10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)

For the transition period from            to            .

Commission file number 0-25034

GREATER BAY BANCORP

(Exact name of registrant as specified in its charter)

California	77-0387041
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

2860 West Bayshore Road, Palo Alto, California 94303

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code:  (650) 813-8200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Outstanding shares of Common Stock, no par value, as of April 30, 2003:  51,920,203

GREATER BAY BANCORP

INDEX

Part I.    Financial Information
Item 1.  Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002	3
Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and 2002	4
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2003 and 2002	5
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002	6
Notes to Consolidated Financial Statements	7
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.  Controls and Procedures	46
Part II.    Other Information
Item 1.  Legal Proceedings	48
Item 2.  Changes in Securities and Use of Proceeds	48
Item 3.  Default Upon Senior Security	48
Item 4.  Submission of Matters to a Vote of Securities Holders	48
Item 5.  Other Information	48
Item 6.  Exhibits and Reports on Form 8-K	48
Signatures	49
Certifications	50

2

GREATER BAY BANCORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2003 (unaudited)			December 31, 2002
	(Dollars in thousands)
ASSETS
Cash and due from banks	$	243,684		$	300,514
Federal funds sold		128,000			14,000
Other short-term securities		3,490			—
Cash and cash equivalents		375,174			314,514
Investment securities:
Available for sale, at fair value		2,326,792			2,458,421
Other securities		97,823			104,565
Investment securities		2,424,615			2,562,986
Total loans:
Commercial		1,974,656			2,067,142
Term real estate—commercial		1,642,560			1,610,277
Total commercial		3,617,216			3,677,419
Real estate construction and land		704,041			710,990
Real estate other		247,335			251,665
Consumer and other		165,650			166,331
Deferred loan fees and discounts		(15,044	)		(15,245	)
Total loans, net of deferred fees		4,719,198			4,791,160
Allowance for loan and lease losses		(129,818	)		(129,613	)
Total loans, net		4,589,380			4,661,547
Property, premises and equipment, net		51,437			52,069
Goodwill		145,605			144,181
Other intangible assets		45,975			47,722
Interest receivable and other assets		326,820			292,708
Total assets	$	7,959,006		$	8,075,727
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Demand, noninterest-bearing	$	1,114,447		$	1,028,672
MMDA, NOW and savings		2,658,502			2,673,973
Time certificates, $100,000 and over		803,328			829,717
Other time certificates		945,483			739,911
Total deposits		5,521,760			5,272,273
Borrowings		1,335,406			1,737,243
Company obligated mandatorily redeemable cumulative trust preferred securities of subsidiary trusts holding solely junior subordinated debentures		204,000			204,000
Other liabilities		186,670			165,502
Total liabilities		7,247,836			7,379,018
Preferred stock of real estate investment trust subsidiaries of the Banks		15,650			15,650
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred stock, no par value: 4,000,000 shares authorized		—			—
7.25% convertible preferred stock, stated value $50.00: recorded at fair value at issuance; 2,356,606 reserved shares; 1,630,504 and 1,673,898 shares issued and outstanding as of March 31, 2003 and December 31, 2002, respectively		80,441			80,900
Common stock, no par value: 80,000,000 shares authorized; 51,774,074 and 51,577,795 shares issued and outstanding as of March 31, 2003 and December 31, 2002, respectively		236,915			234,627
Unearned compensation		(723	)		(1,450	)
Accumulated other comprehensive income		13,915			18,624
Retained earnings		364,972			348,358
Total shareholders’ equity		695,520			681,059
Total liabilities and shareholders’ equity	$	7,959,006		$	8,075,727

See notes to consolidated financial statements.

3

GREATER BAY BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three months ended March 31,
	2003		2002
	(Dollars in thousands, except per share amounts)
INTEREST INCOME
Loans	$	80,877	$	82,575
Investment securities:
Taxable		23,789		43,319
Tax-exempt		1,223		1,432
Total interest on investment securities		25,012		44,751
Other interest income		1,455		2,099
Total interest income		107,344		129,425
INTEREST EXPENSE
Deposits		16,533		20,934
Long-term borrowings		2,904		6,317
Trust Preferred Securities		4,807		4,980
Other borrowings		6,933		9,640
Total interest expense		31,177		41,871
Net interest income		76,167		87,554
Provision for loan and lease losses		6,495		16,000
Net interest income after provision for loan and lease losses		69,672		71,554
NON-INTEREST INCOME
Insurance agency commissions and fees		30,642		10,891
Service charges and other fees		2,831		2,828
Loan and international banking fees		2,038		2,527
Gain on sale of investments, net		2,023		347
Gain on sale of loans		1,543		496
Trust fees		757		906
ATM network revenue		406		583
Other income		4,524		4,014
Total		44,764		22,592
OPERATING EXPENSES
Compensation and benefits		45,432		28,575
Occupancy and equipment		9,642		8,838
Legal and other professional fees		4,962		1,689
Telephone, postage and supplies		1,746		1,633
Correspondent bank and ATM network fees		1,701		1,341
Amortization of intangibles		1,671		562
Data processing		1,251		1,129
Insurance		1,236		648
Marketing and promotion		1,115		1,452
FDIC insurance and regulatory assessments		498		463
Dividends paid on preferred stock of real estate investment trusts		453		464
Client services		344		647
Directors fees		338		289
Other expenses		2,953		2,283
Total operating expenses		73,342		50,013
Income before provision for income taxes		41,094		44,133
Provision for income taxes		15,997		16,531
Net income	$	25,097	$	27,602
Net income per common share—basic	$	0.46	$	0.54
Net income per common share—diluted	$	0.45	$	0.52
Cash dividends per share of common stock	$	0.135	$	0.115

See notes to consolidated financial statements.

4

GREATER BAY BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three months ended March 31,
	2003			2002
	(Dollars in thousands)
Net income	$	25,097		$	27,602
Other comprehensive loss:
Unrealized net losses on securities:
Unrealized net holding losses arising during period (net of taxes of $(2.5) million and $(45,000) for the three months ended March 31, 2003 and 2002, respectively)		(3,600	)		(64	)
Less: reclassification adjustment for net gain included in net income		(1,191	)		(204	)
Net change		(4,791	)		(268	)
Cash flow hedge:
Net losses arising during period (net of taxes of $(548,000) for the three months ended March 31, 2003)		(784	)		—
Less: reclassification adjustment for income included in net income (net of taxes of $605,000 for the three months ended March 31, 2003)		866			—
Net change		82			—
Other comprehensive loss		(4,709	)		(268	)
Comprehensive income	$	20,388		$	27,334

See notes to consolidated financial statements.

5

GREATER BAY BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three months ended March 31,
	2003			2002
	(Dollars in thousands)
Cash flows—operating activities
Net income	$	25,097		$	27,602
Reconcilement of net income to net cash from operations:
Provision for loan and lease losses		6,495			16,000
Depreciation and amortization		7,148			9,156
Amortization of intangible assets		1,747			562
Accretion of discount on CODES		1,502			—
Deferred income taxes		(84	)		(242	)
Gain on sale of OREO		(98	)		—
Gain on sale of loans		(1,543	)		(496	)
Gain on sale of investments, net		(2,023	)		(347	)
Changes in assets and liabilities net of effects from purchase of ABD:
Accrued interest receivable and other assets		(21,252	)		(88,805	)
Accrued interest payable and other liabilities		19,666			82,285
Deferred loan fees and discounts, net		(1,100	)		(445	)
Operating cash flows, net		35,555			45,270
Cash flows—investing activities
Maturities and partial paydowns on investment securities:
Available for sale		675,757			547,772
Other securities		7,367			—
Purchase of investment securities:
Available for sale		(738,205	)		(893,996	)
Other securities		(625	)		(7,778	)
Proceeds from sale of available for sale securities		181,582			140,065
Loans, net		53,833			(22,088	)
Proceeds from sale of portfolio loans		14,482			4,464
Payment for business acquisition		(1,883	)		(40,793	)
Proceeds from sale of other real estate owned		495			—
Purchase of property, premises and equipment		(2,162	)		(2,091	)
Purchase of bank owned life insurance policies		(7,718	)		(19,600	)
Investing cash flows, net		182,923			(294,045	)
Cash flows—financing activities
Net change in deposits		249,487			51,141
Net change in other borrowings—short-term		(512,301	)		67,932
Proceeds from other borrowings—long-term		—			149,600
Principal repayment—long-term borrowings		(37,460	)		—
Proceeds from Senior Notes Series A		147,924			—
Proceeds from sale of common stock		3,014			7,612
Cash dividends on convertible preferred stock		(1,478	)		(262	)
Cash dividends on common stock		(7,004	)		(5,821	)
Financing cash flows, net		(157,818	)		270,202
Net change in cash and cash equivalents		60,660			21,427
Cash and cash equivalents at beginning of period		314,514			215,404
Cash and cash equivalents at end of period	$	375,174		$	236,831
Cash flows—supplemental disclosures
Cash paid during the period for:
Interest	$	30,775		$	34,817
Income taxes	$	228		$	—
Non-cash transactions:
Additions to other real estate owned	$	3,000		$	972

See notes to consolidated financial statements.

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Consolidated Balance Sheet as of March 31, 2003, and the Consolidated Statements of Operations, Comprehensive Income and Cash Flows for the three months ended March 31, 2003 have been prepared by Greater Bay Bancorp (“Greater Bay” on a parent-only basis, and “we,” “our” or “the Company” on a consolidated basis) and are not audited. The interim financial data as of March 31, 2003 is unaudited; however, in our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The results of operations for the quarter ended March 31, 2003 are not necessarily indicative of the results expected for any subsequent quarter or for the entire year ending December 31, 2003.

Organization and Nature of Operations

Greater Bay is a financial holding company with 11 bank subsidiaries: Bank of Petaluma, Bank of Santa Clara, Bay Area Bank, Bay Bank of Commerce, Coast Commercial Bank, Cupertino National Bank, Golden Gate Bank, Mid-Peninsula Bank, Mt. Diablo National Bank, Peninsula Bank of Commerce, and San Jose National Bank. We also have a commercial insurance brokerage subsidiary, ABD Insurance and Financial Services (“ABD”). We also conduct business through the following divisions: CAPCO, Greater Bay Bank Contra Costa Region, Greater Bay Bank Fremont Region, Greater Bay Bank Carmel, Greater Bay Bank Marin, Greater Bay Bank Santa Clara Valley Group, Greater Bay Bank SBA Lending Group, Greater Bay Corporate Finance Group, Greater Bay International Banking Division, Greater Bay Trust Company, Matsco, Pacific Business Funding and the Venture Banking Group.

In addition to these divisions, we have the following consolidated subsidiaries which issued trust preferred securities and purchased Greater Bay’s junior subordinated deferrable interest debentures: GBB Capital II, GBB Capital III, GBB Capital IV, GBB Capital V, GBB Capital VI, and GBB Capital VII. We also created CNB Investment Trust I (“CNBIT I”), CNB Investment Trust II (“CNBIT II”), MPB Investment Trust (“MPBIT”), and SJNB Investment Trust (“SJNBIT”), all of which are Maryland real estate investment trusts and wholly owned subsidiaries of Cupertino National Bank, Mid-Peninsula Bank, and San Jose National Bank, respectively. These entities were formed in order to provide flexibility in raising capital.

We provide a wide range of commercial banking services to small and medium-sized businesses, property managers, business executives, real estate developers, professionals and other individuals. We operate community banking offices throughout the San Francisco Bay Area including the Silicon Valley, San Francisco and the San Francisco Peninsula, the East Bay, Santa Cruz, Marin, Monterey, and Sonoma Counties. ABD provides commercial insurance brokerage, employee benefits consulting and risk management solutions to business clients throughout the United States. We also own a broker-dealer, which executes mutual fund transactions. CAPCO’s office is located in Bellevue, Washington and it operates in the Pacific Northwest. Matsco markets its dental and veterinarian financing services nationally.

Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Greater Bay, its subsidiaries and operating divisions. All significant intercompany transactions and balances have been eliminated. Certain reclassifications have been made to prior periods’ consolidated financial statements to conform to the current presentation. Our accounting and reporting policies conform to generally accepted accounting principles and the prevailing practices within the banking industry.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of certain revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive Income

Statement of Financial Accounting Standards (“SFAS”) No. 130, “Reporting Comprehensive Income” requires us to classify items of other comprehensive income by their nature in the financial statements and display the accumulated other comprehensive income separately from retained earnings in the equity section of the balance sheet. The changes to the balances of accumulated other comprehensive income are as follows:

	Unrealized gains on securities			Cash flow hedges			Accumulated other comprehensive income
	(Dollars in thousands)
Balance—December 31, 2002	$	18,996		$	(372	)	$	18,624
Current period change in fair value		(4,791	)		82			(4,709	)
Balance—March 31, 2003	$	14,205		$	(290	)	$	13,915
Balance—December 31, 2001	$	3,967		$	—		$	3,967
Current period change in fair value		(268	)		—			(268	)
Balance—March 31, 2002	$	3,699		$	—		$	3,699

Stock-Based Compensation

In October 1995, the Financial Accounting Standards Board issued SFAS No. 123 “Accounting for Stock-Based Compensation” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation” (“SFAS No. 123 and No. 148”). Under the provisions of SFAS No. 123 and No. 148, we are encouraged, but not required, to measure compensation costs related to our employee stock compensation plans under the fair value method. If we elect not to recognize compensation expense under this method, we are required to disclose the pro forma net income and net income per share effects based on the SFAS No. 123 and No. 148 fair value methodology. We implemented the requirements of SFAS No. 123 and No. 148 in 1997 and have elected to adopt the disclosure provisions of these statements.

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

We apply Accounting Principles Board (“APB”) Opinion No. 25 and related interpretations in our accounting for stock options. Accordingly, no compensation cost has been recognized for our stock option plan. Had compensation for our stock option plan been determined consistent with SFAS No. 123, our net income per common share would have been reduced to the pro forma amounts indicated below:

	Three months ended March 31
	2003		2002
	(Dollars in thousands, except per share amounts)
Stock-based employee compensation cost, net of tax, that would have been included in the determination of net income if the fair value method had been applied to all awards	$	1,174	$	1,182
Net income:
As reported	$	25,097	$	27,602
Pro forma	$	23,923	$	26,420
Basic net income per common share:
As reported	$	0.46	$	0.54
Pro forma	$	0.43	$	0.52
Diluted net income per common share:
As reported	$	0.45	$	0.52
Pro forma	$	0.43	$	0.50

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions for grants during the periods indicated:

	Three months ended March 31
	2003		2002
Dividend yield	3.4	%	1.5	%
Expected volatility	45.2	%	37.0	%
Risk free rates	2.9	%	4.4	%
Weighted average expected life	5.75		5.75

No adjustments have been made for forfeitures. The actual value, if any, that the option holder will realize from these options will depend solely on the increase in the common share stock price over the option price when the options are exercised.

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

NOTE 2—BUSINESS COMBINATIONS

On March 12, 2002, we completed the acquisition of ABD for a purchase price of approximately $195.2 million in cash and shares of a new series of convertible preferred stock in a tax-free reorganization accounted for using the purchase method of accounting. This amount included an initial payment on consummation of the merger of $72.5 million in convertible preferred stock and $59.1 million in cash, and the present value of an earn-out payment of approximately $63.6 million in convertible preferred stock (or common stock in certain instances) and cash contingent upon ABD meeting specified performance goals annually through 2005. In addition, we capitalized merger and other related costs of $1.6 million which was recorded as goodwill. ABD’s results of operations have been included in the consolidated financial statements since the date of the acquisition. The source of funds for the acquisition was a $30.0 million term loan and available cash.

We have allocated the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price over the estimated fair values of the net assets acquired was $95.6 million, which was recorded as goodwill. Assets acquired included other intangibles of $50.4 million, representing the fair value of ABD’s book of business at the acquisition date. Goodwill is evaluated annually for possible impairment under the provisions of SFAS No. 142 “Goodwill and Other Intangible Assets,” (“SFAS No. 142”). Based upon our evaluation, as of December 31, 2002, no impairment exists. The other intangible assets will be amortized using a method that approximates the anticipated utilization of the expirations that will cover a period of seven years and nine months.

The following table presents pro forma financial information as if the acquisition of ABD had occurred on January 1, 2002.

	Three months ended March 31, 2002
	Greater Bay Bancorp		ABD(1)			Pro forma
	(Dollars in thousands, except per share amounts)
Net interest income and non-interest income	$	110,146	$	15,665		$	125,811
Income before provision for income taxes		44,133		(611	)		43,522
Net income		27,602		(667	)		26,935
Net income per common share—basic						$	0.53
Net income per common share—diluted						$	0.50

(1) Includes only ABD’s results through March 11, 2002. ABD’s post-acquisition results, including revenues of $11.1 million, income before provision for income taxes of $3.6 million and net income of $2.1 million, are included in the Greater Bay Bancorp column for 2002.

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets by business segment are as follows at the dates indicated:

	March 31, 2003				December 31, 2002
	Goodwill		Other  intangible assets		Goodwill		Other intangible assets
	(Dollars in thousands)
Community banking:
CAPCO	$	6,054	$	130	$	6,054	$	140
Matsco		19,707		—		18,207		—
Other		2,360		2,049		2,360		2,140
Total community banking		28,121		2,179		26,621		2,280
Insurance brokerage services:
ABD		117,484		43,796		117,560		45,442
Total	$	145,605	$	45,975	$	144,181	$	47,722

Based on ABD achieving its specified performance goals for 2002, we accrued for ABD’s estimated 2002 earn-out payment as of December 31, 2002. During the quarter ended March 31, 2003, we finalized procedures to determine the exact amount of the ABD earn-out payment. As a result of the final determination of the 2002 earn-out payment, we reduced the number of shares of convertible preferred stock issued by approximately 43,394 shares and reduced goodwill by $76,000. Also included in the balance of goodwill recorded in connection with the Matsco acquisition is additional goodwill of $1.5 million that was recognized during the first quarter of 2003 upon satisfaction of certain contingencies.

We adopted SFAS No. 142 on January 1, 2002. Upon adoption of SFAS No. 142, goodwill was no longer amortized. Prior to the adoption of SFAS No. 142, goodwill was amortized using the straight-line method over 20 years.

We recorded expirations of $45.4 million in connection with the ABD acquisition. Expirations represent the estimated fair value of ABD’s existing customer list (or “book of business”) that ABD had developed over a period of years through the date of acquisition by Greater Bay. The expirations are estimated to have a life of seven years and nine months. Amortization for intangibles for 2003 and each of the next five years is estimated to range between $5.0 million and $6.5 million per year.

All of our other intangible assets have finite useful lives. We have no indefinite lived intangible assets other than goodwill. Other intangible assets at March 31, 2003 were as follows:

	Gross carrying amount		Accumulated amortization			Total
	(Dollars in thousands)
ABD expirations	$	50,375	$	(6,579	)	$	43,796
CAPCO customer base		200		(70	)		130
Core deposits		3,461		(1,412	)		2,049
Total intangible assets	$	54,036	$	(8,061	)	$	45,975

SFAS No. 142 also requires an analysis of impairment of goodwill annually or more frequently upon the occurrence of certain events. During 2002, we completed the required initial impairment tests of goodwill and an annual update. Based upon our latest evaluation, our goodwill was not impaired at December 31, 2002.

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

NOTE 4—BORROWINGS

Borrowings are detailed as follows:

	March 31, 2003		December 31, 2002
	(Dollars in thousands)
Short-term borrowings:
FHLB advances	$	774,558	$	1,279,565
Securities sold under agreements to repurchase		94,997		111,291
Fed funds purchased		9,000		—
Total short-term borrowings		878,555		1,390,856
Long-term borrowings:
FHLB advances		171,541		206,834
Senior Notes Series A		148,374		—
Zero Coupon Senior Convertible Contingent Debt Securities		73,977		73,580
Term loan		30,000		30,000
Securities sold under agreements to repurchase		20,000		20,000
Other long-term notes payable		12,959		15,973
Total long-term borrowings		456,851		346,387
Total borrowings	$	1,335,406	$	1,737,243

Short-term borrowings

During the three months ended March 31, 2003 and the year ended December 31, 2002, the average balance of short-term FHLB advances was $1.0 billion and $1.2 billion, respectively, and the average interest rates during those periods were 2.29% and 2.78%, respectively. The maximum amounts outstanding at any month-end during the three months ended March 31, 2003 and the year ended December 31, 2002 were $1.1 billion and $1.4 billion, respectively. The FHLB advances are collateralized by loans and securities pledged to the FHLB. At March 31, 2003 and December 31, 2002, investment securities with a carrying value of $1.5 billion and $1.5 billion, respectively, and loans with a carrying value of $338.6 million and $322.8 million, respectively, were pledged to the FHLB for both short-term and long-term borrowings.

During the three months ended March 31, 2003 and the year ended December 31, 2002, the average balance of securities sold under short-term agreements to repurchase was $102.8 million and $236.8 million, respectively, and the average interest rates during those periods were 2.30% and 2.05%, respectively. The maximum amounts outstanding at any month-end during the three months ended March 31, 2003 and the year ended December 31, 2002 were $114.3 million and $400.9 million, respectively. Securities sold under short-term agreements to repurchase generally mature within 90 days of dates of purchase.

During the three months ended March 31, 2003 and the year ended December 31, 2002, the average balance of federal funds purchased was $511,000 and $314,000, respectively, and the average interest rates during those periods were 1.75% and 1.82%, respectively. There were no amounts outstanding at any month-end during the three months ended March 31, 2003 and the year ended December 31, 2002.

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

In addition, as of March 31, 2003 and December 31, 2002, we had a short-term, secured credit facility totaling $60.0 million. At March 31, 2003 and December 31, 2002, we had no advances outstanding under this facility. The credit facility provides for an interest rate of LIBOR plus 0.875%. As of March 31, 2003, we were in compliance with all financial covenants for this credit facility. We had additional short-term credit facilities with similar terms available during the year ended December 31, 2002. During the three months ended March 31, 2003 and the year ended December 31, 2002, the average balances under all of our short-term credit facilities were $0 and $16.5 million, respectively, and the average interest rates during those periods were 0% and 2.81%, respectively. The maximum amounts outstanding at any month-end under these types of facilities during the three months ended March 31, 2003 and the year ended December 31, 2002 were $0 and $45.0 million, respectively.

Long-term borrowings

The long-term FHLB advances mature between 2004 and 2011. During the three months ended March 31, 2003 and the year ended December 31, 2002, we paid an average interest rate of 3.81% and 3.73%, respectively on these advances.

As of March 31, 2003 and December 31, 2002, we had a term loan outstanding of $30.0 million that matures in 2007. For the three months ended March 31, 2003 and the year ended December 31, 2002, we paid an average rate of 3.20% on this loan. As of March 31, 2003, we were in compliance with all related financial covenants for this credit facility.

On March 19, 2003, we received approximately $147.9 million in net proceeds through a private placement of Senior Notes, Series A. As of March 31, 2003, there was an outstanding balance of $148.4 million on these notes. The notes were offered at an original offering price of $986.16 per $1,000 principal amount at maturity. The notes mature on March 31, 2008. The notes may not be redeemed at our option and do not require repayment at the option of the holders, in whole or in part, prior to maturity. The notes have a fixed rate of 5.25% per annum payable semi-annually on March 31 and September 30 of each year, commencing September 30, 2003. We will use the net proceeds from the notes for general corporate purposes, which may include working capital, capital expenditures, acquisitions and repayment of existing indebtedness. The notes are not registered with the Securities Exchange Commission (“SEC”). We have entered into a registration rights agreement with the initial purchasers, in which we agreed to make an exchange offer which, if consummated, will permit holders to exchange their notes for a new series of notes (the “exchange notes”) that are identical in all material respects with the notes, except that the exchange notes will be registered with the SEC. If we fail to proceed with the exchange offer as required under the notes, we will be required to pay additional interest on the notes at a rate of 0.25% per annum until all registration defaults have been cured.

NOTE 5—PER SHARE DATA

Basic net income per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted net income per common share is computed by dividing net income available to common shareholders and assumed conversions by the weighted average number of common shares plus common equivalent shares outstanding including dilutive stock options and convertible preferred stock. The following table provides a reconciliation of the numerators and denominators of the basic and diluted net income per common share computations for the three months ended March 31, 2003 and 2002.

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

	For the three months ended March 31, 2003
	Income (numerator)			Shares (denominator)	Per share amount
	(Dollars in thousands, except per share amounts)
Basic net income per share:
Net income	$	25,097
Dividends on preferred stock		(1,478	)
Income available to common shareholders		23,619		51,735,000	$	0.46
Effect of dilutive securities:
Stock options		—		426,000
Diluted net income per common share:
Income available to common shareholders and assumed conversions	$	23,619		52,161,000	$	0.45

	For the three months ended March 31, 2002
	Income (numerator)			Shares (denominator)	Per share amount
	(Dollars in thousands, except per share amounts)
Basic net income per share:
Net income	$	27,602
Dividends on preferred stock		(262	)
Income available to common shareholders		27,340		50,204,000	$	0.54
Effect of dilutive securities:
Convertible preferred stock		262		827,000
Stock options		—		1,995,000
Diluted net income per common share:
Income available to common shareholders and assumed conversions	$	27,602		53,026,000	$	0.52

There were options outstanding to purchase 4,967,118 shares and 1,850,351 shares that were considered anti-dilutive whereby the options’ exercise price was greater than the average market price of the common shares, during the three months ended March 31, 2003 and 2002, respectively.

The convertible preferred stock was considered anti-dilutive in the first quarter of 2003, whereby the preferred dividends of $1.5 million divided by the common stock equivalent of the convertible preferred stock of 2,785,000 shares was greater than the diluted earnings per common share. Net income available to common shareholders is based on total net income less preferred dividends of $1.5 million for the first quarter of 2003.

NOTE 6—ACTIVITY OF BUSINESS SEGMENTS

The accounting policies of the segments are described in the “Summary of Significant Accounting Policies.” Segment data includes intersegment revenue, as well as charges allocating the appropriate corporate-headquarters costs to each of our operating segments. Intersegment revenue is recorded at prevailing market terms and rates and is not significant to the results of the segments. This revenue is eliminated in consolidation. We evaluate the performance of our segments and allocate resources to them based on net interest income, non-interest income, net income before income taxes, total assets and deposits.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

We are organized primarily along community banking and insurance brokerage services business segments. We have aggregated 14 operating divisions into the “community banking” segment. Community banking provides a range of commercial banking services to small and medium-sized businesses, real estate developers, property managers, business executives, professional and other individuals. The insurance brokerage services segment provides commercial insurance brokerage and employee benefits consulting services. We conduct our business within the United States; we have no foreign operations.

The following table shows each segment’s key operating results and financial position for the three months ended March 31, 2003 and 2002:

	As of and for the three months ended March 31, 2003						As of and for the three months ended March 31, 2002
	Community banking		Insurance agency services		Total		Community banking		Insurance agency services(2)		Total
	(Dollars in thousands)
Statements of operations
Net interest income after provision for loan and lease losses	$	74,187	$	219	$	74,406	$	70,737	$	166	$	70,903
Non-interest income		12,760		30,642		43,402		10,290		10,891		21,181
Operating expenses:
Direct operating expenses		24,304		23,557		47,861		22,262		7,495		29,757
Intercompany allocation		29,129		—		29,129		18,497		—		18,497
Total operating expenses		53,433		23,557		76,990		40,759		7,495		48,254
Income before provision for income taxes(1)	$	33,513	$	7,305	$	40,818	$	40,269	$	3,562	$	43,831
Balance sheets
Total assets	$	6,537,025	$	240,481	$	6,777,506	$	6,994,936	$	210,517	$	7,205,453
Deposits		5,521,759		—		5,521,759		5,272,273		—		5,272,273

(1) Includes intercompany earnings allocation charge which is eliminated in consolidation.

(2) We acquired ABD on March 12, 2002 and its results of operations are included only from the date of acquisition through March 31, 2002.

A reconciliation of total segment net interest income and non-interest income combined, net income before income taxes, and total assets to the consolidated numbers in each of these categories for the three months ended March 31, 2003 and 2002 is presented below.

	Three months ended March 31, 2003			Three months ended March 31, 2002
	(Dollars in thousands)
Net interest income and non-interest income
Total segment net interest income after provision for loan and lease losses and non-interest income	$	117,808		$	92,084
Parent company net interest income after provision for loan and lease losses and non-interest income		(3,372	)		2,062
Consolidated net interest income after provision for loan and lease losses and non-interest income	$	114,436		$	94,146
Income before provision for income taxes
Total segment income before provision for income taxes	$	40,818		$	43,831
Parent company income before provision for income taxes		276			302
Consolidated income before provision for income taxes	$	41,094		$	44,133
Total assets
Total segment assets	$	6,777,506		$	7,205,453
Parent company assets		1,181,500			870,274
Consolidated total assets	$	7,959,006		$	8,075,727

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

NOTE 7—GUARANTEES

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtedness to Others” (“FIN 45”), which requires us to disclose information about obligations under certain guarantee arrangements. FIN 45 defines a guarantee as a contract that contingently requires us to pay a guaranteed party based on:

1) changes in underlying asset, liability, or equity security of the guaranteed party or

2) a third party’s failure to perform under an obligating guarantee (performance guarantee).

We consider the following off-balance sheet lending arrangements to be guarantees under FIN 45:

• Financial standby letters of credit and financial guarantees are conditional lending commitments issued by us to guarantee the performance of a customer to a third party in borrowing arrangements. At March 31, 2003, the maximum undiscounted future payments that we could be required to make was $98.9 million. 60.6% of these arrangements mature within one year. We generally have recourse to recover from the customer any amounts paid under these guarantees;

• We may be required to make contingent payments to the former shareholders of ABD and The Matsco Companies, Inc based on their future operating results. As of March 31, 2003, under the acquisition agreement with ABD, the maximum gross future earn-out payments to ABD’s former shareholders is $56.4 million plus 65% of the EBITDA (as defined in the acquisition agreement) in excess of the Forecast EBITDA, payable through 2005 in a combination of cash and noncumulative convertible preferred stock or, in certain circumstance, common stock. The Forecast EBITDA for ABD, as defined in the acquisition agreement, is $29.6 million, $34.6 million and $40.3 million for the years ended December 31, 2003, 2004 and 2005, respectively. As of March 31, 2003, under the acquisition agreement with The Matsco Companies, Inc, the maximum gross future earn-out payments to the former shareholders is $4.5 million, through 2005; and

• Several of our Banks have guaranteed credit cards issued to our clients by an unaffiliated financial institution. As of March 31, 2003, the combined credit limits on those accounts are $4.9 million.

NOTE 8—VARIABLE INTEREST ENTITIES

FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”) defines variable interest entities as a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. A variable interest entity often holds financial assets, including loans or receivables, real estate or other property. A variable interest entity may be essentially passive or it may engage in research and development or other activities on behalf of another company. FIN 46 requires that a variable interest entity be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. FIN 46 also requires disclosures about variable interest entities that we are not required to consolidate but in which we have a significant variable interest. As of March 31, 2003, we did not have an interest in any variable interest entities.

Matsco Lease Finance, Inc. III (“MLF III”) is a special purpose corporation wholly owned by Greater Bay formed for the purpose of issuing lease-backed notes. MLF III, CNBIT I, CNBIT II, MPBIT and SJNBIT each have some characteristics of variable interest entities as defined by FIN 46. The results of and financial position of these five entities are fully consolidated with our results and financial position, and therefore these entities are exempt from the provisions of FIN 46.

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, 2003 and December 31, 2002 and for the

Three Months Ended March 31, 2003 and 2002

NOTE 9—COMMON STOCK CASH DIVIDEND

On March 25, 2003, we declared a cash dividend of $0.135 cents per common share payable on April 21, 2003 to shareholders of record as of April 4, 2003.

17

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Greater Bay is a financial holding company with 11 bank subsidiaries (the “Banks”): Bank of Petaluma, Bank of Santa Clara, Bay Area Bank, Bay Bank of Commerce, Coast Commercial Bank, Cupertino National Bank, Golden Gate Bank, Mid-Peninsula Bank, Mt. Diablo National Bank, Peninsula Bank of Commerce, and San Jose National Bank. We also have a commercial insurance brokerage subsidiary, ABD. We also conduct business through the following divisions: CAPCO, Greater Bay Bank Contra Costa Region, Greater Bay Bank Fremont Region, Greater Bay Bank Carmel, Greater Bay Bank Marin, Greater Bay Bank Santa Clara Valley Group, Greater Bay Bank SBA Lending Group, Greater Bay Corporate Finance Group, Greater Bay International Banking Division, Greater Bay Trust Company, Matsco, Pacific Business Funding and the Venture Banking Group.

In addition to these divisions, we have the following consolidated subsidiaries which issued trust preferred securities and purchased Greater Bay’s junior subordinated deferrable interest debentures: GBB Capital II, GBB Capital III, GBB Capital IV, GBB Capital V, GBB Capital VI, and GBB Capital VII. We also created CNBIT I, CNBIT II, MPBIT, and SJNBIT, all of which are Maryland real estate investment trusts and wholly owned subsidiaries of Cupertino National Bank, Mid-Peninsula Bank, and San Jose National Bank, respectively. These entities were formed in order to provide flexibility in raising capital.

We provide a wide range of commercial banking services to small and medium-sized businesses, property managers, business executives, real estate developers, professionals and other individuals. We operate community banking offices throughout the San Francisco Bay Area including Silicon Valley, San Francisco and the San Francisco Peninsula, the East Bay, Santa Cruz, Marin, Monterey, and Sonoma Counties. ABD provides commercial insurance brokerage, employee benefits consulting and risk management solutions to business clients throughout the United States. We also own a broker-dealer, which executes mutual fund transactions. CAPCO’s office is located in Bellevue, Washington and it operates in the Pacific Northwest. Matsco markets its dental and veterinarian financing services nationally.

At March 31, 2003, we had total assets of $8.0 billion, total loans, net, of $4.6 billion and total deposits of $5.5 billion.

The following discussion and analysis is intended to provide greater details of our results of operations and financial condition. The following discussion should be read in conjunction with our consolidated financial data included elsewhere in this document. Certain statements under this caption constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. Our actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference include but are not limited to economic conditions, competition in the geographic and business areas in which we conduct our operations, fluctuation in interest rates, credit quality and government regulation and other factors discussed in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2002.

18

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

CRITICAL ACCOUNTING POLICIES

Our accounting policies are integral to understanding the results reported. Accounting policies are described in detail in Note 1 to the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS presented in our 2002 annual report on Form 10-K. Our most complex accounting policies require management’s judgment to ascertain the valuation of assets, liabilities, commitments and contingencies. We have established detailed policies and control procedures that are intended to ensure valuation methods are well controlled and applied consistently from period to period. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The following is a brief description of our current accounting policies involving significant management valuation judgments.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses represents management’s best estimate of losses inherent in the existing loan portfolio. The allowance for loan and lease losses is increased by the provision for loan and lease losses charged to expense and reduced by loans charged-off, net of recoveries. The allowance for loan and lease losses is determined based on management’s assessment of several factors: reviews and evaluation of individual loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experiences and the level of classified and nonperforming loans.

Loans are considered impaired if, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is generally based on the present value of expected future cash flows discounted at the historical effective interest rate stipulated in the loan agreement, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. In measuring the fair value of the collateral, management uses assumptions and methodologies consistent with those that would be utilized by unrelated third parties.

Changes in the financial condition of individual borrowers, economic conditions, historical loss experience and the condition of the various markets in which collateral may be sold may all affect the required level of the allowance for loan and lease losses and the associated provision for loan and lease losses.

Available for Sale Securities

The fair value of most securities classified as available for sale is based on quoted market prices. If quoted market prices are not available, fair values are extrapolated from the quoted prices of similar instruments.

Goodwill and Other Intangible Assets

As discussed in Note 3 of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, we must assess goodwill and other intangible assets each year for impairment. This assessment involves estimating cash flows for future periods. If the future cash flows were materially less than the recorded goodwill and other intangible assets balances, we would be required to take a charge against earnings to write down the assets to the lower value.

19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Deferred Tax Assets

Our deferred tax assets are explained in Note 15 to the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS presented in our 2002 annual report on Form 10-K. We use an estimate of future earnings to support our position that the benefit of our deferred tax assets will be realized. If future income should prove non-existent or less than the amount of the deferred tax assets within the tax years to which they may be applied, the asset may not be realized and our net income will be reduced.

Supplemental Employee Compensation Benefits Agreements

As described in detail in Note 17 to the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS presented in our 2002 annual report on Form 10-K, we have entered into supplemental employee compensation benefits agreements with certain executive and senior officers. The measurement of the liability under these agreements include estimates involving life expectancy, length of time before retirement, and expected benefit levels. Should these estimates prove materially wrong, we could incur additional or reduced expense to provide the benefits.

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS

The following table summarizes income, income per common share and certain key financial ratios for the periods indicated.

	Three months ended March 31, 2003			Three months ended March 31, 2002
	(Dollars in thousands, except per share amounts)
Net income	$	25,097		$	27,602
Net income per common share:
Basic	$	0.46		$	0.54
Diluted	$	0.45		$	0.52
Return on average assets		1.28	%		1.39	%
Return on average shareholders’ equity		14.66	%		20.38	%

Net income declined 9.1% during the first quarter of 2003 as compared to the first quarter of 2002. The decline was due primarily to lower net yield on interest-earning assets reflecting the continual reduction in market interest rates and increases in operating expenses due to the ABD acquisition and our increased emphasis on enhanced enterprise-wide risk management. These factors were partially offset by increased ABD net income and a lower provision for loan and lease losses. For the three months ended March 31, 2003, net interest income decreased 13.0% as compared to the three months ended March 31, 2002. This decrease was primarily due to a 38 basis point decrease in our net yield on interest-earning assets for the three months ended March 31, 2003 as compared to the same period of 2002. Non-interest income for the three months ended March 31, 2003 increased 98.1%, primarily as a result of the ABD acquisition. Operating expenses increased 46.6% during the three months ended March 31, 2003, as compared to three months ended March 31, 2002 primarily as a result of the ABD acquisition on March 12, 2002, which was responsible for 68.8% of the increase, and our increased emphasis on enhanced enterprise-wide risk management.

21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Net Interest Income-Overview

Our interest rate risk (“IRR”) strategy focuses on mitigating IRR in our balance sheet. We primarily use balance sheet matching techniques and, to a limited extent, derivatives to manage IRR. Two years ago, our balance sheet had substantial IRR in a falling rate environment, as the majority of our loans had interest rates tied to the prime rate. Interest rates on those loans move downward immediately upon a market interest rate decrease, compared to our interest-bearing liabilities, that do not reprice as quickly, or to the same magnitude, as the interest rate sensitive loans. At that time, we initiated a program to shift the funding source for our specialty finance businesses, comprised of the CAPCO, Corporate Finance, Matsco and Pacific Business Funding divisions, from a core deposit base to a wholesale funding strategy. This strategy also changed our balance sheet to a more leveraged position that was designed to protect our net interest income in a declining interest rate environment.

Over the course of the last 12 months, the Federal Reserve’s target Federal funds rate declined 50 basis points during the first quarter of 2003 from the first quarter of 2002. Our IRR strategy mitigated the adverse impact of this continuing interest rate decline, while also protecting our net interest income.

We continue to proactively manage our IRR in this uncertain economic market environment to ensure that we are positioned for long-term success compared to short-term earnings goals that would not be sustainable in a rising interest rate environment. Our current strategy, which is continually reviewed in relationship to market conditions, includes a gradual reduction of the investment securities portfolio. This strategy will continue to reduce current net interest income in the near-term, but will position us to take advantage of an improving economy and rising market interest rates over the longer term. Because the balance sheet is positioned to be more asset sensitive, our net interest margin will continue to be pressured in the event of a continuing flat-to-declining interest rate environment.

The contraction of the investment securities portfolio will continue through 2003, with a target of approximately $2.0 billion for our investment securities portfolio by the end of this year. During the first quarter of 2003, the investment securities portfolio declined by $138.4 million to $2.4 billion. While $2.0 billion is currently the target for our investment portfolio, market conditions or a different mix of fixed rate versus variable rate assets could change the ultimate portfolio size and composition.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Net Interest Income

Net interest income decreased 13.0% to $76.2 million for the first quarter of 2003 from $87.6 million for the first quarter of 2002. This decrease was primarily due to the 38 basis point decrease in our net yield on interest-earning assets, and to a lesser degree, the $408.3 million, or 5.4%, decrease in average interest-earning assets.

Net interest income decreased 6.0% to $76.2 million in the first quarter of 2003 from $81.0 million during the fourth quarter of 2002. This decrease was primarily due to the 3 basis point decrease in our net yield on interest-earning assets and by the $249.2 million, or 3.4%, decrease in our average interest-earning assets.

The following table presents, for the periods indicated, our condensed average balance sheet information together with interest income and yields earned on average interest-earning assets and interest expense and rates paid on average interest-bearing liabilities. Average balances are average daily balances.

	Three months ended March 31, 2003						Three months ended March 31, 2002
	Average balance(1)		Interest		Average yield / rate		Average balance(1)		Interest		Average yield / rate
INTEREST-EARNING ASSETS:
Fed funds sold	$	49,956	$	139	1.13	%	$	55,159	$	222	1.63	%
Other short-term securities		7,441		79	4.31	%		345		5	5.88	%
Investment securities:
Taxable		2,261,348		25,026	4.49	%		2,917,473		45,191	6.28	%
Tax-exempt(2)		93,890		1,223	5.28	%		125,618		1,432	4.62	%
Loans(3)		4,716,930		80,877	6.95	%		4,439,279		82,575	7.54	%
Total interest-earning assets		7,129,565		107,344	6.11	%		7,537,874		129,425	6.96	%
Noninterest-earning assets		810,245						490,786
Total assets	$	7,939,810		107,344			$	8,028,660		129,425
INTEREST-BEARING LIABILITIES:
Deposits:
MMDA, NOW and Savings	$	2,715,821		8,247	1.23	%	$	2,346,499		8,751	1.51	%
Time deposits, over $100,000		539,702		2,902	2.18	%		603,115		3,857	2.59	%
Other time deposits		1,109,600		5,385	1.97	%		1,170,100		8,326	2.89	%
Total interest-bearing deposits		4,365,123		16,534	1.54	%		4,119,714		20,934	2.06	%
Borrowings		1,511,075		9,836	2.64	%		2,100,865		15,957	3.08	%
Trust Preferred Securities		204,000		4,807	9.56	%		233,022		4,980	8.67	%
Total interest-bearing liabilities		6,080,198		31,177	2.08	%		6,453,601		41,871	2.63	%
Noninterest-bearing deposits		977,556						935,428
Other noninterest-bearing liabilities		172,297						75,025
Preferred stock of real estate investment trust subsidiaries of the Banks		15,650						15,306
Shareholders’ equity		694,109						549,300
Total shareholders’ equity and liabilities	$	7,939,810		31,177			$	8,028,660		41,871
Net interest income			$	76,167					$	87,554
Interest rate spread					4.03	%					4.33	%
Contribution of interest free funds					0.31	%					0.38	%
Net yield on interest-earning assets(4)					4.33	%					4.71	%

(1) Nonaccrual loans are excluded from the average balance and only collected interest on nonaccrual loans is included in the interest column.

(2) Tax equivalent yields earned on the tax exempt securities are 7.94% and 6.77% for the three months ended March 31, 2003 and March 31, 2002, respectively, using the federal statutory rate of 34%.

(3) Loan fees totaling $1.1 million and $1.9 million are included in loan interest income for the three months ended March 31, 2003 and March 31, 2002, respectively.

(4) Net yield on interest-earning assets during the period equals (a) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (b) average interest-earning assets for the period.

23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

	Three months ended March 31, 2003						Three months ended December 31, 2002
	Average balance(1)		Interest		Average yield / rate		Average balance(1)		Interest		Average yield / rate
	(Dollars in thousands)
INTEREST-EARNING ASSETS:
Fed funds sold	$	49,956	$	139	1.13	%	$	87,667	$	282	1.28	%
Other short-term securities		7,441		79	4.31	%		32,528		186	2.27	%
Investment securities:
Taxable		2,261,348		25,026	4.49	%		2,447,710		31,368	5.08	%
Tax-exempt(2)		93,890		1,223	5.28	%		108,747		1,296	4.73	%
Loans(3)		4,716,930		80,877	6.95	%		4,702,111		83,804	7.07	%
Total interest-earning assets		7,129,565		107,344	6.11	%		7,378,763		116,936	6.29	%
Noninterest-earning assets		810,245						840,862
Total assets	$	7,939,810		107,344			$	8,219,625		116,936
INTEREST-BEARING LIABILITIES:
Deposits:
MMDA, NOW and Savings	$	2,715,821		8,247	1.23	%	$	2,780,112		9,337	1.33	%
Time deposits, over $100,000		539,702		2,902	2.18	%		555,671		3,345	2.39	%
Other time deposits		1,109,600		5,385	1.97	%		1,203,345		6,818	2.25	%
Total interest-bearing deposits		4,365,123		16,534	1.54	%		4,539,128		19,500	1.70	%
Borrowings		1,511,075		9,836	2.64	%		1,634,780		11,782	2.86	%
Trust Preferred Securities		204,000		4,807	9.56	%		203,000		4,635	9.06	%
Total interest-bearing liabilities		6,080,198		31,177	2.08	%		6,376,908		35,917	2.23	%
Noninterest-bearing deposits		977,556						995,490
Other noninterest-bearing liabilities		172,297						163,861
Preferred stock of real estate investment trust subsidiaries of the Banks		15,650						15,650
Shareholders’ equity		694,109						667,716
Total shareholders’ equity and liabilities	$	7,939,810		31,177			$	8,219,625		35,917
Net interest income			$	76,167					$	81,019
Interest rate spread					4.03	%					4.05	%
Contribution of interest free funds					0.31	%					0.30	%
Net yield on interest-earning assets(4)					4.33	%					4.36	%

(1) Nonaccrual loans are excluded from the average balance and only collected interest on nonaccrual loans is included in the interest column.

(2) Tax equivalent yields earned on the tax exempt securities are 7.94% and 6.96% for the three months ended March 31, 2003 and December 31, 2002, respectively, using the federal statutory rate of 34%.

(3) Loan fees totaling $1.1 million and $1.0 million are included in loan interest income for the three months ended March 31, 2003 and December 31, 2002, respectively.

(4) Net yield on interest-earning assets during the period equals (a) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (b) average interest-earning assets for the period.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The most significant impact on our net interest income between periods is derived from the interaction of changes in the volume of, and rate earned or paid on, interest-earning assets and interest-bearing liabilities. The volume of interest-earning asset dollars in loans and investments, compared to the volume of interest-bearing liabilities represented by deposits and borrowings, combined with the spread, produces the changes in the net interest income between periods. The table below sets forth, for the periods indicated, a summary of the changes in average asset and liability balances (volume) and changes in average interest rates (rate). Changes in interest income and expense which are not attributable specifically to either volume or rate are allocated proportionately between both variances. Nonaccrual loans are excluded from average loans.

	Three months ended March 31, 2003 compared with March 31, 2002 favorable / (unfavorable)									Three months ended March 31, 2003 compared with December 31, 2002 favorable / (unfavorable)
	Volume			Rate			Net			Volume			Rate			Net
	(Dollars in thousands)
INTEREST EARNED ON INTEREST-EARNING ASSETS
Federal funds sold	$	(19	)	$	(64	)	$	(83	)	$	(113	)	$	(30	)	$	(143	)
Other short-term investments		76			(2	)		74			(662	)		555			(107	)
Investment securities:
Taxable		(8,885	)		(11,280	)		(20,165	)		(2,497	)		(3,845	)		(6,342	)
Tax-exempt		(395	)		186			(209	)		(199	)		126			(73	)
Loans		4,985			(6,683	)		(1,698	)		(33	)		(2,894	)		(2,927	)
Total interest income		(4,238	)		(17,843	)		(22,081	)		(3,504	)		(6,088	)		(9,592	)
INTEREST EXPENSE ON INTEREST-BEARING LIABILITIES
Deposits:
MMDA, NOW and savings		(1,260	)		1,764			504			255			835			1,090
Time deposits over $100,000		380			575			955			110			333			443
Other time deposits		411			2,530			2,941			552			881			1,433
Total interest-bearing deposits		(469	)		4,869			4,400			917			2,049			2,966
Borrowings		4,055			2,066			6,121			966			980			1,946
Trust Preferred Securities		655			(482	)		173			(14	)		(158	)		(172	)
Total interest expense		4,242			6,452			10,694			1,869			2,871			4,740
Net increase (decrease) in net interest income	$	4		$	(11,391	)	$	(11,387	)	$	(1,635	)	$	(3,217	)	$	(4,852	)

The Quarter Ended March 31, 2003 Compared to March 31, 2002

Interest income in the first quarter of 2003 decreased 17.1%, or $22.1 million, to $107.3 million from $129.4 million in the quarter ended March 31, 2002. This was primarily due to the decline in interest rates and to a lesser extent, a decrease in interest-earning assets.

The average yield on interest-earning assets decreased 85 basis points to 6.11% in the first quarter of 2003 from 6.96% in the same period of 2002 primarily reflecting the general decline in market rates of interest during 2002. The average yield on loans decreased 59 basis points to 6.95% in the first quarter of 2003 from 7.54% in the same period of 2002.

Average interest-earning assets decreased $408.3 million, or 5.4%, to $7.1 billion in the first quarter of 2003, compared to $7.5 billion in the same period of 2002. Average loans increased $277.7 million, or 6.3%, to $4.7 billion for the three months ended March 31, 2003 from $4.4 billion in the same period of 2002 as a result of our relationship managers’ business development efforts. Average investment securities, Federal funds sold and other short-term securities, decreased 22.2% to $2.4 billion in the first quarter of 2003 from $3.1 billion in the same period of 2002 as a result of our IRR strategy described above. Loans represented approximately 66.2% of total interest-earning assets in the first quarter of 2003 compared to 58.9% in the same period of 2002.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Interest expense in the first quarter of 2003 decreased 25.5%, or $10.7 million, to $31.2 million from $41.9 million in the same period of 2002, reflecting the declines in interest rates and average interest-bearing liabilities. The average rate paid on interest-bearing liabilities decreased 54 basis points to 2.08% in the first quarter of 2003 from 2.63% in the first quarter of 2002. Average interest-bearing liabilities decreased 5.8% to $6.1 billion in the first quarter of 2003 from $6.5 billion in the same period of 2002. The decrease was due primarily to the decrease in wholesale funding resulting from our IRR strategy.

During the first quarter of 2003, average noninterest-bearing deposits increased to $977.6 million from $935.4 million in the same period of 2002.

As a result of the foregoing, our interest rate spread decreased to 4.03% in the first quarter of 2003 from 4.33% in the same period of 2002, and the net yield on interest-earning assets decreased in the first quarter of 2003 to 4.33% from 4.71% in the same period of 2002.

The Quarter Ended March 31, 2003 Compared to December 31, 2002

Interest income in the first quarter of 2003 decreased 8.2%, or $9.6 million, to $107.3 million from $116.9 million in the previous quarter. This was due to the decline in interest rates and the decline in interest-earning assets.

The average yield on interest-earning assets decreased 18 basis points to 6.11% in the first quarter of 2003 from 6.29% in the previous quarter primarily reflecting the decline in the market rate of short-term investments during the first quarter of 2003. The average yield on loans decreased 12 basis points to 6.95% in the first quarter of 2003 from 7.07% in the fourth quarter of 2002.

Average interest-earning assets decreased $249.2 million, or 3.4%, to $7.1 billion in the first quarter of 2003, compared to $7.4 billion in the previous quarter. Average loans increased $14.8 million, or 0.3%, during the three months ended March 31, 2003 from the previous quarter. This increase was offset by a decrease in average investment securities, Federal funds sold and other short-term securities, of 9.9% to $2.4 billion in the first quarter of 2003 from $2.7 billion in the previous quarter as a result of our IRR strategy described above. Loans represented approximately 66.2% of total interest-earning assets in the first quarter of 2003 compared to 63.7% in the previous quarter.

Interest expense in the first quarter of 2003 decreased 13.2%, or $4.7 million, to $31.2 million from $35.9 million in the previous quarter, reflecting the declines in interest rates and average interest-bearing liabilities. The average rate paid on interest-bearing liabilities decreased 15 basis points to 2.08% in the first quarter of 2003 from 2.23% in the previous quarter. Average interest-bearing liabilities decreased 4.7% to $6.1 billion in the first quarter of 2003 from $6.4 billion in the previous quarter. The decrease was due primarily to the decrease in wholesale funding resulting from our IRR strategy.

During the first quarter of 2003, average noninterest-bearing deposits decreased to $977.6 million from $995.5 million in the previous quarter.

As a result of the foregoing, our interest rate spread decreased to 4.03% in the first quarter of 2003 from 4.05% in the previous quarter, and the net yield on interest-earning assets decreased in the first quarter of 2003 to 4.33% from 4.36% in the previous quarter.

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Provision for Loan and Lease Losses

The provision for loan and lease losses represents the current period credit cost associated with maintaining an appropriate allowance for credit losses. The loan loss provision for each period is dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the loan portfolio, delinquencies, assessments by management, third parties and regulators of the quality of the loan portfolio, the value of the underlying collateral on problem loans and the general economic conditions in our market area. Periodic fluctuations in the provision for loan and lease losses result from management’s assessment of the adequacy of the allowance for loan and lease losses; however, actual losses may vary from current estimates.

The provision for loan and lease losses in the first quarter of 2003 was $6.5 million, compared to $7.0 million in the fourth quarter of 2002 and $16.0 million in the first quarter of 2002. The slight decrease in the provision for loan and lease losses reflects the results of our review and analysis of the loan portfolio and the adequacy of our existing allowance for loan and lease losses. For further information on the allowance for loan and lease losses and nonperforming assets and a description of our systematic methodology employed in determining an adequate allowance for loan and lease losses, see “FINANCIAL CONDITION—Nonperforming Assets and Other Risk Factors” and “FINANCIAL CONDITION—Allowance for Loan and Lease Losses”.

Non-Interest Income

The following table sets forth information concerning non-interest income by category for the periods indicated.

	Three month periods ended:
	March 31, 2003		December 31, 2002			September 30, 2002			June 30, 2002		March 31, 2002
	(Dollars in thousands)
Insurance agency commissions and fees	$	30,642	$	23,664		$	26,359		$	27,601	$	10,891
Service charges and other fees		2,831		2,786			2,771			2,762		2,828
Loan and international banking fees		2,038		2,309			2,124			2,273		2,527
Gain on sale of investments, net		2,023		(358	)		9,065			3,004		347
Gain on sale of loans		1,543		1,999			2,049			210		496
Trust fees		757		922			844			894		906
ATM network revenue		406		574			629			628		583
Other income		4,524		3,510			5,875			2,138		4,014
Gain on early retirement of CODES		—		2,605			5,770			—		—
Warrant income		—		—			(89	)		—		—
Total	$	44,764	$	38,011		$	55,397		$	39,510	$	22,592

Non-interest income increased during the first quarter of 2003 as compared to the fourth quarter of 2002 and the first quarter of 2002, primarily due to the increases in insurance agency commissions and fees, gain on sale of investments, net and other income.

Our first quarter of 2003 results included insurance agency commissions and fees totaling $30.6 million, as compared to $23.7 million recorded during the fourth quarter of 2002 and $10.9 million recorded during the first quarter of 2002. A portion of the increase during the first quarter of 2003, as compared to the fourth quarter of 2002, is as a result of the seasonality of ABD’s revenues. During the first quarter of 2003, ABD received a significant portion of its annual override income which represents bonus payments from insurance companies based on various factors related to ABD’s production during the prior calendar year. The amount of override income is not estimable before receipt, and therefore this income is not recorded until received. The increase during the first quarter of 2003, as compared to the same period in 2002, is a result of the timing of the acquisition of ABD, which occurred on March 12, 2002. As a result, the first quarter of 2002 only included one month of ABD’s operations.

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

During the first quarter of 2003, we recorded a $2.0 million gain on sale of investments, compared to a $358,000 loss for the fourth quarter of 2002, and a $347,000 gain in the first quarter of 2002. The gain on sale of investments in the first quarter of 2003 was the result of sales undertaken in order to manage IRR and in anticipation of forthcoming increases in prepayment rates. Also, the gain on sale of investments is net of a $1.5 million loss for first quarter of 2003, a $2.4 million loss for fourth quarter of 2002 and a $147,000 gain for first quarter of 2002 recognized on derivative instruments in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”).

During the first quarter of 2003, we recorded a $1.5 million gain on sale of loans, compared to $2.0 million for the fourth quarter of 2002, and $496,000 in the first quarter of 2002. Of the $1.5 million gain on sale of loans, $1.2 million of the gain was related to the sale of $9.7 million of Matsco’s loan production during the first quarter of 2003. There was no sale of Matsco’s loan production for the same period of last year. During the first quarter of 2003, the gain on sale of loans also includes gains on the sale of SBA loans of $347,000, as compared to $956,000 during the fourth quarter of 2002 and $496,000 for the same period of last year.

For the first quarter of 2003, our trust fees declined to $757,000, as compared to $922,000 for the fourth quarter of 2002 and $906,000 for the first quarter of 2002. The decline is due to a decrease in market value of assets under administration, primarily in the employee benefits area. The assets under management were $598.9 million at March 31, 2003, as compared to $607.2 million at December 31, 2002, and $644.2 million at March 31, 2002. The decline in assets was a result of the decline in market value of assets outpacing asset inflows.

Operating Expenses

The following table sets forth the major components of operating expenses for the periods indicated.

	Three month periods ended:
	March 31, 2003			December 31, 2002			September 30, 2002			June 30, 2002			March 31, 2002
	(Dollars in thousands)
Compensation and benefits	$	45,432		$	41,735		$	39,767		$	38,647		$	28,575
Occupancy and equipment		9,642			10,225			10,035			10,267			8,838
Legal and other professional fees		4,962			2,835			2,462			1,915			1,689
Amortization of intangibles		1,671			1,658			1,650			1,650			562
FDIC insurance and regulatory assessments		498			491			409			417			463
Dividends paid on real estate investment trusts		453			421			465			464			463
Client service expenses		344			480			433			557			647
Expenses on other real estate owned		1			—			—			—			—
Other expenses		10,339			7,260			7,957			10,597			8,776
Contribution to the Greater Bay Bancorp Foundation and related expenses		—			—			479			—			—
Trust Preferred Securities early retirement expense		—			—			—			975
Total operating expenses	$	73,342		$	65,105		$	63,657		$	65,489		$	50,013
Efficiency ratio		60.65	%		54.70	%		44.50	%		51.10	%		45.41	%
Total operating expenses to average assets		3.75	%		3.14	%		2.98	%		3.12	%		2.53	%

Operating expenses totaled $73.3 million for the first quarter of 2003, as compared to $65.1 million for the fourth quarter of 2002 and $50.0 million for the first quarter of 2002. The ratio of operating expenses to average assets was 3.75% in the first quarter of 2003, 3.14% in the fourth quarter of 2002, and 2.53% in the first quarter of 2002.

28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

We computed the efficiency ratio by dividing total operating expenses by net interest income and non-interest income. An increase in the efficiency ratio indicates that more resources are being utilized to generate the same (or greater) volume of income while a decrease would indicate more efficient resource allocation. Our efficiency ratio for the first quarter of 2003 was 60.65%, as compared to 54.70% in the fourth quarter of 2002 and 45.41% in the first quarter of 2002.

Operating expenses for the fourth quarter of 2002 were net of approximately $5.0 million in reductions to accrual estimates to reflect the current economic environment and the actual expenses anticipated to be paid which were recorded during the fourth quarter. Of these adjustments, $4.0 million was included in other expenses. There were no significant adjustments of this nature during the first quarter of 2003.

Excluding the fourth quarter adjustments to accrual estimates, operating expenses increased $3.2 million during the first quarter of 2003 as compared to the fourth quarter of 2002. This increase is primarily due to a $3.7 million increase in compensation and benefits and a $1.1 million increase in legal and other professional fees, excluding the impact of the fourth quarter accrual adjustments. These increases were offset by a $921,000 decrease in other expenses, excluding the impact of the fourth quarter accrual adjustments, and a $583,000 decrease in occupancy and equipment expense. As compared to the first quarter of 2002, operating expenses during the first quarter of 2003 increased $23.3 million. This increase was primarily due to the ABD acquisition, as the first quarter of 2002 only included one month of ABD’s operations, and a $3.3 million increase in legal and other professional fees.

During the quarters ended March 31, 2003 and, excluding the impact of the fourth quarter accrual adjustments, December 31, 2002, we added personnel and resources, both internal and external, to enhance our compliance and enterprise-wide risk management programs and processes. These improvements are required as a result of our substantial growth over the last several years, implementation of additional procedures required by the Sarbanes-Oxley Act of 2002 and our response to the Cure Agreement (see “Financial Condition—Cure Agreement”, below). These expenditures include additional charges resulting from independent audit scope changes, expansion of internal audit services, professional and consulting fee increases, expansion of finance and accounting resources, system enhancements and process improvements. These expenditures will primarily impact our compensation and benefits expense and legal and other professional fees.

Compensation and benefits expenses increased in the first quarter of 2003 to $45.4 million, compared to $41.7 million in the fourth quarter of 2002 and $28.6 million in the first quarter of 2002. This increase is primarily as a result of the ABD acquisition, the result of the seasonal impact of payroll taxes and benefits, and the additions in personnel made to enhance our enterprise-wide risk management. Additions to staff and systems will continue to increase salary and other expense over the next several quarters.

Occupancy and equipment expense for the first quarter of 2003 were $9.6 million, compared to $10.2 million in the fourth quarter of 2002 and $8.8 million in the first quarter of 2002. As a result of our ABD acquisition on March 12, 2002, for the first quarter of 2002 we had only one month of ABD’s occupancy and equipment expense as compared to three months for the first quarter of 2003 and the fourth quarter of 2002.

Legal and other professional fees increased in the first quarter of 2003 to $5.0 million, compared to $2.8 million in the fourth quarter of 2002 and $1.7 million in the first quarter of 2002. The increase relates to our growth and ongoing projects designed to improve efficiency and enhance risk management.

29

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Our amortization of intangibles totaled $1.7 million for the first quarter of 2003, compared to $1.7 million for the fourth quarter of 2002 and $562,000 for the first quarter of 2002. The amortization primarily relates to expirations recorded with the ABD acquisition. Amortization of other intangible assets for 2003 through 2007 is estimated to range between $5.0 million and $6.5 million annually.

Income Taxes

Our effective income tax rate for the first quarter of 2003 was 38.0% as compared to 37.5% for the same period in 2002. The effective rates were lower than the statutory rate of 42% due to benefits resulting from the non-taxable increase in life insurance cash surrender values, California enterprise zone interest income exclusion and tax-exempt income on municipal securities.

Income of Business Segments

We are organized along community banking and insurance brokerage services business segments. The net income before income taxes for the community banking business segment was $33.5 million for the first quarter of 2003 and $40.3 million for the first quarter of 2002. The income before income taxes for the insurance brokerage services business segment was $7.3 million for the first quarter of 2003 and $3.6 million for the first quarter of 2002. For additional information regarding our results by business segment see Note 6 of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

30

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

FINANCIAL CONDITION

Total assets decreased 1.4% to $8.0 billion at March 31, 2003, compared to $8.1 billion at December 31, 2002. The decline in our total assets during the first quarter of 2003, as compared to December 31, 2002, was a result of the reduction of our investment securities portfolio consistent with our IRR strategy and a decrease in total loans.

Investment Securities

The investment portfolio is comprised of U.S. Treasury securities, U.S. government agency securities, mortgage-backed securities, obligations of states and political subdivisions, corporate debt instruments and a modest amount of equity securities, including Federal Reserve Bank stock and Federal Home Loan Bank (“FHLB”) stock. Investment securities classified as available for sale are recorded at fair value, while investment securities classified as held to maturity are recorded at cost. Unrealized gains or losses on available for sale securities, net of the deferred tax effect, are reported as increases or decreases in shareholders’ equity. Portions of the portfolio are utilized for pledging requirements for deposits of state and local subdivisions, securities sold under repurchase agreements, and FHLB advances. We do not include Federal Funds sold and certain other short-term securities as investment securities. These other investments are included in cash and cash equivalents.

Investment securities decreased 5.4% to $2.4 billion at March 31, 2003 compared to $2.6 billion at December 31, 2002. As previously discussed, we commenced a process to de-leverage the balance sheet by reducing the size of the investment portfolio and wholesale borrowings during 2002. Part of this de-leveraging strategy seeks to capture value on securities where prepayments are accelerating. We monitor the effect of changes in prepayments and durations and make adjustments related to amortization and accretion of related premium and discounts to reflect these changes. We will continue this process in 2003, with an estimated $2.0 billion target for our investment securities portfolio by the end of 2003. While $2.0 billion is currently the target for our investment portfolio, market conditions or a different mix of fixed rate versus variable rate investment securities could change the ultimate size and composition of the portfolio. The combined effects of the continuing decline of market interest rates, investment security sales and the term of new investment securities acquired to compensate for prepayments have the net effect of reducing the duration of our investment securities portfolio. This reduction in duration is consistent with our IRR strategy described above.

Loans

Total gross loans at March 31, 2003 were $4.7 billion compared to $4.8 billion at December 31, 2002.

Our loan portfolio is concentrated in commercial (primarily manufacturing, service and technology) and real estate lending, with the balance in leases and consumer loans. Our lending operations are located in a market area that is dependent on the technology and real estate industries and supporting service companies. Thus, a further downturn in these sectors of the economy could adversely impact our borrowers. This could, in turn, adversely impact the borrowers’ ability to repay their loans, reduce the demand for loans and decrease our net interest margin.

For the quarter ended March 31, 2003, total loans decreased $72.0 million, or 1.5%. The contraction in the loan portfolio was a result of low loan demand resulting from the current weaknesses in the local and national economies.

31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

For the first quarter of 2003, the commercial loan portfolio decreased $92.5 million. Real estate construction and land loans decreased by $6.9 million; real estate loans other decreased by $4.3 million; and consumer and other loans decreased by $681,000. These decreases were offset by a $32.3 million increase in term real estate—commercial.

The following table presents the composition of our loan portfolio at the dates indicated.

	March 31, 2003					December 31, 2002
	Amount			%		Amount			%
	(Dollars in thousands)
Commercial	$	1,974,656		43.0	%	$	2,067,142		44.3	%
Term real estate—commercial		1,642,560		35.8			1,610,277		34.5
Total Commercial		3,617,216		78.8			3,677,419		78.8
Real estate construction and land		704,041		15.3			710,990		15.3
Real estate other		247,335		5.4			251,665		5.4
Consumer and other		165,650		3.6			166,331		3.6
Total loans, gross		4,734,242		103.1			4,806,405		103.1
Deferred fees and discounts, net		(15,044	)	(0.3	)		(15,245	)	(0.3	)
Total loans, net of deferred fees		4,719,198		102.8			4,791,160		102.8
Allowance for loan and lease losses		(129,818	)	(2.8	)		(129,613	)	(2.8	)
Total loans, net	$	4,589,380		100.0	%	$	4,661,547		100.0	%

The following table presents the maturity distribution of our commercial, real estate construction and land, term real estate— commercial and real estate other portfolio and the allocation between fixed and variable rate loans at March 31, 2003.

	Commercial		Term real estate—commercial		Real estate construction and land		Real estate other
	(Dollars in thousands)
Loans maturing in:
One year or less:
Fixed rate	$	205,800	$	50,629	$	137,590	$	3,232
Variable rate		469,470		73,694		475,745		20,431
One to five years:
Fixed rate		406,979		289,020		14,621		14,251
Variable rate		314,687		289,820		64,192		31,077
After five years:
Fixed rate		417,417		369,948		7,095		4,329
Variable rate		160,303		569,449		4,798		174,015
Total	$	1,974,656	$	1,642,560	$	704,041	$	247,335

Nonperforming Assets and Other Risk Factors

We generally place loans on nonaccrual status when they become 90 days past due, unless they are well secured and in the process of collection. When a loan is placed on nonaccrual status, any interest previously accrued and not collected is generally reversed from income. Loans are charged-off when management determines that collection has become unlikely. Restructured loans are those where we have granted a concession on the interest paid or original repayment terms due to financial difficulties of the borrower. Restructured loans which are performing in accordance with the agreed upon modified loan term are presented in the period of restructure and the three subsequent quarters. Other real estate owned (“OREO”) consists of real property acquired through foreclosure on the related collateral underlying defaulted loans.

32

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

The following table sets forth information regarding nonperforming assets at the dates indicated.

	March 31, 2003			December 31, 2002			September 30, 2002			June 30,  2002			March 31, 2002
	(Dollars in thousands)
Nonperforming loans:
Nonaccrual loans	$	37,223		$	37,750		$	47,695		$	42,349		$	27,837
Total nonperforming loans		37,223			37,750			47,695			42,349			27,837
Other repossessed assets		62			—			—			—			—
OREO		3,000			397			930			509			972
Total nonperforming assets	$	40,285		$	38,147		$	48,625		$	42,858		$	28,809
Restructured loans	$	—		$	4,500		$	4,500		$	4,500		$	4,500
Accruing loans past due 90 days or more	$	—		$	944		$	6,132		$	6,729		$	2,614
Nonperforming assets to total loans and OREO		0.85	%		0.80	%		1.04	%		0.92	%		0.64	%
Nonperforming assets to total assets		0.51	%		0.47	%		0.58	%		0.50	%		0.35	%
Nonperforming assets, restructured loans and accruing loans past due 90 days or more to total loans and OREO		0.85	%		0.91	%		1.26	%		1.15	%		0.80	%
Nonperforming assets, restructured loans and accruing loans past due 90 days or more to total assets		0.51	%		0.54	%		0.71	%		0.63	%		0.43	%

We had nonperforming assets of $40.3 million at March 31, 2003, $38.1 million at December 31, 2002, and $28.8 million at March 31, 2002. Our ratio of nonperforming assets to total assets at March 31, 2003 was 0.51%, as compared to 0.47% at December 31, 2002 and 0.35% at March 31, 2002. The Uniform Bank Performance Report for all California commercial banks with assets in excess of $100 million reported an average ratio of nonperforming assets to total assets of 0.61% as of December 31, 2002 for the banks covered by the report. While we recognize that the economic slowdown can impact our clients’ financial performances and ultimately their ability to repay their loans, we continue to be cautiously optimistic about the key credit indicators from our loan portfolio. We believe we are proactive in managing credit risk to ensure we have a strong and well-reserved balance sheet to manage through slowing economic periods.

At March 31, 2003, $12.2 million of nonperforming assets were related to commercial loans, $9.1 million were from our Shared National Credit (“SNC”) portfolio, $8.5 million were real estate construction loans, $5.8 million were Matsco credits, $1.6 million were commercial term real estate loans and $3.0 million in OREO.

In accordance with SFAS No. 114, “Accounting by Creditors for Impairment of a Loan,” as amended by SFAS No. 118, a loan is considered impaired, based on current information and events, if it is probable that we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. In certain circumstances, the determination of the impairment of a loan is subjective and, among other factors, is dependent upon the judgment of management. Changes in the levels of impaired loans can have an impact on our nonperforming asset levels, and indirectly, our allowance for loan and lease losses. As of March 31, 2003 and December 31, 2002, our impaired loans were $37.2 million and $37.8 million, respectively. As of March 31, 2003 and December 31, 2002, all of our impaired loans are on nonaccrual status.

33

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

In addition to the loans disclosed above as nonaccrual or restructured, management has also identified a single commercial credit, which is partially collateralized, totaling $10.9 million that on the basis of information known to us was judged to have a higher than normal risk of becoming nonperforming. Management cannot, however, predict the extent to which economic conditions may worsen or other factors that may impact our borrowers and our loan portfolio. Accordingly, there can be no assurance that other loans will not become 90 days or more past due, be placed on nonaccrual, become restructured loans, or other real estate owned in the future.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses is established through a provision for loan and lease losses based on management’s determination of losses incurred in our loan portfolio. The allowance is increased by provisions charged against current earnings and reduced by net charge-offs. Loans are charged-off when they are deemed to be uncollectable; recoveries are generally recorded only when cash payments are received.

The following table sets forth information concerning our allowance for loan and lease losses at the dates and for the period indicated.

	At and for the three month periods ended
	March 31, 2003			December 31, 2002			September 30, 2002			June 30, 2002			March 31, 2002
	(Dollars in thousands)
Period end loans outstanding	$	4,734,242		$	4,806,405		$	4,710,013		$	4,699,010		$	4,513,294
Average loans outstanding	$	4,742,974		$	4,746,886		$	4,688,370		$	4,575,569		$	4,464,596
Allowance for loan and lease losses:
Balance at beginning of period	$	129,613		$	128,429		$	126,092		$	125,331		$	124,744
Charge-offs:
Commercial		(7,791	)		(8,221	)		(18,420	)		(6,624	)		(16,219	)
Term real estate—commercial		(894	)		—			(7,531	)		(2,000	)		—
Total commercial		(8,685	)		(8,221	)		(25,951	)		(8,624	)		(16,219	)
Real estate construction and land		—			—			—			—			—
Real estate other		—			—			—			—			—
Consumer and other		(329	)		(226	)		(149	)		(236	)		(135	)
Total charge-offs		(9,014	)		(8,447	)		(26,100	)		(8,860	)		(16,354	)
Recoveries:
Commercial		2,647			2,594			650			446			915
Term real estate—commercial		1			—			—			20			—
Total commercial		2,648			2,594			650			466			915
Real estate construction and land		—			—			—			—			1
Real estate other		—			—			—			—			—
Consumer and other		76			37			11			155			25
Total recoveries		2,724			2,631			661			621			941
Net charge-offs		(6,290	)		(5,816	)		(25,439	)		(8,239	)		(15,413	)
Provision charged to income		6,495			7,000			27,776			9,000			16,000
Balance at end of period	$	129,818		$	129,613		$	128,429		$	126,092		$	125,331
Quarterly net charge-offs to average loans outstanding during the period, annualized		0.54	%		0.49	%		2.15	%		0.72	%		1.40	%
Year to date net charge-offs to average loans outstanding during the period, annualized		0.54	%		1.19	%		1.43	%		1.05	%		1.40	%
Allowance as a percentage of period end loans outstanding		2.74	%		2.70	%		2.73	%		2.68	%		2.78	%
Allowance as a percentage of nonperforming loans		322.25	%		339.77	%		264.12	%		294.21	%		435.04	%

34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Our non-relationship SNC portfolio totaled $32.2 million at March 31, 2003, compared to $43 million at December 31, 2002. During the past nine months, total commitments in our SNC portfolio have been reduced by $102 million and the funded amount has been reduced by $75 million. The total SNC non-relationship portfolio as of March 31, 2003 had commitments of only $35 million. Subsequent to quarter-end, we further reduced the SNC non-relationship loan portfolio by selling a loan with a net book value of $3.4 million for $3.5 million, resulting in a recovery of $100,000. For the first quarter of 2003, our non-relationship SNC portfolio losses approximated $1.1 million as compared to $427,000 for the fourth quarter of 2002 and $11.1 million for the same period of 2002. These non-relationship SNC portfolio losses represented 16.8%, 7.3% and 72.1% of our net charge-offs for those periods.

We employ a systematic methodology for determining our allowance for loan and lease losses that includes a monthly review process and monthly adjustment of the allowance. Our process includes a periodic loan by loan review for loans that are individually evaluated for impairment as well as detailed reviews of other loans, either individually or in pools. This includes an assessment of known problem loans, potential problem loans, and other loans that exhibit deterioration.

Our methodology incorporates a variety of risk considerations, both quantitative and qualitative, in establishing an allowance for loan and lease losses that management believes is appropriate at each reporting date. Quantitative factors include our historical loss experience, collateral values, and other factors. Our historical loss experience analysis considers our five year loss experience with our experience over the prior two years weighted most heavily, and is stratified by loan type. Qualitative factors include the general economic environment in our marketplace, and in particular, the state of the real estate market in the San Francisco Bay Area and the technology industries based in the Silicon Valley. Credit concentration, trends in credit quality and the pace of portfolio growth are other qualitative factors that are considered in our methodology. These qualitative factors are evaluated in connection with the unallocated portion of the allowance for loan and lease losses.

As we add new products, increase in complexity, and expand our geographic coverage, we will enhance our methodology to keep pace with the size and complexity of the loan portfolio. In this regard, we have periodically engaged outside firms to independently assess our methodology and, on an ongoing basis, we engage outside firms to perform independent credit reviews of our loan portfolio. Management believes that our current methodology is appropriate given our size and level of complexity.

While this methodology utilizes historical and other objective information, the establishment of the allowance for loan and lease losses is, to some extent, based on the judgment and experience of management. Management believes that the allowance for loan and lease losses is adequate as of March 31, 2003 to cover incurred losses in the loan portfolio. However, future changes in circumstances, economic conditions or other factors could cause management to increase or decrease the allowance for loan and lease losses as necessary.

At March 31, 2003, the allowance for loan and lease losses was $129.8 million, consisting of a $105.8 million allocated allowance and a $24.0 million unallocated allowance. The unallocated allowance recognizes the model and estimation risk associated with the allocated allowances, and management’s evaluation of various conditions, the effects of which are not directly measured in determining the allocated allowance. The evaluation of the inherent loss regarding these conditions involves a higher degree of uncertainty because they are not identified with specific problem credits or portfolio segments.

Deposits

We emphasize developing total client relationships in order to increase our core deposit base. Deposits reached $5.5 billion at March 31, 2003, an increase of 4.7% compared to December 31, 2002. This increase is attributable to our relationship managers’ continuing efforts to generate increases in our core deposits.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Our noninterest-bearing demand deposit accounts increased 8.3% to $1.1 billion at March 31, 2003 compared to $1.0 billion at December 31, 2002.

Money market deposit accounts (“MMDA”), negotiable order of withdrawal accounts (“NOW”) and savings accounts decreased 0.6% to $2.7 billion at March 31, 2003 compared to $2.7 billion at December 31, 2002.

MMDA, NOW and savings accounts were 48.1% of total deposits at March 31, 2003 as compared to 50.7% at December 31, 2002. Time certificates of deposit totaled $1.7 billion, or 31.7% of total deposits at March 31, 2003 compared to $1.6 billion or 29.8% of total deposits at December 31, 2002.

Borrowings

Borrowings were $1.3 billion at March 31, 2003 and $1.7 billion at December 31, 2002. At March 31, 2003, borrowings consisted of securities sold under agreements to repurchase, FHLB advances, Zero Coupon Senior Convertible Contingent Debt Securities, a senior note, a term loan and other notes payable. The overall contraction in the borrowings during 2003 was a result of the IRR strategy described above.

Liquidity and Cash Flow

The objective of our liquidity management is to maintain each Bank’s ability to meet the day-to-day cash flow requirements of our clients who either wish to withdraw funds or require funds to meet their credit needs. We must manage our liquidity position to allow the Banks to meet the needs of their clients while maintaining an appropriate balance between assets and liabilities to meet the return on investment expectations of our shareholders. We monitor the sources and uses of funds on a daily basis to maintain an acceptable liquidity position. In addition to liquidity from core deposits and repayments and maturities of loans and investments, the Banks have the ability to sell securities under agreements to repurchase, obtain FHLB advances or purchase overnight Federal Funds.

Greater Bay is a company separate and apart from the Banks and ABD and therefore it must provide for its own liquidity. In addition to its own operating expenses, Greater Bay is responsible for the payment of the interest on its bank credit facilities, senior notes and on the outstanding trust preferred securities and is directly responsible for the contingent interest on the zero coupon senior convertible contingent debt securities, and the dividends paid on our common stock and the 7.25% noncumulative convertible preferred stock. Substantially all of Greater Bay’s revenues are obtained from management fees, interest received on its investments and dividends declared and paid by our subsidiaries. There are statutory and regulatory provisions that limit the ability of the Banks and ABD to pay dividends to Greater Bay. At March 31, 2003, the subsidiaries had approximately $81.2 million in the aggregate available to be paid as dividends to Greater Bay. We do not believe that such a limitation will adversely impact Greater Bay’s ability to meet its ongoing cash obligations.

During 2002, Greater Bay raised approximately $200 million through a private offering of Zero Coupon Senior Convertible Contingent Debt Securities (“CODES”). During 2002, Greater Bay retired $126.4 million of these debt securities. The debt securities were offered at an original offering price of $639.23 per $1,000 principal amount at maturity. The debt securities may not be redeemed for five years from their date of issue, but Greater Bay may be required to repurchase these securities at their accreted value, at the option of the holders, on April 24, 2004, 2007, 2012 or 2017. Greater Bay pays no interest on these securities unless contingent interest or additional amounts become payable or a tax event occurs and semi-annual interest payments are paid. The debt securities accrete interest at an annual rate of 2.25%. Each $1,000 in principal amount at maturity of the debt securities is convertible into 15.3699 shares of Greater Bay common stock if the closing price of Greater Bay’s common stock exceeds the contingent conversion price or in certain other circumstances.

36

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

On March 19, 2003, we received approximately $147.9 million in net proceeds through a private placement of Senior Notes, Series A. The senior notes were issued to replace the CODES which were repurchased during 2002 and to provide liquidity to our holding company. The decision to repurchase the CODES was made after considering the likelihood that the CODES would be put back to us in 2004, the gain which could be recognized upon the CODES repurchase, the anticipated potential rate increases which would have resulted from refinancing the CODES in 2004 and our improving capital position which lowered the importance of the capital feature of the CODES, which is not contained in the senior notes. As of March 31, 2003, there was an outstanding balance of $148.4 million on these notes. The notes were offered at an original offering price of $986.16 per $1,000 principal amount at maturity. The notes mature on March 31, 2008. The notes may not be redeemed at our option and do not require repayment at the option of the holders, in whole or in part, prior to maturity. The notes have a fixed rate of 5.25% per annum paid semi-annually on March 31 and September 30 of each year, commencing September 30, 2003. The notes restrict our ability to sell, dispose of or encumber shares of capital stock of our bank subsidiaries. We will use the net proceeds from the notes for general corporate purposes, which may include working capital, capital expenditures, acquisitions and repayment of existing indebtedness. The notes are not registered with the SEC. We have entered into a registration rights agreement with the initial purchasers, in which we agreed to make an exchange offer which, if consummated, will permit holders to exchange their notes for a new series of notes (the “exchange notes”) that are identical in all material respects with the notes, except that the exchange notes will be registered with the SEC. If we fail to proceed with the exchange offer as required under the notes, we will be required to pay additional interest on the notes at a rate of 0.25% per annum until all registration defaults have been cured.

As of March 31, 2003, Greater Bay had $30.0 million outstanding under a term loan that matures in 2007. The interest rate on this term loan was 3.20%. The term loan is secured by a pledge of all of the stock of Coast Commercial Bank. The term loan also requires Greater Bay to comply with certain debt covenants, including (a) prohibitions on the imposition of any encumbrance or lien on certain of Greater Bay’s property; and (b) the maintenance of certain capital and financial performance ratios. In addition, as of March 31, 2003, Greater Bay had a short-term, secured credit facility totaling $60.0 million. At March 31, 2003, we had no advances outstanding under this facility. The credit facility provides for an interest rate based on LIBOR plus 0.875%. This credit facility is secured by a pledge of all of the stock of Mid-Peninsula Bank and, during the period that Greater Bay is subject to the cure agreement with the Federal Reserve, investment securities in an amount not less than the aggregate principal amount of outstanding advances under the facility. The credit facility also requires Greater Bay to comply with certain debt covenants, including (a) prohibitions on the imposition of any encumbrance or lien on certain of Greater Bay’s or its subsidiaries’ properties; (b) the merger or consolidation of Greater Bay or any of its subsidiaries with any other person, subject to certain exceptions; (c) incurrence of additional debt; (d) the maintenance of certain capital and financial performance ratios; and (e) the maintenance of a minimum net worth of Mid-Peninsula Bank. Greater Bay was in compliance with all related financial covenants for these notes and credit facilities.

As of March 31, 2003, Greater Bay did not have any material commitments for capital expenditures.

Net cash provided by operating activities totaled $35.6 million for the three months ended March 31, 2003 and $45.3 million for the same period in 2002. Net cash available for investing activities totaled $182.9 million in the three months ended March 31, 2003 and net cash used for investment activities totaled $294.0 million in the same period of 2002. The comparatively large balance of cash available for investing purposes during the three months ended March 31, 2002 primarily reflects our decline in loan growth and our program to leverage the balance sheet. The significant comparative decrease during the same period of 2003 reflects our effort to de-leverage the balance sheet as described in “Net Interest Income—Overview” above.

37

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

For the three months ended March 31, 2003, net cash used by financing activities was $157.8 million, compared to net cash provided by financing activities of $270.2 million in the same period of 2002. Historically, our primary financing activity has been through deposits. For the three months ended March 31, 2003 and 2002, deposit gathering activities generated cash of $249.5 million and $51.1 million, respectively. This represents a total of 158.1% and 18.9% of the financing cash flows for the three months ended March 31, 2003 and 2002, respectively. For the three months ended March 31, 2003 short-term and long-term borrowings decreased $401.8 million from December 31, 2002. Cash flows from borrowings increased $217.5 million for the three months ended March 31, 2002 from December 31, 2001 The decrease in borrowings for the three months ended March 31, 2003 was the result of the implementation of our process to de-leverage the balance sheet by reducing the size of the investment portfolio and wholesale borrowings in the first quarter.

Capital Resources

Shareholders’ equity at March 31, 2003 increased to $695.5 million from $681.1 million at December 31, 2002. Greater Bay declared dividends of $0.135, and $0.49 per common share during the three months ended March 31, 2003 and the year ended December 31, 2002, respectively. We paid cash dividends on the noncumulative convertible preferred stock of $0.90625 during the first quarter of 2003 at the annual rate of $3.625 per preferred share.

A banking organization’s total qualifying capital includes two components: core capital (Tier 1 capital) and supplementary capital (Tier 2 capital). Core capital, which must comprise at least half of total capital, includes common shareholders’ equity, qualifying perpetual preferred stock, trust preferred securities and minority interests, less goodwill. Supplementary capital includes the allowance for loan losses (subject to certain limitations), other perpetual preferred stock, trust preferred securities, certain other capital instruments and term subordinated debt. Our major capital components are shareholders’ equity and Trust Preferred Securities in core capital, and the allowance for loan losses in supplementary capital.

At March 31, 2003, the minimum risk-based capital requirements to be considered adequately capitalized were 4.0% for core capital and 8.0% for total capital. Federal banking regulators have also adopted leverage capital guidelines to supplement risk-based measures. The leverage ratio is determined by dividing Tier 1 capital as defined under the risk-based guidelines by average total assets (not risk-adjusted) for the preceding quarter. The minimum leverage ratio is 3.0%, although most banking organizations are expected to exceed that amount by 1.0% or more, depending on their circumstances.

Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991, the Federal Reserve, the Office of the Comptroller of the Currency and the FDIC have adopted regulations setting forth a five-tier system for measuring the capital adequacy of the financial institutions they supervise. Our capital levels as of the dates indicated and the two highest levels recognized under these regulations are as follows:

	Tangible equity		Leverage ratio		Tier 1 risk-based capital ratio		Total risk-based capital ratio
Company:
March 31, 2003	6.69	%	9.18	%	12.08	%	13.34	%
December 31, 2002	6.40	%	8.61	%	11.71	%	12.97	%
March 31, 2002	4.99	%	7.67	%	10.31	%	11.99	%
Well-capitalized	N/A		5.00	%	6.00	%	10.00	%
Adequately capitalized	N/A		4.00	%	4.00	%	8.00	%

38

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

In addition, at March 31, 2003, each of our subsidiary banks had levels of capital that exceeded the well-capitalized guidelines.

Our tangible equity to asset ratio has improved from 4.99% at March 31, 2002 to 6.69% at March 31, 2003. In evaluating our tangible equity ratio, we believe it is important to consider the composition of the goodwill and other intangibles that is deducted from total equity to arrive at tangible equity. At March 31, 2003, total goodwill and other intangibles was $191.6 million, the majority of which is related to the ABD acquisition. Based on ABD’s performance and current comparable valuations based upon the recent sales of peer insurance agencies, we believe that ABD is worth more than the recorded goodwill and other intangibles value.

While the strategic acquisition of ABD in 2002 caused an initial decline in our capital ratios, our ability to deliver above average shareholder returns during a period of economic stress, coupled with our balance sheet management strategy, has had the effect of increasing capital ratios at the end of the first quarter of 2003. When our capital ratios are compared to those of the top 75 U.S. Banks (by asset size) at December 31, 2002, we had tangible equity, leverage, tier 1 and total risk-based capital ratios equal to or exceeding the top 75 U.S. Banks’ average ratios.

Cure Agreement

On January 3, 2003, Greater Bay received a notice from the Federal Reserve that followed the completion of the most recent regulatory examinations of Greater Bay and the Banks. In response to the notice, Greater Bay delivered to the Federal Reserve a corrective action plan designed to enhance its enterprise-wide risk management program. Prior to receipt of the notice from the Federal Reserve, Greater Bay had already dedicated significant time and resources to addressing these items, and commenced many of the action items contained within the corrective action plan, including the appointment in December 2002 of a Chief Risk Officer to oversee Greater Bay’s Enterprise-Wide Risk Management Group.

On February 17, 2003, Greater Bay entered into a cure agreement with the Federal Reserve which incorporates the terms of Greater Bay’s corrective action plan. To improve Greater Bay’s risk management program, the action plan requires enhancements to policies and procedures relating to interest rate sensitivity, liquidity and capital management, asset risk management, and compliance. In the area of interest rate sensitivity, Greater Bay will perform additional stress testing of its IRR exposure under best case and worse case scenarios, review its IRR limits and test its core deposit assumptions. Liquidity management will be augmented by stress testing the liquidity position under various scenarios and by developing a more sophisticated monitoring system for Greater Bay’s funding strategy. In addition, Greater Bay will establish a process to quantify and support the appropriateness of established capital limits relative to its risk profile. In the area of asset risk management, Greater Bay will establish subsidiary bank level commercial real estate concentration limits, improve the documentation supporting the allowance for loan and lease losses and strengthen systems relating to loan and investment policies. Greater Bay will also enhance the processes for identifying and monitoring legal risks to ensure future compliance with all applicable laws and regulations, including the Bank Secrecy Act and anti-money laundering laws.

To maintain its financial holding company status, Greater Bay must complete the corrective action plan by July 7, 2003 or such additional time as the Federal Reserve may permit. During this period, Greater Bay may not engage in new financial holding company activities or acquire nonbank subsidiaries engaged in financial activities without the prior written approval of the Federal Reserve. If the corrective action is not completed within the relevant time period, the Federal Reserve could impose additional limitations or conditions on our conduct or activities, require Greater Bay to divest its subsidiary Banks, or, at Greater Bay’s election, engage only in activities permissible for bank holding companies. Such a development would potentially adversely impact Greater Bay’s insurance brokerage activities conducted through Greater Bay’s subsidiary, ABD, although Greater Bay believes it could mitigate the impact of this development through alternative means of conducting these activities.

39

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

We continue to make progress in complying with all aspects of the cure agreement and believe we are on schedule to meet all of the requirements of the agreement in a timely manner. However, it is the Federal Reserve which has the authority to determine our ultimate compliance with all terms of the cure agreement.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

The definition of “off-balance sheet arrangements” includes any transaction, agreement or other contractual arrangement to which an entity is a party under which we have:

• Any obligation under a guarantee contract that has the characteristics as defined in paragraph 3 of FIN 45;

• A retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, such as a subordinated retained interest in a pool of receivables transferred to an unconsolidated entity;

• Any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, except that it is both indexed to the registrant’s own stock and classified in stockholders’ equity; or

• Any obligation, including contingent obligations, arising out of a material variable interest, as defined in FIN 46, in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant.

In the ordinary course of business, we have issued certain guarantees which qualify as off-balance sheet arrangements. As of March 31, 2003, those guarantees include the following:

• Financial standby letters of credit and financial guarantees are conditional lending commitments issued by us to guarantee the performance of a customer to a third party in borrowing arrangements. At March 31, 2003, the maximum undiscounted future payments that we could be required to make was $98.9 million. 60.6% of these arrangements mature within one year. We generally have recourse to recover from the customer any amounts paid under these guarantees;

• We may be required to make contingent payments to the former shareholders of ABD and The Matsco Companies, Inc based on their future operating results. As of March 31, 2003, under the acquisition agreement with ABD, the maximum gross future earn-out payments to ABD’s former shareholders is $56.4 million plus 65% of the EBITDA (as defined in the acquisition agreement) in excess of the Forecast EBITDA, payable through 2005 in a combination of cash and noncumulative convertible preferred stock or, in certain circumstance, common stock. The Forecast EBITDA for ABD, as defined in the acquisition agreement, is $29.6 million, $34.6 million and $40.3 million for the years ended December 31, 2003, 2004 and 2005, respectively. As of March 31, 2003, under the acquisition agreement with The Matsco Companies, Inc, the maximum gross future earn-out payments to the former shareholders is $4.5 million, through 2005; and

• Several of our Banks have guaranteed credit cards issued to our clients by an unaffiliated financial institution. As of March 31, 2003, the combined credit limits on those accounts are $4.9 million.

40

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

FIN 46 defines variable interest entities as a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. A variable interest entity often holds financial assets, including loans or receivables, real estate or other property. A variable interest entity may be essentially passive or it may engage in research and development or other activities on behalf of another company. FIN 46 requires that a variable interest entity be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. FIN 46 also requires disclosures about variable interest entities that we are not required to consolidate but in which it has a significant variable interest. As of March 31, 2003, we did not have an interest in any variable interest entities.

MLF III is a special purpose corporation wholly owned by Greater Bay formed for the purpose of issuing lease-backed notes. MLF III, CNBIT I, CNBIT II, MPBIT and SJNBIT each have some characteristics of variable interest entities as defined by FIN 46. The results of and financial position of these five entities are fully consolidated with our results and financial position, and therefore these entities are exempt from the provisions of FIN 46.

The following table provides the amounts due under specified contractual obligations for the periods indicated as of March 31, 2003.

	Less than one year		One to three years		Four to five years		More than five years		Total
	(Dollars in thousands)
Commitment to fund loans	$	1,232,856	$	—	$	—	$	—	$	1,232,856
Commitments under letters of credit		98,912		—		—		—		98,912
Deposits		4,304,588		83,660		19,055		11		4,407,314
Borrowings		878,555		234,500		—		222,351		1,335,406
Trust Preferred Securities		—		—		—		204,000		204,000
Capital lease obligations		—		—		—		—		—
Operating lease obligations		14,519		52,217		23,916		29,865		120,517
Purchase obligations		12,150		—		—		—		12,150
Other liabilities		158,866		—		—		27,804		186,670

The obligations are categorized by their contractual due dates. Approximately $273.8 million of the commitments to fund loans relate to real estate construction and a significant percentage is expected to fund within the next 12 months. However, the remainder relates primarily to revolving lines of credit or other commercial loans, and many of these commitments are expected to expire without being drawn upon. Therefore the total commitments do not necessarily represent future cash requirements. We may, at our option, prepay certain borrowings and trust preferred securities prior to their maturity date. Furthermore, the actual payment of certain current liabilities may be deferred into future periods.

A “purchase obligation” is an agreement to purchase goods or services that is enforceable and legally binding on the registrant and that specifies all significant terms including (1) fixed or minimum quantities to be purchased, (2) fixed, minimum or variable price provisions, and (3) the approximate timing of the transaction. The definition of “purchase obligations” includes capital expenditures for purchases of goods or services over a five-year period. At March 31, 2003, we had potential future venture capital funding requirements of $9.6 million and a commitment to construct a headquarters building for one of our Banks for $2.5 million.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our financial performance is impacted by, among other factors, interest rate risk and credit risk. We do not utilize derivatives to mitigate our credit risk, relying instead on an extensive loan review process and our allowance for loan and lease losses. See “—Allowance for Loan and Lease Losses” herein.

Interest rate risk is the risk of a change in market value of portfolio equity due to changes in interest rates. This risk is addressed by our Management Asset & Liability Committee (“ALCO”), which includes senior management representatives. The ALCO monitors interest rate risk by analyzing the potential impact to the net portfolio value and net interest income from potential changes to interest rates and considers the impact of alternative strategies or changes in balance sheet structure. The ALCO manages our balance sheet in part to maintain the potential impact on net portfolio value and net interest income within acceptable ranges despite changes in interest rates.

Our exposure to interest rate risk is reviewed on at least a quarterly basis by the Board ALCO and the Management ALCO. Interest rate risk exposure is measured using interest rate sensitivity analysis to determine our change in net portfolio value in the event of hypothetical changes in interest rates. If potential changes to net portfolio value and net interest income resulting from hypothetical interest rate changes are not within the Board-approved limits, the Board may direct management to adjust its asset and liability mix to bring interest rate risk within Board-approved limits.

In order to reduce the exposure to interest rate fluctuations, we have implemented strategies to more closely match our balance sheet composition. Although we are doing so to a lesser extent than in prior years, we have generally focused our investment activities on securities with terms or average lives averaging approximately three and a half years which effectively lengthens the average duration of our assets. We have utilized short-term borrowings and deposit marketing programs to shorten the effective duration of our liabilities. In addition, we have utilized two interest rate swaps and an interest rate collar to manage the interest rate risk of certain long term debt instruments and deposit liabilities. When these derivative instruments were acquired, they were determined to be highly effective and were accounted for as hedges under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended by SFAS No. 138, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133 and 138”). During 2001, we determined that the designation of these derivatives as hedges was no longer appropriate. Subsequent to that determination, changes in the value of the derivative contracts were recorded to current income. During 2002, we elected to reassert our designation of one of the interest rate swaps as a cash flow hedge. Subsequent to that designation, changes to the fair value of that hedge are included in other comprehensive income to the extent that the swap is deemed effective. Changes in value attributed to ineffectiveness are recorded in current income.

Market Value of Portfolio Equity

Interest rate sensitivity is computed by estimating the changes in net market value of portfolio equity, or market value over a range of potential changes in interest rates. The market value of portfolio equity is the market value of our assets minus the market value of our liabilities plus the market value of any off-balance sheet items. The market value of each asset, liability, and off-balance sheet item is its net present value of expected cash flows discounted at market rates after adjustment for rate changes. We measure the impact on market value of portfolio equity for an immediate and sustained 100 basis point increase and decrease (“shock”) in interest rates. The following table shows our projected change in net portfolio value for this set of rate shocks as of the dates indicated.

42

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Change in interest rates	March 31, 2003							March 31, 2002
	Net portfolio value		Projected change					Net portfolio value		Projected change
			Dollars			Percentage				Dollars			Percentage
	(Dollars in millions)
100 basis point rise	$	1,003	$	16		1.6	%	$	1,058	$	(27	)	-2.5	%
Base scenario		987		—		—			1,085		—		—
100 basis point decline		924		(63	)	-6.5	%		1,091		6		0.5	%

The preceding table indicates that as of March 31, 2003 an immediate and sustained 100 basis point increase in interest rates would increase our market value of portfolio equity by approximately 1.6% and an immediate and sustained 100 basis point decrease in interest rates would decrease our market value of portfolio equity by approximately 6.5%. The foregoing analysis attributes significant value to our noninterest-bearing deposit balances.

The market value of portfolio equity is based on the net present values of each product in the portfolio, which in turn is based on cash flows factoring in recent market prepayment estimates from public sources. The discount rates are based on recently observed spread relationships and adjusted for the assumed interest rate changes. Some valuations are provided directly from independent broker quotations.

The net portfolio value of equity as of March 31, 2003 was $987 million as compared to $1.1 billion as of March 31, 2002. The major reason for the decrease was the overall decline in interest rates which reduced the discount rate used in the calculation of the net present value. The reduced discount rate most significantly impacted non-term deposits, resulting in a significant reduction in their contribution to the calculation of the net portfolio value of equity as of March 31, 2003 as compared to March 31, 2002. The second reason for the change in the market value of equity relates to a significant shift within the non-term deposits to shorter duration liabilities also reducing their contribution to the calculation of the net portfolio value of equity.

In addition, there has been significant movement in the projected change of market value of portfolio equity due to a 100 basis point rise or decline in interest rates between March 31, 2003 and 2002. This is primarily due to two factors. During 2002, we substantially reduced the size of our aggregate fixed rate investment portfolio. At the same time higher prepayment rates on mortgage products reduced the lives of the remaining investments. The reduction in size and life of the investment portfolio decreased the average life and duration of total assets. In addition, in the fourth quarter of 2002 we reclassified our Trust Preferred Securities to a debt security classification, which caused the Trust Preferred Securities to be included in the calculation, whereas previously in the first quarter of 2002 the Trust Preferred Securities were treated as equity securities and therefore not included. The reduction of fixed rate assets and increase in fixed rate liabilities resulted in a small gain in value in rates up compared to a small reduction in the prior year.

Net Interest Income

The impact of interest rate changes on net interest income and net income are measured using income simulation. The various products in our balance sheet are modeled to simulate their income (and cash flow) behavior in relation to interest rates. Income for the next 12 months is calculated for current interest rates and for immediate and sustained rate shocks.

The income simulation model includes various assumptions regarding the repricing relationships for each product. Many of our assets are floating rate loans, which are assumed to reprice immediately, and to the same extent as the change in market rates according to their contracted index. Our non-term deposit products reprice more slowly, usually changing less than the change in market rates and at our discretion. As of March 31, 2003, the analysis indicates that our net interest income for the next 12 months would increase by 2.8% if rates increased 100 basis points, and decrease by 3.6% if rates decreased 100 basis points.

43

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

This analysis indicates the impact of change in net interest income for the given set of rate changes and assumptions. It assumes the balance sheet grows modestly, but that its composition remains similar to the composition at year-end. It does not account for all the factors that impact this analysis including changes that management may make in the balance sheet composition to mitigate the impact of interest rate changes or secondary impacts such as changes to our credit risk profile as interest rates change. Furthermore, loan prepayment rate estimates and spread relationships change regularly. Interest rate changes create changes in actual loan prepayment rates that will differ from the market estimates incorporated in the analysis. In addition, the proportion of adjustable-rate loans in our portfolio could decrease in future periods if market interest rates remain at or decrease below current levels. Changes that vary significantly from the assumptions may have significant effects on our net interest income.

Gap Analysis

In addition to the above analysis, we also perform a gap analysis as part of the overall interest rate risk management process. This analysis is focused on the maturity structure of assets and liabilities and their repricing characteristics over future periods. An effective interest rate risk management strategy seeks to match the volume of assets and liabilities maturing or repricing during each period. Gap sensitivity is measured as the difference between the volume of assets and liabilities in our current portfolio that is subject to repricing at various time horizons. The main focus is usually on the one-year cumulative gap. The difference is known as interest sensitivity gaps.

The following table shows interest sensitivity gaps for different intervals as of March 31, 2003:

	Immediate or one day			2 days To 6 months			7 months to 12 months			1 Year to 3 years			4 years to 5 years			More than 5 years			Total rate sensitive			Total non-rate sensitive			Total
	(Dollars in thousands)
As of March 31, 2003
Assets:
Cash and due from  banks	$	—		$	7,623		$	—		$	—		$	—		$	—		$	7,623		$	239,551		$	247,174
Federal Funds Sold		128,000			—			—			—			—			—			128,000			—			128,000
Investment securities		91,558			775,955			326,998			555,893			229,579			419,346			2,399,329			25,286			2,424,615
Loans		2,067,919			850,504			338,716			844,626			530,608			86,825			4,719,198			—			4,719,198
Allowance for loan and lease losses		—			—			—			—			—			—			—			(129,818	)		(129,818	)
Other assets		—			—			—			—			—			—			—			569,837			569,837
Total assets	$	2,287,477		$	1,634,082		$	665,714		$	1,400,519		$	760,187		$	506,171		$	7,254,150		$	704,856		$	7,959,006
Liabilities and Equity:
Deposits	$	2,645,620		$	1,416,801		$	242,167		$	83,660		$	19,055		$	11		$	4,407,314		$	1,114,446		$	5,521,760
Borrowings		126,531			528,441			270,706			223,501			185,428			799			1,335,406			—			1,335,406
Trust preferred securities		—			20,000			—			—			—			184,000			204,000			—			204,000
Other liabilities		—			—			—			—			—			—			—			186,670			186,670
Shareholders’ equity		—			—			—			—			—			—			—			711,170			711,170
Total liabilities and equity	$	2,772,151		$	1,965,242		$	512,873		$	307,161		$	204,483		$	184,810		$	5,946,720		$	2,012,286		$	7,959,006
Gap	$	(484,674	)	$	(331,160	)	$	152,841		$	1,093,358		$	555,704		$	321,361		$	1,307,430		$	(1,307,430	)	$	—
Cumulative Gap	$	(484,674	)	$	(815,834	)	$	(662,993	)	$	430,365		$	986,069		$	1,307,430		$	1,307,430		$	—		$	—
Cumulative Gap/ total assets		-6.09	%		-10.25	%		-8.33	%		5.41	%		12.39	%		16.43	%		16.43	%		0.00	%		0.00	%
As of March 31, 2002
Gap	$	(97,412	)	$	(917,149	)	$	(115,474	)	$	802,363		$	723,757		$	663,375		$	1,059,461		$	(1,059,461	)	$	—
Cumulative Gap	$	(97,412	)	$	(1,014,561	)	$	(1,130,035	)	$	(327,672	)	$	396,085		$	1,059,460		$	1,059,461		$	—		$	—
Cumulative Gap/ total assets		-1.17	%		-12.18	%		-13.57	%		-3.93	%		4.75	%		12.72	%		12.72	%		0.00	%		0.00	%

44

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

The foregoing table indicates that we had a one year cumulative negative gap of $663.0 million, or 8.3% of total assets, at March 31, 2003. In theory, this would indicate that at March 31, 2003, $663.0 million more in liabilities than assets would reprice if there were a change in interest rates over the next 365 days. Thus, if interest rates on assets and liabilities were to increase in equal amounts, the gap would tend to result in a lower net interest margin. However, changes in the mix of earning assets or supporting liabilities can either increase or decrease the net interest margin without affecting interest rate sensitivity. In addition, the interest rate spread between an asset and its supporting liability can vary significantly while the timing of repricing of both the asset and its supporting liability can remain the same, thus impacting net interest income. This characteristic is referred to as a basis risk and, generally, relates to the repricing characteristics of short-term funding sources such as certificates of deposit.

The cumulative gap for the immediate or one-day period decreased approximately $387.3 million between March 31, 2002 and 2003. This decrease in the immediate or one-day period was due to an increase in non-term deposits which are included in this category (see below for a further discussion regarding non-term deposits) and a decrease in variable rate loans on a period-to-period basis. The cumulative gap for the 2-days to 6-months category declined $198.7 million, but the composition of the cumulative gap changed due to the shorter duration of the fixed income investment portfolio offset by the increase in the amount of deposits. The cumulative gap for the 12-months period as of March 31, 2003 showed a decline in interest rate sensitivity as compared to March 31, 2002. This decline is mainly due to the shorter duration of the fixed income investment portfolio at March 31, 2003 as compared to March 31, 2002 offset slightly by an increase in deposits.

Gap analysis has certain limitations. Measuring the volume of repricing or maturing assets and liabilities does not always measure the full impact on the portfolio value of equity or net interest income. Gap analysis does not account for rate caps on products; dynamic changes such as increasing prepay speeds as interest rates decrease, basis risk, or the benefit of non-rate funding sources. The relation between product rate repricing and market rate changes (basis risk) is not the same for all products. The majority of our loan portfolio reprices quickly and completely following changes in market rates, while non-term deposit rates in general move more slowly and usually incorporate only a fraction of the change in rates. Products categorized as non-rate sensitive, such as noninterest-bearing demand deposits, in the Gap analysis behave like long term fixed rate funding sources. Both of these factors tend to make our actual behavior more asset sensitive than is indicated in the Gap analysis. In fact we expect to experience higher net interest income when rates rise, opposite of what is indicated by the Gap analysis. Therefore, management uses income simulation, net interest income rate shocks and market value of portfolio equity as its primary interest rate risk management tools.

45

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

CONTROLS AND PROCEDURES

Within the 90 days prior to the date of filing this report, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-14(c) of the Securities Exchange Act of 1934, as amended. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.

There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of our evaluation.

RECENT ACCOUNTING PRONOUNCEMENT

Accounting for Stock-Based Compensation—Transition and Disclosure

In January 2003, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation” (“SFAS No. 148”). SFAS No. 148 amends SFAS No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. If awards of stock-based employee compensation were outstanding and accounted for under the intrinsic value method of APB Opinion No. 25, “Accounting for Stock” (“APB No. 25”) issued to employees, certain disclosures have to be made for any period for which an income statement is presented.

SFAS No. 148 shall be effective for financial statements for fiscal years ending after December 15, 2002. We continue to apply APB No. 25 in accounting for stock-based compensation and have adopted the disclosure requirements of SFAS No. 123 and SFAS No. 148.

Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others—an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34

In November 2002, the FASB issued FIN 45. FIN 45 addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. FIN 45 also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of a guarantee for the obligations the guarantor has undertaken in issuing that guarantee.

The initial recognition and initial measurement of a liability of a guarantor shall be applied only on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The guarantor’s previous accounting for guarantees issued prior to the date of this Interpretation’s initial application shall not be revised or restated to reflect the effect of the recognition and measurement provisions of the Interpretation.

The disclosure requirements in Interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The disclosure requirements of FIN 45 are discussed in Note 7 of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. The implementation of the initial recognition provisions of FIN 45 did not have a significant impact on our financial condition or operating results. We do not expect the full adoption of FIN 45 to have a material impact on our financial condition or operating results.

46

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS (CONTINUED)

Consolidation of Variable Interest Entities

In January 2003, the FASB issued FIN 46. FIN 46 explains how to identify variable interest entities and how an enterprise assesses its interests in a variable interest entity to decide whether to consolidate that entity. FIN 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. Variable interest entities that effectively disperse risks will not be consolidated unless a single party holds an interest or combination of interests that effectively recombines risks that were previously dispersed.

FIN 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003.

FIN 46 may be applied prospectively with a cumulative-effect adjustment as of the date on which it is first applied or by restating previously issued financial statements for one or more years with a cumulative-effect adjustment as of the beginning of the first year restated.

We do not expect the adoption of FIN 46 to have a material impact on our financial condition or operating results.

Derivative Instruments and Hedging Activities

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“SFAS No. 149”). The provisions of SFAS No.149 that relate to SFAS No. 133 and No. 138 implementation issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In addition, provisions of SFAS No. 149 which relate to forward purchases or sales of when-issued securities or other securities that do not yet exist, should be applied to both existing contracts and new contracts entered into after June 30, 2003. The changes in SFAS No. 149 improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. In particular, SFAS No. 149 (1) clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative discussed in paragraph 6(b) of SFAS No. 133 and No. 138, (2) clarifies when a derivative contains a financing component, (3) amends the definition of an underlying to conform it to language used in FIN 45, and (4) amends certain other existing pronouncements. Those changes will result in more consistent reporting of contracts as either derivatives or hybrid instruments.

SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, except as stated above and for hedging relationships designated after June 30, 2003. In addition, except as stated above, all provisions of SFAS No.149 should be applied prospectively.

We do not expect the adoption of SFAS No. 149 to have a material impact on our financial condition or operating results.

47

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings—Not applicable

ITEM 2. Changes in Securities and Use of Proceeds—Not applicable

ITEM 3. Defaults Upon Senior Securities—Not applicable

ITEM 4. Submission of Matters to a Vote of Security Holders—Not applicable

ITEM 5. Other Information—Not applicable

ITEM 6. Exhibits and Reports on Form 8-K

The Exhibits listed below are filed or incorporated by reference as part of this Report.

(a) Exhibits

Exhibit No.	Description of Exhibits
4.1	Indenture between Greater Bay Bancorp and Wilmington Trust Company, as trustee, dated as of March 24, 2003.
4.2	Officers’ Certificate dated March 24, 2003, including Forms of the 144A Note, Regulation S Note and Certificated Note for the 5.25% Senior Notes, Series A, due March 31, 2008 and the Global Note for the 5.25% Senior Notes, Series B, due March 31, 2008.
10.1	Registration Rights Agreement, dated as of March 24, 2003, among Greater Bay Bancorp, Keefe Bruyette & Woods, Inc., and the Other Initial Purchasers.
99.1	Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

During the quarter ended March 31, 2003, Greater Bay filed the following Current Reports on Form 8-K: (1) March 26, 2003 (containing a press release regarding the completion of a private offering of $150 million of senior notes); (2) March 5, 2003 (containing a press release which provided an update on regulatory matters and performance guidance for 2003); (3) March 3, 2003 (containing a press release and slide presentation for analysts’ conference); (4) February 4, 2003 (containing an updated slide presentation as of December 31, 2002); (5) January 23, 2003 (containing a press release announcing fourth quarter 2002 and year end results); and (6) January 17, 2003 (containing a press release announcing the receipt of a regulatory notice from the Board of Governor of the Federal Reserve System).

48

Signatures

In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Greater Bay Bancorp (Registrant)
By:	/s/    STEVEN C. SMITH
	Steven C. Smith Executive Vice President, Chief Administrative Officer and Chief Financial Officer

Date: May 7, 2003

49

Certification

I, David L. Kalkbrenner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Greater Bay Bancorp;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weakness in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective action with regard to significant deficiencies and material weaknesses.

/s/    DAVID L. KALKBRENNER          

David L. Kalkbrenner
President and Chief Executive Officer

Date: May 7, 2003

50

Certification

I, Steven C. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Greater Bay Bancorp;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weakness in internal controls; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective action with regard to significant deficiencies and material weaknesses.

/s/    STEVEN C. SMITH          

Steven C. Smith

Executive Vice President, Chief Administrative Officer and

Chief Financial Officer

Date: May 7, 2003

51

EX-4.1

                                                                     EXHIBIT 4.1

                                    INDENTURE

                                     Between

                               GREATER BAY BANCORP

                                       and

                            WILMINGTON TRUST COMPANY,
                                   AS TRUSTEE

                           Dated as of March 24, 2003

                             SENIOR DEBT SECURITIES



                               GREATER BAY BANCORP

         RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
                      INDENTURE, DATED AS OF MARCH 24, 2003

  TRUST INDENTURE
    ACT SECTION                               INDENTURE SECTION

3.10(a)(1)                                           6.09
3.10(a)(2)                                           6.09
3.10(a)(3)                                           N/A
3.10(a)(4)                                           N/A
3.10(a)(5)                                           6.09
3.10(b)                                              6.08; 6.10
3.10(c)                                              N/A
3.11(a)                                              6.13(a)
3.11(b)                                              6.13(b)
                                                     7.03(a)(2);
3.11(b)(2)                                           7.03(b)
3.12(a)                                              7.01; 7.02(a)
3.12(b)                                              7.02(b)
3.12(c)                                              7.02(c)
3.13(a)                                              7.03(a)
3.13(b)                                              7.03(b)
3.13(c)                                              7.03(a), 7.03(b)
3.13(d)                                              7.03(c)
3.14(a)(1), (2) and (3)                              7.04
3.14(a)(4)                                           10.09
3.14(b)                                              N/A
3.14(c)(1)                                           1.02
3.14(c)(2)                                           1.02
3.14(c)(3)                                           N/A
3.14(d)                                              N/A
3.14(e)                                              1.02
3.14(f)                                              N/A
3.15(a)                                              6.01(a)
3.15(b)                                              6.02; 7.03(a)(6)
3.15(c)                                              6.10(b)
3.15(d)                                              6.10(c)
3.15(d)(1)                                           6.10(a)(1)
3.15(d)(2)                                           6.10(c)(2)
3.15(d)(3)                                           6.10(c)(3)
3.15(e)                                              5.14
3.16(a)                                              1.01
3.16(a)(1)(A)                                        5.02; 5.12
3.16(a)(1)(B)                                        5.13

                                        i



3.16(a)(2)                                           N/A
3.16(b)                                              5.08
3.16(c)                                              1.04
3.17(a)(1)                                           5.03
3.17(a)(2)                                           5.04
3.17(b)                                              10.03
3.18(a)                                              1.07

THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF
THE INDENTURE.

                                       ii



                                Table of Contents

                                                                           Page
                                                                           ----

                                   ARTICLE I.

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  Section 1.01        Definitions..............................................1
  Section 1.02        Compliance Certificates and Opinions.....................9
  Section 1.03        Form of Documents Delivered to Trustee..................10
  Section 1.04        Acts of Securityholders.................................10
  Section 1.05        Notices, etc., to Trustee and Company...................12
  Section 1.06        Notice to Securityholders; Waiver.......................12
  Section 1.07        Language of Notices, Etc................................13
  Section 1.08        Conflict with Trust Indenture Act.......................13
  Section 1.09        Effect of Headings and Table of Contents................14
  Section 1.10        Successors and Assigns..................................14
  Section 1.11        Separability Clause.....................................14
  Section 1.12        Benefits of Indenture...................................14
  Section 1.13        Governing Law...........................................14
  Section 1.14        Legal Holidays..........................................14
  Section 1.15        Judgment Currency; Payment to be in Proper Currency.....14
  Section 1.16        Moneys of Different Currencies to be Segregated.........15

                                   ARTICLE II.

                                 SECURITY FORMS

  Section 2.01        Forms Generally.........................................15
  Section 2.02        Form of Securities......................................16
  Section 2.03        Form of Trustee's Certificate of Authentication.........16

                                  ARTICLE III.

                                 THE SECURITIES

  Section 3.01        Title and Terms.........................................17
  Section 3.02        Denominations...........................................20
  Section 3.03        Execution, Authentication, Delivery and Dating..........20
  Section 3.04        Temporary Securities....................................22
  Section 3.05        Registration, Registration of Transfer and Exchange.....24
  Section 3.06        Mutilated, Destroyed, Lost and Stolen Securities........27
  Section 3.07        Payment of Interest; Interest Rights Preserved..........28
  Section 3.08        Persons Deemed Owners...................................29
  Section 3.09        Cancellation............................................30
  Section 3.10        Computation of Interest.................................30

                                      iii



  Section 3.11        Forms of Certification..................................31
  Section 3.12        Payment in Currencies...................................31
  Section 3.13        CUSIP Numbers...........................................33

                                   ARTICLE IV.

                           SATISFACTION AND DISCHARGE

  Section 4.01        Satisfaction and Discharge of Indenture.................33
  Section 4.02        Application of Trust Money..............................35
  Section 4.03        Satisfaction, Discharge and Defeasance of
                      Securities of Any Series................................35
  Section 4.04        Repayment to Company....................................38
  Section 4.05        Reinstatement...........................................38

                                   ARTICLE V.

                                    REMEDIES

  Section 5.01        Events of Default.......................................38
  Section 5.02        Acceleration of Maturity; Rescission and Annulment......40
  Section 5.03        Collection of Indebtedness and Suits for
                      Enforcement by Trustee..................................41
  Section 5.04        Trustee May File Proofs of Claim........................42
  Section 5.05        Trustee May Enforce Claims Without Possession
                      of Securities...........................................42
  Section 5.06        Application of Money or Other Property Collected........43
  Section 5.07        Limitation on Suits.....................................43
  Section 5.08        Unconditional Right of Securityholders to
                      Receive Principal, Premium, Maturity
                      Consideration and Interest..............................44
  Section 5.09        Restoration of Rights and Remedies......................44
  Section 5.10        Rights and Remedies Cumulative..........................44
  Section 5.11        Delay or Omission Not Waiver............................45
  Section 5.12        Control by Holders......................................45
  Section 5.13        Waiver of Past Defaults.................................45
  Section 5.14        Undertaking for Costs...................................46
  Section 5.15        Waiver of Stay or Extension Laws........................46

                                   ARTICLE VI.

                                   THE TRUSTEE

  Section 6.01        Certain Duties and Responsibilities.....................46
  Section 6.02        Notice of Defaults......................................48
  Section 6.03        Certain Rights of Trustee...............................48
  Section 6.04        Not Responsible for Recitals or Issuance of
                      Securities..............................................49

                                       iv



  Section 6.05        May Hold Securities.....................................49
  Section 6.06        Money or Other Property Held in Trust...................50
  Section 6.07        Compensation and Reimbursement..........................50
  Section 6.08        Disqualification; Conflicting Interests.................51
  Section 6.09        Corporate Trustee Required; Eligibility.................51
  Section 6.10        Resignation and Removal; Appointment of Successor.......52
  Section 6.11        Acceptance of Appointment by Successor..................53
  Section 6.12        Merger, Conversion, Consolidation or Succession to
                      Business of Trustee.....................................54
  Section 6.13        Preferential Collection of Claims Against Company.......55
  Section 6.14        Appointment of Authenticating Agent.....................55

                                  ARTICLE VII.

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

  Section 7.01        Company to Furnish Trustee Names and Addresses of
                      Holders.................................................57
  Section 7.02        Preservation of Information; Communications to
                      Holders.................................................57
  Section 7.03        Reports by Trustee......................................58
  Section 7.04        Reports by Company......................................58

                                  ARTICLE VIII.

                  CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

  Section 8.01        Company May Consolidate, etc., Only on Certain Terms....59
  Section 8.02        Successor Corporation Substituted.......................60

                                   ARTICLE IX.

                             SUPPLEMENTAL INDENTURES

  Section 9.01        Supplemental Indentures Without Consent of
                      Securityholders.........................................61
  Section 9.02        Supplemental Indentures with Consent of
                      Securityholders.........................................62
  Section 9.03        Execution of Supplemental Indentures....................64
  Section 9.04        Effect of Supplemental Indentures.......................64
  Section 9.05        Conformity with Trust Indenture Act.....................64
  Section 9.06        Reference in Securities to Supplemental Indentures......64

                                   ARTICLE X.

                                    COVENANTS

  Section 10.01       Payment of Principal, Premium, if any, the Maturity
                      Consideration and Interest..............................64
  Section 10.02       Maintenance of Office or Agency.........................65

                                        v



  Section 10.03       Money or Other Property for Securities Payments and
                      Deliveries to Be Held in Trust..........................66
  Section 10.04       Additional Amounts......................................67
  Section 10.05       Corporate Existence.....................................68
  Section 10.06       Maintenance of Properties...............................68
  Section 10.07       Payment of Taxes and Other Claims.......................69
  Section 10.08       Limitation on Sale, Issuance or Other Dispositions
                      of Voting Stock of Certain Subsidiaries.................69
  Section 10.09       Limitation Upon Liens on Certain Capital Stock..........71
  Section 10.10       Statement as to Compliance..............................71
  Section 10.11       Waiver of Certain Covenants.............................72
  Section 10.12       Calculation of Original Issue Discount..................72
  Section 10.13       Statement by Officers as to Default.....................72

                                   ARTICLE XI.

                            REDEMPTION OF SECURITIES

  Section 11.01       Applicability of Article................................72
  Section 11.02       Election to Redeem; Notice to Trustee...................72
  Section 11.03       Selection by Trustee of Securities to Be Redeemed.......73
  Section 11.04       Notice of Redemption....................................73
  Section 11.05       Deposit of Redemption Price.............................74
  Section 11.06       Securities Payable on Redemption Date...................74
  Section 11.07       Securities Redeemed in Part.............................75

                                  ARTICLE XII.

                                  SINKING FUNDS

  Section 12.01       Applicability of Article................................75
  Section 12.02       Satisfaction of Sinking Fund Payments with Securities...75
  Section 12.03       Redemption of Securities for Sinking Fund...............76

                                  ARTICLE XIII.

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

  Section 13.01       Exemption from Individual Liability.....................76

                                  ARTICLE XIV.

                                  MISCELLANEOUS

  Section 14.01       Counterparts............................................77

                                       vi



  ANNEX A             Additional Provisions Relating to Transfers in Certain
                      Situations
  EXHIBIT A           Form of Certificate to be Given by Person Entitled to
                      Receive Bearer Note Certificate
  EXHIBIT B           Form of Certificate to be Given by Euroclear and
                      Clearstream in Connection with the Exchange of a Portion
                      of a Temporary Global Note Certificate
  EXHIBIT C           Form of Certificate to be Given by Euroclear and
                      Clearstream to Obtain Interest Prior to an Exchange Date
                      Certificate
  EXHIBIT D           Form of Certificate to be Given by Beneficial Owners to
                      Obtain Interest Prior to an Exchange Date Certificate
  EXHIBIT E           Form of Transfer/Exchange Certificate for
                      Transfer/Exchange from Restricted Certificated Note to
                      Rule 144A Global Note
  EXHIBIT F           Form of Transfer/Exchange Certificate for
                      Transfer/Exchange from Restricted Certificated Note to
                      Regulation S Global Note
  EXHIBIT G           Form of Transfer/Exchange Certificate for
                      Transfer/Exchange from Restricted Certificated Note to
                      Unrestricted Global Note
  EXHIBIT H           Form of Transfer/Exchange Certificate for
                      Transfer/Exchange from Rule 144A Global Note to Regulation
                      S Global Note
  EXHIBIT I           Form of Transfer/Exchange Certificate for
                      Transfer/Exchange from Rule 144A Global Note to
                      Unrestricted Global Note
  EXHIBIT J           Form of Transfer/Exchange Certificate for
                      Transfer/Exchange from Regulation S Global Note to Rule
                      144A Global Note
  EXHIBIT K           Form of Letter to be Delivered by Institutional Accredited
                      Investors

                                       vii



        THIS INDENTURE is dated as of March 24, 2003 between GREATER BAY
BANCORP, a corporation duly organized and existing under the laws of the State
of California (herein called the "Company"), having its principal executive
office at 2860 West Bayshore Road, Palo Alto, California 94303, and Wilmington
Trust Company, a Delaware banking corporation (herein called the "Trustee"),
having its principal corporate trust office located in Wilmington, Delaware.

                             RECITALS OF THE COMPANY

        The Company deems it necessary from time to time to issue its unsecured
and unsubordinated debentures, notes or other evidence of indebtedness to be
issued in one or more series (hereinafter called the "Securities") as
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.

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

        NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                    ARTICLE I.

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

        Section 1.01    Definitions.

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

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

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

        (3)     all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and

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

        Certain terms, used principally in Article Six, are defined in that
Article.

                                        1



        "Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.

        "Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote, 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.

        "Authenticating Agent" with respect to any series of Securities means
any Person authorized to act on behalf of the Trustee to authenticate Securities
pursuant to Section 6.14.

        "Authorized Newspaper" means a newspaper, in an official language of the
country of publication or in the English language, customarily published on each
Business Day whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

        "Authorized Officer" means the Chairman of the Board, the Chief
Executive Officer, the President, any Vice Chairman of the Board, the Chief
Financial Officer, any Executive Vice President or Senior Vice President, the
Treasurer, the Secretary, the Controller, any Assistant Controller, any
Assistant Treasurer or any Assistant Secretary of the Company.

        "Bank" means (i) any institution organized under the laws of the United
States, any State of the United States, the District of Columbia, any territory
of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands
which (a) accepts deposits that the depositor has a legal right to withdraw on
demand, and (b) engages in the business of making commercial loans and (ii) any
trust company organized under any of the foregoing laws.

        "Bearer Security" means any Security in the form established pursuant to
Section 2.02 which is payable to bearer.

        "Board of Directors" means either the board of directors of the Company,
any duly authorized committee of that board or the Chief Financial Officer, any
Executive Vice President or Senior Vice President of the Company duly authorized
by the Board of Directors of the Company to take a specified action or make a
specified determination.

        "Board Resolution" means a resolution duly adopted by the Board of
Directors.

        "Business Day" means any day other than a Saturday or Sunday that is
neither a legal holiday nor a day on which banking institutions are authorized
or obligated by law, regulation or executive order to close in The City of New
York or Wilmington, Delaware or (i) with respect to Securities denominated in a
Foreign Currency, in the city specified in the Board Resolution

                                        2



pursuant to Section 3.01 or (ii) with respect to Securities which will bear
interest based on a specified percentage of London interbank offered quotations,
a day which is also a day on which banks in London, England are open for
business (including dealings in foreign exchange and foreign currency deposits).

        "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or if at any time after the execution and delivery of this instrument
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties on such
date.

        "Common Depository" has the meaning specified in Section 3.04.

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

        "Company Request" or "Company Order" mean, respectively, a written
request or order signed in the name of the Company by any two Authorized
Officers and delivered to the Trustee.

        "Components", with respect to a composite currency, means the currency
amounts that are components of such composite currency on the conversion date
with respect to such composite currency. After such conversion date if the
official unit of any component currency is altered by way of combination or
subdivision, the number of units of such currency in the Component shall be
proportionately divided or multiplied. After such conversion date if two or more
component currencies are consolidated into a single currency, the amounts of
those currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of such consolidated component
currencies expressed in such single currency, and such amount shall thereafter
be a Component. If after such conversion date any component currency shall be
divided into two or more currencies, the amount of such currency as a Component
shall be replaced by amounts of such two or more currencies, each of which shall
be equal to the amount of such former component currency divided by the number
of currencies into which such component currency was divided, and such amounts
shall thereafter be Components.

        "Constituent Bank" means a Subsidiary which is a Bank.

        "Corporate Trust Office" means the corporate trust office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office, at the date of the execution of this
Agreement, is located at 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.

        "Corporation" includes corporations, associations, companies and
business trusts.

        "Coupon" means any interest coupon appertaining to a Bearer Security.

        "Defaulted Interest" has the meaning specified in Section 3.07.

                                        3



        "Euro" means the single currency of participating member states which
was introduced on January 1, 1999 at the commencement of the third stage of
European economic and monetary union pursuant to the Treaty establishing the
European Communities as amended by the Treaty on European Union..

        "Event of Default" has the meaning specified in Section 5.01.

        "Exchange Date" has the meaning specified in Section 3.04.

        "Exchange Rate" means (a) if pursuant to Section 3.12(a) payment is to
be made in U.S. dollars with respect to a Security denominated in a Foreign
Currency, the highest firm bid quotation for U.S. dollars received by the
Exchange Rate Agent at approximately 11:00 A.M., New York City time on the
second Business Day preceding the applicable payment date (or, if no such rates
are quoted on such date, the last date on which such rates were quoted), from
three recognized foreign exchange dealers in The City of New York selected by
the Exchange Rate Agent and approved by the Company (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on
such payment date, of the aggregate amount of the Foreign Currency payable on
such payment date in respect of all Securities denominated in such Foreign
Currency and (b) if an Exchange Rate is to be computed for purposes of any
provisions other than Section 3.12(a), the rate determined pursuant to the
foregoing clause (a) on such date and at such time as may be specified in the
relevant provision.

        In the case of clause (a) above, if no such bid quotations are
available, payments pursuant to Section 3.12(a) will be made in the applicable
Foreign Currency, unless such Foreign Currency is unavailable due to the
imposition of exchange controls (or, in the case of a composite currency, such
currency ceases to be used for the purposes for which it was established as
provided in Section 3.12(d)) or other circumstances beyond the control of the
Company, in which case the Company will be entitled to make payments in U.S.
dollars on the basis of the Market Exchange Rate for such Foreign Currency.

        If for any reason any of the foregoing rates are not available with
respect to one or more Foreign Currencies for which an Exchange Rate is
required, the Company shall use the most recently available quotation of the
Federal Reserve Bank of New York, or quotations from one or more commercial
banks in The City of New York or in the country of issue of the Foreign Currency
in question, or such other quotations as the Company, in each case, shall deem
appropriate; provided, however, that if there is more than one market for
dealing in any Foreign Currency by reason of foreign exchange regulations or
otherwise, the market to be used for such quotations shall be the largest market
upon which a nonresident issuer of securities designated in such Foreign
Currency would purchase such Foreign Currency in order to make payments in
respect of such securities.

        "Exchange Rate Agent" means the New York clearing house bank designated
by the Company to act as such for any series of Securities for that series (with
notice to the Trustee for that series), or any successor thereto, and may be the
Trustee for that series.

        "Exchange Rate Officer's Certificate", with respect to any date for the
payment of principal of (and premium, if any) and interest on any series of
Securities, means a certificate

                                        4



signed by an officer of the Exchange Rate Agent and delivered to the Company and
to the Trustee, setting forth (i) the applicable Market Exchange Rate or
Exchange Rate and (ii) the U.S. dollar or Foreign Currency amount of principal
(and premium, if any) and interest payable with respect to a Security of any
series on the basis of the Market Exchange Rate or Exchange Rate, as the case
may be (on an aggregate basis and on the basis of a Security having the lowest
denomination principal amount pursuant to Section 3.02 in the relevant
currency).

        "Foreign Currency" means a currency issued by the government of any
country (other than a currency of the United States of America) or any composite
currency based on the aggregate value of currencies of any group of countries.

        "Foreign Government Obligations" has the meaning specified in Section
4.03.

        "Holder", when used with respect to any Security, means a
Securityholder.

        "Indenture" means with respect to each series of Securities for which a
Person is acting as Trustee, this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of any particular series of Securities for which
such Person is Trustee established as contemplated by Section 3.01 exclusive,
however, of any provisions or terms which relate solely to other series of
Securities for which such Person is not Trustee, regardless of when such terms
or provisions were adopted, and exclusive of any provisions or terms adopted by
means of one or more indentures supplemental hereto executed and delivered after
such Person had become such Trustee but to which such Person, as such Trustee,
was not a party.

        "Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

        "Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of an installment of interest on such
Security.

        "Judgment Currency" has the meaning specified in Section 1.15.

        "Market Exchange Rate" means (a) if pursuant to Section 3.12(d), payment
is to be made in U.S. dollars with respect to a Security denominated in a
Foreign Currency (other than a composite currency), the noon buying rate in The
City of New York for cable transfers of such Foreign Currency as certified by
the Federal Reserve Bank of New York on the second Business Day preceding the
applicable payment date and (b) if pursuant to Section 3.12(d) payment is to be
made in U.S. dollars with respect to a Security denominated in a composite
currency, for each Component of such composite currency, the Market Exchange
Rate determined pursuant to the foregoing clause (a) on the second Business Day
preceding the applicable payment date.

        In the event a Market Exchange Rate as described in clause (a) or (b)
above is not available, the Company will be entitled to make payments in U.S.
dollars pursuant to Section 3.12(d) on the basis of the most recently available
Market Exchange Rate for such Foreign Currency or each Component of such
composite currency, as the case may be.

                                        5



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

        "Maturity Consideration" means securities, which may be issued by the
Company or another Person, or a combination of cash, such securities and/or
other property that may be delivered to Holders of Securities of any series to
satisfy the Company's obligations with regard to payment upon Maturity, or upon
any redemption or required repurchase or in connection with any exchange
provisions, or any interest payment.

        "New York Banking Day" has the meaning specified in Section 1.15.

        "Officers' Certificate" means a certificate signed by two Authorized
Officers, one of whom must be the principal financial officer, and delivered to
the Trustee. Each such certificate shall contain the statements set forth in
Section 1.02.

        "Opinion of Counsel" means a written opinion of counsel, who may (except
as otherwise expressly provided in this Indenture) be an employee of the
Company, and who shall be acceptable to the Trustee.

        "Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.02.

        "Outstanding", when used with respect to a Security or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:

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

        (ii)    such Securities for whose payment or redemption money in the
                necessary amount has been theretofore deposited with the Trustee
                for such series or any Paying Agent in trust for the Holders of
                such Securities; provided that, if such Securities are to be
                redeemed, notice of such redemption has been duly given pursuant
                to this Indenture or provision therefor satisfactory to the
                Trustee has been made; and

        (iii)   such Securities which have been paid pursuant to Section 3.06 or
                in exchange for or in lieu of which other Securities have been
                authenticated and delivered pursuant to this Indenture, other
                than any such Securities in respect of which there shall have
                been presented to the Trustee proof satisfactory to it that such
                Securities are held by a protected purchaser (within the meaning
                of Article 8 of the Uniform Commercial Code) in whose hands such
                Securities are valid obligations of the Company;

        provided, however, that in determining whether the Holders of the
requisite principal amount of such Securities Outstanding have given any
request, demand, authorization,

                                        6



direction, notice, consent or waiver hereunder, the principal amount of Original
Issue Discount Securities that shall be deemed to be Outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the Maturity thereof pursuant to Section 5.02 and Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which are registered in the Security Register in the
name of the Company, any obligor stated to be so obligated on such Securities or
any Affiliate of the Company or such obligor which is listed as such on an
Officers' Certificate delivered to the Trustee for that series shall be
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor. The Trustee shall be entitled
to rely upon an Officers' Certificate as conclusive evidence regarding the
ownership or pledge of Securities by the Company or any Affiliate of the
Company.

        "Paying Agent" means with respect to any series of Securities, any
Person authorized by the Company to pay or deliver the principal of (and
premium, if any), Maturity Consideration or interest on, any Securities of that
series on behalf of the Company.

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

        "Place of Payment", when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
10.02, the principal of (and premium, if any), Maturity Consideration and
interest on the Securities of that series are payable or deliverable as
specified in accordance with Section 3.01.

        "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

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

        "Redemption Price", when used with respect to any Security to be
redeemed, means the price or Maturity Consideration specified in such Security
at which it is to be redeemed pursuant to this Indenture.

        "Registered Security" means any Security in the form established
pursuant to Section 2.01 which is registered in the Security Register.

                                        7



        "Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date, if any, specified in such Security as the
"Regular Record Date".

        "Required Currency" means the currency in which principal of (and
premium, if any), Maturity Consideration and interest on a Security is payable
pursuant to Section 3.12.

        "Responsible Officer", means, when used with respect to the Trustee, an
officer within the corporate trust department who has direct responsibility for
the administration of this Indenture and any other officer of the Trustee to
whom corporate trust matters are referred because of his knowledge of and
familiarity with the particular subject.

        "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

        "Securityholder" means, in the case of a Registered Security, the Person
in whose name the Security is registered in the Security Register and, in the
case of a Bearer Security (or any temporary global Security in bearer form), the
bearer thereof and, when used with respect to any coupon, the bearer thereof.

        "Security Register", "Security Registrar" and "Co-Security Registrar"
have the respective meanings specified in Section 3.05.

        "Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 3.07) means a date fixed by the Trustee pursuant to Section
3.07.

        "Specified Currency" means the currency in which the Securities of any
series are denominated.

        "Stated Maturity", when used with respect to any Security, or any
installment of principal, Maturity Consideration thereof or interest thereon,
means the date specified in such Security or a coupon representing such
installment of interest as the fixed date on which the principal or Maturity
Consideration of such Security, or such installment of principal, Maturity
Consideration or interest, is due and payable or deliverable.

        "Subsidiary" means a Corporation more than 50% of the Voting Stock of
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries or by the Company and one or more other Subsidiaries.

        "Trustee" means the Person named as "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to the securities of that series.

        "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, as in force at the date as of
which this instrument was executed, except as provided in Section 9.05.

                                        8



        "United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.

        "United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien subsidiary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

        "U.S. Government Obligations" has the meaning specified in Section 4.03.

        "Vice President", when used with respect to the Company or a Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".

        "Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the Board of
Directors, managers or trustees of such Corporation (irrespective of whether or
not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

        Section 1.02    Compliance Certificates and Opinions.

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

        Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than annual certificates
provided pursuant to Section 10.10) shall include:

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

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

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

                                        9



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

        Section 1.03    Form of Documents Delivered to Trustee.

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

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

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

        Section 1.04    Acts of Securityholders.

        (a)     Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Securityholders of any series 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 herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the 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 Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

        (b)     The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute sufficient proof of the authority
of the Person

                                       10



executing the same. 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 provided
in any other manner which the Trustee deems sufficient.

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

        (d)     The principal amount and serial numbers of Bearer Securities
held by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such
Bearer Security, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding.

        (e)     The fact and date of execution of any such instrument or
writing, the authority of the Person executing the same and the principal amount
and serial numbers of Bearer Securities held by the Person so executing such
instrument or writing and the date of holding the same may also be proved in any
other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.

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

        (g)     For purposes of determining the principal amount of Outstanding
Securities of any series, or if such Outstanding Securities are not payable at
Maturity for a fixed principal amount, the issue price of Outstanding Securities
of any series, the Securityholders of which are required, requested or permitted
to give any request, demand, authorization, direction, notice, consent, waiver
or take any other Act under the Indenture, each Security denominated in a
Foreign Currency shall be deemed to have a principal amount or issue price
determined by converting the principal amount or issue price of such Security in
the currency or currencies in which such Security is denominated into U.S.
dollars at the Exchange Rate(s) as of 9:00 A.M. New York City time as determined
by an Exchange Rate Agent (as evidenced by a certificate of such Exchange Rate
Agent) on the date such Act is delivered to the Trustee pursuant to Section
1.04(a). Any such determination by the Company or an Exchange Rate Agent shall
be conclusive and binding on the Holders and the Trustee for such series, and

                                       11



neither the Company nor such Exchange Rate Agent shall be liable therefor in the
absence of bad faith.

        (h)     The Company may, but shall not be obligated to, set a record
date for purposes of determining the identity of Holders entitled to vote or
consent to any action by vote or consent authorized or permitted under this
Indenture. If a record date is fixed, those persons who were Holders of
Securities at such record date (or their duly designated proxies), and only
those persons, shall be entitled to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date. No such vote or consent shall be
valid or effective for more than 120 days after such record date.

        Section 1.05    Notices, etc., to Trustee and Company.

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

                        (1)     the Trustee by any Securityholder or by the
                Company shall be sufficient for every purpose hereunder if made,
                given, delivered or filed in writing to or with the Trustee and
                received at its Corporate Trust Office; or

                        (2)     the Company by any Securityholder or the Trustee
                shall be sufficient for every purpose hereunder (unless
                otherwise herein expressly provided) if in writing and mailed,
                first-class postage prepaid, to the Company addressed to the
                attention of its Secretary at the address of its principal
                office specified in the first paragraph of this Indenture, or at
                any other address previously furnished in writing to the Trustee
                by the Company.

        Section 1.06    Notice to Securityholders; Waiver.

        Where this Indenture or any Security provides for notice to Holders of
any series of Securities of any event:

                        (1)     such notice shall be sufficiently given (unless
                otherwise herein, or in such Security, expressly provided) if in
                writing and mailed, first-class postage prepaid, to each Holder
                of a Registered Security affected by such event, at his address
                as it appears in the Security Register, not later than the
                latest date, and not earlier than the earliest date, prescribed
                for the giving of such notice;

                        (2)     such notice shall be sufficiently given to
                Holders of Bearer Securities if published in an Authorized
                Newspaper in The City of New York and, if the Securities of such
                series are then listed on The International Stock Exchange of
                the United Kingdom and the Republic of Ireland Limited and such
                stock exchange shall so require, in London and, if the Security
                of such series are then listed on the Luxembourg Stock Exchange
                and such stock exchange shall so require, in Luxembourg and, if
                the Security of such series are then

                                       12



                listed on any other stock exchange and such stock exchange shall
                so require, in any other required city outside the United States
                or, if not practicable, elsewhere in Europe on a Business Day at
                least twice, the first such publication to be not earlier than
                the earliest date, and not later than the latest date,
                prescribed for the giving of such notice; it being understood
                that the Company shall notify the Trustee of any of the
                foregoing requirements a reasonable amount of time prior to the
                date on which such notice must be given (but in no event less
                than five Business Days).

        In case by reason of the suspension of regular mail service in the
applicable country or countries or by reason of any other case it shall be
impracticable to give such notice to Holders of Registered Securities by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. In any case
where notice to Holders of Registered Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Registered Security shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice by publication to Holders of Bearer Securities given as provided
above.

        In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.

        Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Such waivers of notice by Securityholders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

        Section 1.07    Language of Notices, Etc.

        Any request, demand, authorization, direction, notice, consent, or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication, as may be specified in a form of Security or, in the
absence of such specification, as directed in writing by the Company.

        Section 1.08    Conflict with Trust Indenture Act.

        If and to the extent that any provision hereof limits, qualifies or
conflicts with the duties imposed by any of Section 310 to 317, inclusive, of
the Trust Indenture Act through operation of Section 318(c) thereof, such
imposed duties shall control.

                                       13



        Section 1.09    Effect of Headings and Table of Contents.

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

        Section 1.10    Successors and Assigns.

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

        Section 1.11    Separability Clause.

        In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

        Section 1.12    Benefits of Indenture.

        Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

        Section 1.13    Governing Law.

        This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles thereof.

        Section 1.14    Legal Holidays.

        In any case where any Interest Payment Date, Stated Maturity or
Redemption Date of any Security or any date on which any Defaulted Interest is
proposed to be paid or delivered shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of the Securities or this
Indenture) payment or delivery of the principal of (and premium, if any),
Maturity Consideration or interest on any Securities need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day, or such other Business Day as may be specified in an Officers' Certificate
delivered to the appropriate Trustee pursuant to Section 3.01 hereof, at such
Place of Payment with the same force and effect as if made on the Interest
Payment Date, Stated Maturity or Redemption Date or on the date on which
Defaulted Interest is proposed to be paid or delivered, and, if such payment or
delivery is made, no interest shall accrue on such payment or delivery for the
period from and after any such Interest Payment Date, Stated Maturity,
Redemption Date or on the date on which Defaulted Interest is proposed to be
paid or delivered, as the case may be.

        Section 1.15    Judgment Currency; Payment to be in Proper Currency.

        Each reference in any Security to any currency shall be of the essence.
Subject to Section 3.12(d), the Company agrees, to the fullest extent that it
may effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert

                                       14



the sum or amount of Maturity Consideration due or payable in respect of the
principal of (and premium, if any), Maturity Consideration or interest on the
Securities of any series in a Specified Currency into a currency in which a
judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the Exchange Rate (as determined by the Exchange Rate Agent) as of
11:00 A.M. New York City time on the New York Banking Day immediately preceding
that on which final unappealable judgment is given and (b) its obligations to
make any payment or delivery of principal of (and premium, if any), Maturity
Consideration and interest on any Security (i) shall not be discharged or
satisfied by any tender by the Company, or recovery by the Trustee, either
pursuant to any judgment (whether or not entered in accordance with subsection
(a) above) or otherwise, in any currency other than the Required Currency,
except to the extent that any such tender or recovery shall result in the
Trustee timely holding the full amount of the Required Currency then due and
payable in respect of such payments, (ii) shall be enforceable as an alternative
or additional cause of action for the purpose of recovering, in the Required
Currency, the amount, if any, by which such timely holding shall fall short of
the full amount of the Required Currency so expressed to be then due and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close. Except as permitted under Section
3.12(d), if any such tender or recovery is in a currency other than the Required
Currency, the Trustee for the series may take such actions as it considers
appropriate to exchange such currency for the Required Currency; provided,
however, that the Trustee shall have no obligation to make any payment in any
currency other than the currency tendered to or recovered by such Trustee. The
costs and risks of any such exchange, including without limitation the risks of
delay and exchange rate fluctuation, shall be borne by the Company, and the
Company shall remain fully liable for any shortfall or delinquency in the full
amount of the Required Currency then due and payable, and in no circumstances
shall the Trustee be liable therefor. The Company hereby waives any defense of
payment based upon any such tender or recovery which is not in the Required
Currency, or which, when exchanged for the Required Currency by the Trustee, is
less than the full amount of the Required Currency then due and payable.

        Section 1.16    Moneys of Different Currencies to be Segregated.

        The Trustee shall, to the extent required by law, segregate all moneys,
funds and accounts held by the Trustee hereunder in one currency from any
moneys, funds and accounts in any other currencies, notwithstanding any
provision herein which would otherwise permit the Trustee to commingle such
moneys, funds and accounts.

                                  ARTICLE II.

                                 SECURITY FORMS

        Section 2.01    Forms Generally.

        The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions,

                                       15



substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities. If temporary Securities of any
series are issued in global form as permitted by Section 3.04, the form thereof
also shall be established as provided in the preceding sentence.

        The Trustee's certificate of authentication shall be in substantially
the form set forth in this Article.

        Unless otherwise provided as contemplated by Section 3.01 with respect
to any series of Securities, the Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by Section 3.01,
the Securities of a series shall be issuable solely in bearer form, or in both
registered and bearer form. Unless otherwise specified as contemplated by
Section 3.01, Securities in bearer form shall have interest coupons attached.

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

        Section 2.02    Form of Securities.

        Each Security shall be in one of the forms approved from time to time by
or pursuant to a Board Resolution. Upon or prior to the delivery of a Security
in any such form to the Trustee for authentication, the Company shall deliver to
the Trustee the following:

                        (1)     the Board Resolution by or pursuant to which
                such form of Security has been approved, certified by the
                Secretary or an Assistant Secretary of the Company;

                        (2)     the Officers' Certificate required by Section
                3.01 of this Indenture;

                        (3)     the Company Order required by Section 3.03 of
                this Indenture; and

                        (4)     the Opinion of Counsel required by Section 3.03
                of this Indenture.

        Section 2.03    Form of Trustee's Certificate of Authentication.

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                                       16



        This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.

                                                WILMINGTON TRUST COMPANY,
                                                      as Trustee

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

                                  ARTICLE III.

                                 THE SECURITIES

        Section 3.01    Title and Terms.

        The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued up
to the aggregate principal amount of Securities from time to time authorized by
or pursuant to a Board Resolution.

        The Securities may be issued in one or more series. All Securities of
each series issued under this Indenture shall in all respects be equally and
ratably entitled to the benefits hereof with respect to such series without
preference, priority or distinction on account of the actual time or times of
the authentication and delivery or Maturity of the Securities of such series.
There shall be established in or pursuant to a Board Resolution, and set forth
in an Officers' Certificate, reasonably acceptable to the Trustee, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

                        (1)     the title of the Securities, including CUSIP
                numbers, of the series (which shall distinguish the Securities
                of the series from all other Securities);

                        (2)     the Trustee for the Securities of the series
                (which Trustee shall be the Trustee named herein or a successor
                Trustee appointed in accordance with the terms of this
                Indenture);

                        (3)     any limit upon the aggregate principal amount of
                the Securities of the series which may be authenticated and
                delivered under this Indenture (except for securities
                authenticated and delivered upon registration of transfer of, or
                in exchange for, or in lieu of, other Securities of the series
                pursuant to this Article Three or Sections 9.06 or 11.07);

                        (4)     the date or dates on which the principal or
                Maturity Consideration of the Securities of the series is
                payable or deliverable;

                        (5)     the rate or rates, or the method to be used in
                ascertaining the rate or rates, at which the Securities of the
                series shall bear interest, if any, the date or dates from which
                such interest shall accrue, the Interest Payment Dates on

                                       17



                which such interest shall be payable or deliverable and the
                Regular Record Date for the interest payable or deliverable on
                any Interest Payment Date;

                        (6)     the place or places where, subject to the
                provisions of Section 10.02, the principal of (and premium, if
                any), Maturity Consideration and interest, if any, on Securities
                of the series shall be payable or deliverable;

                        (7)     the office or offices or agency where the
                Registered Securities may be presented for registration of
                transfer or exchange and the place or places where notices and
                demands to or upon the Company in respect of the Securities of
                such series may be made;

                        (8)     the period or periods within which, the price,
                prices or Maturity Consideration at which and the terms and
                conditions upon which Securities of the series may be redeemed,
                in whole or in part, at the option of the Company;

                        (9)     the obligation, if any, of the Company to redeem
                or purchase Securities of the series pursuant to any sinking
                fund or analogous provisions or at the option of a Holder
                thereof and the period or periods within which, the price or
                prices at which and the terms and conditions upon which
                Securities of such series shall be redeemed or purchased, in
                whole or in part, pursuant to such obligation;

                        (10)    the denominations in which Securities of the
                series shall be issuable;

                        (11)    if other than the principal amount thereof, the
                portion of the principal amount of Securities of the series
                which shall be payable or deliverable upon declaration of
                acceleration of the Maturity thereof pursuant to Section 5.02;

                        (12)    (A) the currency of denomination of the
                Securities of the series, which may be in U.S. dollars or any
                Foreign Currency, (B) if such currency of denomination of such
                series is a composite currency other than the Euro, the agency
                or organization, if any, responsible for overseeing such
                composite currency and (C) if such Securities are denominated in
                a Foreign Currency, the financial center relative to such
                Foreign Currency;

                        (13)    the designation of the currency or currencies in
                which payment of the principal of (and premium, if any) and
                interest on the Securities of the series will be made (which
                shall be either U.S. dollars or the Foreign Currency in which
                such Security is denominated), and if in U.S. dollars on a
                Security denominated in a Foreign Currency, whether the Holders
                thereof may elect to have such payments made in such Foreign
                Currency;

                        (14)    if the Securities of the series are to be
                denominated in a Foreign Currency, the designation of an
                Exchange Rate Agent for purposes of determining the amounts
                payable or deliverable with respect to such Securities

                                       18



                in U.S. dollars or a Foreign Currency and exchanging a Foreign
                Currency into U.S. dollars or U.S. dollars into a Foreign
                Currency, as the case may be;

                        (15)    if the amount of payments of principal of (and
                premium, if any), Maturity Consideration or interest, if any, on
                the Securities of the series may be determined with reference to
                an index based on a coin or currency other than that in which
                the Securities are stated to be payable or deliverable, the
                method or methods by which such amounts shall be determined;

                        (16)    the extent to which any of the Securities will
                be issuable in temporary or permanent global form, and the
                manner in which any interest payable or deliverable on a
                temporary or permanent global Security shall be paid or
                delivered;

                        (17)    any addition to or modification or deletion of
                any Event of Default or covenants of the Company with respect to
                the Securities of such series whether or not such Events of
                Default or covenants are consistent with the Events of Default
                or covenants set forth herein;

                        (18)    any covenant solely for the benefit of the
                Securities of the series;

                        (19)    the applicability of Section 4.03 of this
                Indenture to the Securities of the series;

                        (20)    the appointment of any Paying Agent or Agents
                for the Securities of such series;

                        (21)    whether, and the terms and conditions relating
                to when the Company may satisfy all or part of its obligations
                with regard to payment or delivery upon Maturity, or any
                redemption or required repurchase or in connection with any
                exchange provisions, or any interest payment, by paying or
                delivering Maturity Consideration to the Holders of the
                Securities;

                        (22)    any restrictions on transfer of the Securities
                of the series;

                        (23)    any legends to be placed on the Securities of
                the series;

                        (24)    whether the Securities of the series may be
                issued in registered form, bearer form or a combination;

                        (25)    whether Securities shall vote and consent
                together with other Securities as a single class and/or shall
                constitute a single series with other Securities;

                        (26)    whether the Securities are subject to the
                additional provisions relating to book-entry securities and
                transfers in certain situations set forth in Annex A attached
                hereto; and

                                       19



                        (27)    any other terms of the series (which terms shall
                not be inconsistent with the provisions of this Indenture).

        All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officers' Certificate or in any such
indenture supplemental hereto.

        At the option of the Company, interest on the Securities of any series
that bears interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register.

        If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee for such series at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.

        Section 3.02    Denominations.

        The Securities of each series shall be issuable in such form and
denominations as shall be specified as contemplated by Section 3.01. In the
absence of any specification with respect to the Securities of any series, the
Registered Securities of such series shall be issuable only as Securities
without coupons in minimum denominations of $1,000 and any integral multiple of
$1,000 in excess thereof and the Bearer Securities of each series, if any, shall
be issuable with coupons and in denominations of $10,000 and $50,000.

        Section 3.03    Execution, Authentication, Delivery and Dating.

        The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, one of its
Vice Chairmen, the Chief Financial Officer or one of its Executive Vice
Presidents or Senior Vice Presidents or Secretary. The signature of any or all
of these officers on the Securities may be manual or facsimile. Coupons shall
bear the facsimile signature of the Company's Chairman of the Board, its Chief
Executive Officer, its President, a Vice Chairman of the Board, its Chief
Financial Officer, one of its Executive Vice Presidents or Senior Vice
Presidents or Secretary or the Treasurer.

        Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.

        At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities and such other documents as the Trustee may
reasonably request, and such Trustee in accordance with the Company Order and
subject to the provisions hereof shall authenticate and deliver such Securities
as provided in this Indenture and not otherwise; provided, however, that, in
connection with its original issuance, no Bearer

                                       20



Security shall be mailed or otherwise delivered to any location in the United
States; and provided, further, that a definitive Bearer Security may be
delivered in connection with its original issuance only if the Person entitled
to receive such Bearer Security shall have delivered to the Trustee, or such
other Person as shall be specified in a temporary global Security delivered
pursuant to Section 3.04, a certificate in the form required by Section 3.11(1).

        In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon, an Opinion of Counsel complying with Section
1.02 and stating that:

        (a)     the form of such securities has been established in conformity
with the provisions of this Indenture;

        (b)     the terms of such Securities have been established in conformity
with the provisions of this Indenture;

        (c)     all conditions precedent to the authentication and delivery of
such Securities have been complied with and that such Securities, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or affecting the
enforcement of creditors' rights and to general principles of equity; and

        (d)     such other matters as the Trustee may reasonably request.

        The Trustee shall not be required to authenticate such Securities if the
issuance of such Securities pursuant to this Indenture will adversely affect
such Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to such
Trustee.

        Notwithstanding the generality of the foregoing, the Trustee will not be
required to authenticate Securities denominated in a Foreign Currency if the
Trustee reasonably believes that it would be unable to perform its duties with
respect to such Securities.

        Each Registered Security shall be dated the date of its authentication;
and unless otherwise specified as contemplated by Section 3.01, each Bearer
Security and any temporary global Security referred to in Section 3.04 shall be
dated as of the date of issuance of such Security.

        No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver

                                       21



such Security to the Trustee for cancellation as provided in Section 3.09
together with a written statement (which need not comply with Section 1.02 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued or sold by the Company, for all purposes of this Indenture,
such Security shall be deemed never to have been authenticated and delivered
under this Indenture and shall never be entitled to the benefits of this
Indenture.

        Section 3.04    Temporary Securities.

        Pending the preparation of definitive Securities of any series, the
Company may execute, and upon delivery of a Company Order the Trustee for such
series shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued in registered form or, if authorized, in bearer form with
one or more coupons or without coupons and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities. In
the case of any series which may be issuable as Bearer Securities, such
temporary Securities may be in global form, representing such of the Outstanding
Securities of such series as shall be specified therein.

        Except in the case of temporary Securities in global form, each of which
shall be exchanged in accordance with the provisions of the following paragraph,
if temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities of such
series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of such
series of authorized denominations provided, however, that no definitive Bearer
Security shall be delivered in exchange for a temporary Registered Security; and
provided, further, that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in Section 3.03. Until so exchanged the, temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.

        If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided in such
temporary global Security, be delivered to the London office of a depository or
common depository (the "Common Depository"), as directed by the Company, for the
benefit of the operator of the Euroclear System ("Euroclear") and Clearstream
Banking, societe anonyme ("Clearstream"), for credit to the respective accounts
of the beneficial owners of such Securities (or to such other accounts as they
may direct). Upon receipt of a Company Order, the Trustee or any Authenticating
Agent shall authenticate such temporary global Security and make such indication
to reflect the initial principal amount, or an increase in the principal amount,
of Outstanding Securities represented thereby. Until such initial
authentication, such temporary global Security shall not evidence any obligation
of the Company. Such temporary global Security shall at any time represent the
aggregate principal

                                       22



amount of Outstanding Securities theretofore indicated thereon as provided
above, subject to reduction to reflect exchanges as described below.

        Unless otherwise specified in such temporary global Security, and
subject to the second proviso in the following paragraph, the interest of a
beneficial owner of Securities in a series in a temporary global Security shall
be exchanged for definitive Securities of such series and of like tenor
following the Exchange Date when the account holder instructs Euroclear or
Clearstream, as the case may be, to request such exchange on his behalf and
delivers to Euroclear or Clearstream, as the case may be, a certificate in the
form required by Section 3.12(1), dated no earlier than fifteen days prior the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and Clearstream, the Trustee, any Authenticating Agent appointed
for such series of Securities and each Paying Agent. Unless otherwise specified
in such temporary global Security, any such exchange shall be made free of
charge to the beneficial owners of such temporary global Security, except that
the Company may charge any Person receiving definitive Securities for the cost
of insurance, postage, transportation and the like in the event that such Person
does not take delivery of such definitive Securities in person at the offices of
Euroclear or Clearstream.

        Without unnecessary delay but in any event not later than one Business
Day prior to the date specified in, or determined pursuant to the terms of, any
such temporary global Security as the "Exchange Date" (the "Exchange Date"), the
Company shall deliver to the Trustee, or, if the Trustee appoints an
Authenticating Agent pursuant to Section 6.14, to any such Authenticating Agent,
definitive Securities in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. Unless
otherwise specified as contemplated by Section 3.01, such definitive Securities
shall be in the form of Bearer Securities or Registered Securities, or any
combination thereof, as may be specified by the Company to the Trustee or any
such Authenticating Agent, as may be appropriate. On or after the Exchange Date,
such temporary global Security shall be surrendered by the Common Depository to
the Trustee or any such Authenticating Agent, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities without charge to the Common Depository and the Trustee or any such
Authenticating Agent shall authenticate and deliver, in exchange for each
portion of such temporary global Securities, an equal aggregate principal amount
of definitive Securities of the same series, of authorized denominations and of
like tenor as the portion of such temporary global Security to be exchanged,
which, except as otherwise specified as contemplated by Section 3.01, shall be
in the form of Bearer Securities or Registered Securities, or any combination
thereof, as shall be specified by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depository, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by Clearstream, as to the portion of such temporary
global Security held for its account then to be exchanged, each in the form
required by Section 3.11(2); and provided, further, that a definitive Bearer
Security shall be delivered in exchange for a portion of a temporary global
Security only in compliance with the conditions set forth in Section 3.03.

                                       23



        Upon any exchange of a portion of any such temporary global Security,
the Trustee or any such Authenticating Agent or the Common Depository, as the
case may be, shall indicate upon such temporary global Security, the amount of
such exchange to reflect the reduction of the principal amount evidenced
thereby, whereupon its remaining principal amount shall be reduced for all
purposes by the amount so exchanged. Until so exchanged in full, such temporary
global Security shall in all respects be entitled to the same benefits under
this Indenture as definitive Securities of such series authenticated and
delivered hereunder, except that, unless otherwise specified as contemplated by
Section 3.01, interest payable on such temporary global Security on an Interest
Payment Date for Securities of such series occurring prior to the applicable
Exchange Date shall be payable, without interest, to Euroclear and Clearstream
on or after such Interest Payment Date upon delivery by Euroclear and
Clearstream to the Trustee or such Authenticating Agent, as the case may be, of
a certificate or certificates in the form required by Section 3.11(3), for
credit on or after such Interest Payment Date to the respective accounts of the
Persons who are the beneficial owners of such temporary global Security on such
Interest Payment Date and who have each delivered to Euroclear or Clearstream,
as the case may be, a certificate in the form required by Section 3.11(4).

        Section 3.05    Registration, Registration of Transfer and Exchange.

        With respect to Registered Securities, the Company shall keep or cause
to be kept at the office of the Security Registrar designated pursuant to this
Section 3.05 or Section 10.02 a register (being the combined register of the
Security Registrar and all Co-Security Registrars and herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and the registration of transfers of Securities and
the Company shall appoint a Security Registrar, and any Co-Security Registrar as
may be appropriate, to keep the Security Register. The Trustee is hereby
initially appointed Security Registrar with respect to the series of Securities
for which it is acting as Trustee. Such Security Register shall be in written
form or in any other form capable of being converted into written form within a
reasonable time. At all reasonable times the information contained in such
Security Register shall be available for inspection by the Trustee at the office
of the Security Registrar. In the event that any Registered Securities issued
hereunder have Wilmington, Delaware as a Place of Payment, the Company shall
appoint either a Security Registrar or Co-Security Registrar located in
Wilmington, Delaware.

        Upon surrender for registration of transfer by the Securityholder of any
Registered Security of any series at the office or agency of the Company in a
Place of Payment, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and Stated Maturity.

        At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series, of any authorized
denominations and of like aggregate principal amount and Stated Maturity, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the
Securityholder making the exchange is entitled to receive.

                                       24



        Registered Securities may not be exchanged for Bearer Securities. Bearer
Securities may not be exchanged for Bearer Securities of other authorized
denominations.

        At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default appertaining thereto. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment from the
Company; provided, however, that interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency of a Paying Agent located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related date for
payment of Defaulted Interest, such Bearer Security shall be surrendered without
the coupon relating to such Interest Payment Date or proposed date for payment,
as the case may be.

        Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.

        Notwithstanding the foregoing, except as otherwise provided in or
pursuant to this Indenture, any global Security shall be exchangeable for
definitive Securities only if (i) the depositary notifies the Company that it is
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days of the date the
Company is so informed in writing, (ii) the depository ceases to be a "clearing
agency" under the Securities Exchange Act of 1934, as amended, (iii) the
Company, at its option, executes and delivers to the Trustee a Company Order to
the effect that such global Security shall be so exchangeable into definitive
securities, or (iv) an Event of Default has occurred and is continuing with
respect to the Securities. If the beneficial owners of interests in a global
Security are entitled to exchange such interests for definitive Securities, then
without unnecessary delay but in any event not later than the earliest date on
which such interests may be so exchanged, the Company shall deliver to the
Trustee definitive Securities in such form and denominations as are required by
or pursuant to this Indenture, and of the same series, containing identical
terms and in aggregate principal amount equal to the principal amount of such
global Security, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, such global Security shall be surrendered
from time to time by the depositary as shall be specified in the Company Order
with respect thereto, and in accordance with instructions

                                       25



given to the Trustee and the depositary (which instructions shall be in writing,
but need not be contained in or accompanied by an Officers' Certificate or be
accompanied by an opinion of Counsel but upon which the Trustee may conclusively
rely and shall be protected in acting upon in accordance with Section 6.03
hereof), as shall be specified in the Company order with respect thereto to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
in part, for definitive Securities as described above without charge. The
Trustee shall authenticate and make available for delivery, in exchange for each
portion of such surrendered global Security, a like aggregate principal amount
of definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such global Security to be exchanged; provided,
however, that no such exchanges may occur during a period beginning at the
opening of business 15 days before any selection of Securities of the same
series to be redeemed and ending on the relevant Redemption Date; and provided,
further, that (unless otherwise provided in or pursuant to this Indenture) no
Bearer Security delivered in exchange for a portion of a global Security shall
be mailed or otherwise delivered to any location in the United States. Promptly
following any such exchange in part, such global Security shall be returned by
the Trustee to the depositary in accordance with the instructions of the Company
referred to above. If a Registered Security is issued in exchange for any
portion of a global Security after the close of business at the office or agency
of such global Security where such exchange occurs on or after (i) any Regular
Record Date for such Security and before the opening of business at such office
or agency on the next Interest Payment Date, or (ii) any Special Record Date for
such Security and before the opening of business at such office or agency on the
related proposed date for payment of interest or Default Interest, as the case
may be, interest shall not be payable on such Interest Payment Date or proposed
date for payment, as the case may be, in respect of such Registered Security,
but shall be payable on such Interest Payment Date or proposed date for payment,
as the case may be, only to the Person to whom interest in respect of such
portion of such global Security shall be payable in accordance with the
provisions of this Indenture.

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

        Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Security Registrar or the
Co-Security Registrar for the series) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company, the Security
Registrar or the Co-Security Registrar for the series duly executed, by the
Holder thereof or his attorney duly authorized in writing.

        Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made to the Holder for any registration of
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Securities) require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.

        None of the Company, the Security Registrar nor any Co-Security
Registrar shall be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of

                                       26



redemption of Securities of that series selected for redemption under Section
11.03 and ending at the close of business on (A) if Securities of the series are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption of Registered Securities of such series so selected for
redemption, or (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer or exchange of any Securities so
selected for redemption in whole or in part.

        Section 3.06    Mutilated, Destroyed, Lost and Stolen Securities.

        If (i) any mutilated Security or Security with a mutilated coupon,
surrendered to the Trustee or the Security Registrar, or if the Company, the
Trustee and the Security Registrar receive evidence to their satisfaction of the
destruction, loss or theft of any Security or coupon, and (ii) there is
delivered to the Company, the Trustee and the Security Registrar such Security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company, the Trustee or the Security Registrar that
such Security has been acquired by a protected purchaser (within the meaning of
Article 8 of the Uniform Commercial Code), the Company shall execute and upon
its request the Trustee shall authenticate and deliver, in lieu of any such
mutilated, destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series and
Stated Maturity and of like tenor and principal amount, bearing a number not
contemporaneously outstanding and, if applicable, with coupons corresponding to
the coupons appertaining thereto.

        In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or deliver the
Maturity Consideration deliverable thereon; provided, however, that payment of
principal of (and premium, if any), Maturity Consideration and any interest on
Bearer Securities shall be payable only at an office or agency located outside
the United States, and, in the case of interest, unless otherwise specified as
contemplated by Section 3.01, only upon presentation and surrender of the
coupons appertaining thereto.

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

        Every new Security of any series, with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security or in
exchange for a Security with a destroyed, lost or stolen coupon, shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security and its coupons, if any, or the
destroyed, lost or stolen coupons shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of the same series and their
coupons, if any, duly issued hereunder.

                                       27



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

        Section 3.07    Payment of Interest; Interest Rights Preserved.

        Unless otherwise provided, as contemplated by Section 3.01, interest on
any Registered Security which is payable or deliverable, and is punctually paid,
delivered or duly provided for, on any Interest Payment Date shall unless
otherwise provided in such Security be paid or delivered to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business of the Regular Record Date for such interest, provided,
however, that in the case of a Registered Security originally issued between a
Regular Record Date and the Interest Payment Date or on an Interest Payment Date
relating to such Regular Record Date, interest for the period beginning on the
date of issue and ending on such Interest Payment Date shall be paid or
delivered on the next succeeding Interest Payment Date to the Person in whose
name such Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date with respect to
such succeeding Interest Payment Date. Unless otherwise specified as
contemplated by Section 3.01, in case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency referred to in Section 3.05) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable or deliverable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable or deliverable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.

        Any interest on any Registered Security of any series which is payable
or deliverable, but is not punctually paid, delivered or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable or deliverable to the Holder on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be
paid or delivered by the Company, at its election in each case, as provided in
clause (1) or (2) below:

                        (1)     The Company may elect to make payment or
                delivery of any Defaulted Interest to the Persons in whose names
                any such Registered Securities of such series (or their
                respective Predecessor Securities) are registered at the close
                of business on a Special Record Date for the payment or delivery
                of such Defaulted Interest, which shall be fixed in the
                following manner. The Company shall notify the Trustee in
                writing of the amount of Defaulted Interest proposed to be paid
                or delivered on each Registered Security of such series and the
                date of the proposed payment or delivery, and at the same time
                the Company shall deposit with the Trustee an amount of money or
                other property equal to the aggregate amount proposed to be paid
                or delivered in respect of such Defaulted Interest or shall make
                arrangements satisfactory to the Trustee for such deposit prior
                to the date of the proposed payment or delivery, such money or
                other property when deposited to be held in trust for

                                       28



                the benefit of the Persons entitled to such Defaulted Interest
                as provided in this clause. Thereupon the Trustee shall fix a
                Special Record Date for the payment or delivery of such
                Defaulted Interest which shall be not more than 15 days nor less
                than 10 days prior to the date of the proposed payment or
                delivery and not less than 10 days after the receipt by the
                Trustee of the notice of the proposed payment or delivery. The
                Trustee shall promptly notify the Company of such Special Record
                Date and, in the name and at the expense of the Company, shall
                cause notice of the proposed payment or delivery of such
                Defaulted Interest and the Special Record Date therefor to be
                mailed, first-class postage prepaid, to each Holder of
                Securities of such series at his address as it appears in the
                Security Register, not less than 10 days prior to such Special
                Record Date. Notice of the proposed payment or delivery of such
                Defaulted Interest and the Special Record Date therefor having
                been so mailed, such Defaulted Interest shall be paid or
                delivered to the Persons in whose names such Registered
                Securities of such series (or their respective Predecessor
                Securities) are registered at the close of business on such
                Special Record Date and shall no longer be payable or
                deliverable pursuant to the following clause (2). In case a
                Bearer Security of any series is surrendered at the office or
                agency in a Place of Payment for such series in exchange for a
                Registered Security of such series after the close of business
                at such office or agency on any Special Record Date and before
                the opening of business at such office or agency on the related
                proposed date of payment or delivery of Defaulted Interest, such
                Bearer Security shall be surrendered without the coupon relating
                to such proposed date for payment or delivery and Defaulted
                Interest will not be payable or deliverable on such proposed
                date for payment or delivery in respect of the Registered
                Security issued in exchange for such Bearer Security, but will
                be payable only to the Holder of such coupon when due in
                accordance with the provisions of this Indenture.

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

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

        Section 3.08    Persons Deemed Owners.

        Title to any Bearer Security, any coupons appertaining thereto and any
temporary global Security in bearer form shall pass by delivery.

                                       29



        Prior to due presentment of a Security of any series for registration of
transfer of any Registered Security , the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment or
delivery of principal of (and premium, if any), Maturity Consideration in
respect of, and (subject to Section 3.07) interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

        The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security and the bearer of any coupon, as the
case may be, as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

        No holder of any beneficial interest in any global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such global Security, and such depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the owner of such global
security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a depositary or impair, as between a depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of rights of the depositary (or its nominee) as Holder of
any Security.

        Section 3.09    Cancellation.

        All Securities and coupons surrendered for payment, registration of
transfer, exchange, repayment, redemption or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee. All Securities so delivered or surrendered directly to the
Trustee for any such purpose, shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture or such Securities. All canceled Securities or
coupons held by the Trustee shall be disposed of by the Trustee in accordance
with its customary procedures and the Trustee shall deliver a certificate of
such disposition to the Company, if requested by the Company in writing.

        Section 3.10    Computation of Interest.

        Except as otherwise specified as contemplated by Section 3.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.

                                       30



        Section 3.11    Forms of Certification.

        (1)     Whenever any provision of this Indenture or the forms of
Securities contemplate that certifications be given by a Person entitled to
receive a Bearer Security, such certification shall be provided substantially in
the form of Exhibit A hereto, with only such changes as shall be approved by the
Company.

        (2)     Whenever any provision of this Indenture or the forms of
Securities contemplate that certification be given by Euroclear and Clearstream
in connection with the exchange of a portion of a temporary global Security,
such certification shall be provided substantially in the form of Exhibit B
hereto, with only such changes as shall be approved by the Company.

        (3)     Whenever any provision of the Indenture or the forms of
Securities contemplate that certification be given by Euroclear and Clearstream
in connection with payment of interest with respect to a temporary global
Security prior to the related Exchange Date, such certification shall be
provided substantially in the form of Exhibit C hereto, with only such changes
as shall be approved by the Company.

        (4)     Whenever any provision of the Indenture or the forms of
securities contemplate that certification be given by a beneficial owner of a
portion of a temporary global Security in connection with payment or delivery of
interest in respect to a temporary global Security prior to the related Exchange
Date, such certification shall be provided substantially in the form of Exhibit
D hereto, with only such changes as shall be approved by the Company.

        Section 3.12    Payment in Currencies.

        (a)     Unless otherwise provided in Section 3.01 hereof, subject to
subsection (b) hereof, payment of the principal of (and premium, if any),
Maturity Consideration if the Maturity Consideration is to be satisfied by a
cash payment and interest on the Securities of any series, whether or not
denominated in a Foreign Currency pursuant to Section 3.01 shall be made in U.S.
dollars. If a series of Securities is denominated in a Foreign Currency, the
amount receivable in U.S. dollars by the Holders of such series shall be
determined as provided in Section 3.12(c).

        (b)     If authorized pursuant to Section 3.01, any Holder of a Security
of a series of Securities denominated in a Foreign Currency may elect to receive
payments in the Foreign Currency in which such Security is denominated pursuant
to Section 3.01. A Holder may make such election by delivering to the Trustee a
written notice thereof, in such form as may be acceptable to such Trustee, not
later than the close of business on the Regular Record Date or Special Record
Date, as the case may be, immediately preceding the applicable Interest Payment
Date or the fifteenth day immediately preceding the Maturity of an installment
of principal, as the case may be. Such election shall remain in effect with
respect to such Holder until such Holder delivers to such Trustee a written
notice rescinding such election; provided, however, that any such notice must be
delivered to such Trustee not later than the close of business on the Regular
Record Date or Special Record Date, as the case may be, immediately preceding
the next Interest Payment Date or the fifteenth day immediately preceding the
Maturity of an installment of principal, as the case may be, in order to be
effective for the

                                       31



payment to be made thereon; and provided, further, that no such rescission may
be made with respect to payments to be made on any Security with respect to
which notice of redemption has been given by the Company pursuant to Article
Eleven. The Trustee will advise the Company, in writing, of the aggregate amount
payable in a Foreign Currency pursuant to an election under this subsection (b).

        (c)     For each series of securities denominated in a Foreign Currency,
the Exchange Rate Agent shall deliver to the Company and to the Trustee, by
personal delivery, telecopy, or other means reasonably acceptable to such
Trustee and the Company, not later than the close of business on the second
Business Day prior to the date each payment is required to be made with respect
to the Securities of such series, a copy of the Exchange Rate Officer's
Certificate relating to each such Foreign Currency. Payments in U.S. dollars
pursuant to Section 3.12(a) shall be equal to the sum obtained by converting the
specified Foreign Currency, which is to be paid in U.S. dollars pursuant to
Section 3.12(a), at the applicable Exchange Rate or Market Exchange Rate set
forth in such Exchange Rate Officer's Certificate.

        (d)     If the Foreign Currency, other than a composite currency, in
which a series of Securities is denominated is not available to the Company for
making payment thereof due to the imposition of exchange controls or other
circumstances beyond the control of the Company, then with respect to each date
for the payment of principal of (and premium, if any) and interest on such
series of Securities occurring after the last date on which the Foreign Currency
was so used, all payments with respect to the Securities of any such series
shall be made in U.S. dollars. If payment is to be made in U.S. dollars to the
Holders of any such series of Securities pursuant to the provisions of the
preceding sentence, then the amount to be paid in U.S. dollars on a payment date
by the Company to the Trustee for the series and by such Trustee or any Paying
Agent to the Holders of Securities of such series shall be determined by an
Exchange Rate Agent and shall be equal to the sum obtained by converting the
specified Foreign Currency into U.S. dollars at the applicable Market Exchange
Rate set forth in an Exchange Rate Officer's Certificate.

        (e)     All decisions and determinations of the Company or an Exchange
Rate Agent regarding the Exchange Rate, Market Exchange Rate or conversion of
Foreign Currency into U.S. dollars pursuant to Section 1.04(g) or this
Subsection shall, in the absence of manifest error, be conclusive for all
purposes and irrevocably binding upon the Company (in the case of a
determination by an Exchange Rate Agent), the Trustee for the series, any Paying
Agent and all Holders of the Securities of such series. If a Foreign Currency
(other than a composite currency) in which payment of a series of Securities may
be made, pursuant to subsection (a) above, is not available to the Company for
making payments thereof due to the imposition of exchange controls or other
circumstances beyond the control of the Company, the Company, after learning
thereof, will give notice thereof to the Trustee promptly (and the

                                       32



Trustee promptly thereafter will give notice to the Holders of such series of
Securities denominated in a Foreign Currency in the manner provided in Section
1.06) specifying the last date on which such Foreign Currency was used for the
payment of principal of (and premium, if any), or interest on such series of
Securities. In the event any composite currency in which a Security is
denominated or payable ceases to be used for the purposes for which it was
established or is not available due to circumstances beyond the control of the
Company, the Company, after learning thereof, will give notice thereof to the
Trustee for such Series promptly (and the Trustee thereafter will give notice to
the Holders of such series of securities denominated in a Foreign Currency in
the manner provided in Section 1.06). In the event of any subsequent change in
any Component of any composite currency in which a series of Securities is
denominated or payable, the Company, after learning thereof, will give notice to
the Trustee for the series similarly (and such Trustee promptly thereafter will
give notice to the Holders in the manner provided in Section 1.06). The Trustee
shall be fully justified and protected in reasonably relying and acting upon the
information so received by it from the Company and from any Exchange Rate Agent
and shall not otherwise have any duty or obligation to determine such
information independently. The Company agrees to appoint and maintain an
Exchange Rate Agent as is necessary for the performance of the obligations of
the Exchange Rate Agent specified herein.

        Section 3.13    CUSIP Numbers.

        The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption 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 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 Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.

                                  ARTICLE IV.

                           SATISFACTION AND DISCHARGE

        Section 4.01    Satisfaction and Discharge of Indenture.

     This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and rights to receive payments thereon
and any right to receive additional amounts, as provided for Section 10.04), and
each Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when

                        (1)       either

                        (A) all Securities theretofore authenticated and
                delivered (other than (i) coupons appertaining to Bearer
                Securities surrendered for exchange for Registered Securities
                and maturing after such exchange, whose surrender is not
                required or has been waived as provided in Section 3.05, (ii)
                coupons appertaining to Bearer Securities called for redemption
                and maturing after the relevant Redemption Date, whose surrender
                has been waived as provided in Section 11.07, (iii) Securities
                and coupons which have been destroyed, lost or stolen and which
                have been replaced or paid as provided in Section 3.06, and (4)
                Securities for whose payment money or, if applicable, such other
                property constituting Maturity

                                       33



                Consideration if determinable has theretofore been deposited in
                trust or segregated and held in trust by the Company and
                thereafter repaid to the Company or discharged from such trust,
                as provided in Section 10.03) have been delivered to the Trustee
                for cancellation; or

                        (B) all such Securities not theretofore delivered to the
                appropriate Trustee for cancellation,

        (i)     have become due and payable, or

        (ii)    will become due and payable at their Stated Maturity within one
year, or

        (iii)   are to be called for redemption within one year under
arrangements satisfactory to the appropriate Trustee for the giving of notice of
redemption by such Trustee in the name, and at the expense, of the Company,

                                and the Company, in the case of (i), (ii) or
                                (iii) above, has deposited or caused to be
                                deposited with such Trustee, as trust funds in
                                trust for the purpose, an amount (said amount to
                                be immediately due and payable to the Holders)
                                sufficient to pay and discharge the entire
                                indebtedness on such Securities and coupons of
                                the relevant series not theretofore delivered to
                                such Trustee for cancellation, for principal
                                (and premium, if any) and interest to the date
                                of such deposit (in the case of Securities which
                                have become due and payable) or to the Stated
                                Maturity or Redemption Date, as the case may be
                                or, if applicable, such other property
                                constituting Maturity Consideration if
                                determinable; or

                        (2)     the Company has paid or caused to be paid all
                other sums payable hereunder by the Company; and

                        (3)     the Company has delivered to the Trustee an
                Officers' Certificate and an Opinion of Counsel, each stating
                that all conditions precedent herein provided for relating to
                the satisfaction and discharge of this Indenture have been
                complied with.

        Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Company to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge. The
Trustee may give notice to the Holders or Securities Outstanding of the
immediate availability of the amount referred to in clause (1) of this Section
4.01.

        In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of the Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the

                                       34



other conditions thereto are met. The effectiveness of any such instrument shall
be conditioned upon receipt of such instruments from the Trustee.

        Section 4.02    Application of Trust Money.

        Subject to the provisions of the last paragraph of Section 10.03, all
money, property, U.S. Government Obligations and Foreign Government Obligations
deposited with the Trustee pursuant to Sections 4.01 and 4.03 in respect of
Securities of a series shall be held in trust and applied by it, in accordance
with the provisions of such Securities, the coupons, if any, and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any), Maturity
Consideration and interest for whose payment such money has been deposited with
the Trustee; unless otherwise specified herein, such money need not be
segregated from other funds except to the extent required by law.

        Section 4.03    Satisfaction, Discharge and Defeasance of Securities of
Any Series.

        If this Section 4.03 is specified, as contemplated by Section 3.01, to
be applicable to the Securities of any series, the Company shall be deemed to
have paid and discharged the entire indebtedness on all the Securities of any
such series at the time Outstanding, and, upon Company Request, the Trustee for
the series, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction, discharge and defeasance of such indebtedness, when

                        (1)     either

                        (A) with respect to all Securities of such series at the
                time Outstanding, the Company shall have deposited or caused to
                be deposited irrevocably with the Trustee as trust funds in
                trust, (i) in the case of Securities denominated in a Foreign
                Currency, money in such Foreign Currency or such Foreign
                Government Obligations (as defined below) of the government or
                governments issuing such Foreign Currency or a combination
                thereof, or (ii) in the case of Securities denominated in U.S.
                dollars, U.S. dollars or U.S. Government Obligations (as defined
                below) or a combination thereof, in each case, in an amount
                which, or which through the payment of interest, principal and
                premium, if any, in respect thereof in accordance with their
                terms will provide (without any reinvestment of such interest,
                principal or premium), not later than one Business Day before
                the due date of any payment in respect of the Securities for
                such series, money in an amount sufficient (in the case of a
                deposit including any U.S. Government Obligations or Foreign
                Government Obligations in the opinion of a nationally recognized
                firm of independent public accountants expressed in a written
                certification thereof delivered to such Trustee at or prior to
                the time of such deposit) to pay and discharge each installment
                of principal of (including any mandatory sinking fund payments),
                premium, if any, and interest on, the Outstanding Securities of
                such series on the dates such installments of principal (and
                premium, if any), and interest are due or the Stated Maturity or
                date of redemption of such series, if applicable; or

                                       35



                        (B) the Company has properly fulfilled such other means
                of satisfaction and discharge as is specified, as contemplated
                by Section 3.01, to be applicable to the Securities of such
                series;

                        (2)     the Company shall have delivered to the Trustee
                an Officers' Certificate certifying as to whether the Securities
                of such series are then listed on the New York Stock Exchange;

                        (3)     if the Securities of such series are then listed
                on the New York Stock Exchange, the Company shall have delivered
                to the Trustee an Opinion of Counsel to the effect that the
                Company's exercise of its option under this Section would not
                cause such Securities to be delisted;

                        (4)     no Event of Default or event (including such
                deposit) which, with notice or lapse of time, or both, would
                become an Event of Default with respect to the Securities of
                such series shall have occurred and be continuing on the date of
                such deposit as evidenced to such Trustee in an Officers'
                Certificate delivered to such Trustee concurrently with such
                deposit;

                        (5)     the Company shall have paid or caused to be paid
                all other sums payable with respect to the Securities of such
                series at the time outstanding;

                        (6)     such deposit will not result in a breach or
                violation of, or constitute a default under, this Indenture or
                any other agreement or instrument to which the Company is a
                party or by which it is bound;

                        (7)     the Company shall have delivered to the Trustee
                an Opinion of Counsel to the effect that Holders of the
                Securities of such series will not recognize income, gain or
                loss for Federal income tax purposes as a result of the
                Company's exercise of its option under this Section 4.03 and
                will be subject to Federal income tax on the same amount and in
                the manner and at the same times as would have been the case if
                such option had not been exercised, and, in the case of the
                Securities of such series being discharged, accompanied by a
                ruling to that effect received from, or published by, the
                Internal Revenue Service;

                        (8)     the Company shall have delivered to the Trustee
                for the series an Officers' Certificate and an Opinion of
                Counsel, each stating that such satisfaction, discharge and
                defeasance is authorized or permitted by this Indenture and that
                all conditions precedent herein provided for relating to the
                satisfaction, discharge and defeasance of the entire
                indebtedness on all Securities of any such series at the time
                Outstanding have been complied with; and

                        (9)     the Company has delivered to the Trustee an
                Opinion of Counsel to the effect that immediately following the
                deposit described in clause (1) above neither the Company nor
                the Trust held by the Trustee shall be an

                                       36



                "investment company" or a company "controlled" by an "investment
                company" within the meaning of the Investment Company Act of
                1940.

        "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof.

        "Foreign Government Obligations" means securities denominated in a
Foreign Currency that are (i) direct obligations of a foreign government for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
a foreign government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such foreign government, which, in either
case, under clauses (i) or (ii) are not callable or redeemable at the option of
the issuer thereof.

        Any deposits with the Trustee for the series referred to in Sections
4.01 and 4.03(l)(A) above shall be irrevocable and shall be made under the terms
of an escrow trust agreement in form and substance reasonably satisfactory to
the Trustee. If any Securities of a series with respect to which a deposit has
been made pursuant to Sections 4.01 and 4.03(l)(A) at the time outstanding are
to be redeemed prior to their Stated Maturity, whether pursuant to any optional
redemption provisions or in accordance with any mandatory sinking fund
requirement, the applicable escrow trust agreement shall provide therefor and
the Company shall make such arrangements as are satisfactory to the Trustee for
the series for the giving of notice of redemption by the Trustee for the series
in the name, and at the expense, of the Company. If the Securities of such
series are not to become due and payable at their Stated Maturity or upon call
for redemption within one year of the date of deposit, then the Company shall
give, promptly after the date of such deposit, notice of such deposit to the
Holders of Securities of such series.

        Upon the satisfaction of the conditions set forth in this Section 4.03
with respect to all the Securities of any series at the time Outstanding, the
terms and conditions of such series, including the terms and conditions with
respect thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company (except as to any surviving rights of conversion or
registration of transfer or exchange and rights relating to mutilated,
destroyed, lost and stolen Securities pursuant to Section 3.06 of Securities of
such series expressly provided for herein or in the form of Security of such
series); provided, that the Company shall not be discharged from any payment
obligations in respect of Securities of such series which are deemed not to be
Outstanding under clause (iii) of the definition thereof if such obligations
continue to be valid obligations of the Company under applicable law; and
provided, further, that in the event a petition for relief under the Bankruptcy
Reform Act of 1978 or a successor statute is filed with respect to the Company
within 91 days after the deposit, the entire indebtedness on all Securities of
such series shall not be discharged and in such event the Trustee shall return
such deposited funds or obligations as it is then holding to the Company on
Company Request.

                                       37



        Section 4.04    Repayment to Company.

        After the payment in full of the entire indebtedness of a series of
Securities with respect to which a deposit has been made with the Trustee
pursuant to Section 4.03, such Trustee and any Paying Agent for such series
shall upon Company Request promptly return to the Company any money, U.S.
Government Obligations or Foreign Government Obligations held by them that are
not required for the payment of the principal of (and premium, if any), and
interest on the Securities of such series.

        Section 4.05    Reinstatement.

        If the Trustee is unable to apply any money, U.S. Government Obligations
or Foreign Government Obligations in accordance with Section 4.03 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 4.03 until such time as the Trustee is permitted to apply all such
money, U.S. Government Obligations or Foreign Government Obligations in
accordance with Section 4.03.

                                   ARTICLE V.

                                    REMEDIES

        Section 5.01    Events of Default.

        "Event of Default", wherever used herein with respect to Securities of
any series, 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),
unless it is either inapplicable to a particular series or it is specifically
deleted or modified in the supplemental indenture under which such series of
Securities is issued or in the form of Security for such series:

                        (1)     default in the payment or delivery of any
                interest upon any Security of that series when it becomes due
                and payable, and continuance of such default for a period of 30
                days; or

                        (2)     default in the payment of the principal of (or
                premium, if any, on) any Security of that series at its
                Maturity; or

                        (3)     default in the delivery or payment of Maturity
                Consideration when due; or

                        (4)     default in the deposit of any sinking fund
                payment, when and as due by the terms of a Security of that
                series; or

                        (5)     default in the performance, or breach, of any
                covenant or warranty of the Company in this Indenture (other
                than a covenant or warranty a

                                       38



                default in whose performance or whose breach is elsewhere in
                this Section specifically dealt with or which has expressly been
                included in this Indenture solely for the benefit of series of
                Securities other than that series), and continuance of such
                default or breach for a period of 60 days after there has been
                given, for such series by registered or certified mail, to the
                Company by the Trustee or to the Company and the Trustee by the
                Holders of at least 25% in principal amount of the Outstanding
                Securities of that series 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

                        (6)     an event of default, as defined in any mortgage,
                indenture (including this Indenture), trust agreement or other
                instrument securing, evidencing or providing for any
                indebtedness of the Company or any Constituent Bank as a result
                of which indebtedness of the Company or such Constituent Bank in
                excess of $15 million aggregate principal amount shall be or
                become due and payable prior to the date on which the same would
                otherwise become due and payable and such acceleration shall not
                have been annulled or rescinded within 30 days of notice of such
                acceleration to the Company or such Constituent Bank;

                        (7)     the entry by a court having jurisdiction in the
                premises of (A) a decree or order for relief in respect of the
                Company or any Constituent Bank in an involuntary case or
                proceeding under any applicable Federal or State bankruptcy,
                insolvency, reorganization or other similar law or (B) a decree
                or order appointing a custodian, receiver, liquidator, assignee,
                trustee, sequestrator or other similar official of the Company
                or any Constituent Bank or of any substantial part of its
                property, or ordering the winding up or liquidation of its
                affairs, and the continuance of any such decree or order for
                relief or any such other decree or order unstayed and in effect
                for a period of 60 consecutive days; or

                        (8)     the commencement by the Company or any
                Constituent Bank of a voluntary case or proceeding under any
                applicable Federal or State bankruptcy, insolvency,
                reorganization or other similar law or of any other case or
                proceeding to be adjudicated a bankrupt or insolvent, or the
                consent by any of the foregoing to the entry of a decree or
                order for relief in an involuntary case or proceeding under any
                applicable Federal or State bankruptcy, insolvency,
                reorganization or other similar law or to the commencement of
                any bankruptcy or insolvency case or proceeding, or the filing
                by any of the foregoing of a petition or answer or consent
                seeking reorganization or relief under any applicable Federal or
                State law, or the consent by any of the foregoing to the filing
                of such petition or to the appointment of or taking possession
                by a custodian, receiver, liquidator, assignee, trustee,
                sequestrator or similar official of the Company or any
                Constituent Bank or of any substantial part of the property of
                any, or the making by any of the foregoing of an assignment for
                the benefit of creditors, or the admission by any of the
                foregoing in writing of its inability to pay its debts generally
                as they become

                                       39



                due, or the taking of corporate action by the Company or any
                Constituent Bank in furtherance of any such action; or

                        (9)     any other Event of Default provided with respect
                to Securities of that series.

        Section 5.02    Acceleration of Maturity; Rescission and Annulment.

        If an Event of Default specified in Section 5.01(1), (2), (3), (4), (5),
(6) or (9) with respect to any series of Securities for which there are
Securities Outstanding occurs and is continuing, then, and in every such case,
the Trustee or the Holders of not less than 25% in aggregate principal amount
or, if such Securities are not payable at Maturity for a fixed principal amount,
25% of the aggregate issue price of the Outstanding Securities of that series
may declare the principal amount or Maturity Consideration (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
of the Securities of that series to be immediately due and payable or
deliverable, by a notice in writing to the Company (and to the Trustee if given
by Securityholders), and upon any such declaration the same shall become
immediately due and payable or deliverable. If an Event of Default specified in
Section 5.01(7) or (8) with respect to any series of Securities for which there
are Securities Outstanding occurs, then, and in every such case, the principal
amount or Maturity Consideration (or, if the Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) and all unpaid interest of all of the
Securities of that series shall be immediately due and payable or deliverable
without any declaration or other act on the part of the Trustee or any Holder of
any Security of such series.

        At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money or other property due or deliverable has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount or, if such Securities are not payable at Maturity for a
fixed principal amount, the aggregate issue price of the Outstanding Securities
of that series, by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if

                        (1)     the Company has paid, or deposited with or
                delivered to the Trustee a sum or other property sufficient to
                pay

                        (A)     all overdue installments of interest on all
                Securities of such series,

                        (B)     the principal of (and premium, if any, on) or
                Maturity Consideration of any Securities of that series which
                have become due otherwise than by such declaration of
                acceleration and interest thereon at the rate or rates
                prescribed therefor by the terms of the Securities of such
                series,

                        (C)     to the extent that payment of such interest is
                lawful, interest upon overdue installments of interest at the
                rate or rates prescribed therefor by the terms of the Securities
                of such series, and

                                       40



                        (D)     all sums paid or advanced by the Trustee
                hereunder, the Security of any series Registrar, the Co-Security
                Registrar for such series and any Paying Agent and the
                reasonable compensation, expenses, disbursements and advances of
                any one of them and their agents and counsel; and

                        (2)     all Events of Defaults with respect to
                Securities of that series, other than the non-payment of the
                principal of, or non-delivery of the Maturity Consideration of,
                Securities of that series which have become due solely by such
                declaration of acceleration, have been cured or waived as
                provided in Section 5.13.

        No such rescission shall affect any subsequent default or impair any
right consequent thereon.

        Section 5.03    Collection of Indebtedness and Suits for Enforcement by
Trustee.

        The Company covenants that if

                        (1)     default is made in the payment of any
                installment of interest on any Security of any series when such
                interest becomes due and payable and such default continues for
                a period of 30 days, or

                        (2)     default is made in the payment or delivery of
                the principal of (or premium, if any, on) or the delivery of the
                Maturity Consideration of any Security of any series at the
                Maturity thereof,

        the Company will, upon demand of the Trustee, pay or deliver to it, for
the benefit of the Holder of any such Security, the whole amount or other
property then due and payable or deliverable on any such Security for principal
(and premium, if any), Maturity Consideration and interest on and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any), Maturity Consideration and on any
overdue installments of interest, at the rate or rates prescribed therefor by
the terms of any such Security, and, in addition thereto, such further amount as
shall be sufficient to cover the reasonable costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and any other amounts due the Trustee under
Section 6.07.

        If the Company fails to pay or deliver such amounts and/or other
consideration forthwith upon such demand, such Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding for the
collection of the sums or other property so due and unpaid or not delivered, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys or other property adjudged or decreed to be payable or deliverable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities, wherever situated.

        If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as such Trustee

                                       41



shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.

        Section 5.04    Trustee May File Proofs of Claim.

        In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal or Maturity
Consideration of the Securities shall then be due and payable or deliverable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal (and premium, if any), or delivery of the Maturity Consideration and
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,

                        (i)     to file and prove a claim for the whole amount
                of principal (and premium, if any), Maturity Consideration and
                interest owing and unpaid or undelivered in respect of the
                Securities of each series and to file such other papers or
                documents as may be necessary or advisable in order to have the
                claims of such Trustee (including any claim for the reasonable
                compensation, expenses, disbursements and advances of the
                Trustee, its agents and counsel and any other amounts due the
                Trustee under Section 6.07) and of the Securityholders allowed
                in such judicial proceeding, and

                        (ii)    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 Securityholder to make such payments or deliveries to the Trustee and,
in the event that the Trustee shall consent to the making of such payments or
deliveries directly to the Securityholders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07.

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

        Section 5.05    Trustee May Enforce Claims Without Possession of
Securities.

        All rights of action and claims under this Indenture or the Securities
of any series or coupons, if any, appertaining thereto, may be prosecuted and
enforced by the Trustee without the possession of any of the Securities of such
series or coupons appertaining thereto or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of

                                       42



judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 6.07, be for the ratable benefit
of the Holders of the Securities of such series or coupons appertaining thereto
in respect of which such judgment has been recovered.

        Section 5.06    Application of Money or Other Property Collected.

        Any money or other property collected by the Trustee with respect to a
series of Securities pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or other property on account of principal (or
premium, if any), Maturity Consideration or interest upon presentation of the
Securities of such series or coupons appertaining thereto, if any, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:

        FIRST: To the payment of all amounts due such Trustee under Section
6.07.

        SECOND: To the payment of the amounts then due and unpaid upon the
Securities of such series and coupons for principal of (and premium, if any),
Maturity Consideration and interest, respectively. Subject to Section 3.12(d),
the Security Holders of each series of Securities denominated in a Foreign
Currency shall be entitled to receive a ratable portion of the amount determined
by an Exchange Rate Agent by converting the principal amount Outstanding of such
series of Securities in the currency in which such series of Securities is
denominated into U.S. dollars at the Exchange Rate (as determined by the
Exchange Rate Agent, as of the date of declaration of acceleration of the
Maturity of the Securities (or, if there is no such rate on such date for the
reasons specified in Section 3.12(d), such rate of the date specified in such
section).

        THIRD: The balance if any, to the persons entitled thereto.

        Section 5.07    Limitation on Suits.

        No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless

                        (1)     such Holder has previously given written
                notice to the Trustee of a continuing Event of Default with
                respect to the Securities of that series;

                        (2)     the Holders of not less than 25% in
                principal amount or, if such Securities are not payable at
                Maturity for a fixed principal amount, the aggregate issue price
                of the Outstanding Securities of that series shall have made
                written request to the Trustee to institute proceedings in
                respect of such Event of Default in its own name as Trustee
                hereunder;

                        (3)     such Holder or Holders have offered to the
                Trustee indemnity satisfactory to the Trustee against the costs,
                expenses and liabilities to be incurred in compliance with such
                request;

                                       43



                        (4) such Trustee for 60 days after its receipt of such
                notice, request and offer of indemnity has failed to institute
                any such proceeding; and

                        (5) no direction inconsistent with such written request
                has been given to the Trustee during such 60-day period by the
                Holders of a majority in principal amount or, if such Securities
                are not payable at Maturity for a fixed principal amount, the
                aggregate issue price of the Outstanding Securities of that
                series;

        it being understood and intended that no one or more Holders of
Securities of such series shall have any right in any manner whatever by virtue
of, or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Securities of such series or
Holders of any other series, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of Holders of Securities of such series.

        Section 5.08    Unconditional Right of Securityholders to Receive
Principal, Premium, Maturity Consideration and Interest.

        Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment or delivery of the principal of (and premium, if any), Maturity
Consideration and (subject to Section 3.07) interest on such Security or payment
of such coupon on the respective Stated Maturity or Maturities expressed in such
Security or coupon (or, in the case of redemption, on the Redemption Date) and
to institute suit for the enforcement of such payment or delivery, and such
rights shall not be impaired without the consent of such Holder.

        Section 5.09    Restoration of Rights and Remedies.

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

        Section 5.10    Rights and Remedies Cumulative.

        Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 3.06, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

                                       44



        Section 5.11    Delay or Omission Not Waiver.

        No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.

        Section 5.12    Control by Holders.

        The Holders of not less than a majority in principal amount, or if such
Securities are not payable at Maturity for a fixed principal amount, the
aggregate issue price of the Outstanding Securities of any series, shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on such Trustee, with respect to the Securities of such series; provided that:

                        (1) such direction shall not be in conflict with any
                rule of law or with this Indenture,

                        (2) the Trustee may take any other action deemed proper
                by such Trustee which is not inconsistent with such direction,

                        (3) such direction is not unduly prejudicial to the
                rights of Holders of such series not taking part in such
                direction, and

                        (4) subject to the provisions of Section 6.01, the
                Trustee shall have the right to decline to follow any such
                direction if the Trustee, in good faith, shall by a Responsible
                Officer or Officers of the Trustee, determine that the
                proceeding so directed would involve personal liability.

        Section 5.13    Waiver of Past Defaults.

        Subject to Section 5.02, the Holders of not less than a majority in
principal amount, or if such Securities are not payable at Maturity for a fixed
principal amount, the aggregate issue price of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default not theretofor cured,

                        (1) in the payment or delivery of the principal of (or
                premium, if any), Maturity Consideration or interest on any
                Security of such series, or

                        (2) in respect of a covenant or provision hereof which
                under Article Nine cannot be modified or amended without the
                consent of the Holder of each Outstanding Security of such
                series affected.

        Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of the Securities of such series

                                       45



under this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

        Section 5.14    Undertaking for Costs.

        All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount, or if such Securities are not payable at Maturity for a
fixed principal amount, the aggregate issue price of the Outstanding Securities
of any series, or to any suit instituted by any Holder of Securities or coupons
for the enforcement of the payment of the principal of (or premium, if any),
Maturity Consideration or interest on any Security or payment of any coupon on
or after the Stated Maturity or Maturities expressed in such Security or coupon
(or, in the case of redemption, on or after the Redemption Date).

        Section 5.15    Waiver of Stay or Extension Laws.

        The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the exercise of any power
herein granted to the Trustee, but will suffer and permit the exercise of every
such power as though no such law had been enacted.

                                   ARTICLE VI.

                                   THE TRUSTEE

        Section 6.01    Certain Duties and Responsibilities.

        (a)     Except during the continuance of an Event of Default with
respect to any series of Securities,

                        (1) the Trustee undertakes to perform such duties and
                only such duties as are specifically set forth in this Indenture
                and only with respect to series of Securities as to which it is
                Trustee, and no implied covenants or obligations shall be read
                into this Indenture against the Trustee; and

                                       46



                        (2) in the absence of bad faith on its part, the Trustee
                may conclusively rely, as to the truth of the statements and the
                correctness of the opinions expressed therein, upon certificates
                or opinions furnished to the Trustee and conforming to the
                requirements of this Indenture; but in the case of any such
                certificates or opinions which by any provision hereof are
                specifically required to be furnished to the Trustee, the
                Trustee shall be under a duty to examine the same to determine
                whether or not they conform to the requirements of this
                Indenture.

        (b)     In case an Event of Default has occurred and is continuing as to
a series of Securities as to which it is Trustee, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.

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

                        (1) this Subsection shall not be construed to limit the

                effect of Subsection (a) of this Section;

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

                        (3) the Trustee shall not be liable with respect to any
                action taken, suffered or omitted to be taken by it in good
                faith in accordance with the direction of the Holders of a
                majority in principal amount or, if such Securities are not
                payable at Maturity for a fixed principal amount, the aggregate
                issue price of the Outstanding Securities of any series,
                relating to the time, method and place of conducting any
                proceeding for any remedy available to the Trustee, or
                exercising any trust or power conferred upon the Trustee, under
                this Indenture with respect to the Securities of such series;
                and

        (d)     No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

        (e)     Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

                                       47



        Section 6.02    Notice of Defaults.

        Within 90 days after the occurrence of any default hereunder known to
the Trustee with respect to the Securities of any series, the Trustee shall
transmit by mail to all Holders of Securities of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any), Maturity Consideration or interest on any Security of such series, or
in the payment of any sinking fund installment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders of Securities
of such series; and provided, further, that in the case of any default of the
character specified in Section 5.01(5) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default" with
respect to Securities of any series, means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.

        Section 6.03    Certain Rights of Trustee.

        Subject to the provisions of Section 6.01:

        (a)     the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, 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)     any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;

        (c)     whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed), may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;

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

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

                                       48



        (f)     the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney;

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

        (h)     the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;

        (i)     the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture; and

        (j)     the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.

        Section 6.04    Not Responsible for Recitals or Issuance of Securities.

        The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof. The Trustee
shall not be responsible for the use or application of any monies received by
any Paying Agent other than the Trustee.

        Section 6.05    May Hold Securities.

        The Trustee, any Authenticating Agent, any Paying Agent, the Security
Registrar, any Co-Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar, Co-Registrar or such other agent.

                                       49



        Section 6.06    Money or Other Property Held in Trust.

        Subject to Section 1.16, money or other property held by the Trustee or
any Paying Agent in trust hereunder need not be segregated from other funds or
other property except to the extent required by law. Neither the Trustee nor any
Paying Agent shall be under any liability for interest on any money or other
property received by it hereunder except as otherwise agreed with the Company.

        Section 6.07    Compensation and Reimbursement.

        The Company agrees

                        (1) to pay each of the Trustee, any Co-Trustee, the
                Security Registrar, any Co-Security Registrar and any Paying
                Agent, as the case may be, from time to time such compensation
                as shall be agreed in writing between the Company and the
                Trustee 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);

                        (2) except as otherwise expressly provided herein, to
                pay to or to reimburse each of the Trustee, any Co-Trustee, the
                Security Registrar, any Co-Security Registrar and any Paying
                Agent, as the case may be, upon their request for all reasonable
                expenses, disbursements and advances incurred or made by any one
                of them in accordance with any provision of this Indenture
                (including the reasonable compensation and the expenses and
                disbursements of their agents and counsel), except any such
                expense, disbursement or advance as may be attributable to their
                negligence or willful misconduct;

                        (3) to indemnify each of the Trustee, any Co-Trustee,
                the Security Registrar, any Co-Security Registrar and any Paying
                Agent, as the case may be, for, and to hold each of them
                harmless against, any and all loss, liability, damage, claim or
                expense, including taxes (other than taxes based on the income
                of the Trustee) incurred without negligence or willful
                misconduct on the part of such entity, arising out of or in
                connection with the acceptance or administration of the trust or
                trusts hereunder, including the costs and expenses of defending
                themselves against any claim (whether asserted by the Company, a
                Holder or any other Person) or liability in connection with the
                exercise or performance of any of their powers or duties
                hereunder; and

                        (4) as security for the performance of the obligations
                of the Company pursuant to this Section 6.07, the Trustee for
                the Securities of any series shall have a lien prior to the
                Securities of all such series upon all property and funds held
                or collected by the Trustee as such.

        The obligations of the Company under this Section shall survive the
resignation or removal of the Trustee and satisfaction and discharge of this
Indenture.

                                       50



        When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.01(7) or Section 5.01(8), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses or
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.

        Section 6.08    Disqualification; Conflicting Interests.

        The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act during
the period of time provided for therein. In determining whether the Trustee has
a conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded this
Indenture with respect to Securities of any particular series of Securities
other than that series.

        Nothing herein shall prevent the Trustee from filing with the Securities
and Exchange Commission the application referred to in the second to last
paragraph of Section 310(b) of the Trust Indenture Act.

        Section 6.09    Corporate Trustee Required; Eligibility.

        There shall at all times be a Trustee with respect to each series of
Securities hereunder which shall at all times be either

                (i)     a Corporation organized and doing business under the
        laws of the United States of America, any State thereof or the District
        of Columbia, authorized under such laws to exercise corporate trust
        powers, and subject to supervision or examination by federal, state or
        District of Columbia authority; or

                (ii)    a Corporation or other Person organized and doing
        business under the laws of a foreign government that is permitted to act
        as Trustee pursuant to a rule, regulation or order of the Commission,
        authorized under such laws to exercise corporate trust powers, and
        subject to supervision or examination by authority of such foreign
        government or a political subdivision thereof substantially equivalent
        to supervision or examination applicable to United States institutional
        trustees, in either case having a combined capital and surplus of at
        least $50,000,000.

        If such Corporation or national banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Corporation or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. Neither the
Company nor any person directly or indirectly controlling, controlled by, or
under common control with the Company shall serve as trustee for the Securities
of any series issued hereunder. If at any time the Trustee with respect to any
series of 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.

                                       51



        Section 6.10    Resignation and Removal; Appointment of Successor.

        (a)     No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

        (b)     The Trustee may resign with respect to any series of Securities
at any time by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee, required by Section 6.11, shall not have been
delivered to the resigning Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.

        (c)     The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of removal, the Trustee being removed may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

        (d)     If at any time:

                        (1) the Trustee shall fail to comply with Section 310(b)
                of the Trust Indenture Act with respect to any series of
                Securities after written request therefor by the Company or by
                any Securityholder who has been a bona fide Holder of a Security
                of any series for at least six months; or

                        (2) the Trustee shall cease to be eligible under Section
                6.09 with respect to any series of Securities and shall fail to
                resign after written request therefor by the Company or by any
                Holder of Securities of such series; or

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

        then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject to Section
5.14, any Securityholder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.

        (e)     If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee with respect to any
series of Securities for any

                                       52



cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 6.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee with respect to such series, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company with respect to
such series. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Securityholder who has been
a bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

        (f)     The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Registered Securities of such series as their names and addresses
appear in the Security Register and, if Securities of such series are issuable
as Bearer Securities, by publishing notice of such event once in an Authorized
Newspaper in each Place of Payment located outside the United States. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

        Section 6.11    Acceptance of Appointment by Successor.

        (a)     In case of the appointment hereunder of a successor Trustee with
respect to any series of Securities, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee or Trustees an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee or Trustees shall become
effective with respect to all or any such series as to which it is resigning as
Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee or Trustees with respect to all or any such series; but,
on the request of the Company or the successor Trustee, such retiring Trustee or
Trustees shall, upon payment of its charges and all amounts owing under Section
6.07, execute and deliver an instrument transferring to such successor Trustee
all the rights, powers, and trusts of the retiring Trustee or Trustees; and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee or Trustees hereunder with respect to
all or any such series.

        (b)     In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each

                                       53



successor Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any notice given to, or received by, or any act
or failure to act on the part of any other Trustee hereunder, and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee, to the extent contemplated by
such supplemental indenture, all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.

        (c)     Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.

        (d)     No successor Trustee with respect to a series of Securities
shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible with respect to such series
under this Article.

        Section 6.12    Merger, Conversion, Consolidation or Succession to
Business of Trustee.

        Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or national banking association
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation or

                                       54



national banking association 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. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

        Section 6.13    Preferential Collection of Claims Against Company.

        The Trustee shall comply with Section 311(a) of the Trust Indenture Act
with respect to each series of Securities for which it is Trustee.

        Section 6.14    Appointment of Authenticating Agent.

        At any time when any of the Securities of any series remain Outstanding
the Trustee may appoint an Authenticating Agent or Agents with respect to any
such series of Securities, which may include any Affiliate of the Company. Such
Authenticating Agent or Agents, at the option of the Trustee, shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.06, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by a
Trustee or a Trustee's certificate of authentication or the delivery of
Securities to the Trustee for authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent, and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent and delivery of Securities to the
Authenticating Agent on behalf of the Trustee. Each Authenticating Agent shall
be acceptable to the Company and shall at all times be a corporation or national
banking association organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus as most recently reported or determined by it sufficient under the laws
of any jurisdiction under which it is organized and in which it is doing
business to conduct a trust business, and which is otherwise authorized under
such laws to conduct such business and is subject to supervision or examination
by federal or state authority. Notwithstanding the foregoing, an Authenticating
Agent located outside the United States may be appointed by the Trustee if
previously approved in writing by the Company and if such Authenticating Agent
has a combined capital and surplus as most recently reported or determined by it
sufficient under the laws of any jurisdiction under which it is organized and in
which it is doing business to conduct a trust business. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

        The Trustee shall initially act as Authenticating Agent for each series
of Securities issued hereunder.

        Any Corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any Corporation or

                                       55



national banking association resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any
Corporation or national banking association succeeding to all or substantially
all the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such Corporation or
national banking association shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
any Trustee or the Authenticating Agent.

        An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time (and upon
request by the Company shall) terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.

        The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.

        The provisions of Sections 3.08, 6.04, 6.05 and 6.07 shall be applicable
to each Authenticating Agent.

        If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series covered by such appointment may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:

        This is one of the Securities of the series provided for under the
within-mentioned Indenture.

                                                *, as Trustee

                                                By
                                                  ------------------------------
                                                     As Authenticating Agent

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

                                       56



                                  ARTICLE VII.

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

        Section 7.01    Company to Furnish Trustee Names and Addresses of
Holders.

        The Company will furnish or cause to be furnished to the Trustee for
each series

        (a)     semiannually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, containing the
names and addresses of the Holders of Registered Securities as of such Regular
Record Date; and

        (b)     at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content as of the date not more than 15 days prior to the time
such list is requested to be furnished,

        except that no such lists need be furnished so long as the Trustee is
in possession thereof by reason of its acting as Security Registrar for such
series.

        Section 7.02    Preservation of Information; Communications to Holders.

        (a)     The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and the names
and addresses of Holders of Securities received by the Trustee in its capacity
as the Security Registrar or Co-Security Registrar, if so acting. The Trustee
may destroy any list furnished to it as provided in Section 7.01 upon receipt of
a new list so furnished,

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

                        (i)     afford such applicants access to the information
                preserved at the time by the Trustee in accordance with Section
                7.02(a); or

                        (ii)    inform such applicants as to the approximate
                number of Holders of Securities of such series or all
                Securities, as the case may be, whose names and addresses appear
                in the information preserved at the time by the Trustee in
                accordance with Section 7.02(a), and as to the approximate cost
                of mailing to such Holders the form of proxy or other
                communication, if any, specified in such application.

                                       57



        If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Security of such series or all Holders of Securities,
as the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02(a), a copy
of the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the Holders
of Securities of such series or all Securities, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders of Securities with reasonable promptness after
the entry of such order and the renewal of such tender; otherwise, the Trustee
shall be relieved of any obligation or duty to such applicants respecting their
application.

        (c)     Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
of Securities in accordance with Section 7.02(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 7.02 (b).

        Section 7.03    Reports by Trustee.

        (a)     The term "reporting date", as used in this Section, shall be May
15 of each year, commencing with the later of May 15, 2004 or the first May 15
after the first issuance of Securities of a series for which the Trustee is
acting as Trustee pursuant to this Indenture. Within 60 days after the reporting
date in each year, the Trustee shall transmit by mail to all Holders of
Registered Securities as provided in Section 313(c) of the Trust Indenture Act,
as their names and addresses appear in the Security Register, a brief report
dated as of such reporting date if required by Section 313(a) of the Trust
Indenture Act.

        (b)     A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which the Securities are listed, with the Commission and with the
Company. The Company will promptly notify the Trustee when the Securities are
listed on any stock exchange and of any delisting thereof.

        Section 7.04    Reports by Company.

        The Company shall:

                                       58



                        (1) file with the Trustee, within 15 days after the
                Company is required to file the same with the Commission, copies
                of the annual reports and of the information, documents and
                other reports (or copies of such portions of any of the
                foregoing as the Commission may from time to time by rules and
                regulations prescribe) which the Company may be required to file
                with the Commission pursuant to Section 13 or Section 15(d) of
                the Securities Exchange Act of 1934, as amended; or, if the
                Company is not required to file information, documents or
                reports pursuant to either of said Sections, then it shall file
                with the Trustee and the Commission, in accordance with rules
                and regulations prescribed from time to time by the Commission,
                such of the supplementary and periodic information, documents
                and reports which may be required pursuant to Section 13 of the
                Securities Exchange Act of 1934, as amended, in respect of a
                security listed and registered on a national securities exchange
                as may be prescribed from time to time in such rules and
                regulations;

                        (2) file with the Trustee and the Commission, in
                accordance with rules and regulations prescribed from time to
                time by the Commission, such additional information, documents
                and reports with respect to compliance by the Company with the
                conditions and covenants of this Indenture as may be required
                from time to time by such rules and regulations; and

                        (3) transmit by mail to all Holders of Securities, as
                their names and addresses appear in the Security Register,
                within 30 days after the filing thereof with the Trustee, such
                summaries of any information, documents and reports required to
                be filed by the Company pursuant to paragraphs (1) and (2) of
                this Section as may be required by rules and regulations
                prescribed from time to time by the Commission.

        Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                                 ARTICLE VIII.

                  CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

        Section 8.01    Company May Consolidate, etc., Only on Certain Terms.

        The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:

                        (1) The corporation formed by such consolidation or into
                which the Company is merged or the Person which acquires by
                conveyance or transfer or which leases the properties and assets
                of the Company substantially as an entirety shall be a
                corporation organized and existing under the laws of

                                       59



                the United States of America, any State thereof or the District
                of Columbia and shall expressly assume, by an indenture
                supplemental hereto, executed and delivered to the Trustee, in
                form satisfactory to the Trustee, the due and punctual payment
                or delivery of the principal of (and premium, if any), Maturity
                Consideration and interest on (including all additional amounts,
                if any, payable pursuant to Section 10.04) all the Securities
                and the performance of every covenant of this Indenture on the
                part of the Company to be performed or observed;

                        (2) immediately after giving effect to such transaction,
                no Event of Default, and no event which, after notice or lapse
                of time or both, would become an Event of Default, shall have
                happened and be continuing; and

                        (3) the Company has delivered to the Trustee an
                Officers' Certificate and an Opinion of Counsel, each stating
                that such consolidation, merger, conveyance or transfer and such
                supplemental indenture comply with this Article and that all
                conditions precedent herein provided for relating to such
                transaction have been complied with.

        provided, that, the provisions of this Section 8.01 may be changed as
to any series of Securities if and to the extent provided in an Officer's
Certificate delivered pursuant to Section 3.01 establishing the terms of such
series of Securities.

        Section 8.02    Successor Corporation Substituted.

        Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 8.01, the successor corporation formed by such consolidation or
into which the Company is merged or to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein. In the event of any such
conveyance or transfer, the Company as the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture and may be
dissolved, wound up and liquidated at any time thereafter.

        Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee on its behalf for the purpose
pursuant to such provisions. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.

                                       60



        In case of any such consolidation, merger, sale or conveyance, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.

                                  ARTICLE IX.

                             SUPPLEMENTAL INDENTURES

        Section 9.01    Supplemental Indentures Without Consent of
Securityholders.

        Without notice to or the consent of any Holder of any Security or
coupon, the Company, when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:

                        (1) to evidence the succession of another corporation to
                the Company, and the assumption by any such successor of the
                covenants of the Company herein and in the Securities; or

                        (2) to add to the covenants of the Company for the
                benefit of the Holders of all or any series of Securities (and
                if such covenants are to be for the benefit of less than all
                series of Securities, stating that such covenants are expressly
                being included solely for the benefit of such series), or to
                surrender any right or power herein conferred upon the Company;
                or

                        (3) to add any additional Events of Default with respect
                to all or any series of the Securities (and, if such Event of
                Default is applicable to less than all the series of Securities,
                specifying the series to which such Event of Default is
                applicable) for the benefit of the Holders of all or any series
                of the Securities (and if such Events of Default are to be for
                the benefit of less that all series of Securities stating that
                such Events of default are expressly being included solely for
                the benefit of such series); provided, however, that in respect
                of any such additional Events of Default, such supplemental
                indenture may provide for a particular period of grace after
                default (which period may be shorter or longer than that allowed
                in the case of other defaults) or may provide for an immediate
                enforcement upon such default or may limited the remedies
                available to the Trust upon such default or may limit the right
                of the Holders of a majority in aggregate principal amount of
                that or those series of Securities to which such additional
                Events of Default apply to waive such default; or

                        (4) to add to or change any of the provisions of this
                Indenture to provide that Bearer Securities may be registrable
                as to principal, to change or eliminate any restrictions on the
                payment of principal of (or premium, if any), Maturity
                Consideration or any interest on Bearer Securities, to permit
                Bearer Securities to be issued in exchange for Registered
                Securities, to permit Bearer Securities to be issued in exchange
                for Bearer Securities of other authorized denominations or to
                permit the issuance of Securities in uncertificated form,

                                       61



                provided any such action shall not adversely affect the
                interests of the Holders of Securities of any series or any
                related coupons in any material respect; or

                        (5)  to change or eliminate any of the provisions of
                this Indenture, provided that any such change or elimination
                shall become effective only when there is no Security
                Outstanding of any series created prior to the execution of such
                supplemental indenture which is adversely affected by such
                change in or elimination of such provision; or

                        (6)  to convey, transfer, assign, mortgage or pledge any
                property to or with the Trustee securing any series of Security;
                or

                        (7)  to establish the form or terms of Securities of
                any series as permitted by Sections 2.01 and 3.01; or

                        (8)  to evidence and provide for the acceptance of
                appointment hereunder by a successor Trustee with respect to the
                Securities of one or more series and to add to or change the
                provisions of this Indenture as shall be necessary to provide
                for or facilitate the administration of the trusts hereunder by
                more than one Trustee, pursuant to the requirements of Section
                6.11(b); or

                        (9)  to cure any ambiguity, to 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 Indenture, provided
                that such action shall not adversely affect the interests of the
                Holders of Securities of any series or any related coupons in
                any material respect; or

                        (10) to supplement any of the provisions of this
                Indenture to such extent as shall be necessary to permit or
                facilitate the defeasance and discharge of any series of
                Securities pursuant to Section 4.01 and 4.03; provided in each
                case that any such action shall not adversely affect the
                interests of Holders of Securities of such series and any
                related coupons or any other series of Securities in any
                material respect; or

                        (11) to provide for conversion rights of the Holders of
                Securities of any series to enable such Holders to convert such
                Securities into other securities of the Company.

        Section 9.02    Supplemental Indentures with Consent of Securityholders.

        With the consent of the Holders of not less than a majority in
principal amount or, if such Securities are not payable at Maturity for a fixed
principal amount, a majority of the aggregate issue price of the Outstanding
Securities of all series affected by such supplemental indenture or indentures
(acting as one class), by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in

                                       62



any manner the rights of the Holders of Securities of each such series and any
related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holders of each
Outstanding Security affected thereby,

                        (1) change the Stated Maturity of the principal of, or
                or the Stated Maturity of any installment of principal of or
                interest (or premium, if any) or any Maturity Consideration on
                any Outstanding Security, or reduce the principal amount or
                Maturity Consideration thereof (or premium, if any, thereon) or
                the rate of interest thereon or change the obligation of the
                Company to pay additional amounts pursuant to Section 10.04
                (except as contemplated by Section 8.01(1) and permitted by
                Section 9.01, or reduce the amount of the principal of an
                Original Issue Discount Security that would be due and payable
                upon a declaration of acceleration of the Maturity thereof
                pursuant to Section 5.02, or change the method of calculating
                interest thereon or the any Place of Payment where, or the coin
                or currency unit or other property in which, any Outstanding
                Security (or premium, if any, thereon) or the interest thereon
                is payable or deliverable, or impair the right to institute suit
                for the enforcement of any such payment or delivery on or after
                the Stated Maturity thereof (or, in the case of redemption, on
                or after the Redemption Date); or

                        (2) reduce the percentage in principal amount or issue
                price of the Outstanding Securities of any series, the consent
                of whose Holders is required for any such supplemental
                indenture, or the consent of whose Holders is required for any
                waiver (of compliance with certain provisions of this Indenture
                or certain defaults hereunder and their consequences) provided
                for in this Indenture; or

                        (3) modify any of the provisions of this Section,
                Section 5.13 or Section 10.11, except to increase any such
                percentage or to provide that certain other provisions of this
                Indenture cannot be modified or waived without the consent of
                the Holder of each Outstanding Security affected thereby;
                provided, however, that this clause shall not be deemed to
                require the consent of any Holder with respect to changes in the
                references to "the Trustee" and concomitant changes in this
                Section and Section 10.11 or the deletion of this proviso, in
                accordance with the requirements of Sections 6.11(b) and
                9.01(8).

                        (4) change any obligations of the Company to maintain an
                office or agency in the places and for the purposes specified in
                Section 10.02; or

        A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the right under this
Indenture of the Holders of Securities of any other series.

                                       63



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

        Section 9.03    Execution of Supplemental Indentures.

        In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
in addition to the documents required by Section 1.02, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
and complies with this Indenture and has been duly authorized, executed and
delivered and is enforceable in accordance with its terms. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects such Trustee's own rights, duties or immunities under this Indenture or
otherwise.

        Section 9.04    Effect of Supplemental Indentures.

        Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

        Section 9.05    Conformity with Trust Indenture Act.

        Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

        Section 9.06    Reference in Securities to Supplemental Indentures.

        Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by such Trustee in exchange for
Outstanding Securities of such series.

                                   ARTICLE X.

                                    COVENANTS

        Section 10.01   Payment of Principal, Premium, if any, the Maturity
Consideration and Interest.

        The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay or deliver the principal of (and
premium, if any), Maturity Consideration and interest (if any) on the Securities
of such series and any additional amounts described in

                                       64



Section 10.04 in accordance with the terms of the Securities of such series, any
coupons appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 3.01 with respect to any series of Securities, any
interest due on Bearer Securities on or before Maturity shall be payable or
deliverable only outside the United States upon presentation and surrender of
the several coupons for such interest installments as are evidenced thereby as
they severally mature. Any payment by the Company to a Paying Agent hereunder
shall be made in the applicable currency or currencies in which the respective
payments are required to be made.

        Section 10.02   Maintenance of Office or Agency.

        If Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or
surrendered for payment or delivery of Maturity Consideration, where Securities
of that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and of any change in the
location, of such office or agency. If Securities of a series may be issuable as
Bearer Securities, the Company will maintain an office or agency where any
Securities of that series may be presented or surrendered for payment (A) in the
Borough of Manhattan, The City of New York or Wilmington, Delaware, (B) 1100
North Market Street, Wilmington, Delaware 19890-0001. Attn: Corporate Trust
Administration, where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served, (C) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Securities of that
series pursuant to Section 10.04); provided, however, that if the Securities of
that series are listed on The International Stock Exchange of the United Kingdom
and the Republic of Ireland Limited or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent for the Securities of
that series in London or Luxembourg or any other required city located outside
the United States, as the case may be, so long as the Securities of that series
are listed on such exchange, and (D) subject to any laws or regulations
applicable thereto, in a Place of Payment for such series located outside the
United States an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of such Trustee, except that the Bearer Securities of
that series and the related coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Bearer Securities of
that series pursuant to Section 10.04) at the place specified for the purpose as
contemplated by Section 3.01, and the Company hereby appoints such Trustee as
its agent to receive all such presentations, surrenders,

                                       65



notices and demands. Notwithstanding any other provisions, to the contrary, the
Company at its option may make payment of principal (and premium if any), and
interest with respect to Registered Securities by check mailed to the address of
the Person entitled thereto, as such address appears on the registry books of
the Company.

        No payment or delivery of principal, premium, Maturity Consideration or
interest on Bearer Securities shall be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States.

        The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes specified above in this Section and
may from time to time rescind such designations; provided, however, that no such
designation, appointment or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee for such series of any such designation or rescission and
of any change in the location of any such other office or agency. Unless and
until the Company rescinds such appointment, the Company hereby appoints the
Trustee, acting through its Corporate Trust Office, as its Paying Agent with
respect to all series of Securities.

        Section 10.03   Money or Other Property for Securities Payments and
Deliveries to Be Held in Trust.

        If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any), Maturity Consideration or interest on any of
the Securities of such series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum or other property sufficient to pay or
deliver the principal (and premium, if any), Maturity Consideration or interest
so becoming due until such sums or other property shall be paid or delivered to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act. If the Company chooses to
act as its own Paying Agent, the Company shall notify the Trustee 15 Business
Days prior to such action.

        Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to the opening of business on each due date of the
principal of (and premium, if any), Maturity Consideration or interest on any
Securities of such series, deposit with a Paying Agent a sum or other property
sufficient to pay or deliver the principal (and premium, if any), Maturity
Consideration or interest so becoming due, such sum or other property to be held
in trust for the benefit of the Persons entitled to such principal (and premium,
if any), Maturity Consideration or interest, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.

        The Company will cause each Paying Agent other than the Trustee for any
series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:

                                       66



                        (1) hold all sums or other property held by it for the
                payment of or delivery of the principal of (and premium, if
                any), Maturity Consideration or interest on Securities of such
                series in trust for the benefit of the Persons entitled thereto
                until such sums or other property shall be paid or delivered to
                such Persons or otherwise disposed of as herein provided;

                        (2) give the Trustee notice of any default by the
                Company (or any other obligor upon the Securities of such
                series) in the making of any payment or delivery of principal
                (and premium, if any), Maturity Consideration or interest on the
                Securities of such series; and

                        (3) at any time during the continuance of any such
                default, upon the written request of the Trustee, forthwith pay
                or deliver to the Trustee all sums or other property so held in
                trust by such Paying Agent.

        The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay or
deliver, or by Company Order direct any Paying Agent to pay or deliver, to the
Trustee all sums or other property held in trust by the Company or such Paying
Agent, such sums or other property to be held by the Trustee upon the same
trusts as those upon which such sums or other property were held by the Company
or such Paying Agent; and, upon such payment or delivery by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money or other property.

        Any money or other property deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment or delivery of the
principal of (and premium, if any), Maturity Consideration or interest in any
Security of any series and remaining unclaimed for two years after such
principal (and premium, if any), Maturity Consideration or interest has become
due and payable or deliverable shall be paid or delivered to the Company on
Company request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment or delivery thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
or other property, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment or delivery, may at the expense
of the Company cause to be published once, in an Authorized Newspaper in each
Place of Payment, notice that such money or other property remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money or other
property then remaining will be repaid or delivered to the Company.

        Section 10.04   Additional Amounts.

        If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of any series or any
coupon appertaining thereto additional amounts as provided therein. Whenever in
this Indenture there is mentioned, in any context, the payment of the principal
of (or premium, if any) or interest on, or in respect to, any Security of any
series or payment of any related coupon or the net proceeds received on the sale
or exchange

                                       67



of any Securities of any series, such mention shall be deemed to include mention
of the payment of additional amounts provided for in this Section to the extent
that, in such context, additional amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and express mention
of the payment of additional amounts (if applicable) in any provisions hereof
shall not be construed as excluding additional amounts in those provisions
hereof where such express mention is not made.

        If the Securities of a series provided for the payment of additional
amounts, at least 15 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment or delivery of
principal (and premium, if any) or Maturity Consideration is made), and at least
15 days prior to each date of payment or delivery of principal of (and premium,
if any) or Maturity Consideration or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment or delivery of principal of (and premium, if any) or Maturity
Consideration or interest on the Securities of that series shall be made to
Holders of Securities of that series or any related coupons who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
or deliveries to such Holders of Securities or coupons and the Company will pay
to the Trustee or such Paying Agent the additional amounts required by this
Section. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against any loss, liability or expense reasonably
incurred without negligence or bad faith on their part arising out of or in
connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section.

        Section 10.05   Corporate Existence.

        Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, and that of each Subsidiary and the rights (charter and statutory)
and franchises of the Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries considered as a
whole and that the loss thereof is not disadvantageous in any material respect
to the Holders of Securities.

        Section 10.06   Maintenance of Properties.

        The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this

                                       68



Section shall prevent the Company from discontinuing the operation and
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company or of the
Subsidiary concerned, desirable in the conduct of its business or the business
of any Subsidiary and not disadvantageous in any material respect to the Holders
of Securities.

        Section 10.07   Payment of Taxes and Other Claims.

        The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and the Company shall have set aside on its books adequate reserves
with respect thereto (segregated to the extent required by generally accepted
accounting principles).

        Section 10.08   Limitation on Sale, Issuance or Other Disposition of
Voting Stock of Certain Subsidiaries.

        Except as set forth below, the Company will not sell, assign, pledge,
transfer or otherwise dispose of, or permit the issuance of, or permit a
Subsidiary to sell, assign, pledge, transfer or dispose of, any shares of Voting
Stock of any Subsidiary, or any securities convertible into or options, warrants
or rights to subscribe for or purchase shares of Voting Stock of any Subsidiary,
which is:

                (a)     A Constituent Bank; or

                (b)     A Subsidiary which owns shares of Voting Stock or any
        securities convertible into or options, warrants or rights to subscribe
        for or purchase shares of Voting Stock of a Constituent Bank (an
        "Intermediate Holding Company");

        provided, however, that nothing in this Section shall prohibit any
        dispositions made by the Company or any Subsidiary (i) acting in a
        fiduciary capacity for any person other than the Company or any
        Subsidiary, or (ii) to the Company or any of its wholly owned (except
        for directors' qualifying shares) Subsidiaries. Notwithstanding the
        foregoing, sales, assignments, pledges, transfers, issuances or other
        dispositions of shares of Voting Stock or securities convertible into or
        options, warrants or rights to subscribe for or purchase shares of
        Voting Stock of a corporation referred to in Clause (a) or (b) above may
        be made where:

                        (i)     the sales, assignments, pledges, transfers,
                issuances or other dispositions are made, in the minimum amount
                required by law, to any Person for the purpose of the
                qualification of such Person to serve as a director; or

                                       69



(ii)   the sales, assignments, pledges, transfers, issuances or other
           dispositions are made in compliance with an order of a court or
           regulatory authority of competent jurisdiction; or

(iii)  the sales, assignments, pledges, transfers, issuances or other
           dispositions are made in connection with a merger or consolidation of
           a Constituent Bank or an Intermediate Holding Company with or into a
           Subsidiary, if, after such merger or consolidation with such
           Subsidiary, the Company owns, directly or indirectly, not less than
           the percentage of Voting Stock of the surviving entity of such
           transaction as it owned of such Constituent Bank or Intermediate
           Holding Company prior to such transaction; or

(iv)   the sales, assignments, pledges, transfers, issuances or other
           dispositions are for fair market value (as determined by the Board of
           Directors of the Company, which determination shall be conclusive and
           evidenced by a Board Resolution and, if applicable, the
           determinations of the board of directors of the Constituent Bank or
           the Intermediate Holding Company, as the case may be; or

(v)    a Constituent Bank or an Intermediate Holding Company sells additional
           shares of Voting Stock to its stockholders at any price, if, after
           such sale, the Company owns, directly or indirectly, not less than
           the percentage of Voting Stock of such Constituent Bank or
           Intermediate Holding Company it owned prior to such sale; or

(vi)   a pledge is made or lien or encumbrance is created to secure any
           indebtedness, advances or line of credit pursuant to the Term Loan
           and Security Agreement, dated July 31, 2002, as amended, by and
           between the Company and U.S. Bank National Association (the "U.S.
           Bank Loan") or the 364 Day Revolving Credit Agreement, dated December
           16, 2002, as amended, among the Company, the Initial Lenders named
           therein and Wells Fargo Bank, National Association, as agent (the
           "Wells Fargo Loan Facility") or any extensions, replacements or
           renewals of the U.S. Bank Loan or the Wells Fargo Loan Facility; or

(vii)  a pledge is made or a lien or encumbrance is created to secure loans or
           other indebtedness, advances or lines of credit by a Constituent Bank
           subject to Section 23A of the Federal Reserve Act ("Section 23A
           Loans"); or

(viii) a pledge is made or a lien or encumbrance is created with respect to
           Voting Stock, or any security convertible into or exercisable into
           Voting Stock of any Constituent Bank or Intermediate Holding Company
           that represents, individually or in the aggregate, less than 35% of
           the Company's consolidated assets to secure any loan, indebtedness,
           advance or line of credit (collectively referred to as "Other
           Loans"), other than the U.S. Bank Loan, the Wells Fargo Loan Facility
           or Section 23A Loans; provided, however, that any pledges, liens or
           encumbrances made or created with respect to the U.S. Bank Loan, the
           Wells Fargo Loan Facility or Section 23A Loans will be counted in
           determining whether any further pledges, liens or encumbrances can be
           made or created with respect to Other Loans.

           A pledge, lien or encumbrance created pursuant to (vi) or (vii) above
       shall not be subject to any other limitations set forth in this
       Indenture.

                                       70



        Section 10.09   Limitation Upon Liens on Certain Capital Stock.

        Except as permitted in Section 10.08, the Company will not at any time,
directly or indirectly, create, assume, incur or suffer to be created, assumed
or incurred or to exist any mortgage, pledge, encumbrance or lien or charge of
any kind upon (1) any of its shares of capital stock of any Constituent Bank
(other than directors' qualifying shares), or (2) any of its shares of capital
stock of an Intermediate Holding Company; provided, however, that,
notwithstanding the foregoing, the Company may incur or suffer to be incurred or
to exist upon such capital stock (a) any liens, pledges, charges, mortgages or
encumbrances with respect to any capital stock of any Constituent Bank or
Intermediate Holding Company to the same extent as permitted for the Voting
Stock of such entities as set forth in 10.08 above, (b) liens for taxes,
assessments or other governmental charges or levies imposed or required by law
which are not overdue for a period of more than 30 days or are payable without
penalty or of which the amount, applicability or validity is being contested by
the Company in good faith by appropriate proceedings and the Company shall have
set aside on its books adequate reserves with respect thereto (segregated to the
extent required by generally accepted accounting principles) or (c) the lien of
any judgment, if such judgment shall not have remained undischarged, or unstayed
on appeal or otherwise, for more than 60 days.

        Section 10.10   Statement as to Compliance.

        The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, commencing with the first calendar year following the
issuance of Securities of any series under this Indenture, a brief certificate,
which need not comply with Section 1.02, signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, covering the period from the date of issuance of such Securities to
the end of the calendar year in which such Securities were issued, in the case
of the first such certificate, and covering the preceding calendar year in the
case of each subsequent certificate stating, as to each signer thereof, that

                        (1) a review of the activities of the Company during
                such year and of performance under this Indenture has been made
                under his supervision, and

                        (2) to the best of his knowledge, based on such review,
                (a) the Company has complied with all conditions and covenants
                on its part contained in this Indenture throughout such year,
                or, if there has been a default by the Company in the
                performance, observance or fulfillment of any such condition or
                covenant, specifying each such default known to him and the
                nature and status thereof, and (b) no event has occurred and is
                continuing which is, or after notice or lapse of time or both
                would become, an Event of Default, or, if such an event has
                occurred and is continuing, specifying each such event known to
                him and the nature and status thereof.

        For the purpose of this Section 10.10, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.

                                       71



        Section 10.11   Waiver of Certain Covenants.

        The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 10.05 to 10.09, inclusive,
with respect to the Securities of any series if before the time for such
compliance the Holders of at least 50% in principal amount, or if such
Securities are not payable at Maturity for a fixed principal amount, 50% of the
aggregate issue price, of the Outstanding Securities of such series shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the trustee in respect of any such
term, provision or condition shall remain in full force and effect.

        Section 10.12   Calculation of Original Issue Discount.

        The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.

        Section 10.13   Statement by Officers as to Default.

        The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or default and the action which the
Company proposes to take with respect thereto.

                                  ARTICLE XI.

                            REDEMPTION OF SECURITIES

        Section 11.01   Applicability of Article.

        Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.01 for Securities of any
series) in accordance with this Article.

        Section 11.02   Election to Redeem; Notice to Trustee.

        The election of the Company to redeem any Securities redeemable at the
option of the Company shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount or amount of Maturity Consideration of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in

                                       72



this Indenture, the Company shall furnish such Trustee with an Officers'
Certificate evidencing compliance with such restriction.

        Section 11.03   Selection by Trustee of Securities to Be Redeemed.

        If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days nor
less than 30 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as such Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal amount or
issue price of Securities of such series or a denomination equal to or larger
than the minimum authorized denomination for Securities of that series. Unless
otherwise provided by the terms of the Securities of any series the
denominations of the Securities so selected for partial redemption shall be, in
the case of Registered Securities, equal in value to $1,000 or an integral
multiple of $1,000 in excess thereof in excess thereof, or, in the case of
Bearer Securities, equal to $10,000 or $50,000, and the principal amount of any
such Securities which remains outstanding shall not be less than the minimum
authorized denomination for Securities of such series.

        The Trustee shall promptly notify the Company, the Security Registrar
and the Co-Trustee, if any, in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial redemption, the
principal amount or Maturity Consideration thereof to be redeemed.

        For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

        Section 11.04   Notice of Redemption.

        Notice of redemption shall be given 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 Securities to be redeemed, at his address appearing in
the Security Register.

        All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers) and shall state:

                        (1) the Redemption Date;

                        (2) the Redemption Price;

                        (3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of partial
redemption, respective the principal amounts) of the particular Securities to be
redeemed;

                        (4) that on the Redemption Date, the Redemption Price
                will become due and payable upon each such Security to be
                redeemed and, that interest, if any, thereon will cease to
                accrue on and after said date;

                                       73



                        (5) the place or places where such Securities, together
                in the case of Bearer Securities with all remaining coupons
                appertaining thereto, if any, maturing after the Redemption
                Date, are to be surrendered for payment of the Redemption Price;
                and

                        (6) that the redemption is for a sinking fund, if such
                is the case.

        Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by such
Trustee in the name and at the expense of the Company. The notice if mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice. In any case, a failure to
give such notice by mail or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security.

        Section 11.05   Deposit of Redemption Price.

        Prior to 10:00 A.M., New York City time, on any Redemption Date, the
Company shall deposit or cause to be deposited with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.03) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.

        Section 11.06   Securities Payable on Redemption Date.

        Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
shall cease to bear interest and the coupons for such interest appertaining to
any Bearer Securities so to be redeemed, except to the extent provided below,
shall be void. Upon surrender of any such Securities for redemption in
accordance with said notice, such Securities shall be paid by the Company at the
Redemption Price; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 3.01, only upon
presentation and surrender of coupons for such interest. Installments of
interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such on the close of business on the
relevant Regular Record Dates according to their terms and the provisions of
Section 3.07.

        If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may required to

                                       74



save each of them and any Paying Agent harmless. If thereafter the Holder of
such Bearer Security shall surrender to the Trustee or any Paying Agent any such
missing coupon in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the amount so
deducted from the Company; provided, however, that interest represented by
coupons shall be payable only at an office or agency located outside the United
States and, unless otherwise specified as contemplated by Section 3.01, only
upon presentation and surrender of those coupons.

        If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security, or as otherwise provided in such Security.

        Section 11.07   Securities Redeemed in Part.

        Any Security which is to be redeemed only in part shall be surrendered
at the office or agency of the Company in a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and such Trustee shall authenticate and deliver to
the Holder of such Security without service charge to the Holder, a new Security
or Securities of the same Series and Stated Maturity, of any authorized
denominations as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Security
so surrendered.

                                  ARTICLE XII.

                                  SINKING FUNDS

        Section 12.01   Applicability of Article.

        The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.01 for Securities of such series.

        The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 12.02. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

        Section 12.02   Satisfaction of Sinking Fund Payments with Securities.

        The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) together in the case of any Bearer
Securities of such series, with all unmatured coupons appertaining thereto and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of

                                       75



such Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

        Section 12.03   Redemption of Securities for Sinking Fund.

        Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying (i) the amount of the next ensuing sinking fund payment
for that series pursuant to the terms of that series, (ii) the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 12.02 (such Security to be credited, or proof of
ownership thereof by the Company satisfactory to the Trustee, to be delivered
together with the Officers' Certificate), and (iii) that none of such Securities
has theretofore been so credited and stating the basis for such credit, and will
also deliver to the Trustee any Securities to be so delivered. Not less than 30
days before each sinking fund payment date, the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.03 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided in
Section 11.04. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section
11.06 and 11.07 and subject to the limitations set forth in Section 11.08.

                                  ARTICLE XIII.

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

        Section 13.01   Exemption from Individual Liability.

        No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security or coupon, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations of the Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or coupons or implied
therefrom; and that any and all such personal liability, either at common law or
in equity or by constitution or statute, of, and any and all such rights and
claims against, every such

                                       76



incorporator, stockholder, officer or director, as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or coupons or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of the Securities.

                                  ARTICLE XIV.

                                  MISCELLANEOUS

        Section 14.01   Counterparts.

        This Indenture 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.

                                       77



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

                                            GREATER BAY BANCORP

                                                By /s/ Shawn E. Saunders
                                                  ------------------------------
                                                   Title: Senior Vice President,
                                                   Finance and Accounting

                                            WILMINGTON TRUST COMPANY,
                                                    as Trustee

                                                By /s/ Denise M. Geran
                                                  ------------------------------
                                                   Title: Vice President

                                       78



                                     ANNEX A

                        ADDITIONAL PROVISIONS RELATING TO
                         TRANSFERS IN CERTAIN SITUATIONS

        The following provisions shall only be applicable if the terms of the
Securities of the series provide for their inclusion as permitted under Section
3.01 of the Indenture:

        In Section 1.01, the following definitions shall be added:

                "Certificated Note" means a certificated Security in
                definitive, fully registered form.

                "144A Legend" means the legend set forth on the face of the
                Notes initially sold to qualified institutional buyers (as
                defined in Rule 144A under the Securities Act).

                "Regulation S Legend" means the legend set forth on the face
                of the Notes initially sold to outside the United States in
                accordance with Regulation S under the Securities Act.

                "Restricted Period" means the 40 calendar days after the later
                of the commencement of the offering of the Securities
                represented by the Regulation S Global Note and the issue date
                of such Securities.

                "Unrestricted Certificated Note" means any Certificated Note
                other than a Restricted Certificated Note.

        SECTION 3.14.   Specific Global and Certificated Note Forms.

        (a)     Securities offered and sold to qualified institutional buyers
("QIB"), as such term is defined in Rule 144A promulgated under the Securities
Act of 1933, as amended (the "Securities Act") in reliance on Rule 144A
promulgated under the Securities Act ("Rule 144A Notes") shall be represented by
one or more Securities in registered, global form without interest coupons
(collectively, the "Restricted Global Note"), with such applicable legends as
are provided for herein. Securities offered and sold in offshore transactions in
reliance on Regulation S promulgated under the Securities Act ("Regulation S
Notes") initially shall be represented by one or more Securities in registered,
global form without interest coupons (collectively, the "Regulation S Global
Note," and, together with the Restricted Global Note and any other global notes
representing Securities, the "Global Notes"), with such applicable legends as
are provided for herein. After such time as the Restricted Period shall be
terminated, each such Global Note shall be referred to herein as an
"Unrestricted Global Note." The Global Notes initially shall (i) be registered
in the name of the Depositary Trust Company or another person designated as
depositary by the Company, which person must be a clearing agency registered
under the Securities Exchange Act of 1934, as amended (the "Depository") or the
nominee of such Depository, in each case for credit to an account of an Agent
Member (or, in the case of the Regulation S Global Notes, of Euroclear System
("Euroclear") and Clearstream Banking Luxembourg ("Clearstream")), (ii) be
delivered to the Trustee as custodian for such Depository.

                                    Annex A-1



        Members of, or direct or indirect participants in, the Depository
("Agent Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Notes, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.

        Except as otherwise provided herein or pursuant to Section 3.01,
Securities offered and sold as part of their initial distribution to
"institutional accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) who are not QIBs shall be issued in the form of
Certificated Notes without coupons, registered in the name of the purchaser
thereof (the "Restricted Certificated Notes"), with such applicable legends as
are provided for herein. Restricted Certificated Notes may not be transferred or
exchanged for interests in a Global Note except as provided in Section 3.15.

        Except for Securities authenticated and delivered in connection with
their initial distribution by the Initial Purchasers and unless otherwise agreed
by the Company, no Restricted Certificated Note shall be authenticated and
delivered hereunder unless and until each subsequent purchaser of a beneficial
interest in such Restricted Certificated Note and any subsequent purchaser who
receives a beneficial interest from such subsequent purchaser shall have
executed and delivered to the Company for the offering of such Notes a letter
substantially in the form set forth in Exhibit K and the Company certifies to
the Trustee in writing to that effect.

        Each Global Note shall also bear a legend substantially to the
following effect:

                         "Unless this Note is presented by an authorized
                representative of The Depository Trust Company, a New York
                Corporation ("DTC") to the Company or its agent for
                registration of transfer, exchange or payment, and any Note
                issued is registered in the name of Cede & Co. or such other
                name as requested by an authorized representative of DTC and
                any payment hereon is made to Cede & Co. or such other entity
                as is requested by an authorized representative of DTC, any
                transfer, pledge or other use hereof for value or otherwise by
                a person is wrongful since the registered owner hereof, Cede &
                Co., has an interest herein."

        (b)     Transfers of Global Notes shall be limited to transfer in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for definitive securities in accordance with the rules and procedures
of the Depository and the provisions of Section 3.05. In all cases, definitive
Securities delivered in exchange for any Global Note or beneficial interests
therein shall be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depository (in accordance with
its customary procedures).

                                    Annex A-2



        (c)     In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners of definitive
Securities pursuant to paragraph (b), the Registrar shall reflect on its books
and records the date and a decrease in the principal amount of the Global Note
in an amount equal to the principal amount of the beneficial interest in the
Global Note to be transferred or exchanged, and the Company shall execute, and
the Trustee shall upon receipt of a written order from the Company authenticate
and make available for delivery, one or more definitive Securities of like tenor
and amount.

        (d)   In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in writing in exchange for its beneficial interest
in the Global Notes, an equal aggregate principal amount of definitive
Securities of authorized denominations.

        (e)     The holder of any Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.

        SECTION 3.15.   Special Transfer Provisions.

        (a)     Transfers and Exchanges of Restricted Certificated Notes and
Interests in a Rule 144A Global Note. With respect to the registration of any
proposed transfer or exchange of a Restricted Certificated Note or an interest
in a Rule 144A Global Note, if the Security to be transferred or exchanged
consists of:

        (i)     a Restricted Certificated Note, the Registrar shall register
        the transfer or exchange to:

                (A)     a Rule 144A Global Note if such transfer or exchange is
        being made by a proposed transferor or exchanger who has delivered to
        the Company and the Registrar (x) a certificate from the transferor or
        exchanger substantially in the form of Exhibit E or (y) a certificate
        from the transferee or exchangee advising the Company and the Registrar
        that it is purchasing the Security for its own account or an account
        with respect to which it exercises sole investment discretion and that
        it and any such account is a QIB within the meaning of Rule 144A, and
        is aware that the sale to it is being made in reliance on Rule 144A and
        acknowledges that it has received such information regarding the
        Company as it has requested pursuant to Rule 144A and that it is aware
        that the transferor or exchanger is relying upon its foregoing
        representations in order to claim the exemption from registration
        provided by Rule 144A;

                (B)     a Regulation S Global Note if such transfer or exchange
        is being made by a proposed transferor or exchanger who has delivered to
        the Company and the Registrar (x) a certificate from the transferor or
        exchanger substantially in the form of Exhibit F or (y) a certificate
        from the transferee or exchangee advising the Company and the Registrar
        that it transferred, exchanged or acquired (as applicable) the
        Restricted Certificated Notes in a transaction complying with Rule 903
        or Rule 904 of Regulation S (as applicable)

                                    Annex A-3



under the Securities Act and that, if this transfer or exchange  occurs prior to
the expiration of the Restricted Period,  the interest  transferred or exchanged
will be held immediately thereafter through Euroclear or Clearstream; or

                (C)     an Unrestricted Global Note if such transfer or exchange
        is being made by a proposed transferor or exchanger who has delivered to
        the Company and the Registrar (x) a certificate from the transferor or
        exchanger substantially in the form of Exhibit G or (y) a certificate
        from the transferee or exchangee advising the Company and the Registrar
        that it transferred, exchanged or acquired (as applicable) the
        Restricted Certificated Notes in a transaction complying with Rule 903
        or Rule 904 of Regulation S (as applicable) under the Securities Act and
        that, if this transfer or exchange occurs prior to the expiration of the
        Restricted Period, the interest transferred or exchanged will be held
        immediately thereafter through Euroclear or Clearstream or (z) a
        certificate from the transferee or exchangee advising the Company and
        the Registrar that it transferred, exchanged or acquired (as applicable)
        the Restricted Certificated Notes in a transaction complying with Rule
        144 under the Securities Act.

        Upon the transfer or exchange of Restricted Certificated Notes
        (initially issued to an institutional accredited investor) to a QIB or
        in accordance with Regulation S, these Restricted Certificated Notes
        may, unless the Rule 144A Global Note or the Regulation S Note, as the
        case may be, has previously been exchanged in whole for Restricted
        Certificated Notes, be exchanged for an interest in the Rule 144A Global
        Note or the Regulation S Note, as the case may be. Upon the transfer or
        exchange of a Restricted Certificated Note (initially issued to an
        institutional accredited investor) to an institutional accredited
        investor, that Security will remain a Restricted Certificated Note and
        will require the transferee or exchangee to deliver a certificate to the
        Trustee substantially in the form provided in Exhibit K; or

        (ii)    an interest in a Rule 144A Global Note:

                (A)     to be transferred or exchanged to a transferee or
        exchangee who takes delivery in the form of an interest in a Regulation
        S Global Note, the Registrar shall register the transfer or exchange if
        such transfer or exchange is being made by a proposed transferor or
        exchanger who has delivered to the Registrar a certificate substantially
        in the form of Exhibit H;

                (B)     to be transferred or exchanged to a transferee or
        exchangee who takes delivery in the form of an interest in a Rule 144A
        Global Note, the transfer or exchange of such interest may be effected
        only through the book entry system maintained by the depositary; or

                (C)     to be transferred or exchanged to a transferee or
        exchangee who takes delivery in the form of an interest in an
        Unrestricted Global Note, the Registrar shall register the transfer or
        exchange if such transfer or exchange is being made by a proposed
        transferor or exchanger who has delivered to the Registrar a certificate
        substantially in the form of Exhibit I.

                                   Annex A-4



        (b)     Transfers and Exchanges of Interests in a Regulation S Global
Note. With respect to registration of any proposed transfer or exchange of an
interest in a Regulation S Global Note to a person who takes delivery in the
form of an interest in a Rule 144A Global Note, the Registrar shall register the
transfer or exchange of any Security if the proposed transferor or exchanger has
delivered to the Company and the Registrar a certificate from the transferor or
exchanger substantially in the form of Exhibit J or a certificate from the
transferee or exchangee advising the Company and the Registrar that it is
purchasing the Security for its own account or an account with respect to which
it exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and that the Securities delivered to it shall bear
the Rule 144A Legend and acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A and that it is
aware that the transferor or exchanger is relying upon its foregoing
representations in order to claim the exemption from registration provided by
Rule 144A. The Company shall use its best efforts to cause the depositary to
ensure that beneficial interests in a Regulation S Global Note may be held only
in or through accounts maintained at the depositary by or on behalf of Euroclear
or Clearstream, and no person shall be entitled to effect any transfer or
exchange that would result in any such interest being held otherwise than in or
through such account, except as provided in this Section 3.15(b); provided that
after the expiration of the Restricted Period (but not earlier), investors may
also hold these interests through organizations other than Euroclear and
Clearstream that are participants in the Depository Trust Company system.

        (c)     Transfers and Exchanges of Unrestricted Certificated Notes or
Interests in the Unrestricted Global Note. With respect to any transfer or
exchange of Unrestricted Certificated Notes or interests in the Unrestricted
Global Note, the Registrar shall register the transfer or exchange of any such
Security without requiring any additional certification.

        (d)     Legends. Upon the transfer, exchange or replacement of
Securities that do not bear the Rule 144A Legend or the Regulation S Legend, the
Registrar shall deliver Securities that do not bear either the Rule 144A Legend
or the Regulation S Legend. Upon the transfer, exchange or replacement of
Securities bearing the Rule 144A Legend or the Regulation S Legend, the
Registrar shall deliver only Securities that bear the Rule 144A Legend or the
Regulation S Legend, as the case may be, unless (i) the circumstances
contemplated by subparagraphs (a)(i)(C) or (a)(ii)(C) of this Section 3.15 exist
or (ii) in the case of an exchange of an interest in a Regulation S Global Note
for an interest in an Unrestricted Certificated Note or Unrestricted Global Note
in the manner contemplated in 3.14(a) after the expiration of the Restricted
Period or (iii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer or exchange are
required in order to maintain compliance with the provisions of the Securities
Act.

        (e)     General. By its acceptance of any Security bearing the Rule 144A
Legend or the Regulation S Legend, each holder of such a Security acknowledges
the restrictions on transfer or exchange of such Security set forth in this
Indenture and in such restrictive legend and agrees that it will transfer or
exchange such Security only as provided in this Indenture and such restrictive
legend. The Registrar shall not register a transfer or exchange of any Security
unless such transfer or exchange complies with the restrictions on transfer or
exchange of such Security

                                   Annex A-5



set forth in this Indenture. In connection with any transfer or exchange of
Securities, each holder agrees by its acceptance of the Notes to furnish the
Registrar or the Company with such certifications, legal opinions or other
information as either of them may reasonably require to confirm that such
transfer or exchange is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
provided that the Registrar shall not be required to determine (but may rely on
a determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.

        The Registrar shall retain for a period of two years copies of all
letters, notices and other written communications received pursuant to this
Section and the previous Section. The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable notice to the Registrar.

                                   Annex A-6



                                    EXHIBIT A

                       FORM OF CERTIFICATE TO BE GIVEN BY
               PERSON ENTITLED TO RECEIVE BEARER NOTE CERTIFICATE

     [Insert title or sufficient description of Securities to be delivered]

        This is to certify that the above-captioned Securities are not being
acquired by or on behalf of a United States person, or, if a beneficial interest
in the Securities is being acquired by or on behalf of a United States person,
that such United States person is a financial institution within the meaning of
Section 1.165-12(c)(1)(iv) of the United States Treasury regulations which
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, and the regulations thereunder. If the
undersigned is a dealer, the undersigned agrees to obtain a similar certificate
from each person entitled to delivery of any of the above-captioned Securities
in bearer form purchased from it; provided, however, that, if the undersigned
has actual knowledge that the information contained in such a certificate is
false, the undersigned will not deliver a Security in temporary or definitive
bearer form to the person who signed such certificate notwithstanding the
delivery of such certificate to the undersigned.

        As used herein, "United States person" means any citizen or resident of
the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States federal income taxation regardless
of its source, and "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.

        We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.

        We understand that this certificate is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Dated:  ______________________, 20__


                                      [Name of Person Entitled to Receive Bearer
                                         Security]

                                      ------------------------------------
                                      (Authorized Signatory)

                                      A-1



                                    EXHIBIT B

                FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND
                 CLEARSTREAM IN CONNECTION WITH THE EXCHANGE OF
                A PORTION OF A TEMPORARY GLOBAL NOTE CERTIFICATE

     [Insert title or sufficient description of Securities to be delivered]

        This is to certify with respect to $_____________ principal amount of
the above-captioned Securities (i) that we have received from each of the
persons appearing in our records as persons entitled to a portion of such
principal amount (our "Qualified Account Holders") a certificate with respect to
such portion substantially in the form attached hereto, and (ii) that we are not
submitting herewith for exchange any portion of the temporary global Security
representing the above-captioned Securities excepted in such certificates.

        We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any portion of
the part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.

Dated:  ______________________, 20__
[To be dated no earlier than the Exchange Date]


                                      [Euroclear  Bank,  S.A./N.V.,  as Operator
                                         of the Euroclear  System] [Clearstream
                                           Banking, S.A.]

                                      By:
                                         -----------------------------------

                                       B-1



                                    EXHIBIT C

                FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND
            CLEARSTREAM TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE
                                   CERTIFICATE

             [Insert title or sufficient description of Securities]

        This is to certify that, as of the Interest Payment Date on [Insert
Date], the undersigned, which is a holder of an interest in the temporary global
Security representing the above Securities, is not a United States person.

        As used herein, "United States person" means any citizen or resident of
the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source, and "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.

        We confirm that the interest payable on such Interest Payment Date will
be paid to each of the persons appearing in our records as being entitled to
interest to be paid on the above date from whom we have received a written
certification dated not earlier than 15 days prior to such Interest Payment date
to the effect that the beneficial owner of such portion with respect to which
interest is to be paid on such date either is not a United States person or is a
United States person which is a financial institution which has provided an
Internal Revenue Service Form W-9 or is an exempt recipient as defined in United
States Treasury Regulations ss. 1.6049-4(c)(1)(ii). We undertake to retain
certificates received from our member organizations in connection herewith for
four years from the end of the calendar year in which such certificates are
received.

                                       C-1



                                    EXHIBIT D

             FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS TO
              OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE CERTIFICATE

             [Insert title or sufficient description of Securities]

        This is to certify that as of the date hereof, no portion of the
temporary global Security representing the above-captioned Securities and held
by you for our account is beneficially owned by a United States person or, if
any portion thereof held by you for our account is beneficially owned by a
United States person, such United States person is a financial institution
within the meaning of Section 1.165-12(c)(1)(iv) of the United States Treasury
regulations which agrees to comply with Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986 and the regulations thereunder, and certifies that
either it has provided an Internal Revenue Service Form W-9 or is an exempt
recipient as defined in Section 1.6049-4(c)(1)(ii) of the United States Treasury
regulations.

        As used herein, "United States person" means any citizen or resident of
the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source, and "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.

        We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the Interest Payment Date on [Insert
Date] as to any such portion of such temporary global Security.

                                       D-1



        We understand that this certificate is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Dated:  ______________________, 20__
[To be dated no earlier than 15 days prior to the Exchange Date]

                                      [Name of Person Entitled to Receive Bearer
                                         Security]

                                      ------------------------------------
                                         (Authorized Signatory)

                                      Name:
                                      Title:

        The foregoing reflects any advice received subsequent to the date of any
certificate stating that the statements contained in such certificate are no
longer correct.

Dated:  ______________________, 20__
[To be dated on or after the relevant Interest Payment Date]

                                      [Euroclear  Bank,  S.A./N.V.,  as Operator
                                         of the Euroclear  System] [Clearstream
                                           Banking S.A.]

                                      By:
                                         ---------------------------------

        We understand that this certificate is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Dated:

Dated:  ______________________, 20__
[To be dated on or after the 15th day before the relevant Interest Payment Date]

                                      [Name of Account Holder]

                                      By:
                                         ---------------------------------
                                             (Authorized Signatory)

                                      Name:
                                      Title:

                                       D-2



                                    EXHIBIT E

                      FORM OF TRANSFER/EXCHANGE CERTIFICATE
               FOR TRANSFER/EXCHANGE FROM RESTRICTED CERTIFICATED
                          NOTE TO RULE 144A GLOBAL NOTE
  (Transfers and exchanges pursuant to Section 3.15(a)(i)(A) of the Indenture)

[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20____ of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company") and [Name of Trustee],
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

        This letter relates to US$_______________ principal amount of Notes
presented or surrendered on the date hereof (the "Surrendered Notes") which are
registered in the name of [insert name of transferor/exchanger] (the
"Transferor"). The Transferor has requested a transfer or exchange of such
Surrendered Notes to a person that will take delivery thereof in the form of an
equal principal amount of Notes evidenced by one or more Rule 144A Global Notes
(CUSIP [ISIN] No. ________).

        In connection with such request and in respect of such Surrendered
Notes, the Transferor does hereby certify that such transfer or exchange is
being effected pursuant to and in accordance with Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor
does hereby further certify that the Surrendered Notes are being transferred to
a person that the Transferor reasonably believes is purchasing the Surrendered
Notes for its own account, or for one or more accounts with respect to which
such person exercises sole investment discretion, and such person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A, and in
accordance with any applicable securities laws of any state of the United States
or any other jurisdiction.

                                       E-1



        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters and initial
purchasers, if any, of the Notes being transferred.

[Insert Name of Transferor]

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


Dated:
      --------------------------------------

cc:   [Name of Issuer]

                                       E-2



                                    EXHIBIT F

                      FORM OF TRANSFER/EXCHANGE CERTIFICATE
               FOR TRANSFER/EXCHANGE FROM RESTRICTED CERTIFICATED
                        NOTE TO REGULATION S GLOBAL NOTE
  (Transfers and exchanges pursuant to Section 3.15(a)(i)(B) of the Indenture)

[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20____ of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company") and [Name of Trustee],
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

        This letter relates to US$_______________ principal amount of Notes
presented or surrendered on the date hereof (the "Surrendered Notes") which are
registered in the name of [insert name of transferor/exchanger] (the
"Transferor"). The Transferor has requested a transfer or exchange of such
Surrendered Notes to a person that will take delivery thereof in the form of an
equal principal amount of Notes evidenced by one or more Regulation S Global
Notes (CUSIP [ISIN] No. ________), which amount, immediately after such
transfer, is to be held with the Depositary through Euroclear or Clearstream or
both (Common Code: ).

        In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such transfer or exchange has been effected
pursuant to and in accordance with Rule 903 or Rule 904 (as applicable) under
the Securities Act of 1933, as amended (the "Securities Act"), and accordingly
the Transferor does hereby further certify that:

        (1)     the offer of the Notes was not made to a person in the United
                States;

        (2)     either:

                (A) at the time the buy order was originated, the transferee or
                exchangee was outside the United States or the Transferor and
                any person acting on its behalf reasonably believed that the
                transferee or exchangee was outside the United States, or

                (B) the transaction was executed in, on or through the
                facilities of a designated offshore securities market and
                neither the Transferor nor any person acting on its behalf knows
                that the transaction was pre-arranged with a buyer in the United
                States;

        (3)     no directed selling efforts have been made in contravention of
                the requirements of Rule 903(b) or 904(b) of Regulation S, as
                applicable;
                                       F-1



        (4)     the transaction is not part of a plan or scheme to evade the
        registration requirements of the Securities Act; and

        (5)     upon completion of the transaction, the Notes being transferred
        as described above are to be held with the Depositary through Euroclear
        or Clearstream or both (Common Code).

        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters or initial
purchasers, if any, of the initial offering of such Notes being transferred.
Terms used in this certificate and not otherwise defined in the Indenture have
the meanings set forth in Regulation S under the Securities Act.

[Insert Name of Transferor]

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

Dated:
      --------------------------------------

cc:   [Name of Issuer]

                                       F-2



                                    EXHIBIT G

                      FORM OF TRANSFER/EXCHANGE CERTIFICATE
               FOR TRANSFER/EXCHANGE FROM RESTRICTED CERTIFICATED
                        NOTE TO UNRESTRICTED GLOBAL NOTE
  (Transfers and exchanges pursuant to Section 3.15(a)(i)(C) of the Indenture)

[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20____ of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company") and [Name of Trustee],
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

        This letter relates to US$________ principal amount of Notes presented
or surrendered on the date hereof (the "Surrendered Notes") which are registered
in the name of [insert name of transferor/exchanger] (the "Transferor"). The
Transferor has requested a transfer or exchange of such Surrendered Notes to a
person that will take delivery thereof in the form of an equal principal amount
of Notes evidenced by one or more Unrestricted Global Notes (CUSIP [ISIN] No.
________).

        In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such transfer or exchange has been effected
pursuant to and in accordance with either (i) Rule 903 or Rule 904 (as
applicable) under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) Rule 144 under the Securities Act, and accordingly the Transferor does
hereby further certify that:

        (1)     if the transfer or exchange has been effected pursuant to Rule
                903 or Rule 904:

                (A)     the offer of the Notes was not made to a person in the
                        United States;

                (B)     either:

                        (i) at the time the buy order was originated, the
                        transferee or exchangee was outside the United States or
                        the Transferor and any person acting on its behalf
                        reasonably believed that the transferee or exchangee was
                        outside the United States, or

                        (ii) the transaction was executed in, on or through the
                        facilities of a designated offshore securities market
                        and neither the Transferor nor any person acting on its
                        behalf knows that the transaction was pre-arranged with
                        a buyer in the United States;

                (C)     no directed selling efforts have been made in
                contravention of the requirements of Rule 903(b) or 904(b) of
                Regulation S, as applicable; and

                                       G-1



                (D)     the transaction is not part of a plan or scheme to evade
                the registration requirements of the Securities Act; or

        (2)     if the transfer or exchange has been effected pursuant to Rule
        144, the Notes have been transferred in a transaction permitted by Rule
        144.

        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters and initial
purchasers, if any, of the Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.

[Insert Name of Transferor]
By:
   -----------------------------------------

     Name:
     Title:

Dated:
      --------------------------------------

cc:    [Name of Issuer]

                                       G-2



                                    EXHIBIT H

                      FORM OF TRANSFER/EXCHANGE CERTIFICATE
                   FOR TRANSFER/EXCHANGE FROM RULE 144A GLOBAL
                           NOTE TO REGULATION S GLOBAL
  (Transfers and exchanges pursuant to Section 3.15(a)(ii)(A) of the Indenture)

[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20____of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company"), and [Name of
Trustee], as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.

        This letter relates to US$___________ principal amount of Notes which
are evidenced by one or more Rule 144A Global Notes (CUSIP [ISIN] No. ________)
and held with the Depositary in the name of [insert name of
transferor/exchanger] (the "Transferor"). The Transferor has requested a
transfer or exchange of such beneficial interest in the Notes to a person who
will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Regulation S Global Notes (CUSIP [ISIN] No. ________)
which amount, immediately after such transfer, is to be held with the Depositary
through Euroclear or Clearstream or both (Common Code): [     ].

        In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such transfer or exchange has been effected
pursuant to and in accordance with Rule 903 or Rule 904 (as applicable) under
the Securities Act of 1933, as amended (the "Securities Act"), and accordingly
the Transferor does hereby further certify that:

        (1)     the offer of the Notes was not made to a person in the United
        States;

        (2)     either:

                (A)     at the time the buy order was originated, the transferee
                or exchangee was outside the United States or the Transferor and
                any person acting on its behalf reasonably believed that the
                transferee or exchangee was outside the United States, or

                (B)     the transaction was executed in, on or through the
                facilities of a designated offshore securities market and
                neither the Transferor nor any person acting on its behalf knows
                that the transaction was prearranged with a buyer in the United
                States;

        (3)     no directed selling efforts have been made in contravention of
        the requirements of Rule 903(b) or 904(b) of Regulation S, as
        applicable;

        (4)     the transaction is not part of a plan or scheme to evade the
        registration requirements of the Securities Act; and

                                       H-1



        (5)     upon completion of the transaction, the beneficial interest
        being transferred as described above is to be held with the Depositary
        through Euroclear or Clearstream or both.

        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters or initial
purchasers, if any, of the initial offering of such Notes being transferred or
exchanged. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.

[Insert Name of Transferor]

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

Dated:
      --------------------------------------

cc:     [Name of Issuer]

                                       H-2



                                    EXHIBIT I

                      FORM OF TRANSFER/EXCHANGE CERTIFICATE
                   FOR TRANSFER/EXCHANGE FROM RULE 144A GLOBAL
                        NOTE TO UNRESTRICTED GLOBAL NOTE
  (Transfers and exchanges pursuant to Section 3.15(a)(ii)(C) of the Indenture)

[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20____ of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company") and [Name of Trustee],
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

        This letter relates to US$ ___________ principal amount of Notes which
are evidenced by one or more Rule 144A Global Notes (CUSIP [ISIN] No. ______)
and held with the Depositary in the name of [insert name of
transferor/exchanger] (the "Transferor"). The Transferor has requested a
transfer or exchange of such beneficial interest in the Notes to a person that
will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Unrestricted Global Notes (CUSIP [ISIN] No. ________).

        In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such transfer or exchange has been effected
pursuant to and in accordance with either (i) Rule 903 or Rule 904 (as
applicable) under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) Rule 144 under the Securities Act, and accordingly the Transferor does
hereby further certify that:

        (1)     if the transfer or exchange has been effected pursuant to Rule
        903 or Rule 904:

                (A)     the offer of the Notes was not made to a person in the
                United States;

                (B)     either:

                        (i) at the time the buy order was originated, the
                        transferee or exchangee was outside the United States or
                        the Transferor and any person acting on its behalf
                        reasonably believed that the transferee or exchangee was
                        outside the United States, or

                        (ii) the transaction was executed in, on or through the
                        facilities of a designated offshore securities market
                        and neither the Transferor nor any person acting on its
                        behalf knows that the transaction was pre-arranged with
                        a buyer in the United States;

                (C)     no directed selling efforts have been made in
                contravention of the requirements of Rule 903(b) or 904(b) of
                Regulation S, as applicable; and

                                       I-1



                (D)     the transaction is not part of a plan or scheme to evade
                the registration requirements of the Securities Act; or

        (2)     if the transfer or exchange has been effected pursuant to Rule
        144, the Notes have been transferred in a transaction permitted by Rule
        144.

        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters and initial
purchasers, if any, of the Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.

[Insert Name of Transferor]

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

Dated:
      --------------------------------------

cc:    [Name of Issuer]

                                       I-2



                                    EXHIBIT J

                      FORM OF TRANSFER/EXCHANGE CERTIFICATE
                 FOR TRANSFER/EXCHANGE FROM REGULATION S GLOBAL
                          NOTE TO RULE 144A GLOBAL NOTE
     (Transfers and exchanges pursuant to Section 3.15(b) of the Indenture)
                            [Transferor Certificate]

[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20____ of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company") and [Name of Trustee],
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

        This letter relates to US$____________ principal amount of Notes which
are evidenced by one or more Regulation S Global Notes (CUSIP [ISIN] No.
________) and held with the Depository though [Euroclear] [Clearstream] (Common
Code: ) in the name of [insert name of transferor/exchanger] (the "Transferor").
The Transferor has requested a transfer or exchange of such beneficial interest
in Notes to a person that will take delivery thereof (the "Transferee") in the
form of an equal principal amount of Notes evidenced by one or more Rule 144A
Global Notes (CUSIP [ISIN] No. ________).

        In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such Transferor did not purchase such Notes
as part of their initial distribution and the transfer or exchange is being
effected pursuant to and in accordance with an exemption from the Securities Act
of 1933, as amended (the "Securities Act"), and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.

        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters and initial
purchasers, if any, of the Notes being transferred.

[Insert Name of Transferor]

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

Dated:
      --------------------------------------

cc:     [Name of Issuer]

                                       J-1



                            [Transferee Certificate]
[Name                                  of                               Trustee]
[address]

           Re: ___% Notes due 20___ of [Name of Issuer] (the "Notes")

        Reference is hereby made to the Indenture, dated as of _____ __, 20__
(the "Indenture"), among [Name of Issuer] (the "Company") and [Name of Trustee],
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

        This letter relates to US$____________ principal amount of Notes which
are evidenced by one or more Regulation S Global Notes (CUSIP [ISIN] No.
________) and held with the Depository through [Euroclear] [Clearstream] (Common
Code:          ) in the name of [insert name of transferor/exchanger] (the
"Transferor"). The Transferor has requested a transfer or exchange of such
beneficial interest in Notes [insert name of transferee/exchangee] (the
"Transferee") in the form of an equal principal amount of Notes evidenced by one
or more Rule 144A Global Notes (CUSIP [ISIN] No. ________).

        In connection with such request and in respect of such Notes, the
Transferee does hereby certify that it is purchasing the Notes for its own
account, or for one or more accounts with respect to which the Transferee
exercises sole investment discretion, and the Transferee and each such account
is a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act (a "QIB").

        The Transferee hereby agrees that any future resale, pledge, transfer or
exchange of such Notes may be made only (i) to the Company, (ii) to a person who
the seller reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A, (iii) in an offshore transaction complying with Rule
903 or Rule 904 (as applicable) of Regulation S under the Securities Act, (iv)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 (if available), (v) pursuant to any other available exemption from the
registration requirements under the Securities Act (provided that as a condition
to the registration of transfer or exchange of any such Notes pursuant to this
clause (v) the Company or the Trustee may require delivery of any documents or
other evidence (including but not limited to an opinion of counsel) that it, in
its sole discretion, may deem necessary or appropriate to evidence compliance
with such exemption), or (vi) pursuant to an effective registration statement
under the Securities Act, and in each of such cases in accordance with any
applicable securities laws of any state of the United States. The Transferee
will notify any purchaser of Notes from it of the resale restrictions referred
to above, if then applicable.

                                      J-2



        This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the underwriters and initial
purchasers, if any, of the Notes being transferred.

[Insert Name of Transferor]

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

Dated:
      --------------------------------------

cc:     [Name of Issuer]

                                       J-3



                                    EXHIBIT K

      FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS

Greater Bay Bancorp
2860 West Bayshore Road
Palo Alto, California 94303

[placement agent]

Dear Ladies and Gentlemen:

         We are delivering this letter in connection with an offering of *%
Senior Notes, Series A, due 2006 (the "notes") of Greater Bay Bancorp ("Greater
Bay), all as described in the offering circular (the "offering circular")
relating to the offering.

        We hereby confirm that:

        (a)     we are an institutional "accredited investor" within the meaning
                of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
                1933, as amended (the "Securities Act") (an "institutional
                accredited investor");

        (b)     any purchase of the notes by us will be for our own account or
                for the account of one or more other institutional accredited
                investors for which we exercise sole investment discretion;

        (c)     in the event that we purchase any of the notes, we will acquire
                notes having a minimum purchase price of not less than $100,000,
                in each case for our own account or for any separate account for
                which we are acting;

        (d)     we have such knowledge and experience in financial and business
                matters that we are capable of evaluating the merits and risks
                of purchasing the notes;

        (e)     we are not acquiring the notes with a view to, or for offer or
                sale in connection with, any distribution in violation of the
                Securities Act; and

        (f)     we have received a copy of the offering circular and acknowledge
                that we have had access to such financial and other information,
                and have been afforded the opportunity to ask such questions of
                the placement agent of Greater Bay and receive answers thereto,
                as we deem necessary in connection with our decision to purchase
                the notes.

        We understand that the notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the notes have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any notes, that if in the future we decide to offer, resell, pledge or
otherwise

                                       K-1



transfer such notes, such notes may be offered, resold, pledged or otherwise
transferred only (a) to Greater Bay, (b) to a person whom we reasonably believe
is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act), (c) to a person whom we reasonably believe is an institutional
accredited investor in a transaction in which the institutional accredited
investor, prior to the transfer, furnishes to Greater Bay a signed letter
substantially in the form of letter or (d) pursuant to any other available
exemption from the registration requirements of the Securities Act, in each of
cases (a) through (d), in accordance with any applicable securities laws of any
state of the United States or any other applicable jurisdiction. We understand
that, prior to any transfer referred to in clause (c) of the preceding sentence,
we must furnish to Greater Bay for the notes such certifications, legal opinions
and other information as Greater Bay may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.

        We acknowledge that you, Greater Bay and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.

        THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW RULES.

                                                  Name of Purchaser

Date:___________________                          By:
                                                     ---------------------------
                                                  Name:
                                                  Title:
                                                  Address:

                                       K-2

EX-4.2

                                                                     Exhibit 4.2

                               GREATER BAY BANCORP

                              Officers' Certificate
                    Pursuant to Section 3.01 of the Indenture
                    -----------------------------------------

         Pursuant to Section 3.01 of the Indenture, dated as of March 24, 2003
(the "Indenture"), between Greater Bay Bancorp (the "Company") and Wilmington
Trust Company, as trustee (the "Trustee"), each of the undersigned, the
Executive Vice President, Chief Administrative Officer and Chief Financial
Officer and the Senior Vice President, Finance and Accounting of the Company,
hereby certifies, on the Company's behalf, as follows:

     1. The issuance of Securities of the series designated as the "5.25% Notes,
Series A, due March 31, 2008" in an aggregate principal amount of $150,000,000
(the "Series A Notes") and the issuance of Securities of the series designated
as the "5.25% Notes, Series B, due 2008" (the "Series B Notes") in up to a like
principal amount as the Series A Notes (and in exchange for the Series A Notes),
have been approved and authorized in accordance with the provisions of the
Indenture by resolutions adopted by the Board of Directors of the Company on
January 21, 2003 and by a duly authorized committee of the Board of Directors on
March 19, 2003; such resolutions have not been amended, modified or rescinded
and remain in full force and effect; and such resolutions are the only
resolutions adopted by the Company's Board of Directors, or any committee of
such Board of Directors, relating to the Series A Notes and the Series B Notes.

     2. The Series A Notes are being sold by the Company pursuant to an Offering
Memorandum, dated March 19, 2003 (the "Offering Memorandum").

     3. Capitalized terms not otherwise defined herein shall have the same
meanings set forth in the Indenture.

     4. The terms of the series of Series A Notes shall be as follows:

        (a)  The title of the Series A Notes are "5.25% Notes, Series A, due
             March 31, 2008".

        (b)  The Series A Notes are to be issued in an aggregate principal
             amount of $150,000,000.

        (c)  The principal amount of the Series A Notes shall be payable on
             March 31, 2008.

        (d)  The Series A Notes shall be subject to the Events of Default
             specified in Section 5.01, paragraphs (1), (2), (5), (6),
             (7) and (8), of the Indenture.

        (e)  Section 4.03 of the Indenture shall be applicable to the
             Series A Notes.

        (f)  The Series A Notes shall bear interest at a rate of 5.25%
             per annum (based upon a 360 day year consisting of twelve
             30-day months), from and including the date of original
             issuance (the "Series A Original Issuance Date") or from and
             including the most recent interest payment date to which


             interest has been paid or duly provided for, as the case may
             be, payable semi-annually in arrears on March 31 and
             September 30 of each year (each an "Interest Payment Date")
             commencing on September 30, 2003 until the principal thereof
             is paid or made available for payment. The interest so
             payable, and punctually paid or duly provided for, on any
             Interest Payment Date will, as provided in the Indenture, be
             paid to the Person in whose name such Note (or one or more
             Predecessor Notes) is registered at the close of business on
             the 15th calendar day immediately preceding the relevant
             Interest Payment Date. Any such interest not so punctually
             paid or duly provided for will forthwith cease to be payable
             to the Holder on such Regular Record Date and may either be
             paid to the Person in whose name such Note (or one or more
             Predecessor Notes) is registered at the close of business on
             a Special Record Date for the payment of such Defaulted
             Interest to be fixed by the Trustee, notice whereof shall be
             given to Holders of Notes of this series not less than 10
             days prior to such Special Record Date, or be paid at any
             time in any other lawful manner The amount of interest
             payable for any partial semiannual period will be computed
             on the basis of the actual number of days elapsed during
             that period.

        (g)  The Trustee for the Series A Notes shall be Wilmington Trust
             Company, who shall also be the Securities Registrar and
             initial transfer agent for the Series A Notes (subject to
             the Company's right to remove the Trustee as such transfer
             agent and, from time to time, to designate one or more other
             transfer agents and to rescind from time to time any such
             designations). The Securities Registrar's office as of the
             date hereof is 1100 North Market Street, Wilmington,
             Delaware 19890-0001.

        (h)  The Series A Notes (i) offered and sold to "qualified
             institutional buyers" (referred to herein as "QIBs") as
             defined in Rule 144A of the Securities Act of 1933, as
             amended (the "Securities Act") and (ii) outside the United
             States in accordance with Regulation S may be issued in
             book-entry form and, if so issued, will be represented by
             Restricted Global Notes (as defined in Annex A to the
                                                    -------
             Indenture) delivered to The Depository Trust Company
             ("DTC"), and recorded in the book-entry system maintained by
             DTC. The Series A Notes offered and sold to QIBs will be
             issued as a Restricted Global Note (as defined in Annex A of
                                                               -------
             the Indenture) and the Series A Notes offered and sold
             outside the United States in accordance with Regulation S
             will be issued as a Regulation S Global Note (as defined in
             Annex A of the Indenture). The CUSIP numbers for the
             Restricted Global Note is CUSIP No. 391648 AK 8 and for the
             Regulation S Global Note is U39020 AA 7.

        (i)  The Series A Notes offered and sold to institutional
             accredited investors (referred to herein as "IAIs") that are
             "accredited investors" within meaning of subparagraph
             (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
             will be issued in certificated form as a Restricted
             Certificated Note (as


             defined in Annex A to the Indenture). The CUSIP number for
                        -------
             the Restricted Certificated Notes is CUSIP No. 391648 AM 4.

        (j)  Annex A of the Indenture shall be applicable to the Series A
             -------
             Notes.

        (k)  The Series A Notes shall not be issued in the form of a
             temporary Global Note.

        (l)  The Series A Notes will be issued and transferable only in
             denominations of $1,000 or any amount in excess thereof
             which is an integral multiple of $1,000; provided, however,
             that the Restricted Certificated Notes will have minimum
             denominations of $100,000.

        (m)  The certificates for the Series A Notes issued as a
             Restricted Global Note, a Regulation S Global Note and in
             certificated form as Restricted Certificated Notes shall be
             in substantially the form of Exhibit A, which contains such
                                          ---------
             restrictive legends as shall be applicable to the Restricted
             Global Note, the Regulation S Global Note or the Restricted
             Certificated Notes as set forth therein.

        (n)  The Series A Notes shall be subject to the restrictions on
             transfer as described under the heading "Notice to
             Investors" in the Offering Memorandum.

        (o)  The Trustee shall be the Paying Agent. The Paying Agent's
             office as of the date hereof is 1100 North Market Street,
             Wilmington, Delaware 19890-0001.

        (p)  Subject to Section 10.02 of the Indenture, payments of
             principal, premium, if any, and interest on the Restricted
             Global Notes will be made to DTC, or its nominee, as the
             case may be, as the registered owner or holder of the
             Restricted Global Notes. In the event that any of the Series
             A Notes are issued in certificated form in exchange for the
             Series A Notes issued in global form, as set forth in the
             Indenture, principal and interest thereon will be payable at
             the office of the Paying Agent; provided that payment of
             interest, other than interest payable at maturity, may be
             made at the option of the Company by check mailed by the
             Paying Agent to the address of the person entitled thereto
             as shown on the Securities Register. Notwithstanding the
             foregoing, the payments of interest to DTC or its nominee
             shall be made by wire transfer in immediately available
             funds.

        (q)  Subject to Section 10.02 of the Indenture, payments of
             principal, premium, if any, and interest on the Restricted
             Certificated Notes will be payable at the office of the
             Paying Agent; provided that payment of interest, other than
             interest payable at maturity, may be made at the option of
             the Company by check mailed by the Paying Agent to the
             address of the person entitled thereto as shown on the
             Securities Register.



        (r)  The Series A Notes shall be denominated, and payment of
             principal of (and premium, if any) and interest on the
             Series A Notes will be made in United States dollars.

        (s)  The Company may not satisfy all or part of its obligations
             with regard to payment or delivery upon Maturity, or any
             interest payment by delivering Maturity Consideration.

        (t)  The Series A Notes are not redeemable. The Series A Notes
             will not be subject to any sinking fund.

        (u)  The portion of the principal amount of the Series A Notes
             (and, if outstanding, the Series B Notes) which shall be
             payable upon declaration of acceleration of maturity thereof
             shall not be other than the principal amount thereof,
             provided, that, if such acceleration is declared by the
             Holders of at least 25% in aggregate principal amount of the
             Series A Notes then outstanding (and, if any Series B Notes
             are outstanding, 25% in aggregate principal amount of both
             the Series A Notes and Series B Notes then outstanding
             voting together as a single class), then, upon such
             declaration of acceleration, the Series A Notes which shall
             be payable (and, if outstanding, the Series B Notes which
             shall be payable) shall be the principal amount thereof, or
             premium if any, plus accrued interest.

        (v)  The Series A Notes will not be convertible into any other
             securities or property of the Company.

        (w)  The Series A Notes may be exchanged for the Series B Notes
             when the conditions for issuance of the Series B Notes have
             been satisfied.

        (x)  The Series A Notes will be issued in fully registered form,
             without coupons. The Series A Notes will not be issued in
             bearer form.

        (y)  The amount of payments of principal of (and premium, if any)
             or interest on the Series A Notes will not be determined
             with reference to an index.

        (z)  Series A Notes which are registered in the Securities
             Register may be presented for transfer or exchange at the
             office or agency of the Company in any place where the
             principal and interest on the Series A Note are payable.

        (aa) The place where notices and demands to or upon the Company
             may be made is at the office of the Paying Agent.

        (bb) The Series A Notes shall vote and consent together with the
             Series B Notes as a single class.

        (cc) The Series A Notes shall have any additional terms which
             terms shall not be inconsistent with the provisions of the
             Indenture.



     5. The Series B Notes will be issued with the intent to exchange the Series
A Notes with a like principal amount of Series B Notes, with materially
identical terms, except that the Series B Notes will be registered with the
Securities and Exchange Commission and thus will not be subject to certain
restrictions on transfer.

     6. The terms of the series of Series B Notes shall be as follows:

        (a)  The title of the Series B Notes are "5.25% Notes, Series B,
             due March 31, 2008".

        (b)  The Series B Notes are to be issued in an aggregate
             principal amount of $150,000,000, or such lesser amount of
             the Series A Notes then outstanding, or such lesser amount
             of the Series A Notes that are exchanged for the Series B
             Notes.

        (c)  The principal amount of the Series B Notes shall be payable
             on March 31, 2008.

        (d)  The Series B Notes shall be subject to the Events of Default
             specified in Section 5.01, paragraphs (1), (2), (5), (6), (7) and
             (8), of the Indenture.

        (e)  Section 4.03 of the Indenture shall be applicable to the
             Series B Notes.

        (f)  The Series B Notes shall bear interest at a rate of 5.25%
             per annum (based upon a 360 day year consisting of twelve
             30-day months), from and including the Series A Original
             Issuance Date or from and including the most recent interest
             payment date to which interest has been paid or duly
             provided for, as the case may be, payable semi-annually in
             arrears on March 31 and September 30 of each year (each an
             "Interest Payment Date") commencing on September 30, 2003
             until the principal thereof is paid or made available for
             payment. The interest so payable, and punctually paid or
             duly provided for, on any Interest Payment Date will, as
             provided in the Indenture, be paid to the Person in whose
             name such Note (or one or more Predecessor Notes) is
             registered at the close of business on the 15th calendar day
             immediately preceding the relevant Interest Payment Date.
             Any such interest not so punctually paid or duly provided
             for will forthwith cease to be payable to the Holder on such
             Regular Record Date and may either be paid to the Person in
             whose name such Note (or one or more Predecessor Notes) is
             registered at the close of business on a Special Record Date
             for the payment of such Defaulted Interest to be fixed by
             the Trustee, notice whereof shall be given to Holders of
             Notes of this series not less than 10 days prior to such
             Special Record Date, or be paid at any time in any other
             lawful manner The amount of interest payable for any partial
             semiannual period will be computed on the basis of the
             actual number of days elapsed during that period.



        (g)  The Trustee for the Series B Notes shall be Wilmington Trust
             Company, who shall also be the Securities Registrar and
             initial transfer agent for the Series B Notes (subject to
             the Company's right to remove the Trustee as such transfer
             agent and, from time to time, to designate one or more other
             transfer agents and to rescind from time to time any such
             designations). The Securities Registrar's office as of the
             date hereof is 1100 North Market Street, Wilmington,
             Delaware 19890-0001.

        (h)  The Series B Notes may be issued in book-entry form and, if
             so issued, will be represented by an Unrestricted Global
             Note (as defined in Annex A of the Indenture) delivered to
                                 -------
             The Depository Trust Company ("DTC"), and recorded in the
             book-entry system maintained by DTC. The CUSIP number for
             the Series B Notes is CUSIP No. 391648 AL 6.

        (i)  Annex A of the Indenture shall be applicable to the Series B
             -------
             Notes.

        (j)  The Series B Notes shall not be issued in the form of a
             temporary Global Note.

        (k)  The Series B Notes will be issued and transferable only in
             denominations of $1,000 or any amount in excess thereof
             which is an integral multiple of $1,000.

        (l)  The Series B Notes held by Initial Purchasers will have the
             same legends applicable to the Series A Notes that were so
             exchanged (referred to as the "Restricted Series B Private
             Notes"). The Restricted Series B Private Notes may have a
             different CUSIP number than the CUSIP number for the Series
             B Notes.

        (m)  The Series B Notes issued as an Unrestricted Global Note
             shall be in substantially the form of Exhibit B, which
                                                   ---------
             contains appropriate legends relating to a global note. The
             Series B Notes issued as Restricted Series B Private Notes
             shall be in substantially the form of the Series A Notes
             that were so exchanged and will contain the same legends as
             the Series A Notes that were so exchanged.

        (n)  The Series B Notes issued as an Unrestricted Global Note
             shall not be subject to restrictions on transfer. The Series
             B Notes issued as a Restricted Series B Private Notes shall
             be subject to the restrictions on transfer that were
             applicable to the Series A Notes that were so exchanged.

        (o)  The Trustee shall be the Paying Agent. The Paying Agent's
             office as of the date hereof is 1100 North Market Street,
             Wilmington, Delaware 19890-0001.

        (p)  Subject to Section 10.02 of the Indenture, payments of
             principal, premium, if any, and interest on the Unrestricted
             Global Note will be made to DTC, or its nominee, as the case
             may be, as the registered owner or holder of the Global


             Notes. In the event that any of the Series B Notes are
             issued in certificated form in exchange for the Series B
             Notes issued in global form, as set forth in the Indenture,
             principal and interest thereon will be payable at the office
             of the Paying Agent; provided that payment of interest,
             other than interest payable at maturity, may be made at the
             option of the Company by check mailed by the Paying Agent to
             the address of the person entitled thereto as shown on the
             Securities Register. Notwithstanding the foregoing, the
             payments of interest to DTC or its nominee shall be made by
             wire transfer in immediately available funds.

        (q)  The Series B Notes shall be denominated, and payment of
             principal of (and premium, if any) and interest on the
             Series B Notes will be made in United States dollars.

        (r)  The Company may not satisfy all or part of its obligations
             with regard to payment or delivery upon Maturity, or any
             interest payment by delivering Maturity Consideration.

        (s)  The Series B Notes are not redeemable. The Series B Notes
             will not be subject to any sinking fund.

        (t)  The portion of the principal amount of the Series B Notes
             (and, if outstanding, the Series A Notes) which shall be
             payable upon declaration of acceleration of maturity thereof
             shall not be other than the principal amount thereof,
             provided, that, if such acceleration is declared by the
             Holders of at least 25% in aggregate principal amount of the
             Series B Notes then outstanding (and, if any Series A Notes
             are outstanding, 25% in aggregate principal amount of both
             the Series B Notes and Series A Notes then outstanding
             voting together as a single class), then, upon such
             declaration of acceleration, the Series B Notes which shall
             be payable (and, if outstanding, the Series A Notes which
             shall be payable) shall be the principal amount thereof, or
             premium if any, plus accrued interest.

        (u)  The Series B Notes will not be convertible into any other
             securities or property of the Company.

        (v)  The Series B Notes may be exchanged for the Series A Notes
             when the conditions for issuance of the Series B Notes have
             been satisfied.

        (w)  The Series B Notes will be issued in fully registered form,
             without coupons. The Series B Notes will not be issued in
             bearer form.

        (x)  The amount of payments of principal of (and premium, if any)
             or interest on the Series B Notes will not be determined
             with reference to an index.



        (y)  Series B Notes which are registered in the Securities
             Register may be presented for transfer or exchange at the
             office or agency of the Company in any place where the
             principal and interest on the Series B Note are payable.

        (z)  The place where notices and demands to or upon the Company
             may be made is at the office of the Paying Agent.

        (aa) The Series B Notes shall vote and consent together with the
             Series A Notes as a single class.

        (bb) The Series B Notes shall have any additional terms which
             terms shall not be inconsistent with the provisions of the
             Indenture.

     7. All covenants or conditions precedent provided for in the Indenture
relating to the establishment of the terms of Securities herein described and
the terms of such series have been complied with. All covenants or conditions
precedent provided for in the Indenture relating to the authentication of the
Series A Notes have been complied with.

     Each of the undersigned states that he has read and is familiar with the
provisions of Article III of the Indenture relating to the issuance of
Securities thereunder; that he is generally familiar with the other provisions
of the Indenture and with the affairs of the Company and its corporate acts and
proceedings; and that in his opinion, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not the covenants and conditions referred to above have been complied
with.

     Capitalized terms used herein and not otherwise defined herein have the
meanings specified in the Indenture.


                           [SIGNATURE PAGE TO FOLLOW]



     IN WITNESS WHEREOF, we have hereunto signed our names.

Dated as of March 24, 2003

                                      GREATER BAY BANCORP


                                      By: /s/ Steven C. Smith
                                          ---------------------------------
                                          Steven C. Smith
                                          Executive Vice President, Chief
                                          Administrative Officer and Chief
                                          Financial Officer


                                      By: /s/ Shawn E. Saunders
                                          ---------------------------------
                                          Shawn E. Saunders
                                          Senior Vice President, Finance
                                          and Accounting


                                    EXHIBIT A

                                144A GLOBAL NOTE

        TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT
IN PART, TO THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK)
("DTC"), NOMINEES OF DTC OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND
TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH HEREIN AND IN THE INDENTURE REFERRED
TO HEREIN.

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

        THIS NOTE IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY
BANK OR NONBANK SUBSIDIARY OF GREATER BAY BANCORP AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

        THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF IS DEEMED TO HAVE
AGREED TO BE BOUND BY THE PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT AMONG
GREATER BAY BANCORP AND THE INITIAL PURCHASERS NAMED THEREIN, DATED MARCH 24,
2003 (THE "REGISTRATION RIGHTS AGREEMENT"). GREATER BAY BANCORP WILL PROVIDE A
COPY OF THE REGISTRATION RIGHTS AGREEMENT TO A HOLDER WITHOUT CHARGE UPON
WRITTEN REQUEST TO GREATER BAY BANCORP AT ITS PRINCIPAL PLACE OF BUSINESS.

        THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"); (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE PRIOR
TO THE DATE WHICH IS THE LATER OF (X) TWO YEARS (OR SUCH SHORTER PERIOD OF TIME
AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT) AFTER THE LATER OF THE
ORIGINAL ISSUE



DATE OF THE NOTES AND THE LAST DATE ON WHICH GREATER BAY BANCORP OR ANY
"AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF GREATER BAY
BANCORP WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) OR (Y) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT (A) TO GREATER
BAY BANCORP OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATIONS
UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 50l(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT IS
ACQUIRING A MINIMUM OF $100,000 AGGREGATE PRINCIPAL AMOUNT OF THIS NOTE OR SUCH
INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT OR AS FIDUCIARY OR AGENT FOR
OTHERS (EACH OF WHICH MUST BE SUCH AN INSTITUTIONAL ACCREDITED INVESTOR UNLESS
THE PURCHASER IS A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE SECURITIES ACT OR
A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION AS DESCRIBED IN SECTION
3(a)(5)(A) OF THE SECURITIES ACT, WHETHER ACTING IN ITS INDIVIDUAL CAPACITY OR
IN A FIDUCIARY CAPACITY)) FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO GREATER BAY BANCORP) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND, IN THE CASE OF A TRANSFER PURSUANT TO (D) ABOVE, TO
THE RIGHT OF GREATER BAY BANCORP TO REQUIRE THAT A LETTER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS NOTE BE COMPLETED AND DELIVERED BY THE TRANSFEROR AND,
IN CERTAIN CASES, THE TRANSFEREE TO THE TRUSTEE; AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE GOVERNING THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.



REGISTERED                                                      PRINCIPAL AMOUNT
NO. R-1                                                              $__________
CUSIP NO.: 391648 AK 8

                               GREATER BAY BANCORP

                     5.25% SENIOR NOTES, SERIES A, DUE 2008

        GREATER BAY BANCORP, a California corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of _____________________ DOLLARS
($_________) (or such lesser amount as shall be the outstanding principal amount
of this Note listed on Schedule A hereto) on March 31, 2008, and to pay interest
thereon from March 24, 2003, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for,
semiannually in arrears on March 31 and September 30 in each year, commencing
September 30, 2003 (each an "Interest Payment Date"), at the rate of 5.25% per
annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the 15th calendar day immediately preceding the relevant Interest
Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Notes of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Interest for any full
semiannual period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. The amount of interest payable for any partial semiannual
period will be computed on the basis of the actual number of days elapsed during
that period.

        Payment of the principal of and any such interest on this Note will be
made at the offices or agencies of the Company maintained for that purpose in
Wilmington, Delaware, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check drawn upon any Paying Agent and mailed on or prior to an
Interest Payment Date to the address of the Person entitled thereto as such
address shall appear in the Security Register. Notwithstanding the foregoing,
payments of interest to DTC or its nominee shall be made by wire transfer in
immediately available funds.

        This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued under an Indenture,
dated as of March 24, 2003, as amended and supplemented (the "Indenture"),
between the Company and Wilmington Trust Company, a



Delaware corporation (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and all Indentures
supplemental thereto and all Officers' Certificates pursuant to Section 3.01 of
the Indenture relating to the Notes, reference is hereby made for a statement of
the respective rights of the Company, the Trustee and the Holders of the
Securities, and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Note is one of a series of Notes of the
Company designated as its 5.25% Senior Notes, Series A, due March 31, 2008
(herein called the "Notes"), initially limited in aggregate principal amount to
$150,000,000.

        The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated as of March 24, 2003, among the Company and the Initial
Purchasers named therein (as the same may be amended from time to time, the
"Registration Rights Agreement"). Capitalized terms used in this paragraph and
not defined herein shall have the meanings assigned to them in the Registration
Rights Agreement. In the event that (i) the Exchange Offer Registration
Statement is not filed with the Securities Exchange Commission (the
"Commission") on or prior to the 120th day following March 24, 2003 (the
"Closing Time"), (ii) the Exchange Offer Registration Statement is not declared
effective by the Commission on or prior to the 180th day following the Closing
Time, (iii) the Exchange Offer is not consummated on or prior to the 45th day
following the effective date of the Exchange Offer Registration Statement, (iv)
if required, a Shelf Registration Statement is not filed with the Commission on
or prior to (A) the 180th day following the Closing Time or (B) the 75th day
after the filing obligation arises, whichever is later, (v) if required, a Shelf
Registration Statement is not declared effective on or prior to the 240th day
following the Closing Time (or, if a Shelf Registration Statement is required to
be filed upon the request of any Initial Purchaser, within 120 days after such
request), (vi) a Shelf Registration Statement is declared effective by the
Commission but such Shelf Registration Statement ceases to be effective or such
Shelf Registration Statement or the Prospectus included therein ceases to be
usable in connection with resales of Registrable Securities for any reason and
(A) the aggregate number of days in any consecutive 365-day period for which the
Shelf Registration Statement or such Prospectus shall not be effective or usable
exceeds 90 days, (B) the Shelf Registration Statement or such Prospectus shall
not be effective or usable for more than two periods (regardless of duration) in
any consecutive 365-day period or (C) the Shelf Registration Statement or such
Prospectus shall not be effective or usable for a period of more than 45
consecutive days, or (vii) the Exchange Offer Registration Statement is declared
effective by the Commission but, if the Exchange Offer Registration Statement is
being used in connection with the resale of Exchange Securities as contemplated
by Section 3(f)(B) of the Registration Rights Agreement, the Exchange Offer
Registration Statement ceases to be effective or the Exchange Offer Registration
Statement or the Prospectus included therein ceases to be usable in connection
with resales of Exchange Securities for any reason during the 90-day period
referred to in Section 3(f)(B) of the Registration Rights Agreement (as such
period may be extended pursuant to the last paragraph of Section 3 of the
Registration Rights Agreement) and (A) the aggregate number of days in any
consecutive 365-day period for which the Exchange Offer Registration Statement
or such Prospectus shall not be effective or usable exceeds 90 days, (B) the
Exchange Offer Registration Statement or such Prospectus shall not be effective
or usable for more than two periods (regardless of duration) in any consecutive
365-day period or (C) the Exchange Offer Registration Statement or the
Prospectus shall not be effective or usable for a period of more than 45
consecutive days (each of the events referred to in clauses (i) through (vii)
above being hereinafter called a "Registration Default"), the per annum interest
rate borne by the Registrable Securities shall be increased ("Additional
Interest") by one-quarter of one percent (0.25%) per annum immediately



following such 120-day period in the case of clause (i) above, immediately
following such 180-day period in the case of clause (ii) above, immediately
following such 45-day period in the case of clause (iii) above, immediately
following any such 180-day period or 75-day period, whichever ends later, in the
case of clause (iv) above, immediately following any such 240-day period or
120-day period, whichever ends first, in the case of clause (v) above,
immediately following the 90th day in any consecutive 365-day period, as of the
first day of the third period in any consecutive 365-day period or immediately
following the 45th consecutive day, whichever occurs first, that a Shelf
Registration Statement shall not be effective or a Shelf Registration Statement
or the Prospectus included therein shall not be usable as contemplated by clause
(vi) above, or immediately following the 90th day in any consecutive 365-day
period, as of the first day of the third period in any consecutive 365-day
period or immediately following the 45th consecutive day, whichever occurs
first, that the Exchange Offer Registration Statement shall not be effective or
the Exchange Offer Registration Statement or the Prospectus included therein
shall not be usable as contemplated by clause (vii) above; provided that the
aggregate increase in such annual interest rate under this paragraph may in no
event exceed one-quarter of one percent (0.25%) per annum; further provided that
the aggregate increase in such annual interest rate may in no event be in excess
of the rate permissible under applicable law. Upon the filing of the Exchange
Offer Registration Statement after the 120-day period described in clause (i)
above, the effectiveness of the Exchange Offer Registration Statement after the
180-day period described in clause (ii) above, the consummation of the Exchange
Offer after the 45-day period described in clause (iii) above, the filing of the
Shelf Registration Statement after the 180-day period or 75-day period, as the
case may be, described in clause (iv) above, the effectiveness of a Shelf
Registration Statement after the 240-day period or 120-day period, as the case
may be, described in clause (v) above, the Shelf Registration Statement once
again being effective or the Shelf Registration Statement and the Prospectus
included therein becoming usable in connection with resales of Registrable
Securities, as the case may be, in the case of clause (vi) above, or the
Exchange Offer Registration Statement once again becoming effective or the
Exchange Offer Registration Statement and the Prospectus included therein
becoming usable in connection with resales of Exchange Securities, as the case
may be, in the case of clause (vii) thereof, the interest rate borne by the
Securities from the date of such filing, effectiveness, consummation or
resumption of effectiveness or usability, as the case may be, shall be reduced
to the original interest rate so long as no other Registration Default shall
have occurred and shall be continuing at such time and the Company is otherwise
in compliance with this paragraph; provided, however, that, if after any such
reduction in interest rate, one or more Registration Defaults shall again occur,
the interest rate shall again be increased pursuant to the foregoing provisions.
The Company shall promptly provide the Trustee with notice of any change in the
interest rate borne by this Note. Anything herein to the contrary
notwithstanding, any Holder who was, at the time the Exchange Offer was pending
and consummated, eligible to exchange, and did not validly tender, its Notes for
Exchange Securities in the Exchange Offer will not be entitled to receive any
Additional Interest.

        This Note shall be subject to the Events of Default specified in
paragraphs (1), (2), (5), (6), (7) and (8) of the Indenture.

        This Note may not be redeemed prior to maturity.

        As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered in the Security
Register of the Company upon surrender of this Note



for registration of transfer at the office or agency of the Company in any place
where the principal of and interest on this Note are payable, duly endorsed by,
or accompanied by, a written instrument of transfer in form satisfactory to the
Company, duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

        This Note is issuable as a registered Note without coupons in
denominations of $1,000 and integral multiples of $1,000. As provided in the
Indenture, and subject to certain limitations set forth therein, this Note is
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.

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

        Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes, whether or
not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

        If an Event of Default with respect to the Notes shall occur and be
continuing, the principal hereof may be declared due and payable in the manner
and with the effect provided in the Indenture.

        The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the trustee under
each series to be affected with the consent of the Holders of a majority in
principal amount of the Outstanding Securities of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Outstanding Securities of any
series, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Notes issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.

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

        This Note is governed by and construed in accordance with the internal
laws of the State of New York without regard to its conflicts of law rules.

        All terms used in this Note which are defined in the Indenture shall
have the meanings



assigned to them in the Indenture.

        Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an authenticating agent, by the manual signature of
an authorized officer, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.



        IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated: March ___, 2003

                                            GREATER BAY BANCORP


                                            By:
                                               ---------------------------------

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

                                            WILMINGTON TRUST COMPANY, as Trustee


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



                                   ASSIGNMENT

        FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

- --------------------------------------------------------------------------------
Name and address of assignee, including zip code, must be printed or
typewritten)

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

- --------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing

- --------------------------------------------------------------------------------
Attorney to transfer said Note on the books of the within Company, with full
power of substitution in the premises.

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



                                   SCHEDULE A

                              SCHEDULE OF EXCHANGES

The following exchanges of Notes for Notes represented by this Note have been
made:

                                Change in
                                principal       Principal
Principal                       amount of this  amount of this   Notation made
amount of this  Date exchange   Note due to     Note following   by or on behalf
Note            made            exchange        such exchange    of the Company
- --------------------------------------------------------------------------------
$
- --------------------------------------------------------------------------------

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

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

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

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



                            REGULATION S GLOBAL NOTE

        TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT
IN PART, TO THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK)
("DTC"), NOMINEES OF DTC OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND
TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH HEREIN AND IN THE INDENTURE REFERRED
TO HEREIN.

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

        THIS NOTE IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY
BANK OR NONBANK SUBSIDIARY OF GREATER BAY BANCORP AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

        THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF IS DEEMED TO HAVE
AGREED TO BE BOUND BY THE PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT AMONG
GREATER BAY BANCORP AND THE INITIAL PURCHASERS NAMED THEREIN, DATED MARCH 24,
2003 (THE "REGISTRATION RIGHTS AGREEMENT"). GREATER BAY BANCORP WILL PROVIDE A
COPY OF THE REGISTRATION RIGHTS AGREEMENT TO A HOLDER WITHOUT CHARGE UPON
WRITTEN REQUEST TO GREATER BAY BANCORP AT ITS PRINCIPAL PLACE OF BUSINESS.

        PRIOR TO THE EXPIRATION OF THE 40-DAY "DISTRIBUTION COMPLIANCE PERIOD"
(AS DEFINED IN REGULATION S), THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, A U.S. PERSON WITHIN THE MEANING OF REGULATION S, EXCEPT TO A PERSON
REASONABLY BELIEVED TO BE A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A AND THE INDENTURE
OR OTHERWISE IN ACCORDANCE WITH REGULATION S.

        AS USED HEREIN, THE TERM "UNITED STATES" HAVE THE MEANING GIVEN IT BY
RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE GOVERNING THIS
NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.



REGISTERED                                                      PRINCIPAL AMOUNT
NO. R-1                                                             $___________
CUSIP NO.: U39020 AA 7

                               GREATER BAY BANCORP

                     5.25% SENIOR NOTES, SERIES A, DUE 2008

        GREATER BAY BANCORP, a California corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of __________________ DOLLARS
($__________) (or such lesser amount as shall be the outstanding principal
amount of this Note listed on Schedule A hereto) on March 31, 2008, and to pay
interest thereon from March 24, 2003, or from the most recent Interest Payment
Date (as defined below) to which interest has been paid or duly provided for,
semiannually in arrears on March 31 and September 30 in each year, commencing
September 30, 2003 (each an "Interest Payment Date"), at the rate of 5.25% per
annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the 15th calendar day immediately preceding the relevant Interest
Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Notes of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Interest for any full
semiannual period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. The amount of interest payable for any partial semiannual
period will be computed on the basis of the actual number of days elapsed during
that period.

        Payment of the principal of and any such interest on this Note will be
made at the offices or agencies of the Company maintained for that purpose in
Wilmington, Delaware, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check drawn upon any Paying Agent and mailed on or prior to an
Interest Payment Date to the address of the Person entitled thereto as such
address shall appear in the Security Register. Notwithstanding the foregoing,
payments of interest to DTC or its nominee shall be made by wire transfer in
immediately available funds.

        This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued under an Indenture,
dated as of March 24, 2003, as amended and supplemented (the "Indenture"),
between the Company and Wilmington Trust Company, a



Delaware corporation (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and all Indentures
supplemental thereto and all Officers' Certificates pursuant to Section 3.01 of
the Indenture relating to the Notes, reference is hereby made for a statement of
the respective rights of the Company, the Trustee and the Holders of the
Securities, and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Note is one of a series of Notes of the
Company designated as its 5.25% Senior Notes, Series A, due March 31, 2008
(herein called the "Notes"), initially limited in aggregate principal amount to
$150,000,000.

        The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated as of March 24, 2003, among the Company and the Initial
Purchasers named therein (as the same may be amended from time to time, the
"Registration Rights Agreement"). Capitalized terms used in this paragraph and
not defined herein shall have the meanings assigned to them in the Registration
Rights Agreement. In the event that (i) the Exchange Offer Registration
Statement is not filed with the Securities Exchange Commission (the
"Commission") on or prior to the 120th day following March, 24, 2003 (the
"Closing Time"), (ii) the Exchange Offer Registration Statement is not declared
effective by the Commission on or prior to the 180th day following the Closing
Time, (iii) the Exchange Offer is not consummated on or prior to the 45th day
following the effective date of the Exchange Offer Registration Statement, (iv)
if required, a Shelf Registration Statement is not filed with the Commission on
or prior to (A) the 180th day following the Closing Time or (B) the 75th day
after the filing obligation arises, whichever is later, (v) if required, a Shelf
Registration Statement is not declared effective on or prior to the 240th day
following the Closing Time (or, if a Shelf Registration Statement is required to
be filed upon the request of any Initial Purchaser, within 120 days after such
request), (vi) a Shelf Registration Statement is declared effective by the
Commission but such Shelf Registration Statement ceases to be effective or such
Shelf Registration Statement or the Prospectus included therein ceases to be
usable in connection with resales of Registrable Securities for any reason and
(A) the aggregate number of days in any consecutive 365-day period for which the
Shelf Registration Statement or such Prospectus shall not be effective or usable
exceeds 90 days, (B) the Shelf Registration Statement or such Prospectus shall
not be effective or usable for more than two periods (regardless of duration) in
any consecutive 365-day period or (C) the Shelf Registration Statement or such
Prospectus shall not be effective or usable for a period of more than 45
consecutive days, or (vii) the Exchange Offer Registration Statement is declared
effective by the Commission but, if the Exchange Offer Registration Statement is
being used in connection with the resale of Exchange Securities as contemplated
by Section 3(f)(B) of the Registration Rights Agreement, the Exchange Offer
Registration Statement ceases to be effective or the Exchange Offer Registration
Statement or the Prospectus included therein ceases to be usable in connection
with resales of Exchange Securities for any reason during the 90-day period
referred to in Section 3(f)(B) of the Registration Rights Agreement (as such
period may be extended pursuant to the last paragraph of Section 3 of the
Registration Rights Agreement) and (A) the aggregate number of days in any
consecutive 365-day period for which the Exchange Offer Registration Statement
or such Prospectus shall not be effective or usable exceeds 90 days, (B) the
Exchange Offer Registration Statement or such Prospectus shall not be effective
or usable for more than two periods (regardless of duration) in any consecutive
365-day period or (C) the Exchange Offer Registration Statement or the
Prospectus shall not be effective or usable for a period of more than 45
consecutive days (each of the events referred to in clauses (i) through (vii)
above being hereinafter called a "Registration Default"), the per annum interest
rate borne by the Registrable Securities shall be increased ("Additional
Interest") by one-quarter of one percent (0.25%) per annum immediately



following such 120-day period in the case of clause (i) above, immediately
following such 180-day period in the case of clause (ii) above, immediately
following such 45-day period in the case of clause (iii) above, immediately
following any such 180-day period or 75-day period, whichever ends later, in the
case of clause (iv) above, immediately following any such 240-day period or
120-day period, whichever ends first, in the case of clause (v) above,
immediately following the 90th day in any consecutive 365-day period, as of the
first day of the third period in any consecutive 365-day period or immediately
following the 45th consecutive day, whichever occurs first, that a Shelf
Registration Statement shall not be effective or a Shelf Registration Statement
or the Prospectus included therein shall not be usable as contemplated by clause
(vi) above, or immediately following the 90th day in any consecutive 365-day
period, as of the first day of the third period in any consecutive 365-day
period or immediately following the 45th consecutive day, whichever occurs
first, that the Exchange Offer Registration Statement shall not be effective or
the Exchange Offer Registration Statement or the Prospectus included therein
shall not be usable as contemplated by clause (vii) above; provided that the
aggregate increase in such annual interest rate under this paragraph may in no
event exceed one-quarter of one percent (0.25%) per annum; further provided that
the aggregate increase in such annual interest rate may in no event be in excess
of the rate permissible under applicable law. Upon the filing of the Exchange
Offer Registration Statement after the 120-day period described in clause (i)
above, the effectiveness of the Exchange Offer Registration Statement after the
180-day period described in clause (ii) above, the consummation of the Exchange
Offer after the 45-day period described in clause (iii) above, the filing of the
Shelf Registration Statement after the 180-day period or 75-day period, as the
case may be, described in clause (iv) above, the effectiveness of a Shelf
Registration Statement after the 240-day period or 120-day period, as the case
may be, described in clause (v) above, the Shelf Registration Statement once
again being effective or the Shelf Registration Statement and the Prospectus
included therein becoming usable in connection with resales of Registrable
Securities, as the case may be, in the case of clause (vi) above, or the
Exchange Offer Registration Statement once again becoming effective or the
Exchange Offer Registration Statement and the Prospectus included therein
becoming usable in connection with resales of Exchange Securities, as the case
may be, in the case of clause (vii) thereof, the interest rate borne by the
Securities from the date of such filing, effectiveness, consummation or
resumption of effectiveness or usability, as the case may be, shall be reduced
to the original interest rate so long as no other Registration Default shall
have occurred and shall be continuing at such time and the Company is otherwise
in compliance with this paragraph; provided, however, that, if after any such
reduction in interest rate, one or more Registration Defaults shall again occur,
the interest rate shall again be increased pursuant to the foregoing provisions.
The Company shall promptly provide the Trustee with notice of any change in the
interest rate borne by this Note. Anything herein to the contrary
notwithstanding, any Holder who was, at the time the Exchange Offer was pending
and consummated, eligible to exchange, and did not validly tender, its Notes for
Exchange Securities in the Exchange Offer will not be entitled to receive any
Additional Interest.

        This Note shall be subject to the Events of Default specified in
paragraphs (1), (2), (5), (6), (7) and (8) of the Indenture.

        This Note may not be redeemed prior to maturity.

        As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered in the Security
Register of the Company upon surrender of this Note



for registration of transfer at the office or agency of the Company in any place
where the principal of and interest on this Note are payable, duly endorsed by,
or accompanied by, a written instrument of transfer in form satisfactory to the
Company, duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

        This Note is issuable as a registered Note without coupons in
denominations of $1,000 and integral multiples of $1,000. As provided in the
Indenture, and subject to certain limitations set forth therein, this Note is
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.

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

        Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes, whether or
not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

        If an Event of Default with respect to the Notes shall occur and be
continuing, the principal hereof may be declared due and payable in the manner
and with the effect provided in the Indenture.

        The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the trustee under
each series to be affected with the consent of the Holders of a majority in
principal amount of the Outstanding Securities of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Outstanding Securities of any
series, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Notes issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.

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

        This Note is governed by and construed in accordance with the internal
laws of the State of New York without regard to its conflicts of law rules.

        All terms used in this Note which are defined in the Indenture shall
have the meanings



assigned to them in the Indenture.

        Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an authenticating agent, by the manual signature of
an authorized officer, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.



        IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated: March ____, 2003

                                            GREATER BAY BANCORP


                                            By:
                                               ---------------------------------

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

                                            WILMINGTON TRUST COMPANY, as Trustee


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



                                   ASSIGNMENT

        FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

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

Name and address of assignee, including zip code, must be printed or
typewritten)

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

- --------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing

- --------------------------------------------------------------------------------
Attorney to transfer said Note on the books of the within Company, with full
power of substitution in the premises.

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



                                   SCHEDULE A

                              SCHEDULE OF EXCHANGES

The following exchanges of Notes for Notes represented by this Note have been
made:

                                Change in
                                principal       Principal
Principal                       amount of this  amount of this   Notation made
amount of this  Date exchange   Note due to     Note following   by or on behalf
Note            made            exchange        such exchange    of the Company
- --------------------------------------------------------------------------------
$
- --------------------------------------------------------------------------------

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

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

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

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



                                CERTIFICATED NOTE

        THIS NOTE IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY
BANK OR NONBANK SUBSIDIARY OF GREATER BAY BANCORP AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

        THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF IS DEEMED TO HAVE
AGREED TO BE BOUND BY THE PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT AMONG
GREATER BAY BANCORP AND THE INITIAL PURCHASERS NAMED THEREIN, DATED MARCH 24,
2003 (THE "REGISTRATION RIGHTS AGREEMENT"). GREATER BAY BANCORP WILL PROVIDE A
COPY OF THE REGISTRATION RIGHTS AGREEMENT TO A HOLDER WITHOUT CHARGE UPON
WRITTEN REQUEST TO GREATER BAY BANCORP AT ITS PRINCIPAL PLACE OF BUSINESS.

        THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:

        (1) REPRESENTS THAT IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
        DEFINED IN RULE 50l(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
        "INSTITUTIONAL ACCREDITED INVESTOR");

        (2) REPRESENTS THAT IT IS PURCHASING THIS NOTE FOR INVESTMENT PURPOSES
        AND NOT WITH A VIEW TO, OR OFFFER OR SALE IN CONNECTION WITH, ANY
        DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT;

        (3) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE PRIOR
        TO THE DATE WHICH IS THE LATER OF (X) TWO YEARS (OR SUCH SHORTER PERIOD
        OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT) AFTER THE
        LATER OF THE ORIGINAL ISSUE DATE OF THE NOTES AND THE LAST DATE ON WHICH
        GREATER BAY BANCORP OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE
        SECURITIES ACT) OF GREATER BAY BANCORP WAS THE OWNER OF THIS NOTE (OR
        ANY PREDECESSOR OF THIS NOTE) OR (Y) SUCH LATER DATE, IF ANY, AS MAY BE
        REQUIRED BY APPLICABLE LAW, EXCEPT (A) TO GREATER BAY BANCORP OR ANY OF
        ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
        A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
        SECURITIES ACT) (A "QIB") PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
        ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
        (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
        904 OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
        ACCREDITED INVESTOR THAT IS ACQUIRING A MINIMUM OF $100,000 AGGREGATE
        PRINCIPAL AMOUNT OF



        THIS NOTE OR SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT OR AS
        FIDUCIARY OR AGENT FOR OTHERS (EACH OF WHICH MUST BE SUCH AN
        INSTITUTIONAL ACCREDITED INVESTOR UNLESS THE PURCHASER IS A BANK (AS
        DEFINED IN SECTION 3(a)(2) OF THE SECURITIES ACT OR A SAVINGS AND LOAN
        ASSOCIATION OR OTHER INSTITUTION AS DESCRIBED IN SECTION 3(a)(5)(A) OF
        THE SECURITIES ACT, WHETHER ACTING IN ITS INDIVIDUAL CAPACITY OR IN A
        FIDUCIARY CAPACITY)) FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
        FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
        THE SECURITIES ACT (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
        REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
        OPINION OF COUNSEL ACCEPTABLE TO GREATER BAY BANCORP) OR (E) PURSUANT TO
        AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN
        EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
        STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND TO
        THE RIGHT OF GREATER BAY BANCORP TO REQUIRE THAT A LETTER IN THE FORM
        ATTACHED AS EXHIBIT K TO THE INDENTURE, DATED AS OF MARCH 24, 2003
        BETWEEN GREATER BAY AND THE TRUSTEE, BE COMPLETED AND DELIVERED BY THE
        TRANSFEROR AND, IN CERTAIN CASES, THE TRANSFEREE TO THE TRUSTEE; AND

        (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
        INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
        THIS LEGEND.

AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE GOVERNING THIS NOTE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.

REGISTERED                                                   PRINCIPAL AMOUNT
NO. R-___                                                     $_________________
CUSIP NO.: 391648 AM 4

                               GREATER BAY BANCORP

                     5.25% SENIOR NOTES, SERIES A, DUE 2008

        GREATER BAY BANCORP, a California corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
___________________, or registered assigns, the principal sum of _______________
DOLLARS ($____________) on March 31, 2008, and to pay interest thereon from
March 24, 2003, or from the most recent Interest Payment Date (as defined below)
to which interest has been paid or duly provided for, semiannually in arrears on
March



31 and September 30 in each year, commencing September 30, 2003 (each an
"Interest Payment Date"), at the rate of 5.25% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note (or one
or more Predecessor Notes) is registered at the close of business on the 15th
calendar day immediately preceding the relevant Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Notes of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture. Interest for any full semiannual
period will be computed on the basis of a 360-day year consisting of twelve
30-day months. The amount of interest payable for any partial semiannual period
will be computed on the basis of the actual number of days elapsed during that
period.

        Payment of the principal of and any such interest on this Note will be
made at the offices or agencies of the Company maintained for that purpose in
Wilmington, Delaware, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check drawn upon any Paying Agent and mailed on or prior to an
Interest Payment Date to the address of the Person entitled thereto as such
address shall appear in the Security Register.

        This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued under an Indenture,
dated as of March 24, 2003, as amended and supplemented (the "Indenture"),
between the Company and Wilmington Trust Company, a Delaware corporation (herein
called the "Trustee", which term includes any successor Trustee under the
Indenture), to which Indenture and all Indentures supplemental thereto and
Officers' Certificates pursuant to Section 3.01 of the Indenture relating to the
Notes, reference is hereby made for a statement of the respective rights of the
Company, the Trustee and the Holders of the Securities, and the terms upon which
the Securities are, and are to be, authenticated and delivered. This Note is one
of a series of Notes of the Company designated as its 5.25% Senior Notes, Series
A, due March 31, 2008 (herein called the "Notes"), initially limited in
aggregate principal amount to $150,000,000.

        The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated as of March 24, 2003, among the Company and the Initial
Purchasers named therein (as the same may be amended from time to time, the
"Registration Rights Agreement"). Capitalized terms used in this paragraph and
not defined herein shall have the meanings assigned to them in the Registration
Rights Agreement. In the event that (i) the Exchange Offer Registration
Statement is not filed with the Securities Exchange Commission (the
"Commission") on or prior to the 120th day following March 24, 2003 (the
"Closing Time"), (ii) the Exchange Offer Registration Statement is not declared
effective by the Commission on or prior to the 180th day following the Closing
Time, (iii) the Exchange Offer is not consummated on or prior to the 45th day
following the effective date



of the Exchange Offer Registration Statement, (iv) if required, a Shelf
Registration Statement is not filed with the Commission on or prior to (A) the
180th day following the Closing Time or (B) the 75th day after the filing
obligation arises, whichever is later, (v) if required, a Shelf Registration
Statement is not declared effective on or prior to the 240th day following the
Closing Time (or, if a Shelf Registration Statement is required to be filed upon
the request of any Initial Purchaser, within 120 days after such request), (vi)
a Shelf Registration Statement is declared effective by the Commission but such
Shelf Registration Statement ceases to be effective or such Shelf Registration
Statement or the Prospectus included therein ceases to be usable in connection
with resales of Registrable Securities for any reason and (A) the aggregate
number of days in any consecutive 365-day period for which the Shelf
Registration Statement or such Prospectus shall not be effective or usable
exceeds 90 days, (B) the Shelf Registration Statement or such Prospectus shall
not be effective or usable for more than two periods (regardless of duration) in
any consecutive 365-day period or (C) the Shelf Registration Statement or such
Prospectus shall not be effective or usable for a period of more than 45
consecutive days, or (vii) the Exchange Offer Registration Statement is declared
effective by the Commission but, if the Exchange Offer Registration Statement is
being used in connection with the resale of Exchange Securities as contemplated
by Section 3(f)(B) of the Registration Rights Agreement, the Exchange Offer
Registration Statement ceases to be effective or the Exchange Offer Registration
Statement or the Prospectus included therein ceases to be usable in connection
with resales of Exchange Securities for any reason during the 90-day period
referred to in Section 3(f)(B) of the Registration Rights Agreement (as such
period may be extended pursuant to the last paragraph of Section 3 of the
Registration Rights Agreement) and (A) the aggregate number of days in any
consecutive 365-day period for which the Exchange Offer Registration Statement
or such Prospectus shall not be effective or usable exceeds 90 days, (B) the
Exchange Offer Registration Statement or such Prospectus shall not be effective
or usable for more than two periods (regardless of duration) in any consecutive
365-day period or (C) the Exchange Offer Registration Statement or the
Prospectus shall not be effective or usable for a period of more than 45
consecutive days (each of the events referred to in clauses (i) through (vii)
above being hereinafter called a "Registration Default"), the per annum interest
rate borne by the Registrable Securities shall be increased ("Additional
Interest") by one-quarter of one percent (0.25%) per annum immediately following
such 120-day period in the case of clause (i) above, immediately following such
180-day period in the case of clause (ii) above, immediately following such
45-day period in the case of clause (iii) above, immediately following any such
180-day period or 75-day period, whichever ends later, in the case of clause
(iv) above, immediately following any such 240-day period or 120-day period,
whichever ends first, in the case of clause (v) above, immediately following the
90th day in any consecutive 365-day period, as of the first day of the third
period in any consecutive 365-day period or immediately following the 45th
consecutive day, whichever occurs first, that a Shelf Registration Statement
shall not be effective or a Shelf Registration Statement or the Prospectus
included therein shall not be usable as contemplated by clause (vi) above, or
immediately following the 90th day in any consecutive 365-day period, as of the
first day of the third period in any consecutive 365-day period or immediately
following the 45th consecutive day, whichever occurs first, that the Exchange
Offer Registration Statement shall not be effective or the Exchange Offer
Registration Statement or the Prospectus included therein shall not be usable as
contemplated by clause (vii) above; provided that the aggregate increase in such
annual interest rate under this paragraph may in no event exceed one-quarter of
one percent (0.25%) per annum; further provided that the aggregate increase in
such annual interest rate may in no event be in excess of the rate permissible
under applicable law. Upon the filing of the Exchange Offer Registration
Statement



after the 120-day period described in clause (i) above, the effectiveness of the
Exchange Offer Registration Statement after the 180-day period described in
clause (ii) above, the consummation of the Exchange Offer after the 45-day
period described in clause (iii) above, the filing of the Shelf Registration
Statement after the 180-day period or 75-day period, as the case may be,
described in clause (iv) above, the effectiveness of a Shelf Registration
Statement after the 240-day period or 120-day period, as the case may be,
described in clause (v) above, the Shelf Registration Statement once again being
effective or the Shelf Registration Statement and the Prospectus included
therein becoming usable in connection with resales of Registrable Securities, as
the case may be, in the case of clause (vi) above, or the Exchange Offer
Registration Statement once again becoming effective or the Exchange Offer
Registration Statement and the Prospectus included therein becoming usable in
connection with resales of Exchange Securities, as the case may be, in the case
of clause (vii) thereof, the interest rate borne by the Securities from the date
of such filing, effectiveness, consummation or resumption of effectiveness or
usability, as the case may be, shall be reduced to the original interest rate so
long as no other Registration Default shall have occurred and shall be
continuing at such time and the Company is otherwise in compliance with this
paragraph; provided, however, that, if after any such reduction in interest
rate, one or more Registration Defaults shall again occur, the interest rate
shall again be increased pursuant to the foregoing provisions. The Company shall
promptly provide the Trustee with notice of any change in the interest rate
borne by this Note. Anything herein to the contrary notwithstanding, any Holder
who was, at the time the Exchange Offer was pending and consummated, eligible to
exchange, and did not validly tender, its Notes for Exchange Securities in the
Exchange Offer will not be entitled to receive any Additional Interest.

        This Note shall be subject to the Events of Default specified in
paragraphs (1), (2), (5), (6), (7) and (8) of the Indenture.

        This Note may not be redeemed prior to maturity.

        As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal of and
interest on this Note are payable, duly endorsed by, or accompanied by, a
written instrument of transfer in form satisfactory to the Company, duly
executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

        This Note is issuable in minimum denominations of $100,000 and integral
multiples of $1,000. As provided in the Indenture, and subject to certain
limitations set forth therein, this Note is exchangeable for a like aggregate
principal amount of Notes of different authorized denominations, as requested by
the Holder surrendering the same.

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

        Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee



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

        If an Event of Default with respect to the Notes shall occur and be
continuing, the principal hereof may be declared due and payable in the manner
and with the effect provided in the Indenture.

        The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the trustee under
each series to be affected with the consent of the Holders of a majority in
principal amount of the Outstanding Securities of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Outstanding Securities of any
series, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Notes issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.

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

        This Note is governed by and construed in accordance with the internal
laws of the State of New York without regard to its conflicts of law rules.

        All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

        Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an authenticating agent, by the manual signature of
an authorized officer, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.



         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated: _____________, 2003

                                            GREATER BAY BANCORP


                                            By:
                                               ---------------------------------

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

                                            WILMINGTON TRUST COMPANY, as Trustee


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



                                   ASSIGNMENT

        FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

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

Name and address of assignee, including zip code, must be printed or
typewritten)

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

- --------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing

- --------------------------------------------------------------------------------
Attorney to transfer said Note on the books of the within Company, with full
power of substitution in the premises.

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



                                   EXHIBIT B

                                  GLOBAL NOTE

        TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT
IN PART, TO THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK)
("DTC"), NOMINEES OF DTC OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND
TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH HEREIN AND IN THE INDENTURE REFERRED
TO HEREIN.

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

        THIS NOTE IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY
BANK OR NONBANK SUBSIDIARY OF GREATER BAY BANCORP AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.



REGISTERED                                                  PRINCIPAL AMOUNT
NO. R-1                                                     $___________________
CUSIP NO.: 391648 AL 6

                               GREATER BAY BANCORP

                          5.25% SENIOR NOTES, SERIES B
                                    DUE 2008

        GREATER BAY BANCORP, a California corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of _________________ DOLLARS
($________) (or such lesser amount as shall be the outstanding principal amount
of this Note listed on Schedule A hereto) on March 31, 2008, and to pay interest
thereon from March 24, 2003, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for,
semiannually in arrears on March 31 and September 30 in each year, commencing
September 30, 2003 (each an "Interest Payment Date"), at the rate of 5.25% per
annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the 15th calendar day immediately preceding the relevant Interest
Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Notes of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Interest for any full
semiannual period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. The amount of interest payable for any partial semiannual
period will be computed on the basis of the actual number of days elapsed during
that period.

        Payment of the principal of and any such interest on this Note will be
made at the offices or agencies of the Company maintained for that purpose in
Wilmington, Delaware, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check drawn upon any Paying Agent and mailed on or prior to an
Interest Payment Date to the address of the Person entitled thereto as such
address shall appear in the Security Register. Notwithstanding the foregoing,
payments of interest to DTC or its nominee shall be made by wire transfer in
immediately available funds.

        This Note is one of a duly authorized issue of securities of the Company
(herein called the



"Securities"), issued and to be issued under an Indenture, dated as of March 24,
2003 (the "Indenture"), between the Company and Wilmington Trust Company, a
Delaware corporation (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and all Indentures
supplemental thereto reference is hereby made for a statement of the respective
rights of the Company, the Trustee and the Holders of the Securities, and the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Note is one of a series of Notes of the Company designated as its 5.25%
Notes, Series B, due March 31, 2008 (herein called the "Notes"), initially
limited in aggregate principal amount to $150,000,000.

        The Note shall be subject to the Events of Default specified in Section
5.01, paragraphs (1), (2), (5), (6), (7) and (8), of the Indenture.

        This Note may not be redeemed prior to maturity.

        As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal of and
interest on this Note are payable, duly endorsed by, or accompanied by, a
written instrument of transfer in form satisfactory to the Company, duly
executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

        This Note is issuable as a registered Note without coupons in
denominations of $1,000 and integral multiples of $1,000. As provided in the
Indenture, and subject to certain limitations set forth therein, this Note is
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.

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

        Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes, whether or
not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

        If an Event of Default with respect to the Notes shall occur and be
continuing, the principal hereof may be declared due and payable in the manner
and with the effect provided in the Indenture or all Indentures supplemental
thereto.

        The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the trustee under
each series to be affected with the consent of the Holders of a majority in
principal



amount of the Outstanding Securities of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Outstanding Securities of any
series, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Notes issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.

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

        This Note is governed by and construed in accordance with the internal
laws of the State of New York without regard to its conflicts of law rules.

        All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

        Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an authenticating agent, by the manual signature of
an authorized officer, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.



        IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated: ___________, 2003

                                            GREATER BAY BANCORP


                                            By:
                                               ---------------------------------

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

                                            WILMINGTON TRUST COMPANY, as Trustee


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



                                   ASSIGNMENT

        FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

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

Name and address of assignee, including zip code, must be printed or
typewritten)

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

- --------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing

- --------------------------------------------------------------------------------
Attorney to transfer said Note on the books of the within Company, with full
power of substitution in the premises.

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



                                   SCHEDULE A

                              SCHEDULE OF EXCHANGES

The following exchanges of Notes for Notes represented by this Note have been
made:

                                Change in
                                principal       Principal
Principal                       amount of this  amount of this   Notation made
amount of this  Date exchange   Note due to     Note following   by or on behalf
Note            Made            exchange        such exchange    of the Company
- --------------------------------------------------------------------------------
$
- --------------------------------------------------------------------------------

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

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

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

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

EX-10.1

                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT

                           Dated as of March 24, 2003

                                      among

                              GREATER BAY BANCORP,

                          KEEFE BRUYETTE & WOODS, INC.,

                                       AND

                          THE OTHER INITIAL PURCHASERS
                               REFERRED TO HEREIN

                            as the Initial Purchasers



                          REGISTRATION RIGHTS AGREEMENT

                REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
March 24, 2003 among Greater Bay Bancorp, a California corporation (the
"Company"), Keefe Bruyette & Woods, Inc. (the "Representative"), and the other
parties referred to in Annex A hereto (each, an "Initial Purchaser" and
collectively, the "Initial Purchasers").

                This Agreement is made pursuant to the Purchase Agreement, dated
March 19, 2003, by and among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $150,000,000 aggregate principal amount of the Company's 5.25%
Senior Notes due 2008 (the "Notes"). In order to induce the Initial Purchasers
to enter into the Purchase Agreement and in satisfaction of a condition to the
Initial Purchasers' obligations thereunder, the Company has agreed to provide to
the Initial Purchasers and their respective direct and indirect transferees and
assigns the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the closing under the Purchase
Agreement.

                In consideration of the foregoing, the parties hereto agree as
follows:

                1.      Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:

                        "1933 Act" shall mean the Securities Act of 1933, as
                amended from time to time, and the rules and regulations of the
                SEC promulgated thereunder.

                        "1934 Act" shall mean the Securities Exchange Act of
                1934, as amended from time to time, and the rules and
                regulations of the SEC promulgated thereunder.

                        "Additional Interest" shall have the meaning set forth
                in Section 2(e) hereof.

                        "Applicable Period" shall have the meaning set forth in
                Section 3(f)(B) hereof.

                        "Closing Time" shall mean March 24, 2003.

                        "Depositary" shall mean The Depository Trust Company, or
                any other depositary appointed by the Company, including any
                agent thereof; provided, however, that any such depositary must
                at all times have an address in the Borough of Manhattan, The
                City of New York.

                        "Event Date" shall have the meaning set forth in Section
                2(e) hereof.

                        "Exchange Offer" shall mean the exchange offer by the
                Company of Exchange Securities for Registrable Securities
                pursuant to Section 2(a) hereof.

                                       2



                        "Exchange Offer Registration" shall mean a registration
                under the 1933 Act effected pursuant to Section 2(a) hereof.

                        "Exchange Offer Registration Statement" shall mean an
                exchange offer registration statement of the Company on Form S-4
                (or, if applicable, on another appropriate form) covering the
                Registrable Securities, and all amendments and supplements to
                such registration statement, in each case including the
                Prospectus contained therein, all exhibits thereto and all
                material incorporated or deemed to be incorporated by reference
                therein.

                        "Exchange Securities" shall mean the securities, issued
                by the Company under the Indenture with terms identical to the
                Notes (except that (i) interest thereon shall accrue from the
                last date to which interest has been paid or duly provided for
                on the Notes or, if no such interest has been paid or duly
                provided for, from the Interest Accrual Date, (ii) provisions
                relating to an increase in the stated rate of interest thereon
                upon the occurrence of a Registration Default shall be
                eliminated, and (iii) the transfer restrictions, minimum
                purchase requirements and legends relating to restrictions on
                ownership and transfer thereof as a result of the issuance of
                the Securities without registration under the 1933 Act shall be
                eliminated other than requiring transfers in multiples of
                $1,000) to be offered to Holders of Registrable Securities in
                exchange for Registrable Securities pursuant to the Exchange
                Offer.

                        "Holders" shall mean (i) the Initial Purchasers, for so
                long as they own any Registrable Securities, and each of their
                respective successors, assigns and direct and indirect
                transferees who become registered owners of Registrable
                Securities under the Indenture and (ii) each Participating
                Broker-Dealer that holds Exchange Securities for so long as such
                Participating Broker-Dealer is required to deliver a prospectus
                meeting the requirements of the 1933 Act in connection with any
                resale of such Exchange Securities.

                        "Indenture" shall mean the Indenture, dated as of March
                24, 2003, by and between the Company and Wilmington Trust
                Company, as trustee, as the same may be further amended or
                supplemented from time to time in accordance with the terms
                thereof.

                        "Interest Accrual Date" means March 24, 2003.

                        "Initial Purchasers" shall have the meaning set forth in
                the preamble of this Agreement.

                        "Majority Holders" shall mean the Holders of a majority
                of the aggregate principal amount of Registrable Securities
                outstanding, excluding Exchange Securities referred to in clause
                (ii) of the definition of "Holders" above; provided that
                whenever the consent or approval of Holders of a specified
                percentage of Registrable Securities or Exchange Securities is
                required hereunder, Registrable Securities and Exchange
                Securities held by the Company or any of its affiliates

                                       3



                (as such term is defined in Rule 405 under the 1933 Act) shall
                also be disregarded in determining whether such consent or
                approval was given by the Holders of such required percentage.

                        "NASD" shall mean the National Association of Securities
                Dealers, Inc.

                        "Notes" shall have the meaning set for the in the
                preamble to this Agreement.

                        "Notifying Broker-Dealer" shall have the meaning set
                forth in Section 3(f) hereof.

                        "Participating Broker-Dealer" shall have the meaning set
                forth in Section 3(f) hereof.

                        "Person" shall mean an individual, partnership, joint
                venture, limited liability company, corporation, trust or
                unincorporated organization, or a government or agency or
                political subdivision thereof.

                        "Private Exchange Securities" shall have the meaning set
                forth in Section 2(a) hereof.

                        "Private Exchange" shall have the meaning set forth in
                Section 2(a).

                        "Prospectus" shall mean the prospectus included in a
                Registration Statement, including any preliminary prospectus,
                and any such prospectus as amended or supplemented by any
                prospectus supplement, including a prospectus supplement with
                respect to the terms of the offering of any portion of the
                Registrable Securities covered by a Shelf Registration
                Statement, and by all other amendments and supplements to a
                prospectus, including post-effective amendments, and in each
                case including all material incorporated or deemed to be
                incorporated by reference therein.

                        "Purchase Agreement" shall have the meaning set forth in
                the preamble to this Agreement.

                        "Registrable Securities" shall mean the Notes; provided,
                however, that any Notes shall cease to be Registrable Securities
                when (i) a Registration Statement with respect to such Notes
                shall have been declared effective under the 1933 Act and such
                Notes shall have been disposed of pursuant to such Registration
                Statement, (ii) such Notes, which are eligible to be sold
                without restriction as contemplated by Rule 144, shall have been
                sold to the public pursuant to Rule 144 (or any similar
                provision then in force, but not Rule 144A) under the 1933 Act,
                (iii) such Notes shall have ceased to be outstanding, (iv) such
                Notes have been exchanged for Exchange Securities which have
                been registered pursuant to the Exchange Offer Registration
                Statement upon consummation of the Exchange Offer unless, in the
                case of any Exchange Securities referred to in this clause (iv),
                such Exchange Securities are held by Participating
                Broker-Dealers or otherwise

                                       4



                are not freely tradable without any limitations or restrictions
                under the 1933 Act (in which case such Exchange Securities will
                be deemed to be Registrable Securities until the earlier of (A)
                expiration of the Applicable Period and (B) such time as such
                Exchange Securities are sold to a purchaser in whose hands such
                Exchange Securities are freely tradeable without any limitations
                or restrictions under the 1933 Act) or (v) such Notes have been
                exchanged for Private Exchange Securities pursuant to this
                Agreement (in which case such Private Exchange Securities will
                be deemed to be Registrable Securities until the earlier of (A)
                210 days after the completion of the Exchange Offer and (B) such
                time as such Private Exchange Securities are sold to a purchaser
                in whose hands such Private Exchange Securities are freely
                tradeable without any limitations or restrictions under the 1933
                Act).

                        "Registration Default" shall have the meaning set forth
                in Section 2(e) hereof.

                        "Registration Expenses" shall mean any and all expenses
                incident to performance of or compliance by the Company with
                this Agreement, including without limitation: (i) all SEC, stock
                exchange or NASD registration and filing fees; (ii) all fees and
                expenses incurred in connection with compliance with state or
                other securities or blue sky laws and compliance with the rules
                of the NASD (including fees and disbursements of one counsel for
                all the underwriters or Holders as a group in connection with
                qualification of any of the Exchange Securities or Registrable
                Securities under state or other securities or blue sky laws and
                any filing with and review by the NASD); (iii) all expenses of
                any Persons in preparing, printing and distributing any
                Registration Statement, any Prospectus, any amendments or
                supplements thereto, any underwriting agreements, securities
                sales agreements, and certificates representing the Notes,
                Private Exchange Securities (if any) or Exchange Securities and
                other documents relating to the performance of and compliance
                with this Agreement; (iv) all rating agency fees; (v) all fees
                and expenses incurred in connection with the listing, if any, of
                any of the Notes or Exchange Securities on any securities
                exchange or exchanges or on any quotation system; (vi) all fees
                and disbursements relating to the qualification of the Indenture
                under applicable securities laws; (vii) the fees and
                disbursements of counsel for the Company and the fees and
                expenses of independent public accountants for the Company or
                for any other Person, business or assets whose financial
                statements are included in any Registration Statement or
                Prospectus, including the expenses of any special audits or
                "cold comfort" letters required by or incident to such
                performance and compliance; (viii) the fees and expenses of the
                Trustee, any registrar, any depositary, any paying agent, any
                escrow agent or any custodian, in each case including fees and
                disbursements of their respective counsel; (ix) the fees and
                expenses of the Initial Purchasers in connection with the
                Exchange Offer, including the fees and disbursements of one
                counsel to the Initial Purchasers in connection therewith; and
                (x) in the case of an underwritten offering, any fees and
                disbursements of the underwriters customarily paid by issuers
                and sellers of securities and the fees and expenses of any
                special experts retained by the Company in connection with any
                Registration Statement but

                                       5



                excluding (except as otherwise provided herein) fees and
                disbursements of counsel to the underwriters and the Holders and
                underwriting discounts and commissions and transfer taxes, if
                any, relating to the sale or disposition of Registrable
                Securities by a Holder.

                        "Registration Statement" shall mean any registration
                statement of the Company relating to any offering of the
                Exchange Securities or Registrable Securities pursuant to the
                provisions of this Agreement (including, without limitation, any
                Exchange Offer Registration Statement and any Shelf Registration
                Statement), and all amendments and supplements to any such
                Registration Statement, including post-effective amendments, in
                each case including the Prospectus contained therein, all
                exhibits thereto and all material incorporated or deemed to be
                incorporated by reference therein.

                        "Representative" shall have the meaning set forth in the
                preamble of this Agreement.

                        "SEC" shall mean the Securities and Exchange Commission
                or any successor thereto.

                        "Shelf Registration" shall mean a registration effected
                pursuant to Section 2(b) hereof.

                        "Shelf Registration Statement" shall mean a "shelf"
                registration statement of the Company pursuant to the provisions
                of Section 2(b) of this Agreement which covers all of the
                Registrable Securities or Private Exchange Securities (if any),
                as the case may be, on an appropriate form under Rule 415 under
                the 1933 Act, or any similar rule that may be adopted by the
                SEC, and all amendments and supplements to such registration
                statement, including post-effective amendments, in each case
                including the Prospectus contained therein, all exhibits thereto
                and all material incorporated or deemed to be incorporated by
                reference therein.

                        "TIA" shall mean the Trust Indenture Act of 1939, as
                amended from time to time, and the rules and regulations of the
                SEC promulgated thereunder.

                        "Trustee" shall mean the trustee with respect to the
                Notes, the Private Exchange Securities (if any) and the Exchange
                Securities under the Indenture.

                For purposes of this Agreement: (i) all references in this
Agreement to any Registration Statement, Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR"); (ii) all references in this Agreement to financial statements
and schedules and other information which is "contained," "included,"
"disclosed" or "stated" in any Registration Statement or Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Registration Statement or
Prospectus, as the case may be; (iii) all references in this Agreement to
amendments or supplements to any Registration Statement or Prospectus shall be
deemed to mean and include

                                       6



the filing of any document under the 1934 Act which is incorporated or deemed to
be incorporated by reference in such Registration Statement or Prospectus, as
the case may be; (iv) all references in this Agreement to Rule 144, Rule 144A or
Rule 405 under the 1933 Act, and all references to any sections or subsections
thereof or terms defined therein, shall in each case include any successor
provisions thereto; and (v) all references in this Agreement to days (but not to
business days) shall mean calendar days.

                2.      Registration Under the 1933 Act.

                (a)     Exchange Offer Registration. The Company shall (A) file
with the SEC on or prior to the 120th day after the Closing Time an Exchange
Offer Registration Statement covering the offer by the Company to the Holders to
exchange all of the Registrable Securities for a like aggregate principal amount
of Exchange Securities, (B) use its reasonable best efforts to cause such
Exchange Offer Registration Statement to be declared effective by the SEC no
later than the 180th day after the Closing Time, (C) use its reasonable best
efforts to cause such Registration Statement to remain effective until the
closing of the Exchange Offer and (D) use its reasonable best efforts to
consummate the Exchange Offer no later than 45 days after the effective date of
the Exchange Offer Registration Statement. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder eligible and electing to exchange Registrable Securities for Exchange
Securities (provided that such Holder is not an affiliate of the Company within
the meaning of Rule 405 under the 1933 Act, acquires the Exchange Securities in
the ordinary course of such Holder's business and has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing such Exchange Securities) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the 1933 Act or under the securities or blue sky laws of the states of the
United States other than requiring transfers in multiples of $1,000.

                In connection with the Exchange Offer, the Company shall:

                        (i)     promptly mail to each Holder a copy of the
                Prospectus forming part of the Exchange Offer Registration
                Statement, together with an appropriate letter of transmittal
                and related documents;

                        (ii)    keep the Exchange Offer open for not less than
                20 business days (or longer, if required by applicable law)
                after the date notice thereof is mailed to the Holders and,
                during the Exchange Offer, offer to all Holders who are legally
                eligible to participate in the Exchange Offer the opportunity to
                exchange their Registrable Securities for Exchange Securities;

                        (iii)   use the services of a depositary with an address
                in the Borough of Manhattan, The City of New York for the
                Exchange Offer;

                        (iv)    permit Holders to withdraw tendered Registrable
                Securities at any time prior to the close of business, New York
                City time, on the last business day on which the Exchange Offer
                shall remain open, by sending to the institution specified in
                the Prospectus or the related letter of transmittal or related
                documents

                                        7



                a facsimile transmission or letter setting forth the name of
                such Holder, the principal amount of Registrable Securities
                delivered for exchange, and a statement that such Holder is
                withdrawing its election to have such Registrable Securities
                exchanged;

                        (v)     notify each Holder that any Registrable Security
                not tendered will remain outstanding and continue to accrue
                interest, but will not retain any rights under this Agreement
                (except in the case of the Initial Purchasers and Participating
                Broker-Dealers as provided herein); and

                        (vi)    otherwise comply in all material respects with
                all applicable laws relating to the Exchange Offer.

                If, at or prior to the consummation of the Exchange Offer, any
of the Initial Purchasers holds any Notes acquired by it and having the status
of an unsold allotment in the initial distribution, the Company shall, upon the
request of any such Initial Purchaser, simultaneously with the delivery of the
Exchange Securities in the Exchange Offer, issue and deliver to such Initial
Purchaser in exchange for such Notes a like principal amount of debt securities
(the "Private Exchange") of the Company that are identical (except that such
debt securities shall be subject to transfer restrictions and minimum purchase
requirements, and shall bear a legend relating to restrictions on ownership and
transfer, identical to those applicable to the Notes as a result of the issuance
thereof without registration under the 1933 Act and shall provide for the
payment of Additional Interest) to the Exchange Securities (the "Private
Exchange Securities"). The Company shall use its reasonable best efforts to have
the Private Exchange Securities bear the same CUSIP number as the Exchange
Securities and, if unable to do so, the Company will, at such time as any
Private Exchange Security may be sold publicly pursuant to Rule 144(k) under the
1933 Act, permit any such Private Exchange Security to be exchanged for a like
principal amount of Exchange Securities.

                The Exchange Securities and the Private Exchange Securities (if
any) shall be issued under the Indenture, which shall be qualified under the
TIA. The Notes shall provide that the Exchange Securities issued in respect
thereof, the Private Exchange Securities (if any) issued in respect thereof and
the Notes shall vote and consent together on all matters as a single class and
shall constitute a single series of debt securities issued under the Indenture.

                As soon as practicable after the close of the Exchange Offer
and, if applicable, the Private Exchange, the Company shall:

                        (i)     accept for exchange all Registrable Securities
                duly tendered and not validly withdrawn pursuant to the Private
                Exchange or the Exchange Offer in accordance with the terms of
                the Exchange Offer Registration Statement and the letter of
                transmittal which is an exhibit thereto;

                        (ii)    deliver, or cause to be delivered, to the
                Trustee for cancellation all Registrable Securities so accepted
                for exchange by the Company; and

                        (iii)   cause the Trustee promptly to authenticate and
                deliver Exchange Securities to each Holder of Registrable
                Securities so accepted for exchange equal

                                        8



                in principal amount to the principal amount of the Registrable
                Securities of such Holder so accepted for exchange.

                Interest on each Exchange Security and each Private Exchange
Security (if any) will accrue from the last date on which interest was paid or
duly provided for on the Notes surrendered in exchange therefor or, if no
interest has been paid or duly provided for on such Notes, from the Interest
Accrual Date. The Exchange Offer shall not be subject to any conditions, other
than (i) that the Exchange Offer, or the making of any exchange by a Holder,
does not violate any applicable law or any applicable interpretation of the
staff of the SEC, (ii) that no action or proceeding shall have been instituted
or threatened in any court or by or before any governmental agency with respect
to the Exchange Offer which, in the Company's judgment, would reasonably be
expected to impair the ability of the Company to proceed with the Exchange
Offer, and (iii) that the Holders tender the Registrable Securities to the
Company in accordance with the Exchange Offer. Each Holder of Registrable
Securities (other than Participating Broker-Dealers) who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to represent that (i) it is not an affiliate (as defined in Rule 405
under the 1933 Act) of the Company, (ii) any Exchange Securities to be received
by it will be acquired in the ordinary course of business and (iii) it has no
arrangement with any Person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Securities, and shall be required to
make such other representations as may be reasonably necessary under applicable
SEC rules, regulations or interpretations to render the use of Form S-4 or
another appropriate form under the 1933 Act available. To the extent permitted
by law, the Company shall inform the Initial Purchasers of the names and
addresses of the Holders of Securities to whom the Exchange Offer is made and,
to the extent such information is available to the Company, the names and
addresses of the beneficial owners of such Securities, and the Initial
Purchasers shall have the right to contact such Holders and beneficial owners
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.

                (b)     Shelf Registration. (i) If, because of any change in law
or applicable interpretations thereof by the staff of the SEC, the Company is
not permitted to effect the Exchange Offer as contemplated by Section 2(a)
hereof, or (ii) if for any other reason (A) the Exchange Offer Registration
Statement is not declared effective within 180 days following the Closing Time
or (B) the Exchange Offer is not consummated within 45 days after effectiveness
of the Exchange Offer Registration Statement (provided that if the Exchange
Offer Registration Statement shall be declared effective after such 180-day
period or if the Exchange Offer shall be consummated after such 45-day period,
then the Company's obligations under this clause (ii) arising from the failure
of the Exchange Offer Registration Statement to be declared effective within
such 180-day period or the failure of the Exchange Offer to be consummated
within such 45-day period, respectively, shall terminate), or (iii) upon the
request of any Initial Purchaser (other than an Initial Purchaser holding Notes
acquired directly from the Company) within 30 days following the consummation of
the Exchange Offer who is not eligible to participate in the Exchange Offer or
who elects to participate in the Exchange Offer but does not receive Exchange
Securities which are freely tradeable without any limitations or restrictions
under the 1933 Act, or (iv) upon the request of any of the Initial Purchasers
within 90 days following the consummation of the Exchange Offer (provided that,
in the case of this clause (iv), such Initial Purchaser shall hold Registrable
Securities (including, without limitation, Private Exchange

                                        9



Securities) from an initial allotment that it acquired directly from the
Company), the Company shall, at its cost:

                        (A) as promptly as practicable, but no later than (a)
                the 180th day after the Closing Time or (b) the 75th day after
                any such filing obligation arises, whichever is later, file with
                the SEC a Shelf Registration Statement relating to the offer and
                sale of the Registrable Securities by the Holders from time to
                time in accordance with the methods of distribution elected by
                the Majority Holders of such Registrable Securities and set
                forth in such Shelf Registration Statement;

                        (B) use its reasonable best efforts to cause such Shelf
                Registration Statement to be declared effective by the SEC as
                promptly as practicable, but in no event later than the 240th
                day after the Closing Time (or, in the case of a request by any
                of the Initial Purchasers pursuant to clause (iii) or (iv)
                above, within 120 days after such request). In the event that
                the Company is required to file a Shelf Registration Statement
                pursuant to clause (iii) or (iv) above, the Company shall file
                and use its reasonable best efforts to have declared effective
                by the SEC both an Exchange Offer Registration Statement
                pursuant to Section 2(a) with respect to all Registrable
                Securities and a Shelf Registration Statement (which may be a
                combined Registration Statement with the Exchange Offer
                Registration Statement) with respect to offers and sales of
                Registrable Securities held by such Initial Purchaser;

                        (C) use its reasonable best efforts to keep the Shelf
                Registration Statement continuously effective, supplemented and
                amended as required, in order to permit the Prospectus forming
                part thereof to be usable by Holders for a period of two years
                after the latest date on which any Securities are originally
                issued by the Company (subject to extension pursuant to the last
                paragraph of Section 3) (or, solely in the case of clause (iii)
                or (iv) above of this Section 2(b), 210 days after completion of
                the Exchange Offer) or, if earlier, when all of the Registrable
                Securities covered by such Shelf Registration Statement (i) have
                been sold pursuant to the Shelf Registration Statement in
                accordance with the intended method of distribution thereunder,
                (ii) become eligible for resale pursuant to Rule 144(k) under
                the 1933 Act or (iii) cease to be Registrable Securities; and

                        (D) notwithstanding any other provisions hereof, use its
                best efforts to ensure that (i) any Shelf Registration Statement
                and any amendment thereto and any Prospectus forming a part
                thereof and any supplements thereto comply in all material
                respects with the 1933 Act and the rules and regulations
                thereunder, (ii) any Shelf Registration Statement and any
                amendment or supplement thereto does not, when it becomes
                effective, contain an untrue statement of a material fact or
                omit to state a material fact required to be stated therein or
                necessary to make the statements therein not misleading and
                (iii) any Prospectus forming part of any Shelf Registration
                Statement and any amendment or supplement to such Prospectus
                does not include an untrue statement of a material fact or omit
                to state a material fact necessary in order to make the
                statements therein, in the light of the circumstances under
                which they were made, not misleading.

                                       10



                The Company shall not permit any securities other than
Registrable Securities to be included in the Shelf Registration Statement
without the prior written consent of the Representative. The Company further
agrees, if necessary, to supplement or amend the Shelf Registration Statement if
reasonably requested by the Majority Holders with respect to information
relating to the Holders and otherwise as required by Section 3(b) below, to use
its reasonable best efforts to cause any such amendment to become effective and
such Shelf Registration Statement to become usable as soon as practicable
thereafter and to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.

                (c)     Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) and 2(b)
hereof and, in the case of any Shelf Registration Statement, will reimburse the
Holders or the Initial Purchasers for the fees and disbursements of one counsel
designated in writing by the Majority Holders (or, if a Shelf Registration
Statement is filed solely pursuant to clause (iv) of the first paragraph of
Section 2(b), designated by the Initial Purchasers) to act as counsel for the
Holders of the Registrable Securities in connection with a Shelf Registration.
Each Holder shall pay all fees and disbursements of its counsel other than as
set forth in the preceding sentence or in the definition of Registration
Expenses and all underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's Registrable Securities
pursuant to a Shelf Registration Statement.

                (d)     Effective Registration Statement.

                        (i)     The Company shall be deemed not to have used its
                reasonable best efforts to cause the Exchange Offer Registration
                Statement or any Shelf Registration Statement, as the case may
                be, to become, or to remain, effective during the requisite
                periods set forth herein if the Company takes any action or
                fails to take action that could reasonably be expected to result
                in any such Registration Statement not being declared effective
                or remaining effective or in the case of the Holders of
                Registrable Securities (including, under the circumstances
                contemplated by Section 3(f) hereof, Exchange Securities)
                covered thereby not being able to exchange or offer and sell
                such Registrable Securities during that period unless (A) such
                action is required by applicable law or (B) such action is taken
                by the Company in good faith and for valid business reasons (but
                not including avoidance of the Company's obligations hereunder),
                including the acquisition or divestiture of assets or a material
                corporate transaction or event so long as the Company promptly
                complies with the notification requirements of Section 3(k)
                hereof, if applicable. Nothing in this paragraph shall prevent
                the accrual of Additional Interest on any Registrable
                Securities.

                        (ii)    An Exchange Offer Registration Statement
                pursuant to Section 2(a) hereof or a Shelf Registration
                Statement pursuant to Section 2(b) hereof shall not be deemed to
                have become effective unless it has been declared effective by
                the SEC; provided, however, that if, after such Registration
                Statement has been declared effective, the offering of
                Registrable Securities pursuant to a Registration Statement is
                interfered with by any stop order, injunction or other order or

                                       11



                requirement of the SEC or any other governmental agency or
                court, such Registration Statement shall be deemed not to have
                been effective during the period of such interference until the
                offering of Registrable Securities pursuant to such Registration
                Statement may legally resume.

                        (iii)   During any 365 day period, the Company may, by
                notice as described in Section 3(e) hereof, suspend the
                availability of a Shelf Registration Statement (and, if the
                Exchange Offer Registration Statement is being used in
                connection with the resale of Exchange Securities by
                Participating Broker Dealers as contemplated by Section 3(f),
                the Exchange Offer Registration Statement) and the use of the
                related Prospectus for up to 45 consecutive days each, but no
                more than an aggregate of 90 days during any 365 day period,
                upon the happening of any event or the discovery of any fact or
                the taking of any action referred to in Section 3(e)(vi), but
                subject to compliance by the Company with its obligations under
                the last paragraph of Section 3.

                (e)     Increase in Interest Rate. In the event that:

                        (i)     the Exchange Offer Registration Statement is not
                filed with the SEC on or prior to the 120th day following the
                Closing Time, or

                        (ii)    the Exchange Offer Registration Statement is not
                declared effective by the SEC on or prior to the 180th day
                following the Closing Time, or

                        (iii)   the Exchange Offer is not consummated on or
                prior to the 45th day following the effective date of the
                Exchange Offer Registration Statement, or

                        (iv)    if required, a Shelf Registration Statement is
                not filed with the SEC on or prior to (A) the 180th day
                following the Closing Time or (B) the 75th day after the filing
                obligation arises, whichever is later, or

                        (v)     if required, a Shelf Registration Statement is
                not declared effective on or prior to the 240th day following
                the Closing Time (or, if a Shelf Registration Statement is
                required to be filed upon the request of any Initial Purchaser,
                within 120 days after such request), or

                        (vi)    a Shelf Registration Statement is declared
                effective by the SEC but such Shelf Registration Statement
                ceases to be effective or such Shelf Registration Statement or
                the Prospectus included therein ceases to be usable in
                connection with resales of Registrable Securities for any reason
                and (A) the aggregate number of days in any consecutive 365-day
                period for which the Shelf Registration Statement or such
                Prospectus shall not be effective or usable exceeds 90 days, (B)
                the Shelf Registration Statement or such Prospectus shall not be
                effective or usable for more than two periods (regardless of
                duration) in any consecutive 365-day period or (C) the Shelf
                Registration Statement or such Prospectus shall not be effective
                or usable for a period of more than 45 consecutive days, or

                                       12



                        (vii)   the Exchange Offer Registration Statement is
                declared effective by the SEC but, if the Exchange Offer
                Registration Statement is being used in connection with the
                resale of Exchange Securities as contemplated by Section 3(f)(B)
                of this Agreement, the Exchange Offer Registration Statement
                ceases to be effective or the Exchange Offer Registration
                Statement or the Prospectus included therein ceases to be usable
                in connection with resales of Exchange Securities for any reason
                during the Applicable Period (as such period may be extended
                pursuant to the last paragraph of Section 3 of this Agreement)
                and (A) the aggregate number of days in any consecutive 365-day
                period for which the Exchange Offer Registration Statement or
                such Prospectus shall not be effective or usable exceeds 90
                days, (B) the Exchange Offer Registration Statement or such
                Prospectus shall not be effective or usable for more than two
                periods (regardless of duration) in any consecutive 365-day
                period or (C) the Exchange Offer Registration Statement or the
                Prospectus shall not be effective or usable for a period of more
                than 45 consecutive days, (each of the events referred to in
                clauses (i) through (vii) above being hereinafter called a
                "Registration Default"), the per annum interest rate borne by
                the Registrable Securities shall be increased ("Additional
                Interest") by one-quarter of one percent (0.25%) per annum
                immediately following such 120-day period in the case of clause
                (i) above, immediately following such 180-day period in the case
                of clause (ii) above, immediately following such 45-day period
                in the case of clause (iii) above, immediately following any
                such 180-day period or 75-day period, whichever ends later, in
                the case of clause (iv) above, immediately following any such
                240-day period or 120-day period, whichever ends first, in the
                case of clause (v) above, immediately following the 90th day in
                any consecutive 365-day period, as of the first day of the third
                period in any consecutive 365-day period or immediately
                following the 45th consecutive day, whichever occurs first, that
                a Shelf Registration Statement shall not be effective or a Shelf
                Registration Statement or the Prospectus included therein shall
                not be usable as contemplated by clause (vi) above, or
                immediately following the 90th day in any consecutive 365-day
                period, as of the first day of the third period in any
                consecutive 365-day period or immediately following the 45th
                consecutive day, whichever occurs first, that the Exchange Offer
                Registration Statement shall not be effective or the Exchange
                Offer Registration Statement or the Prospectus included therein
                shall not be usable as contemplated by clause (vii) above;
                provided that the aggregate increase in such annual interest
                rate under this Section 2(e) may in no event exceed one-quarter
                of one percent (0.25%) per annum; further provided that the
                aggregate increase in such annual interest rate may in no event
                be in excess of the rate permissible under applicable law. Upon
                the filing of the Exchange Offer Registration Statement after
                the 120-day period described in clause (i) above, the
                effectiveness of the Exchange Offer Registration Statement after
                the 180-day period described in clause (ii) above, the
                consummation of the Exchange Offer after the 45-day period
                described in clause (iii) above, the filing of the Shelf
                Registration Statement after the 180-day period or 75-day period
                day, as the case may be, described in clause (iv) above, the
                effectiveness of a Shelf Registration Statement after the
                240-day period or 120-day period, as the case may be,

                                       13



                described in clause (v) above, the Shelf Registration Statement
                once again being effective or the Shelf Registration Statement
                and the Prospectus included therein becoming usable in
                connection with resales of Registrable Securities, as the case
                may be, in the case of clause (vi) above, or the Exchange Offer
                Registration Statement once again becoming effective or the
                Exchange Offer Registration Statement and the Prospectus
                included therein becoming usable in connection with resales of
                Exchange Securities, as the case may be, in the case of clause
                (vii) thereof, the interest rate borne by the Securities from
                the date of such filing, effectiveness, consummation or
                resumption of effectiveness or usability, as the case may be,
                shall be reduced to the original interest rate so long as no
                other Registration Default shall have occurred and shall be
                continuing at such time and the Company is otherwise in
                compliance with this paragraph; provided, however, that, if
                after any such reduction in interest rate, one or more
                Registration Defaults shall again occur, the interest rate shall
                again be increased pursuant to the foregoing provisions.

                The Company shall notify the Trustee within three business days
after each and every date on which an event occurs or fails to occur in respect
of which Additional Interest is required to be paid (an "Event Date").
Additional Interest shall be paid by depositing with the Trustee, in trust, for
the benefit of the Holders of Registrable Securities, on or before the
applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be payable on each interest payment date to the record Holder of
Securities entitled to receive the interest payment to be paid on such date as
set forth in the Indenture. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the applicable Event Date.
Anything herein to the contrary notwithstanding, any Holder who was, at the time
the Exchange Offer was pending and consummated, eligible to exchange, and did
not validly tender, its Notes for Exchange Securities in the Exchange Offer will
not be entitled to receive any Additional Interest. For purposes of clarity, it
is hereby acknowledged and agreed that, under current interpretations of law by
the SEC, Initial Purchasers holding unsold allotments of Notes acquired from the
Company are not eligible to participate in the Exchange Offer.

                (f)     Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its obligations under Sections
2(a) through 2(d) hereof may result in material irreparable injury to the
Initial Purchasers, the Holders or the Participating Broker-Dealers for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers, any Holder and any Participating Broker-Dealer may
obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 2(a) through 2(d) hereof.

                3.      Registration Procedures. In connection with the
obligations of the Company with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company shall:

                (a)     prepare and file with the SEC a Registration Statement
or, if required, Registration Statements, within the time periods specified in
Section 2, on the appropriate form

                                       14



under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall,
in the case of a Shelf Registration Statement, be available for the sale of the
Registrable Securities by the selling Holders thereof and, in the case of an
Exchange Offer, be available for the exchange of Registrable Securities and
(iii) shall comply as to form in all material respects with the requirements of
the applicable form and include or incorporate by reference all financial
statements required by the SEC to be filed therewith, and use its reasonable
best efforts to cause such Registration Statement to become effective (and, in
the case of a Shelf Registration Statement, usable for resales) and remain
effective in accordance with Section 2 hereof;

                (b)     prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary
under applicable law to keep such Registration Statement effective for the
applicable period; cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the 1933 Act; and comply with the provisions of the 1933 Act and the 1934
Act with respect to the disposition of all Notes covered by each Registration
Statement during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;

                (c)     in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities, at least 5 business days prior to filing, that
a Shelf Registration Statement with respect to the Registrable Securities is
being filed and advising such Holders that the distribution of Registrable
Securities will be made in accordance with the method elected by the Majority
Holders; (ii) furnish to each Holder of Registrable Securities included in the
Shelf Registration, to counsel for the Initial Purchasers, to counsel for the
Holders, if any, and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder, counsel or
underwriter may reasonably request, including financial statements and schedules
and, if such Holder, counsel or underwriter so requests, all exhibits (including
those incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to the penultimate
paragraph of this Section 3, the Company hereby consents to the use of the
Prospectus, including each preliminary Prospectus, or any amendment or
supplement thereto by each of the Holders of Registrable Securities included in
the Shelf Registration and underwriters of Registrable Securities in connection
with the offering and sale of the Registrable Securities covered by any
Prospectus or any amendment or supplement thereto;

                (d)     use its reasonable best efforts to register or qualify
the Registrable Securities under all applicable state securities or "blue sky"
laws of such jurisdictions as any selling Holder of Registrable Securities
covered by a Shelf Registration Statement and each underwriter of an
underwritten offering of Registrable Securities shall reasonably request, to
cooperate with the Holders and the underwriters of any Registrable Securities in
connection with any filings required to be made with the NASD, to keep each such
registration or qualification effective during the period such Registration
Statement is required to be effective and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall not
be required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be

                                       15



required to qualify but for this Section 3(d) or (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction if it is not then so subject;

                (e)     in the case of a Shelf Registration, notify each Holder
of Registrable Securities included in the Shelf Registration and counsel for
such Holders promptly and, if requested by such Holder or counsel, confirm such
advice in writing promptly (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities authority for
post-effective amendments or supplements to a Registration Statement or
Prospectus or for additional information after a Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if between
the effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby the representations and warranties of the
Company contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to such offering cease to be true and
correct, (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the suspension of use of the Prospectus as a result of the
happening of any event or the discovery of any facts or the taking of any action
during the period a Shelf Registration Statement is effective which is
contemplated in Section 2(d)(i)(A) or 2(d)(i)(B) or which makes any statement
made in such Shelf Registration Statement or the related Prospectus untrue in
any material respect or which constitutes an omission to state a material fact
in such Shelf Registration Statement or Prospectus and (vii) of any
determination by the Company that a post-effective amendment to a Registration
Statement would be appropriate. Without limitation to any other provisions of
this Agreement, the Company agrees that this Section 3(e) shall also be
applicable, mutatis mutandis, with respect to the Exchange Offer Registration
Statement and the Prospectus included therein to the extent that such Prospectus
is being used by Participating Broker-Dealers as contemplated by Section 3(f);

                (f)     (A) in the case of an Exchange Offer, (i) include in the
Exchange Offer Registration Statement (x) a "Plan of Distribution" section
substantially in the form set forth in Annex B hereto or other such form as is
reasonably acceptable to the Representative covering the use of the Prospectus
included in the Exchange Offer Registration Statement by broker-dealers who have
exchanged their Registrable Securities for Exchange Securities for the resale of
such Exchange Securities and (y) a statement to the effect that any such
broker-dealers who wish to use the related Prospectus in connection with the
resale of Exchange Securities acquired as a result of market-making or other
trading activities will be required to notify the Company to that effect,
together with instructions for giving such notice (which instructions shall
include a provision for giving such notice by checking a box or making another
appropriate notation on the related letter of transmittal) (each such
broker-dealer who gives notice to the Company as aforesaid being hereinafter
called a "Notifying Broker-Dealer"), (ii) furnish to each Notifying
Broker-Dealer who desires to participate in the Exchange Offer, without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any broker-dealer who
holds Registrable Securities acquired for its own account as a result of

                                       16



market-making activities or other trading activities (a "Participating
Broker-Dealer"), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be a statutory underwriter and must deliver
a prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities, (iv) subject to the penultimate paragraph of
this Section 3, the Company hereby consents to the use of the Prospectus forming
part of the Exchange Offer Registration Statement or any amendment or supplement
thereto by any Notifying Broker-Dealer in connection with the sale or transfer
of Exchange Securities, and (v) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to participate in
the Exchange Offer the following provision:

                "If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If the undersigned is a broker-dealer that
will receive Exchange Securities for its own account in exchange for Registrable
Securities, it represents that the Registrable Securities to be exchanged for
Exchange Securities were acquired by it as a result of market-making activities
or other trading activities and acknowledges that it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities pursuant to the Exchange Offer; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be deemed to admit that
it is an "underwriter" within the meaning of the 1933 Act";

                (B) to the extent any Notifying Broker-Dealer participates in
the Exchange Offer, (i) the Company shall use its reasonable best efforts to
maintain the effectiveness of the Exchange Offer Registration Statement for a
period of time necessary to permit the Prospectus included therein to be
lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons must
comply with such requirements under the Securities Act and applicable rules and
regulations in order to resell the Exchange Securities; provided, however, that
such period shall not be required to exceed 90 days (or such longer period if
extended pursuant to the last paragraph of this Section 3) (the "Applicable
Period") following the last date on which exchanges are accepted pursuant to the
Exchange Offer, and (ii) the Company will comply, insofar as relates to the
Exchange Offer Registration Statement, the Prospectus included therein and the
offering and sale of Exchange Securities pursuant thereto, with its obligations
under Section 2(b)(D), the last paragraph of Section 2(b), Section 3(c), 3(d),
3(e), 3(i), 3(j), 3(k), 3(o) and 3(p), and the last two paragraphs of this
Section 3 as if all references therein to a Shelf Registration Statement, the
Prospectus included therein and the Holders of Registrable Securities referred,
mutatis mutandis, to the Exchange Offer Registration Statement, the Prospectus
included therein and the applicable Notifying Broker-Dealers and, for purposes
of this Section 3(f), all references in any such paragraphs or sections to the
"Majority Holders" shall be deemed to mean, solely insofar as relates to this
Section 3(f), the Notifying Broker-Dealers who are the Holders of the majority
in aggregate principal amount of the Exchange Securities which are Registrable
Securities;

                (C) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b) or 3(k) hereof, or take any other
action as a result of this Section 3(f), at any time after the expiration of the
Applicable Period (subject to extension pursuant to the last paragraph of this
Section 3) after the last date on which exchanges are accepted pursuant to the
Exchange Offer, and neither Notifying Broker-Dealers nor any other Person shall
be authorized by the

                                       17



Company to, and shall not, deliver such Prospectus after such period in
connection with resales contemplated by this Section 3; and

                (D) In the case of any Exchange Offer Registration Statement,
the Company agrees to deliver to the Initial Purchasers on behalf of the
Participating Broker-Dealer upon the effectiveness of the Exchange Offer
Registration Statement, if requested (i) an opinion of counsel or opinions of
counsel reasonably satisfactory to the Initial Purchasers, (ii) officers'
certificates substantially in the form customarily delivered in a public
offering of debt securities and (iii) a comfort letter or comfort letters in
customary form to the extent permitted by Statement on Auditing Standards No. 72
of the American Institute of Certified Public Accountants (or if such a comfort
letter is not permitted, an agreed upon procedures letter in customary form)
from the Company's independent certified public accountants (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements are, or are required to be, included in the Registration Statement)
at least as broad in scope and coverage as the comfort letter or comfort letters
delivered to the Initial Purchasers in connection with the initial sale of the
Notes to the Initial Purchasers;

                (g)     (i) in the case of an Exchange Offer, furnish counsel
for the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Securities and counsel for any
underwriters of Registrable Securities copies of any request by the SEC or any
state securities authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information;

                (h)     use its reasonable best effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement as soon as
practicable and provide immediate notice to each Holder of the withdrawal of any
such order;

                (i)     in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included in the Shelf Registration, without
charge, at least one conformed copy of each Registration Statement and any
post-effective amendments thereto (without documents incorporated or deemed to
be incorporated therein by reference or exhibits thereto, unless requested), if
such documents are not available via the SEC EDGAR database;

                (j)     in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends other than requiring transfers in multiples
of $1,000; and cause such Registrable Securities to be in such denominations
(consistent with the provisions of the Indenture) and in a form eligible for
deposit with the Depositary and registered in such names as the selling Holders
or the underwriters, if any, may reasonably request in writing at least two
business days prior to the closing of any sale of Registrable Securities
pursuant to such Shelf Registration;

                (k)     in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts as contemplated by Section 3(e)(vi)
hereof, use its reasonable best efforts to prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus
or any document incorporated or deemed to be incorporated therein by reference
or

                                       18



file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not contain at
the time of such delivery any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company agrees to notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission or,
alternatively, to notify the Holders that no such amendment or supplement is
necessary. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination
and to furnish each Holder such number of copies of the Prospectus, as amended
or supplemented, as such Holder may reasonably request;

                (l)     obtain CUSIP numbers for all Exchange Securities or
Registrable Securities, as the case may be, not later than the effective date of
a Registration Statement, and provide the Trustee with printed or word-processed
certificates for the Exchange Securities or Registrable Securities, as the case
may be, in a form eligible for deposit with the Depositary;

                (m)     (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes, if any, to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and (iii)
execute, and use its best efforts to cause the Trustee to execute, all documents
as may be required to effect such changes, if any, and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;

                (n)     in the case of a Shelf Registration, the Holders of a
majority in principal amount of the Registrable Securities registered pursuant
to such Shelf Registration Statement shall have the right to direct the Company
to effect not more than one underwritten registration and, in connection with
such underwritten registration, the Company shall enter into agreements
(including underwriting agreements or similar agreements) and take all other
customary and appropriate actions (including those reasonably requested by the
Holders of a majority in principal amount of the Registrable Securities being
sold) in order to expedite or facilitate the disposition of such Registrable
Securities; provided, however, the Company will not be required to effect such
underwritten registration or enter into any agreements in connection therewith
within 90 days after consummation of any other underwritten public offering of
the Company. In connection with the underwritten registration undertaken at the
direction of the Holders, the Company shall, in a manner that is reasonable and
customary:

                        (i)     make representations and warranties to the
                Holders of such Registrable Securities and the underwriters in
                such form, substance and scope as are customarily made by
                issuers to underwriters in similar underwritten offerings as may
                be reasonably requested by such Holders and the managing
                underwriter(s);

                                       19



                        (ii)    obtain opinions of counsel to the Company (which
                counsel and opinions (in form, scope and substance) shall be
                reasonably satisfactory to the managing underwriter(s), and the
                Holders of a majority in principal amount of the Registrable
                Securities being sold) addressed to each selling Holder and the
                underwriters, covering the matters customarily covered in
                opinions requested in sales of debt securities or underwritten
                offerings of debt securities and such other matters as may be
                reasonably requested by such Holders and the managing
                underwriter(s);

                        (iii)   obtain "cold comfort" letters and updates
                thereof with respect to such Shelf Registration Statement and
                the Prospectus included therein, all amendments and supplements
                thereto and all documents incorporated or deemed to be
                incorporated by reference therein from the Company's independent
                certified public accountants and from the independent certified
                public accountants for any other Person or any business or
                assets whose financial statements are included or incorporated
                by reference in the Shelf Registration Statement, each addressed
                to the underwriters, and use reasonable best efforts to have
                such letters addressed to the selling Holders of Registrable
                Securities, such letters to be in customary form and covering
                matters of the type customarily covered in "cold comfort"
                letters to underwriters in connection with similar underwritten
                offerings and such letters to be delivered at the time of the
                pricing of such underwritten registration with an update to such
                letter to be delivered at the time of closing of such
                underwritten registration;

                        (iv)    if an underwriting agreement or other similar
                agreement is entered into, cause the same to set forth
                indemnification and contributions provisions and procedures
                substantially equivalent to the indemnification and
                contributions provisions and procedures set forth in Section 5
                hereof with respect to the underwriters and all other parties to
                be indemnified pursuant to Section 5 hereof or such other
                indemnification and contributions as shall be satisfactory to
                the Company, the managing underwriter(s) and the Holders of the
                majority in principal amount of the Registrable Securities being
                sold; and

                        (v)     deliver such other documents and certificates as
                may be reasonably requested and as are customarily delivered in
                similar underwritten offerings of debt securities.

The documents referred to in Sections 3(n)(ii) and 3(n)(v) shall be delivered at
the closing under any underwriting or similar agreement as and to the extent
required thereunder. In the case of any such underwritten offering, the Company
shall provide written notice to the Holders of all Registrable Securities of
such underwritten offering at least 30 days prior to the filing of a prospectus
supplement for such underwritten offering. Such notice shall (x) offer each such
Holder the right to participate in such underwritten offering, (y) specify a
date, which shall be no earlier than 15 days following the date of such notice,
by which such Holder must inform the Company of its intent to participate in
such underwritten offering and (z) include the instructions such Holder must
follow in order to participate in such underwritten offering;

                                       20



                (o)     in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Securities and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant retained by such Holders or
underwriters, all financial statements and other records, documents and
properties of the Company reasonably requested by any such Persons, and cause
the respective officers, directors, employees, and any other agents of the
Company to supply all information reasonably requested by any such Persons in
connection with a Shelf Registration Statement;

                (p)     (i) in the case of an Exchange Offer, a reasonable time
prior to the filing of any Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange Offer Registration
Statement or amendment or supplement to such Prospectus, provide copies of such
documents to the Initial Purchasers, and make such changes in any such documents
prior to the filing thereof as the Initial Purchasers or their counsel may
reasonably request; (ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders of
Registrable Securities, to the Initial Purchasers, to the underwriter or
underwriters, of an underwritten offering of Registrable Securities, and to
counsel for any such Holders, Initial Purchasers or underwriters, and make such
changes in any such document prior to the filing thereof as the Holders of
Registrable Securities, the Initial Purchasers, any such underwriter or
underwriters or any of their respective counsel may reasonably request; and
(iii) cause the representatives of the Company to be available for discussion of
such documents as shall be reasonably requested by the Holders of Registrable
Securities, the Initial Purchasers on behalf of such Holders or the
underwriters, and shall not at any time make any filing of any such document of
which such Holders, the Initial Purchasers on behalf of such Holders, their
counsel or any underwriter shall not have previously been advised and furnished
a copy or to which such Holders, the Initial Purchasers on behalf of such
Holders, their counsel or any underwriter shall reasonably object within a
reasonable time period;

                (q)     in the case of a Shelf Registration, use its reasonable
best efforts to cause the Registrable Securities to be rated with the
appropriate rating agencies, if so requested by the Majority Holders or by the
underwriters of an underwritten offering, unless the Registrable Securities are
already so rated;

                (r)     otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC and, with respect to each
Registration Statement and each post-effective amendment, if any, thereto and
each filing by the Company of an Annual Report on Form 10-K, make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering at least twelve months which shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder;

                (s)     cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
underwriter and its counsel; and

                (t)     in the case of a Shelf Registration, a reasonable time
prior to the filing of any Registration Statement, any Prospectus, any amendment
to a Registration Statement or

                                       21



amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus after
the initial filing of a Registration Statement, provide copies of such document
to the Initial Purchasers on behalf of such Holders; and make representatives of
the Company as shall be reasonably requested by the Holders of Registrable
Securities, or the Initial Purchasers on behalf of such Holders, available for
discussion of such document.

                In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Securities to furnish to the Company in
writing, within 15 days after receipt of a request therefor, such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and require such Holder to agree in writing to be bound by all
provisions of this Agreement applicable to such Holder. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company all
information with respect to such Holder necessary to make the information
previously furnished to the Company by such Holder not materially misleading.

                In the case of a Shelf Registration Statement, each Holder
agrees and, in the event that any Participating Broker-Dealer is using the
Prospectus included in the Exchange Offer Registration Statement in connection
with the sale of Exchange Securities pursuant to Section 3(f), each such
Participating Broker-Dealer agrees that, upon receipt of any notice from the
Company of the happening of any event or the discovery of any facts of the kind
described in Section 3(e)(ii), 3(e)(iii) or 3(e)(v) through 3(e)(vii) hereof,
such Holder or Participating Broker-Dealer, as the case may be, will forthwith
discontinue disposition of Registrable Securities pursuant to a Registration
Statement until receipt by such Holder or Participating Broker-Dealer, as the
case may be, of (i) the copies of the supplemented or amended Prospectus
contemplated by Section 3(k) hereof or (ii) written notice from the Company that
the Shelf Registration Statement or the Exchange Offer Registration Statement,
respectively, are once again effective or that no supplement or amendment is
required. If so directed by the Company, such Holder or Participating
Broker-Dealer, as the case may be, will deliver to the Company (at the Company's
expense) all copies in its possession, other than permanent file copies then in
its possession, of the Prospectus covering such Registrable Securities current
at the time of receipt of such notice. Nothing in this paragraph shall prevent
the accrual of Additional Interest on any Notes or Exchange Securities.

                If the Company shall give any such notice to suspend the
disposition of Registrable Securities pursuant to the immediately preceding
paragraph, the Company shall use its reasonable best efforts to file and have
declared effective (if an amendment) as soon as practicable thereafter an
amendment or supplement to the Shelf Registration Statement or the Exchange
Offer Registration Statement or both, as the case may be, or the Prospectus
included therein and shall extend the period during which the Shelf Registration
Statement or the Exchange Offer Registration Statement or both, as the case may
be, shall be maintained effective pursuant to this Agreement (and, if
applicable, the period during which Participating Broker-Dealers may use the
Prospectus included in the Exchange Offer Registration Statement pursuant to
Section 3(f) hereof) by the number of days during the period from and including
the date of the giving of such notice to and including the earlier of the date
when the Holders or Participating Broker-Dealers, respectively, shall have
received copies of the supplemented or

                                       22



amended Prospectus necessary to resume such dispositions and the effective date
of written notice from the Company to the Holders or Participating
Broker-Dealers, respectively, that the Shelf Registration Statement or the
Exchange Offer Registration Statement, respectively, are once again effective or
that no supplement or amendment is required.

                4.      Underwritten Registrations. If any of the Registrable
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Majority Holders of such
Registrable Securities included in such offering, subject to the consent of the
Company, which consent shall not be unreasonably withheld.

                No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

                5.      Indemnification and Contribution.

                (a)     The Company agrees to indemnify and hold harmless each
Initial Purchaser, each Holder, each Participating Broker-Dealer, each
underwriter who participates in an offering of Registrable Securities (each, an
"Underwriter"), and each Person, if any, who controls any Initial Purchaser,
Holder, Participating Broker-Dealer or Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, as follows:

                        (i)     against any and all loss, liability, claim,
                damage and expense whatsoever, as incurred, arising out of any
                untrue statement or alleged untrue statement of a material fact
                contained in any Registration Statement (and any amendment
                thereto) pursuant to which Exchange Securities or Registrable
                Securities were registered under the 1933 Act, including all
                documents incorporated therein by reference, or any omission or
                alleged omission therefrom of a material fact required to be
                stated therein or necessary to make the statements therein not
                misleading, or arising out of any untrue statement or alleged
                untrue statement of a material fact contained in any preliminary
                prospectus or Prospectus (and any amendment thereto) or any
                omission or alleged omission therefrom of a material fact
                necessary in order to make the statements therein, in the light
                of the circumstances under which they were made, not misleading;

                        (ii)    against any and all loss, liability, claim,
                damage and expense whatsoever, as incurred, to the extent of the
                aggregate amount paid in settlement of any litigation, or any
                investigation or proceeding by any governmental agency or body,
                commenced or threatened, or of any claim whatsoever based upon
                any such untrue statement or omission, or any such alleged
                untrue statement or omission; provided that any such settlement
                is effected with the written consent of the Company; and

                                       23



                        (iii)   against any and all expense whatsoever, as
                incurred (including the fees and disbursements of one counsel
                chosen by any indemnified party), reasonably incurred in
                investigating, preparing or defending against any litigation, or
                any investigation or proceeding by any governmental agency or
                body, commenced or threatened, or any claim whatsoever based
                upon any such untrue statement or omission, or any such alleged
                untrue statement or omission, to the extent that any such
                expense is not paid under subparagraph (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter with
respect to such Initial Purchaser, Holder, Participating Broker-Dealer or
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) or made in
reliance upon the Statements of Eligibility and Qualification of Trustees (Form
T-1) under the 1939 Act filed as exhibits to the Registration Statement;

further provided, that this indemnity does not apply to any such Holder,
Participating Broker-Dealer, any Underwriter or controlling person, with respect
to any untrue statement or omission or alleged omission in any preliminary
Prospectus to the extent that any such loss, liability, claim, damage or expense
of any Holder, Participating Broker-Dealer, any underwriter or controlling
person results from the fact that such Holder, any Underwriter or Participating
Broker-Dealer sold Registrable Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
final Prospectus as then amended or supplemented if the Company had previously
furnished copies thereof to such Holder, Underwriter or Participating
Broker-Dealer with sufficient time for such Holder, Underwriter or Participating
Broker-Dealer to distribute such final Prospectus and the loss, liability,
claim, damage or expense of such Holder, Underwriter, Participating
Broker-Dealer, or controlling person results from an untrue statement or
omission of a material fact contained in the preliminary Prospectus which was
corrected in the final Prospectus. Any amounts advanced by the Company to an
indemnified party pursuant to this Section 5 as a result of such losses shall be
returned to the Company if it shall be finally determined by such a court in a
judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by the Company.

                (b)     Each Initial Purchaser, each Holder, each Participating
Broker-Dealer and each Underwriter severally but not jointly, agrees to
indemnify and hold harmless the Company, each director and officer of the
Company, each other Initial Purchaser, selling Holder, Participating
Broker-Dealer and Underwriter, and each Person, if any, who controls the Company
or any Initial Purchaser, other selling Holder, Participating Broker-Dealer or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 5(a) hereof, as incurred, with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in any Registration Statement pursuant to which Exchange
Securities or Registrable Securities were registered under the 1933 Act (or any
amendment thereto) or any Prospectus included therein (or any amendment or
supplement

                                       24



thereto) in reliance upon and in conformity with written information with
respect to such Initial Purchaser, Holder, Participating Broker-Dealer or
Underwriter furnished to the Company by such Initial Purchaser, Holder,
Participating Broker-Dealer, or Underwriter, respectively, expressly for use in
the Shelf Registration Statement (or any amendment thereto) or such Prospectus
(or any amendment or supplement thereto); provided, however, that no such
Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter
from the sale of Registrable Securities pursuant to such Shelf Registration
Statement.

                (c)     Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 5 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

                (d)     In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in this Section 5
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party or
parties on the one hand and the indemnified party or parties on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such indemnifying party
or parties or such indemnified party or parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

                                       25



                (e)     The Company, the Initial Purchasers, the Holders, the
Participating Broker-Dealers and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 5 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 5, no Initial Purchaser, Holder, Participating Broker-Dealer or
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which Registrable Securities sold by it were offered
exceeds the amount of any damages that such Initial Purchaser, Holder,
Participating Broker-Dealer or Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.

                No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.

                For purposes of this Section 5, each Person, if any, who
controls an Initial Purchaser, Holder, Participating Broker-Dealer or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, Holder, Participating Broker-Dealer or Underwriter, as the case may
be, and each director and officer of the Company who signed the Registration
Statement and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The respective obligations of the Initial
Purchasers, Holders, Participating Broker-Dealers and Underwriters to contribute
pursuant to this Section 5 are several in proportion to the principal amount of
Notes purchased by them and not joint.

                The indemnity and contribution provisions contained in this
Section 5 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Initial Purchaser, Holder, Participating Broker-Dealer, Underwriter, or
any Person controlling any Initial Purchaser, Holder, Participating
Broker-Dealer or Underwriter, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Securities and (iv) any sale of Registrable Securities or Exchange
Securities pursuant to a Shelf Registration Statement.

                6.      Miscellaneous.

                (a)     Rule 144 and Rule 144A. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company covenants that it will file all reports required to be filed by it under
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder, that if it ceases to be so required to file such reports, it
will upon the request of any Holder or beneficial owner of Registrable
Securities

                                       26



(i) make publicly available such information (including, without limitation, the
information specified in Rule 144(c)(2) under the 1933 Act) as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to
be delivered, promptly following a request by any Holder or beneficial owner of
Registrable Securities or any prospective purchaser or transferee designated by
such Holder or beneficial owner, such information (including, without
limitation, the information specified in Rule 144A(d)(4) under the 1933 Act) as
is necessary to permit sales pursuant to Rule 144A under the 1933 Act, and (iii)
take such further action that is reasonable in the circumstances, in each case
to the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (y) Rule 144A under the 1933 Act, as
such Rule may be amended from time to time, or (z) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder or
beneficial owner of Registrable Securities, the Company will deliver to such
Holder or beneficial owner a written statement as to whether it has complied
with such requirements.

                (b)     No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof, without the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Registrable
Securities.

                (c)     Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure.

                Notwithstanding the foregoing sentence, (i) this Agreement may
be amended, without the consent of any Holder of Registrable Securities, by
written agreement signed by the Company and the Initial Purchasers, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provision with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement, (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company and the Initial Purchasers to the extent that
any such amendment, modification, supplement, waiver or consent is, in the
reasonable judgment of both the Company and the Initial Purchasers, necessary or
appropriate to comply with applicable law (including any interpretation of the
Staff of the SEC) or any change therein and (iii) to the extent any provision of
this Agreement relates to the Initial Purchasers, such provision may be amended,
modified or supplemented, and waivers or consents to departures from such
provisions may be give, by written agreement signed by the Initial Purchasers
and the Company. Each Holder of Registrable Securities shall be bound by any
amendment or waiver effected pursuant to this Section 6(c), whether or not any
notice, writing or marking indicating such amendment or waiver appears on such
security or is delivered to such Holder.

                                       27



                (d)     Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder or Participating Broker-Dealer (other than an Initial Purchaser),
at the most current address set forth on the records of the registrar under the
Indenture, (ii) if to an Initial Purchaser, at the most current address given by
such Initial Purchaser to the Company by means of a notice given in accordance
with the provisions of this Section 6(d), which address initially is the address
set forth in the Purchase Agreement; and (iii) if to the Company, initially at
the address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d).

                All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, first class, postage prepaid,
if mailed; when receipt is acknowledged, if telecopied; and on the next business
day if timely delivered to a courier guaranteeing overnight delivery.

                Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.

                (e)     Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Securities,
in any manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Registrable Securities, such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.

                (f)     Third Party Beneficiary. Each Holder, Participating
Broker-Dealer and Underwriter shall be a third party beneficiary of the
agreements made hereunder between the Company, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of other Holders hereunder. Each
Holder, by its acquisition of Notes, shall be deemed to have agreed to the
provisions of Section 5(b) hereof.

                (g)     Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

                (h)     Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                                       28



                (i)     Restriction on Resales. If (i) the Company or any of its
subsidiaries or affiliates (as defined in Rule 144 under the 1933 Act) shall
redeem, purchase or otherwise acquire any Registrable Security or any Exchange
Security which is a "restricted security" within the meaning of Rule 144 under
the 1933 Act, the Company will deliver or cause to be delivered such Registrable
Security or Exchange Security, as the case may be, to the Trustee for
cancellation and neither the Company nor any of its subsidiaries or affiliates
will hold or resell such Registrable Security or Exchange Security or issue any
new Security or Exchange Security to replace the same.

                (j)     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                (k)     Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                            [SIGNATURE PAGE FOLLOWS]

                                       29



                IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first written above.

                                            GREATER BAY BANCORP

                                            By:   /s/ Shawn E. Saunders
                                                  --------------------
                                                  Name: Shawn E. Saunders
                                                  Title: Senior Vice President,
                                                  Finance and Accounting

This Registration Rights Agreement is confirmed and accepted as of the date
first above written by the undersigned for itself and on behalf of the other
Initial Purchasers.

KEEFE, BRUYETTE & WOODS, INC.

By:  /s/ Peter J. Wirth
     ------------------
     Name: Peter J. Wirth
     Title:  Managing Director

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                                                                         ANNEX A


                               INITIAL PURCHASERS


                          KEEFE, BRUYETTE & WOODS, INC.

                        SANDLER O'NEILL & PARTNERS, L.P.

                          FTN FINANCIAL CAPITAL MARKETS

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                                                                         ANNEX B

                              PLAN OF DISTRIBUTION

                Each broker-dealer that receives new notes for its own account
under the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of those notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer for resales of
new notes received in exchange for original notes that had been acquired as a
result of market-making or other trading activities. We have agreed that, for a
period of 90 days after the expiration date of the exchange offer, we will make
this prospectus, as it may be amended or supplemented, available to any
broker-dealer for use in connection with any such resale. Any broker-dealers
required to use this prospectus and any amendments or supplements to this
prospectus for resales of the new notes must notify us of this fact by checking
the box on the letter of transmittal requesting additional copies of these
documents.

                Notwithstanding the foregoing, we are entitled under the
registration rights agreement to suspend the use of this prospectus by
broker-dealers under specified circumstances. For example, we may suspend the
use of this prospectus if:

..  the SEC or any state securities authority requests an amendment or supplement
   to this prospectus or the related registration statement or additional
   information;

..  the SEC or any state securities authority issues any stop order suspending
   the effectiveness of the registration statement or initiates proceedings for
   that purpose;

..  we receive notification of the suspension of the qualification of the new
   notes for sale in any jurisdiction or the initiation or threatening of any
   proceeding for that purpose;

..  the suspension is required by law; or

..  an event occurs which makes any statement in this prospectus untrue in any
   material respect or which constitutes an omission to state a material fact in
   this prospectus.

                If we suspend the use of this prospectus, the 90-day period
referred to above will be extended by a number of days equal to the period of
the suspension.

                We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account under
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on those notes or a combination of those methods, at market prices
prevailing at the time of resale, at prices related to prevailing market prices
or at negotiated prices. Any resales may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from the selling broker-dealer or the purchasers of
the new notes. Any broker-dealer that resells new notes received by it for its
own account under the exchange offer and any broker or dealer that

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participates in a distribution of the new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
resale of new notes and any commissions or concessions received by these persons
may be deemed to be underwriting compensation under the Securities Act. The
letter of transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.

                We have agreed to pay all expenses incidental to the exchange
offer other than commissions and concessions of any broker or dealer and will
indemnify holders of the notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act.

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EX-99.1

Exhibit 99.1

Certification

Pursuant to the requirement set forth in Section 906 of the Corporate Fraud Accountability Act of 2002, David L. Kalkbrenner and Steven C. Smith each hereby certify as follows:

1. They are the duly appointed Chief Executive Officer and Chief Financial Officer, respectively, of Greater Bay Bancorp, a California corporation (the “Company”).

2. Based on their knowledge, the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2003, and to which this Certification is attached as Exhibit 99.1 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934 and the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of this 7th day of May, 2003.

/s/    DAVID L. KALKBRENNER          

David L. Kalkbrenner

Chief Executive Officer

/s/    STEVEN C. SMITH          

Steven C. Smith

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Greater Bay Bancorp and will be retained by Greater Bay Bancorp and furnished to the Securities and Exchange Commission or its staff upon request.