      Preferred Securities and the giving of instructions or directions to
      Owners of Preferred Securities evidenced by Book-Entry Preferred
      Securities) as the sole Holder of Preferred Securities evidenced by
      Book-Entry Preferred Securities and shall have no obligations to the
      Owners thereof;

            (iii) to the extent that the provisions of this Section 5.11
      conflict with any other provisions of this Trust Agreement, the provisions
      of this Section 5.11 shall control; and

            (iv) the rights of the Owners of the Book-Entry Preferred Securities
      Certificates shall be exercised only through the Clearing Agency and shall
      be limited to those established by law and agreements between such Owners
      and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
      to the Certificate Depository Agreement, unless and until Definitive
      Preferred Securities Certificates are issued pursuant to Section 5.13, the
      initial Clearing Agency will make book-entry transfers among the Clearing
      Agency Participants and receive and transmit payments on the Preferred
      Securities to such Clearing Agency Participants.

            (e) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.

            Section 5.12 Notices to Clearing Agency. To the extent that a notice
or other communication to the Owners is required under this Trust Agreement,
unless and until Definitive Preferred Securities Certificates shall have been
issued to Owners pursuant to Section 5.13, the Trustees shall give all such
notices and communications specified herein to be given to Owners to the
Clearing Agency, and shall have no obligations to the Owners.

            Section 5.13 Procedures for Issuance of Definitive Preferred
Securities Certificates. Upon surrender to the Securities Registrar of the
typewritten Preferred Securities Certificate or Certificates representing the
Book-Entry Preferred Securities Certificates by the Clearing Agency upon
occurrence of any of the events described in Section 5.11(d), accompanied by
registration instructions, the Administrators, or any one of them, shall execute
and the Securities Registrar shall register the Definitive Preferred Securities
Certificates in accordance with the instructions of the Clearing Agency. Neither
the Securities Registrar nor the Trustees nor the Administrators shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Preferred Securities Certificates, the Trustees and the
Administrators shall recognize the Holders of the Definitive Preferred
Securities Certificates as Securityholders. The Definitive Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrators, as evidenced
by the execution thereof by the Administrators or any one of them.

            Section 5.14 Rights of Securityholders. (a) The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.9, and the Securityholders shall not have any
right or title therein other than the undivided beneficial ownership interest in
the assets of the Trust conferred by their Trust Securities and they shall have
no right to call for any partition or division of property, profits or rights of



                                      -25-
<PAGE>



the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or similar rights. When
issued and delivered to Securityholders against payment of the purchase price
therefor, the Preferred Securities will be fully paid and non-assessable
undivided beneficial interests in the Trust Property. The Holders of the
Preferred Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.

            (b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture 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 at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing to the
Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable as set forth in the Indenture, provided that
the payment of principal, premium and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.

            At any time after such 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, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:

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

                  (A) all overdue installments of interest (including any
            Additional Amounts (as defined in the Indenture)), if any, on all of
            the Debentures;

                  (B) the principal of (and premium, if any, on) any Debentures
            which have become due otherwise than by such declaration of
            acceleration and interest thereon at the rate borne by the
            Debentures; and

                  (C) 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 Property
            Trustee, their agents and counsel and the amounts payable to the
            Debenture Trustee under Section 7.06 of the Indenture; and

            (ii)  all Debenture Events of Default, other than the non-payment of
      the principal of the Debentures which has become due solely by such
      acceleration, have been cured or waived as provided in Article VI of the
      Indenture.

            The Holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum



                                      -26-
<PAGE>



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 in respect of a covenant or provision which 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 Property Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of the
Preferred Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which 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 which 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 5.14(b).

            (c) For so long as any Preferred Securities remain Outstanding, to
the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 6.01(a) or 6.01(b) of the Indenture, any Holder of Preferred Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Article VI of the Indenture, for enforcement of payment to such
Holder of the principal amount of interest on Debentures having a principal
amount equal to the Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this
Section 5.14(c), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Debentures.

            Section 5.15 CUSIP Numbers. The Administrators in issuing the
Preferred Securities may use "CUSIP" numbers (if then generally in use), and, if
so, the Property Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Preferred 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 Preferred Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Administrators will promptly notify
the Property Trustee of any change in the CUSIP numbers.



                                      -27-
<PAGE>



                                   ARTICLE VI

                    ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

            Section 6.1 Limitations on Voting Rights. (a) Except as provided in
this Section, in Sections 5.14, 8.10 and 10.2 and in the Indenture, and as
otherwise required by law, no Holder of Preferred Securities shall have any
right to vote or in any manner otherwise control the administration, operation
and management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Securityholders from time to
time as partners or members of an association.

            (b) So long as any Debentures are held by the Property Trustee, the
Property Trustee shall not (i) direct the time, method or 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 such
Debentures, (ii) waive any past default which 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 to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the Holders of at least a majority in Liquidation Amount of all Outstanding
Preferred Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Preferred Securities. The Property
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of Preferred Securities, except by a subsequent vote of the
Holders of Preferred Securities. Subject to Section 8.3, the Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Property Trustee shall, at the
expense of the Depositor, obtain an Opinion of Counsel to the effect that such
action shall not cause the Trust to be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes.

            (c) If any proposed amendment to the Trust Agreement provides for,
or the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities, except as otherwise provided in
Section 10.2(c). Notwithstanding any other provision of this Trust Agreement, no
amendment to this Trust Agreement may be made if, as a result of such amendment,
it would cause the Trust to be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes.



                                      -28-
<PAGE>



            The Holders of a majority in Liquidation Amount of the Preferred
Securities at the time Outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred on the Property
Trustee with respect to such Preferred Securities; provided, however, that, the
Property Trustee shall have the right to decline to follow any such direction if
the Property Trustee being advised by Opinion of Counsel determines that the
action so directed may not lawfully be taken, or if the Property Trustee in good
faith shall determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Holders of Preferred Securities not parties to such direction, and provided
further that nothing in the Trust Agreement shall impair the right of the
Property Trustee to take any action deemed proper by the Property Trustee and
which is not inconsistent with such direction by such Securityholders.

            Section 6.2 Notice of Meetings. Notice of all meetings of the
Preferred Securityholders, stating the time, place and purpose of the meeting,
shall be given by the Property Trustee pursuant to Section 10.8 to each
Preferred Securityholder of record, at his registered address, at least 15 days
and not more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice.

            Section 6.3 Meetings of Preferred Securityholders. No annual meeting
of Securityholders is required to be held. The Property Trustee, however, shall
call a meeting of Preferred Securityholders to vote on any matter upon the
written request of the Preferred Securityholders of record of at least 25% of
the Preferred Securities (based upon their aggregate Liquidation Amount) and the
Administrators or the Property Trustee may, at any time in their discretion,
call a meeting of Preferred Securityholders to vote on any matters as to which
Preferred Securityholders are entitled to vote.

            Preferred Securityholders of record of at least 50% of the
Outstanding Preferred Securities (based upon their Liquidation Amount), present
in person or by proxy, shall constitute a quorum at any meeting of Preferred
Securityholders.

            If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding at
least a majority of the Preferred Securities (based upon their Liquidation
Amount) held by the Preferred Securityholders of record present, either in
person or by proxy, at such meeting shall constitute the action of the Preferred
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.

            Section 6.4 Voting Rights. Securityholders shall be entitled to one
vote for each $25 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.

            Section 6.5 Proxies, Etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Property Trustee, or with such other officer or agent of the Trust as



                                      -29-
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the Property Trustee may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of the Property Trustee,
proxies may be solicited in the name of the Property Trustee or one or more
officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.

            Section 6.6 Securityholder Action by Written Consent. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding a majority of all Outstanding Trust
Securities (based upon their aggregate Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.

            Section 6.7 Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or to vote by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrators may from time to time fix a date, not more than 90
days prior to the date of any meeting of Securityholders or the payment of a
Distribution or other action (including action to be taken by written consent),
as the case may be, as a record date for the determination of the identity of
the Securityholders of record for such purposes.

            Section 6.8 Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments representing
the requisite number of Securityholders (based upon Liquidation Amounts) are
delivered to the Property Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Securityholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Trust Agreement and (subject
to Section 8.2) conclusive in favor of the Trustees, if made in the manner
provided in this Section.

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



                                      -30-
<PAGE>



            The ownership of Preferred Securities shall be proved by the
Securities Register.

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

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

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

Section 6.9 Inspection of Records. Upon reasonable notice to the Administrators
and the Property Trustee, the records of the Trust shall be open to inspection
by Securityholders during normal business hours for any purpose reasonably
related to such Securityholder's interest as a Securityholder.


                                  ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

            Section 7.1 Representations and Warranties of the Property Trustee
and the Delaware Trustee. The Property Trustee and the Delaware Trustee, each
severally on behalf of and as to itself, hereby represents and warrants for the
benefit of the Depositor and the Securityholders that:

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

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



                                      -31-
<PAGE>



            (c) the Delaware Trustee is a national association duly organized,
validly existing and in good standing under the laws of the United States with
its principal place of business in the State of Delaware;

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

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

            (f) the execution, delivery and performance of this Trust Agreement
have been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and do not require any approval
of stockholders of the Property Trustee and the Delaware Trustee and such
execution, delivery and performance will not (i) violate the Charter or By-laws
of the Property Trustee or the Delaware Trustee, or (ii) violate any law,
governmental rule or regulation of the State of New York or the United States of
America, as the case may be, governing the banking or trust powers of the
Property Trustee or the Delaware Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Delaware
Trustee; and

            (g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing State of New York or federal law governing the banking or trust powers
of the Property Trustee or the Delaware Trustee, as the case may be.

            Any successor Property Trustee and Delaware Trustee shall make
similar representations and warranties as contained in this Section 7.1 for the
benefit of the Depositor and the Securityholders.

            Section 7.2 Representations and Warranties of Depositor. The
Depositor hereby represents and warrants for the benefit of the Securityholders
that:

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



                                      -32-
<PAGE>



            (b) there are no taxes, fees or other governmental charges payable
by the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.


                                  ARTICLE VIII

                         THE TRUSTEES AND ADMINISTRATORS

            Section 8.1 Corporate Property Trustee Required; Eligibility of
Trustees. (a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

            (b) There shall at all times be one or more Administrators hereunder
with respect to the Trust Securities, who shall be appointed by the Holder of
Common Securities. Each Administrator shall be either a natural person who is at
least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.

            (c) There shall at all times be a Delaware Trustee with respect to
the Trust Securities. The Delaware Trustee shall either be (i) a natural person
who is at least 21 years of age and a resident of the State of Delaware or (ii)
a legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.

            Section 8.2 Certain Duties and Responsibilities. (a) The duties and
responsibilities of the Trustees shall be as provided by this Trust Agreement
and, in the case of the Property Trustee, by the Trust Indenture Act and no
implied covenants or obligations shall be read into this Trust Agreement against
the Property Trustee. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees 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 they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them. In the absence of bad faith on its part, the Property Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Property Trustee and conforming to the requirements of this Trust Agreement.
Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release an Administrator
or the Delaware Trustee from liability for his own gross negligence or willful
misconduct. To the extent that, at law or in equity, an Administrator or the



                                      -33-
<PAGE>



Delaware Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to the Securityholders, such Administrator and
the Delaware Trustee shall not be liable to the Trust or any other Trustee or to
any Securityholder for such Administrator's or the Delaware Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the
Administrators and the Delaware Trustee otherwise existing at law or in equity,
are agreed by the Depositor, the Trustees and the Securityholders to replace
such other duties and liabilities of the Administrators and the Delaware
Trustee.

            (b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.2(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act. (c) No provision of this Trust Agreement shall be
construed to relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

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

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

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

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



                                      -34-
<PAGE>



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

            Section 8.3 Certain Notices. Within five Business Days after the
occurrence of any Event of Default actually known to an officer of the Property
Trustee assigned to its Corporate Trust Office, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8, notice of
such Event of Default to the Securityholders, the Administrators and the
Depositor, unless such Event of Default shall have been cured or waived.

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

            Section 8.4 Certain Rights of Property Trustee. Subject to the
provisions of Section 8.2:

            (a) the Property Trustee may rely and shall 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, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;

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

            (c) any direction or act of the Depositor or the Administrators
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate or a certificate signed by any Administrator;



                                      -35-
<PAGE>



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

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

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

            (g)   the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;

            (h)   the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, 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
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;

            (i)   the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property 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 Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust 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 protected in acting in accordance with such instructions;



                                      -36-
<PAGE>



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

            (l)   the Property Trustee shall not be charged with knowledge of an
Event of Default unless an officer of the Property Trustee assigned to its
Corporate Trust Office obtains actual knowledge of such event or the Property
Trustee receives written notice of such event from the Depositor, any Trustee or
Administrator or Securityholders.

            No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property 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 Property 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 Property Trustee
shall be construed to be a duty. Section 8.5 Not Responsible for Recitals or
Issuance of Securities. The recitals contained herein and in the Trust
Securities Certificates shall be taken as the statements of the Trust, and the
Trustees do not assume any responsibility for their correctness. The Trustees
shall not be accountable for the use or application by the Depositor of the
proceeds of the Debentures.

            Section 8.6 May Hold Securities. Any Trustee or any other agent of
any Trustee or the Trust, in its individual or any other capacity, may become
the owner or pledgee of Trust Securities and, subject to Section 8.8 and to
Section 311 of the Trust Indenture Act and except as provided in the definition
of the term "Outstanding" in Article I, may otherwise deal with the Trust with
the same rights it would have if it were not a Trustee or such other agent.

            Section 8.7 Compensation; Indemnity; Fees. The Depositor, in its
capacity as borrower pursuant to the Indenture, agrees:

            (a)   to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);

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

            (c)   to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee,
(iii) any officer, director, shareholder, employee, representative or agent of
any Trustee, and (iv) any employee or agent of the Trust or its Affiliates,
(referred to herein as an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred without gross negligence (or in the case of the Property
Trustee, negligence) or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,



                                      -37-
<PAGE>



including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder; and

            (d)   to the fullest extent permitted by applicable law, to advance
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding which shall be advanced, from time
to time, prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Depositor of (x) a written affirmation by or on
behalf of the Indemnified Person of its or his good faith belief that it or he
has met the standard of conduct set forth in this Section 8.7 and (y) an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in the preceding subsection.

            The provisions of this Section 8.7 shall survive the termination of
this Trust Agreement and the resignation or removal of any Trustee.

            No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.7.

            The Depositor, any Administrator and any Trustee (in the case of the
Property Trustee, subject to Section 8.8 hereof) 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 Trust Securities shall have no rights by virtue of this
Trust Agreement 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. Neither the
Depositor, any Administrator nor any 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 the Depositor, any Administrator or any 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 Trustee may
engage or be interested in any financial or other transaction with the Depositor
or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.

            Section 8.8 Conflicting Interests. If the Property Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Trust Agreement. The Guarantee; the Indenture and
the securities issued or to be thereunder; any Preferred Securities Guarantee
Agreement relating to a Bear Stearns Trust (as defined in the Indenture and the
Existing Indenture) between the Depositor and The Chase Manhattan Bank, as
guarantee trustee; any Amended and Restated Trust Agreement relating to a Bear
Stearns Trust among the Depositor, as depositor, The Chase Manhattan Bank, as
property trustee, Chase Manhattan Bank USA, National Association (or its
predecessors), as Delaware trustee, the administrators named therein and the
several holders; and the Existing Indenture and the securities issued or to be
issued thereunder shall be deemed to be sufficiently described in this Trust
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.



                                      -38-
<PAGE>



            Section 8.9 Co-Trustees and Separate Trustee. Unless a Debenture
Event of Default shall have occurred and be continuing, at any time or times,
for the purpose of conforming to the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property may at the
time be located, the Depositor and the Administrators, except in such instance
as set forth in the following sentence, by agreed action of a majority of such
Administrators, shall have the power to appoint, and upon the written request of
the Administrators, the Depositor shall for such purpose join with the
Administrators in the execution, delivery, and performance of all instruments
and agreements necessary or proper to appoint one or more Persons approved by
the Property Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to the extent required by
law to act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest in such
Person or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section.
If the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.

            Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.

            Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:

            (a)   The Trust Securities shall be delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee.

            (b)   The rights, powers, duties, and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.

            (c)   The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,



                                      -39-
<PAGE>



or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in this Section.

            (d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.

            (e)   The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.

            (f)   Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.

            Section 8.10 Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.

            Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders.
If the instrument of acceptance by the successor Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 60 days after
the giving of such notice of resignation, the Relevant Trustee may petition, at
the expense of the Trust, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.

            Unless a Debenture Event of Default shall have occurred and be
continuing any Trustee may be removed at any time by the Holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed by Act
of the Holders of a majority in Liquidation Amount of the Preferred Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). In no event will the Holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrators, which voting
rights are vested exclusively in the Depositor, as Holder of the Common
Securities.

            If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Debenture Event of Default shall have occurred and
be continuing, the Holder of the Common Securities, by Act of the Holder of the
Common Securities, delivered to the retiring Trustee, shall promptly appoint a
successor Trustee or Trustees, and the retiring Trustee shall comply with the
applicable requirements of Section 8.11. If any Trustee shall resign, be removed
or become incapable of acting as Trustee, at a time when a Debenture Event of
Default Exists, the Holders of the Preferred Securities, by Act of the Holders
of a majority in Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and each successor Trustee shall comply with the



                                      -40-
<PAGE>



applicable requirements of Section 8.11. If an Administrator shall resign, be
removed or become incapable of acting as Administrator, the Holder of Common
Securities by Act of the Holder of Common Securities delivered to the
Administrator (and without the need for action by any other Person) shall
promptly appoint a successor Administrator or Administrators and such successor
Administrator or Administrators shall execute a counterpart to this Trust
Agreement. If no successor Relevant Trustee shall have been so appointed by the
Holder of the Common Securities or the Holders of the Preferred Securities and
accepted appointment in the manner required by Section 8.11, any Holder who has
been a Holder of Trust Securities for at least six months may, on behalf of
himself and all other similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.

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

            Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrator or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Depositor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (a) the unanimous act of remaining Administrators if there are at
least two of them prior to such vacancy or (b) otherwise by the Depositor (with
the successor in each case being a Person who satisfies the eligibility
requirement for Administrators or Delaware Trustee, as the case may be, set
forth in Section 8.1).

            Section 8.11 Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Relevant Trustee, the retiring Relevant
Trustee and each successor Relevant Trustee shall execute and deliver an
amendment hereto wherein each successor Relevant Trustee shall accept such
appointment and which shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Relevant
Trustee all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Trust. Upon the execution
and delivery of such amendment the resignation or removal of the retiring
Relevant Trustee shall become effective to the extent provided therein and each
such successor Relevant Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Relevant Trustee; but, on request of the Trust or any successor
Relevant Trustee such retiring Relevant Trustee shall, upon payment of its
charges, duly assign, transfer and deliver to such successor Relevant Trustee
all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.

            Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the preceding paragraph.



                                      -41-
<PAGE>



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

            Section 8.12 Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant 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.

            Section 8.13 Property Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Trust Securities
or the property of the Trust or of such other obligor or their creditors, the
Property Trustee (irrespective of whether any Distributions or other amounts due
on the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions
or such other amounts) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:

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

            (b)   to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Property Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee under Section 8.7.

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



                                      -42-
<PAGE>



            Section 8.14 Reports by Property Trustee. (a) Not later than January
15 of each year commencing with January 15, 2002, the Property Trustee shall
transmit to all Securityholders in accordance with Section 10.8, and to the
Depositor, a brief report dated as of the immediately preceding November 15
concerning the Property Trustee and its actions under this Trust Agreement if
and as may be required pursuant to Section 313(a) of the Trust Indenture Act.

            (b)   In addition, the Property Trustee shall transmit to
Securityholders such other reports concerning the Property Trustee and its
actions under this Trust Agreement as would be required pursuant to the Trust
Indenture Act were this Trust Agreement to be qualified under the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

            (c)   A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with any exchange,
interdealer quotation system or self-regulatory organization upon which the
Trust Securities are designated for trading, and with the Depositor. The
Depositor will notify the Property Trustee when and as the Preferred Securities
become so designated for trading.

            Section 8.15 Reports to the Property Trustee. The Depositor and the
Administrator on behalf of the Trust shall provide to the Property Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, such compliance certificate
to be delivered annually on or before February 15 of each year beginning in
2002. Section 8.16 Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrator on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act shall be given in the form of an Officers' Certificate. Section
8.17 Number of Trustees. (a) The number of Trustees shall be two. The Property
Trustee and the Delaware Trustee may be the same Person.

            (b)   If a Trustee ceases to hold office for any reason the vacancy
shall be filled with a Trustee appointed in accordance with the provisions of
Section 8.10.

            (c)   The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to dissolve, terminate or annul the Trust.

            Section 8.18 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 his or her power for the purpose of executing any
documents contemplated in Section 2.7(a) or mailing any other governmental
filing; and



                                      -43-
<PAGE>



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

            Section 8.19 Delaware Trustee. (a) Notwithstanding any other
provision of this Trust Agreement, the Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrators or the Property Trustee described in this
Trust Agreement. The Delaware Trustee shall be a trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Delaware
Business Trust Act.

            (b)   It is expressly understood and agreed by the parties hereto
that in fulfilling its obligations as Delaware Trustee hereunder on behalf of
the Trust (i) any agreements or instruments executed and delivered by Chase
Manhattan Bank USA, National Association are executed and delivered not in its
individual capacity but solely as Delaware Trustee under this Trust Agreement in
the exercise of the powers and authority conferred and vested in it, (ii) each
of the representations, undertakings and agreements herein made on the part of
the Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by Chase Manhattan Bank USA, National Association in
its individual capacity but is made and intended for the purpose of binding only
the Trust, and (iii) under no circumstances shall Chase Manhattan Bank USA,
National Association in its individual capacity be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Trust Agreement, except if such breach or
failure is due to any gross negligence or willful misconduct of the Delaware
Trustee.


                                   ARTICLE IX

                       DISSOLUTION, LIQUIDATION AND MERGER

            Section 9.1 Dissolution Upon Expiration Date. Unless earlier
dissolved, the Trust shall automatically dissolve on May 15, 2056 (the
"Expiration Date"). Thereafter, the Trust Property shall be distributed in
accordance with Section 9.4.

            Section 9.2 Early Dissolution. The first to occur of any of the
following events is an "Early Termination Event," the occurrence of which shall
cause a dissolution of the Trust:

            (a)   the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of the Common Securities;

            (b)   the written direction to the Property Trustee from the
Depositor at any time to dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, distribute
Debentures to Securityholders in exchange for the Preferred Securities;



                                      -44-
<PAGE>



            (c)   the redemption of all of the Preferred Securities in
connection with the redemption of all the Debentures; and

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

            Section 9.3 Dissolution. The respective obligations and
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (a) the distribution
by the Property Trustee to Securityholders upon the liquidation of the Trust
pursuant to Section 9.4, or upon the redemption of all of the Trust Securities
pursuant to Section 4.2, of all amounts required to be distributed hereunder
upon the final payment of the Trust Securities; (b) the payment of any expenses
owed by the Trust; and (c) the discharge of all administrative duties of the
Administrators, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.

            Section 9.4 Liquidation. (a) If an Early Termination Event specified
in clause (a), (b) or (d) of Section 9.2 occurs or upon the Expiration Date, the
Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to each Securityholder a
Like Amount of Debentures, subject to Section 9.4(d). Notice of liquidation
shall be given by the Property Trustee by first-class mail, postage prepaid
mailed not later than 15 nor more than 60 days prior to the Liquidation Date to
each Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:

            (i)   state the Liquidation Date;

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

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

            (b)   Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days nor less than 15 days prior
to the Liquidation Date) and, either itself acting as exchange agent or through
the appointment of a separate exchange agent, shall establish such procedures as
it shall deem appropriate to effect the distribution of Debentures in exchange
for the Outstanding Trust Securities Certificates.

            (c)   Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the exchange agent for exchange, (iii) the Depositor shall use



                                      -45-
<PAGE>


its reasonable efforts to have the Debentures designated on or with any
exchange, interdealer quotation system or self-regulatory organization as the
Preferred Securities are then listed, (iv) any Trust Securities Certificates not
so surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures) and (v) all rights of Securityholders holding Trust Securities will
cease, except the right of such Securityholders to receive Debentures upon
surrender of Trust Securities Certificates.

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

            Section 9.5 Mergers, Consolidations, Conversions, Amalgamations or
Replacements of the Trust. The Trust may not merge with or into, consolidate,
convert into, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except
pursuant to this Article IX. At the request of the Holder of a majority of the
Common Securities, without the consent of the Holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, convert into, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to a trust organized as such under the laws of any state; provided, that (i)
such successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Preferred Securities or (b) substitutes for the
Preferred Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in priority with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Debentures, (iii) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (iv) such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or



                                      -46-
<PAGE>



lease does not adversely affect the rights, preferences and privileges of the
Holders of the Preferred Securities (including any Successor Securities) in any
material respect, (v) such successor entity has a purpose substantially
identical to that of the Trust, (vi) prior to such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel from independent counsel to the
Trust experienced in such matters to the effect that (a) such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
Holders of the Preferred Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation, conversion,
amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor
such successor entity will be required to register as an investment company
under the 1940 Act and (vii) the Depositor owns all of the common securities of
such successor entity and guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
convert into, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other Person or permit any other Person to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease would (i) cause the Trust or the
successor entity to be classified as other than a grantor trust or (ii) result
in the recognition of taxable gain or loss by such holder, for United States
federal income tax purposes.


                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

            Section 10.1 Limitation of Rights of Securityholders to Terminate
Trust. Except to the extent set forth in Section 9.2, the death, incapacity,
dissolution, liquidation, termination or bankruptcy of any Person having an
interest, beneficial or otherwise, in Trust Securities shall not operate to
terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor
entitle the legal representatives, successors or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.

            Section 10.2 Amendment. (a) This Trust Agreement may be amended from
time to time by the Trustees, and the Holders of a majority of the Common
Securities, without the consent of any Holders of the Preferred Securities, (i)
to cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be reasonably necessary to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor trust at
all times that any Trust Securities are outstanding or to ensure that the Trust
will not be required to register as an investment company under the 1940 Act;
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any Securityholder,
and any such amendments of this Trust Agreement shall become effective when
notice thereof is given to the Securityholders.



                                      -47-
<PAGE>



            (b)   Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Trustees and the Holders of a
majority of the Common Securities with (i) the consent of Securityholders
representing not less than a majority (based upon Liquidation Amounts) of the
Trust Securities then Outstanding and (ii) receipt by the Trustees of an Opinion
of Counsel to the effect that such amendment or the exercise of any power
granted to the Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States federal income tax purposes
or the Trust's exemption from status of an investment company under the 1940
Act.

            (c)   In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholders, this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the
Securityholders, this paragraph (c) of this Section 10.2 may not be amended.

            (d)   Notwithstanding any other provisions of this Trust Agreement,
no Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States federal income tax purposes.

            (e)   Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.

            (f)   In the event that any amendment to this Trust Agreement is
made, the Property Trustees or the Administrators shall promptly provide to the
Depositor a copy of such amendment.

            (g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement. Section 10.3 Separability. In case any provision in
this Trust Agreement or in the Trust Securities Certificates shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

            Section 10.4 Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN



                                      -48-
<PAGE>



ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES), PROVIDED THAT THE IMMUNITIES AND
STANDARD OF CARE OF THE PROPERTY TRUSTEE IN CONNECTION WITH THE ADMINISTRATION
OF ITS TRUSTS AND DUTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

            Section 10.5 Payments Due on Non-Business Day. If the date fixed for
any payment on any Trust Security shall be a day that is not a Business Day,
then such payment need not be made on such date but may be made on the next
succeeding day that is a Business Day (except as otherwise provided in Sections
4.1(a) and 4.2(d)), with the same force and effect as though made on the date
fixed for such payment, and no interest shall accrue thereon for the period
after such date.

            Section 10.6 Successors. This Trust Agreement shall be binding upon
and shall inure to the benefit of any successor to the Depositor, the Trust or
the Relevant Trustee, including any successor by operation of law. Except in
connection with transactions permitted under Article XI of the Indenture and
pursuant to which the assignee agrees in writing to perform the Depositor's
obligations hereunder, the Depositor shall not assign its obligations hereunder.

            Section 10.7 Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.

            Section 10.8 Reports, Notices and Demands. Any report, notice,
demand or other communication which by any provision of this Trust Agreement is
required or permitted to be given or served to or upon any Securityholder or the
Depositor may be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Preferred
Securityholder, to such Preferred Securityholder as such Securityholder's name
and address may appear on the Securities Register; and (b) in the case of the
Common Securityholder or the Depositor, to The Bear Stearns Companies Inc., 245
Park Avenue, New York, New York 10167, Attention: Corporate Secretary, Facsimile
No.: (212) 272-8904 (until another address is designated by notice to the
Trustees). Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for all
purposes, upon hand delivery, mailing or transmission. Any notice, demand or
other communication which by any provision of this Trust Agreement is required
or permitted to be given or served to or upon the Trust, the Property Trustee,
the Delaware Trustee or the Administrators shall be given in writing addressed
(until another address is designated by notice to the other parties hereto) as
follows: (a) with respect to the Property Trustee to The Chase Manhattan Bank,
450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust
Services; (b) with respect to the Delaware Trustee, to Chase Manhattan Bank USA,
National Association, 1201 Market Street, Wilmington, Delaware 19801, Attention:
Institutional Trust Services; (c) with respect to the Administrators, to them at
the address above for notices to the Depositor, marked "Attention:
Administrators of Bear Stearns Capital Trust III" and (d) with respect to the
Trust, c/o The Bear Stearns Companies Inc., 245 Park Avenue, New York, New York,
10167, Attention: Corporate Secretary. Such notice, demand or other
communication to or upon the Trust, the Administrators, the Property Trustee or



                                      -49-
<PAGE>



the Delaware Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust, the Administrators, the
Property Trustee or the Delaware Trustee, as the case may be.

            Section 10.9 Agreement Not to Petition. Each of the Trustees and the
Depositor agree for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, they shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.9, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Property Trustee
or the Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.

            Section 10.10 Trust Indenture Act; Conflict with Trust Indenture
Act. (a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act and shall, to the extent applicable, be governed by such
provisions.

            (b)   The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.

            (c)   If any provision hereof limits, qualifies or conflicts with
the duties imposed under Section 310 through 317 of the Trust Indenture Act,
such duties shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or excluded, as the case may be. (d) The application of the Trust
Indenture Act to this Trust Agreement shall not affect the nature of the Trust
Securities as equity securities representing undivided beneficial interests in
the assets of the Trust.

            Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST THE TRUSTEES, THE
ADMINISTRATORS, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.



                                      -50-
<PAGE>



            Section 10.12 Counterparts. This Trust Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original; but all such counterparts shall together constitute but one and the
same instrument.

                            [SIGNATURE PAGE FOLLOWS]



                                      -51-
<PAGE>



            IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Trust Agreement of Bear Stearns Capital Trust III as of the date first
above written.


                                       THE BEAR STEARNS COMPANIES INC.,
                                          as Depositor


                                       By: /s/ Samuel L. Molinaro Jr.
                                          --------------------------------------
                                          Name:  Samuel L. Molinaro Jr.
                                          Title: Senior Vice President-Finance
                                                 and Chief Financial Officer


                                       THE CHASE MANHATTAN BANK,
                                         as Property Trustee


                                       By: /s/ Natalia Rodriguez
                                          --------------------------------------
                                          Name:  Natalia Rodriguez
                                          Title: Assistant Vice President


                                       CHASE MANHATTAN BANK USA, NATIONAL
                                       ASSOCIATION,
                                          as Delaware Trustee


                                       By: /s/ Denis Kelly
                                          --------------------------------------
                                          Name:  Denis Kelly
                                          Title: Assistant Vice President


                                           /s/ Jeffrey M. Lipman
                                          --------------------------------------
                                                  Jeffrey M. Lipman,
                                                  as Administrator


                                           /s/ Samuel L. Molinaro Jr.
                                          --------------------------------------
                                                 Samuel L. Molinaro Jr.,
                                                   as Administrator


                                           /s/ Michael Minikes
                                          --------------------------------------
                                                    Michael Minikes,
                                                    as Administrator

<PAGE>



                                                                       EXHIBIT A

                          FORM OF CERTIFICATE OF TRUST

                              CERTIFICATE OF TRUST
                                       OF
                         BEAR STEARNS CAPITAL TRUST III

            THIS Certificate of Trust of Bear Stearns Capital Trust III (the
"Trust"), dated as of November 4, 1998 is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801, et seq.).

            1. Name. The name of the business trust formed hereby is Bear
Stearns Capital Trust III.

            2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801.

            3. Effective Date. This Certificate of Trust shall be effective upon
filing.

            IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first-above
written.


                                       CHASE MANHATTAN BANK DELAWARE,
                                         as Delaware Trustee


                                       By: /s/ Denis Kelly
                                          --------------------------------------
                                          Name:  Denis Kelly
                                          Title: Trust Officer


                                       THE CHASE MANHATTAN BANK,
                                         as Property Trustee


                                       By: /s/ William G. Keenan
                                          --------------------------------------
                                          Name:  William G. Keenan
                                          Title: Trust Officer



                                      A-1
<PAGE>



                                                                       EXHIBIT B


                      FORM OF COMMON SECURITIES CERTIFICATE


Certificate No. __________                 No. of Common Securities __________


                             CERTIFICATE EVIDENCING
                      7.80% TRUST ISSUED COMMON SECURITIES
                                       OF
                         BEAR STEARNS CAPITAL TRUST III
                  (LIQUIDATION AMOUNT $25 PER COMMON SECURITY)


THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS DESCRIBED IN THE TRUST AGREEMENT
(AS DEFINED BELOW).

            Bear Stearns Capital Trust III, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________________________________________________________ (the "Holder")
is the registered owner of

___________________________________________ (______________) Common Securities
of the Trust representing undivided beneficial interests in the assets of the
Trust and designated the 7.80% Trust Issued Common Securities (liquidation
amount $25 per Common Security) (the "Common Securities"). To the extent set
forth in Section 5.10 of the Trust Agreement, the Common Securities are not
transferable and any attempted transfer hereof shall be void. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of May 10, 2001, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business.

            Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

            IN WITNESS WHEREOF, one of the Administrators of the Trust has
executed this certificate this ___ day of _____________.



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



                                      B-1
<PAGE>



                                                                       EXHIBIT C


                    FORM OF PREFERRED SECURITIES CERTIFICATE


Certificate No. __________                No. of Preferred Securities __________

                                                            CUSIP NO. __________


                             CERTIFICATE EVIDENCING
                     7.80% TRUST ISSUED PREFERRED SECURITIES
                                       OF
                         BEAR STEARNS CAPITAL TRUST III
                 (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)


[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO BEAR STEARNS
CAPITAL TRUST III OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*

[THE PREFERRED SECURITIES WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF $25 OR MORE (AT LEAST 100 PREFERRED SECURITIES).
ANY ATTEMPTED TRANSFER, SALE OR OTHER DISPOSITION OF PREFERRED SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $25 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER. ANY TRANSFEREE OF SUCH A BLOCK OF LESS THAN
100 PREFERRED SECURITIES SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS ON SUCH PREFERRED SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED
TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES.]**

            Bear Stearns Capital Trust III, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that

_________________________________________________________________ (the "Holder")

is the registered owner of [the number of Preferred Securities of the Trust
specified in Schedule A hereto]*



                                       C-1
<PAGE>



[___________________________________________ (___________) Preferred Securities
of the Trust]** representing an undivided beneficial interest in the assets of
the Trust and designated the 7.80% Trust Issued Preferred Securities of Bear
Stearns Capital Trust III liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred 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 as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of May 10, 2001, as the same may be
amended from time to time (the "Trust Agreement"). The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement entered into by The
Bear Stearns Companies Inc., a Delaware corporation, and The Chase Manhattan
Bank as guarantee trustee, dated as of May 10, 2001, as the same may be amended
from time to time (the "Guarantee Agreement"), to the extent provided therein.
The Trust will furnish a copy of the Trust Agreement and the Guarantee Agreement
to the Holder without charge upon written request to the Trust at its principal
place of business.

            Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

                            [SIGNATURE PAGE FOLLOWS]



                                      C-2
<PAGE>



            IN WITNESS WHEREOF, one of the administrators of the Trust has
executed this certificate this ___ day of ______________, ____.



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



------------
*     Insert in book-entry securities only.
**    Insert in definitive securities only.



                                      C-3
<PAGE>



                               FORM OF ASSIGNMENT

            FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers the within Preferred Security and all rights thereunder, unto


                    ----------------------------------------
                          Please insert Social Security
                    or other identifying number of assignee:


          ------------------------------------------------------------
               (Name and Address of Assignee, including Zip Code,
                         must be printed or typewritten)


and hereby irrevocably constitutes and appoints

________________________________________________________________________________

Attorney to transfer said Preferred Security on the Register of the Preferred
Securities, with full power of substitution in the premises.

Date:
                                    --------------------------------------------
                                    Signature(s)


                                    Signature(s) must be guaranteed by a
                                    commercial bank or trust company or a member
                                    firm of a major stock exchange.

NOTICE:     The signature to this assignment must correspond with the name as it
            appears upon the face of the within Preferred Security in every
            particular, without alteration or enlargement or any change
            whatever.




                                      C-4
<PAGE>



                                                                      SCHEDULE A

                    CHANGES TO NUMBER OF PREFERRED SECURITIES
                             IN BOOK-ENTRY SECURITY


The initial number of Preferred Securities evidenced by this Book-Entry
Preferred Securities Certificate is ___________.

--------------------------------------------------------------------------------
             NUMBER OF PREFERRED
          SECURITIES BY WHICH THIS
          BOOK-ENTRY SECURITY IS TO
          BE REDUCED AND REASON FOR   REMAINING AMOUNT OF THIS
  DATE            REDUCTION             BOOK-ENTRY SECURITY     NOTATION MADE BY
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                                      C-5

Source: OneCLE Business Contracts.