TOWER GROUP, INC.
                                    as Issuer






                                    INDENTURE
                           Dated as of March 31, 2006


                     WELLS FARGO BANK, NATIONAL ASSOCIATION
                                   As Trustee


                       JUNIOR SUBORDINATED DEBT SECURITIES

                                DUE April 7, 2036


<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.01.  Definitions.....................................................1

                                   ARTICLE II
                                 DEBT SECURITIES

SECTION 2.01.  Authentication and Dating.......................................7

SECTION 2.02.  Form of Trustee's Certificate of Authentication.................8

SECTION 2.03.  Form and Denomination of Debt Securities........................8

SECTION 2.04.  Execution of Debt Securities....................................8

SECTION 2.05.  Exchange and Registration of Transfer of Debt Securities........9

SECTION 2.06.  Mutilated, Destroyed, Lost or Stolen Debt Securities...........11

SECTION 2.07.  Temporary Debt Securities......................................12

SECTION 2.08.  Payment of Interest............................................13

SECTION 2.09.  Cancellation of Debt Securities Paid, etc......................14

SECTION 2.10.  Computation of Interest........................................14

SECTION 2.11.  Extension of Interest Payment Period...........................16

SECTION 2.12.  CUSIP Numbers..................................................17

SECTION 2.13.  Global Debentures..............................................17

                                   ARTICLE III
                       PARTICULAR COVENANTS OF THE COMPANY

SECTION 3.01.  Payment of Principal, Premium and Interest; Agreed
               Treatment of the Debt Securities...............................19

SECTION 3.02.  Offices for Notices and Payments, etc..........................20

SECTION 3.03.  Appointments to Fill Vacancies in Trustee's Office.............20

SECTION 3.04.  Provision as to Paying Agent...................................21

SECTION 3.05.  Certificate to Trustee.........................................22

SECTION 3.06.  Additional Interest............................................22

SECTION 3.07.  Compliance with Consolidation Provisions.......................22

SECTION 3.08.  Limitation on Dividends........................................22

SECTION 3.09.  Covenants as to the Trust......................................23


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                                TABLE OF CONTENTS
                                   (CONTINUED)


                                                                            Page
                                   ARTICLE IV
                LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

SECTION 4.01.  Securityholders' Lists.........................................24

SECTION 4.02.  Preservation and Disclosure of Lists...........................24

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

SECTION 5.01.  Events of Default..............................................25

SECTION 5.02.  Payment of Debt Securities on Default; Suit Therefor...........27

SECTION 5.03.  Application of Moneys Collected by Trustee.....................28

SECTION 5.04.  Proceedings by Securityholders.................................29

SECTION 5.05.  Proceedings by Trustee.........................................29

SECTION 5.06.  Remedies Cumulative and Continuing.............................30

SECTION 5.07.  Direction of Proceedings and Waiver of Defaults by
               Majority of Securityholders....................................30

SECTION 5.08.  Notice of Defaults.............................................31

SECTION 5.09.  Undertaking to Pay Costs.......................................31

                                   ARTICLE VI
                             CONCERNING THE TRUSTEE

SECTION 6.01.  Duties and Responsibilities of Trustee.........................31

SECTION 6.02.  Reliance on Documents, Opinions, etc...........................33

SECTION 6.03.  No Responsibility for Recitals, etc............................34

SECTION 6.04.  Trustee, Authenticating Agent, Paying Agents, Transfer
               Agents or Registrar May Own Debt Securities....................34

SECTION 6.05.  Moneys to be Held in Trust.....................................34

SECTION 6.06.  Compensation and Expenses of Trustee...........................34

SECTION 6.07.  Officers' Certificate as Evidence..............................35

SECTION 6.08.  Eligibility of Trustee.........................................35

SECTION 6.09.  Resignation or Removal of Trustee, Calculation Agent,
               Paying Agent or Debt Security Registrar........................36

SECTION 6.10.  Acceptance by Successor........................................37

SECTION 6.11.  Succession by Merger, etc......................................38

SECTION 6.12.  Authenticating Agents..........................................39


                                      -ii-
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                                TABLE OF CONTENTS
                                   (CONTINUED)


                                                                            Page
                                   ARTICLE VII
                         CONCERNING THE SECURITYHOLDERS

SECTION 7.01.  Action by Securityholders......................................40

SECTION 7.02.  Proof of Execution by Securityholders..........................40

SECTION 7.03.  Who Are Deemed Absolute Owners.................................41

SECTION 7.04.  Debt Securities Owned by Company Deemed Not Outstanding........41

SECTION 7.05.  Revocation of Consents; Future Holders Bound...................41

                                  ARTICLE VIII
                            SECURITYHOLDERS' MEETINGS

SECTION 8.01.  Purposes of Meetings...........................................42

SECTION 8.02.  Call of Meetings by Trustee....................................42

SECTION 8.03.  Call of Meetings by Company or Securityholders.................43

SECTION 8.04.  Qualifications for Voting......................................43

SECTION 8.05.  Regulations....................................................43

SECTION 8.06.  Voting.........................................................44

SECTION 8.07.  Quorum; Actions................................................44

                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

SECTION 9.01.  Supplemental Indentures without Consent of Securityholders.....45

SECTION 9.02.  Supplemental Indentures with Consent of Securityholders........46

SECTION 9.03.  Effect of Supplemental Indentures..............................47

SECTION 9.04.  Notation on Debt Securities....................................47

SECTION 9.05.  Evidence of Compliance of Supplemental Indenture to be
               Furnished to Trustee...........................................48

                                    ARTICLE X
                            REDEMPTION OF SECURITIES

SECTION 10.01. Optional Redemption............................................48

SECTION 10.02. Special Event Redemption.......................................48

SECTION 10.03. Notice of Redemption; Selection of Debt Securities.............48

SECTION 10.04. Payment of Debt Securities Called for Redemption...............49

                                   ARTICLE XI
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 11.01. Company May Consolidate, etc., on Certain Terms................50

SECTION 11.02. Successor Entity to be Substituted.............................50

SECTION 11.03. Opinion of Counsel to be Given to Trustee......................51


                                     -iii-
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                                TABLE OF CONTENTS
                                   (CONTINUED)


                                                                            Page
                                   ARTICLE XII
                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 12.01. Discharge of Indenture.........................................51

SECTION 12.02. Deposited Moneys to be Held in Trust by Trustee................51

SECTION 12.03. Paying Agent to Repay Moneys Held..............................52

SECTION 12.04. Return of Unclaimed Moneys.....................................52

                                  ARTICLE XIII
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 13.01. Indenture and Debt Securities Solely Corporate Obligations.....52

                                   ARTICLE XIV
                            MISCELLANEOUS PROVISIONS

SECTION 14.01. Successors.....................................................53

SECTION 14.02. Official Acts by Successor Entity..............................53

SECTION 14.03. Surrender of Company Powers....................................53

SECTION 14.04. Addresses for Notices, etc.....................................53

SECTION 14.05. Governing Law..................................................54

SECTION 14.06. Evidence of Compliance with Conditions Precedent...............54

SECTION 14.07. Non-Business Days..............................................54

SECTION 14.08. Table of Contents, Headings, etc...............................54

SECTION 14.09. Execution in Counterparts......................................54

SECTION 14.10. Severability...................................................55

SECTION 14.11. Assignment.....................................................55

SECTION 14.12. Acknowledgment of Rights.......................................55

                                   ARTICLE XV
                        SUBORDINATION OF DEBT SECURITIES

SECTION 15.01. Agreement to Subordinate.......................................55

SECTION 15.02. Default on Senior Indebtedness.................................56

SECTION 15.03. Liquidation; Dissolution; Bankruptcy...........................56

SECTION 15.04. Subrogation....................................................57

SECTION 15.05. Trustee to Effectuate Subordination............................58

SECTION 15.06. Notice by the Company..........................................58

SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness..........59

SECTION 15.08. Subordination May Not Be Impaired..............................60


EXHIBITS

EXHIBIT A      FORM OF DEBT SECURITY



                                      -iv-
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          THIS INDENTURE, dated as of March 31, 2006, between Tower Group, Inc.,
a company incorporated in Delaware (hereinafter sometimes called the "Company"),
and Wells Fargo Bank, National Association,  a national banking association with
its  principal  place  of  business  in  the  State  of  Delaware,   as  trustee
(hereinafter sometimes called the "Trustee").

                              W I T N E S S E T H:

          WHEREAS,  for its lawful  corporate  purposes,  the  Company  has duly
authorized the issuance of its Junior  Subordinated Debt Securities due April 7,
2036 (the "Debt  Securities")  under this Indenture and to provide,  among other
things,  for the  execution  and  authentication,  delivery  and  administration
thereof, the Company has duly authorized the execution of this Indenture.

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

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01. Definitions.
                   ------------

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

          "Additional  Interest"  shall  have the  meaning  set forth in Section
3.06.

          "Additional  Provisions"  shall have the  meaning set forth in Section
15.01.

          "Applicable Depository Procedures" means, with respect to any transfer
or transaction  involving a Global Debenture or beneficial interest therein, the
rules and procedures of the Depositary for such Global  Debenture,  in each case
to the extent applicable to such transaction and as in effect from time to time.

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

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

<PAGE>


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

          "Board  Resolution"  means a copy  of a  resolution  certified  by the
Secretary or an Assistant  Secretary of the Company to have been duly adopted by
the Board of  Directors  and to be in full  force and effect on the date of such
certification and delivered to the Trustee.

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

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

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

          "Capital Securities  Guarantee" means the guarantee agreement that the
Company  will enter into with Wells Fargo Bank,  National  Association  or other
Persons  that  operates  directly  or  indirectly  for the benefit of holders of
Capital Securities of the Trust.

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

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

          "Company" means Tower Group, Inc., a company incorporated in Delaware,
and,  subject to the  provisions of Article XI, shall include its successors and
assigns.

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

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

          "Debt Security Registrar" has the meaning stated in Section 2.05

          "Declaration"  means the Amended and Restated  Declaration of Trust of
the Trust dated as of March 31, 2006,  as amended or  supplemented  from time to
time.



                                      -2-
<PAGE>


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

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

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

          "Depositary"  means an  organization  registered as a clearing  agency
under the  Securities  Exchange Act of 1934 that is  designated as Depositary by
the Company or any successor thereto. DTC will be the initial Depositary.

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

          "DTC" means The Depository Trust Company, a New York corporation.

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

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

          "Fee Agreement" means the agreement of even date herewith by and among
the Trustee, the Initial Purchaser, the Sponsor and the Trust.

          "Fixed  Rate"  means a per annum  rate of  interest,  equal to 8.5625%
commencing March 31, 2006.

          "Fixed Rate Period" has the meaning assigned to it in Section 2.10(a).

          "Global  Debenture" means a security that evidences all or part of the
Debt Securities, the ownership and transfers of which shall be made through book
entries by a Depositary.

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

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

          "Interest Payment Date" means January 7, April 7, July 7 and October 7
of each year, commencing on July 7, 2006, during the term of this Indenture.

          "Interest Rate" means the Fixed Rate and Variable Rate, as applicable.

          "Investment  Company  Event"  means the receipt by the Company and the
Trust of an Opinion of Counsel  experienced  in such matters to the effect that,
as a result of a change in law or regulation or written change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory  authority,  there is more than an insubstantial  risk that

                                      -3-
<PAGE>


the Trust is or, within 90 days of the date of such opinion will be,  considered
an "investment  company" that is required to be registered  under the Investment
Company Act of 1940,  as amended,  which change or  prospective  change  becomes
effective or would become effective, as the case may be, on or after the date of
the original issuance of the Debt Securities.

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

          "LIBOR Banking Day" has the meaning set forth in Section 2.10(b)(1).

          "LIBOR Business Day" has the meaning set forth in Section 2.10(b)(1).

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

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

          "Maturity Date" means April 7, 2036.

          "Notice" has the meaning set forth in Section 2.11.

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

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

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

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

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

                                      -4-
<PAGE>


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

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

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

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

          "Principal Office of the Trustee" means the office of the Trustee,  at
which at any particular  time its corporate  trust business shall be principally
administered,  which at all times shall be located  within the United States and
at the time of the execution of this Indenture shall be 919 Market Street, Suite
700, Wilmington, DE 19801.

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

          "Redemption  Price"  means  100% of the  principal  amount of the Debt
Securities  being  redeemed  plus  accrued  and  unpaid  interest  on such  Debt
Securities  to the  Redemption  Date or, in the case of a redemption  due to the
occurrence of a Special Event,  to the Special  Redemption  Date if such Special
Redemption Date is on or after April 7, 2011.

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

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

          "Senior  Indebtedness"  means,  with respect to the  Company,  (i) the
principal,  premium,  if any, and interest in respect of (A) indebtedness of the
Company  for  money  borrowed  and (B)  indebtedness  evidenced  by  securities,
debentures,  notes,  bonds or other similar  instruments  issued by the Company;
(ii) all capital lease obligations of the Company;  (iii) all obligations of the
Company  issued or assumed  as the  deferred  purchase  price of  property,  all
conditional  sale  obligations of the Company and all obligations of the Company
under any title  retention  agreement  (but  excluding  trade  accounts  payable

                                      -5-
<PAGE>


arising in the ordinary course of business); (iv) all obligations of the Company
for the  reimbursement  of any letter of credit,  any banker's  acceptance,  any
security purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement,  any obligation under options
or any similar  credit or other  transaction;  (v) all  obligations  of the type
referred to in clauses (i) through  (iv) above of other  Persons for the payment
of which  the  Company  is  responsible  or  liable  as  obligor,  guarantor  or
otherwise;  and (vi) all  obligations  of the type  referred  to in clauses  (i)
through (v) above of other Persons  secured by any lien on any property or asset
of the  Company  (whether  or not such  obligation  is assumed by the  Company),
whether  incurred  on or  prior  to the  date of this  Indenture  or  thereafter
incurred,  unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding,  it is provided that such  obligations are not
superior or are pari passu in right of payment to the Debt Securities.

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

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

          "Special Redemption Price" means (1) if the Special Redemption Date is
before April 7, 2011,  One Hundred  Seven and One Half  Percent  (107.5%) of the
principal  amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such  redemption  and (2) if the  Special  Redemption  Date is on or
after April 7, 2011, the Redemption Price for such Special Redemption Date.

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

          "Tax  Event"  means the  receipt  by the  Company  and the Trust of an
Opinion of Counsel  experienced  in such matters to the effect that, as a result
of any amendment to or change  (including any announced  prospective  change) in
the laws or any  regulations  thereunder  of the United  States or any political
subdivision  or  taxing  authority  thereof  or  therein,  or as a result of any
official  administrative  pronouncement  (including  any private  letter ruling,
technical advice memorandum,  regulatory  procedure,  notice or announcement (an
"Administrative  Action")) or judicial  decision  interpreting  or applying such
laws or  regulations,  regardless  of  whether  such  Administrative  Action  or
judicial decision is issued to or in connection with a proceeding  involving the
Company  or the Trust and  whether or not  subject  to review or  appeal,  which
amendment, clarification,  change, Administrative Action or decision is enacted,

                                      -6-
<PAGE>


promulgated or announced, in each case on or after the date of original issuance
of the Debt Securities,  there is more than an insubstantial  risk that: (i) the
Trust  is, or will be within  90 days of the date of such  opinion,  subject  to
United States federal  income tax with respect to income  received or accrued on
the Debt Securities; (ii) interest payable by the Company on the Debt Securities
is not, or within 90 days of the date of such opinion,  will not be,  deductible
by the  Company,  in whole or in part,  for  United  States  federal  income tax
purposes;  or (iii)  the Trust is, or will be within 90 days of the date of such
opinion,  subject to or otherwise  required to pay, or required to withhold from
distributions to holders of Trust  Securities,  more than a de minimis amount of
other  taxes  (including  withholding  taxes),  duties,   assessments  or  other
governmental charges.

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

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

          "Trust  Securities" means Common Securities and Capital  Securities of
Tower Group Statutory Trust V.

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

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

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

          "Variable  Rate"  means a per annum rate of  interest,  equal to LIBOR
plus  3.30%,  as  determined  on the LIBOR  Determination  Date  preceding  each
Interest Payment Date, reset quarterly,  commencing upon expiration of the Fixed
Rate Period.

                                   ARTICLE II

                                 DEBT SECURITIES

     SECTION 2.01. Authentication and Dating.
                   --------------------------

          Upon the  execution  and delivery of this  Indenture,  or from time to
time thereafter,  Debt Securities in an aggregate principal amount not in excess
of  $20,619,000  may be executed and delivered by the Company to the Trustee for
authentication,  and the Trustee shall thereupon authenticate and make available
for delivery  said Debt  Securities to or upon the written order of the Company,
signed by its Chairman of the Board of Directors,  Vice  Chairman,  President or
Chief  Financial  Officer or one of its Vice  Presidents,  without  any  further
action by the Company  hereunder.  In authenticating  such Debt Securities,  and
accepting the  additional  responsibilities  under this Indenture in relation to
such Debt Securities,  the Trustee shall be entitled to receive, and (subject to
Section  6.01)  shall be fully  protected  in  relying  upon a copy of any Board
Resolution  or  Board  Resolutions  relating  thereto  and,  if  applicable,  an
appropriate record of any action taken pursuant to such resolution, in each case
certified  by the  Secretary or an Assistant  Secretary or other  officers  with
appropriate delegated authority of the Company as the case may be.

                                      -7-
<PAGE>


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

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

     SECTION 2.02. Form of Trustee's Certificate of Authentication.
                   ------------------------------------------------

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

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

          WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity
but solely as trustee

                             By________________________________
                                      Authorized Officer

     SECTION 2.03. Form and Denomination of Debt Securities.
                   -----------------------------------------

          The Debt Securities  shall be  substantially  in the form of Exhibit A
hereto.  The Debt Securities shall be in registered,  certificated  form without
coupons and in minimum  denominations  of $100,000 and any multiple of $1,000 in
excess thereof.  The Debt Securities shall be numbered,  lettered,  or otherwise
distinguished  in such manner or in  accordance  with such plans as the officers
executing the same may  determine  with the approval of the Trustee as evidenced
by the execution and authentication thereof.

     SECTION 2.04. Execution of Debt Securities.
                   -----------------------------

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

                                      -8-
<PAGE>


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

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

     SECTION 2.05. Exchange and Registration of Transfer of Debt Securities.
                   ---------------------------------------------------------

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

          Debt  Securities to be exchanged may be  surrendered  at the Principal
Office of the Trustee or at any office or agency to be maintained by the Company
for such purpose as provided in Section 3.02, and the Company shall execute, the
Company or the Trustee  shall  register  and the  Trustee or the  Authenticating
Agent shall  authenticate  and make available for delivery in exchange  therefor
the Debt  Security  or Debt  Securities  which  the  Securityholder  making  the
exchange shall be entitled to receive.  Upon due presentment for registration of
transfer of any Debt Security at the  Principal  Office of the Trustee or at any
office or agency of the  Company  maintained  for such  purpose as  provided  in
Section  3.02,  the Company  shall  execute,  the  Company or the Trustee  shall
register and the Trustee or the Authenticating Agent shall authenticate and make
available for delivery in the name of the  transferee or  transferees a new Debt
Security for a like aggregate principal amount.  Registration or registration of
transfer  of any Debt  Security  by the  Trustee or by any agent of the  Company
appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be
deemed to complete the  registration  or  registration  of transfer of such Debt
Security.

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

                                      -9-
<PAGE>


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

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

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

          THIS  SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY
OTHER  APPLICABLE  SECURITIES  LAWS.  NEITHER THIS  SECURITY NOR ANY INTEREST OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH  TRANSACTION  IS EXEMPT  FROM,  OR NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT.  THE  HOLDER  OF  THIS  SECURITY  BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY
(A) TO THE COMPANY,  (B) PURSUANT TO AND IN ACCORDANCE  WITH RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"),  TO A PERSON THE HOLDER  REASONABLY  BELIEVES IS A
"QUALIFIED  INSTITUTIONAL  BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,  (C) PURSUANT
TO AN EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED  INVESTOR"  WITHIN THE MEANING OF SUBPARAGRAPH  (a) (1), (2), (3) OR
(7) OF RULE 501 UNDER THE  SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT,  OR FOR THE ACCOUNT OF AN  "ACCREDITED  INVESTOR,"  FOR  INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN  CONNECTION  WITH,  ANY
DISTRIBUTION  IN  VIOLATION  OF THE  SECURITIES  ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE  EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT  TO THE  COMPANY'S  RIGHT  PRIOR TO ANY  SUCH  OFFER,  SALE OR  TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE,  A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

          THE  HOLDER  OF  THIS  SECURITY  BY  ITS  ACCEPTANCE   HEREOF  AGREES,
REPRESENTS  AND  WARRANTS  THAT IT  WILL  NOT  ENGAGE  IN  HEDGING  TRANSACTIONS
INVOLVING  THIS SECURITY  UNLESS SUCH  TRANSACTIONS  ARE IN COMPLIANCE  WITH THE
SECURITIES ACT.

                                      -10-
<PAGE>


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

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

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

                                      -11-
<PAGE>


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

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

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

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

     SECTION 2.07. Temporary Debt Securities.
                   --------------------------

          Pending the preparation of definitive Debt Securities, the Company may
execute and the Trustee  shall  authenticate  and make  available  for  delivery
temporary Debt Securities  that are typed,  printed or  lithographed.  Temporary
Debt  Securities  shall  be  issuable  in  any  authorized   denomination,   and
substantially  in the form of the  definitive  Debt  Securities  but  with  such
omissions,  insertions and  variations as may be appropriate  for temporary Debt
Securities,  all as may be determined by the Company.  Every such temporary Debt
Security  shall be executed by the Company and be  authenticated  by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect,  as the definitive Debt  Securities.  Without  unreasonable  delay,  the
Company  will  execute and deliver to the  Trustee or the  Authenticating  Agent
definitive  Debt  Securities and thereupon any or all temporary Debt  Securities

                                      -12-
<PAGE>


may be surrendered in exchange therefor,  at the Principal Office of the Trustee
or at any  office  or agency  maintained  by the  Company  for such  purpose  as
provided  in Section  3.02,  and the Trustee or the  Authenticating  Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such  exchange  shall be made by the  Company at its own expense and without any
charge  therefor  except  that  in  case  of  any  such  exchange   involving  a
registration  of transfer the Company may require payment of a sum sufficient to
cover any tax, fee or other governmental  charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be  entitled  to the same  benefits  under this  Indenture  as  definitive  Debt
Securities authenticated and delivered hereunder.

     SECTION 2.08. Payment of Interest.
                   --------------------

          During the Fixed Rate Period, each Debt Security will bear interest at
the Fixed Rate.  Thereafter,  each Debt  Security will bear interest at the then
applicable  Interest Rate from and including  each Interest  Payment Date or, in
the case of the first  interest  period,  the original  date of issuance of such
Debt Security to, but excluding,  the next succeeding  Interest Payment Date or,
in the case of the last interest period, the Redemption Date, Special Redemption
Date or Maturity Date, as applicable,  on the principal thereof,  on any overdue
principal and (to the extent that payment of such interest is enforceable  under
applicable law) on Deferred Interest and on any overdue  installment of interest
(including  Defaulted  Interest),  payable (subject to the provisions of Article
XII) on each Interest Payment Date commencing on July 7, 2006.  Interest and any
Deferred  Interest on any Debt Security that is payable,  and is punctually paid
or duly provided for by the Company,  on any Interest Payment Date shall be paid
to the  Person  in whose  name said Debt  Security  (or one or more  Predecessor
Securities)  is registered  at the close of business on the regular  record date
for such interest  installment,  except that interest and any Deferred  Interest
payable on the  Maturity  Date shall be paid to the Person to whom  principal is
paid.  In the event  that any Debt  Security  or  portion  thereof is called for
redemption and the  redemption  date is subsequent to a regular record date with
respect to any Interest  Payment Date and prior to such  Interest  Payment Date,
interest on such Debt Security will be paid upon  presentation  and surrender of
such Debt Security.

          Any interest on any Debt Security,  other than Deferred Interest, that
is payable,  but is not punctually paid or duly provided for by the Company,  on
any Interest Payment Date (herein called  "Defaulted  Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record date
by virtue of having been such holder,  and such Defaulted Interest shall be paid
by the  Company to the  Persons in whose  names such Debt  Securities  (or their
respective Predecessor  Securities) are registered at the close of business on a
special record date for the payment of such Defaulted  Interest,  which shall be
fixed in the following  manner:  the Company shall notify the Trustee in writing
of the  amount  of  Defaulted  Interest  proposed  to be paid on each  such Debt
Security and the date of the proposed payment,  and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate  amount
proposed  to be paid in  respect  of  such  Defaulted  Interest  or  shall  make
arrangements  reasonably  satisfactory  to the Trustee for such deposit prior to
the date of the proposed payment,  such money when deposited to be held in trust

                                      -13-
<PAGE>


for the benefit of the Persons  entitled to such  Defaulted  Interest as in this
clause  provided.  Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall not be more than fifteen nor less
than ten days prior to the date of the  proposed  payment  and not less than ten
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall  promptly  notify the Company of such special  record date and, in
the name and at the expense of the  Company,  shall cause notice of the proposed
payment of such  Defaulted  Interest and the special  record date therefor to be
mailed,  first  class  postage  prepaid,  to each  Securityholder  at his or her
address  as it  appears in the Debt  Security  Register,  not less than ten days
prior to such  special  record  date.  Notice of the  proposed  payment  of such
Defaulted  Interest and the special  record date therefor  having been mailed as
aforesaid,  such Defaulted  Interest shall be paid to the Persons in whose names
such Debt Securities (or their respective Predecessor Securities) are registered
on such special  record date and  thereafter  the Company  shall have no further
payment obligation in respect of the Defaulted Interest.

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

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

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

     SECTION 2.09. Cancellation of Debt Securities Paid, etc.
                   ------------------------------------------

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

     SECTION 2.10. Computation of Interest
                   -----------------------

          (a) From March 31, 2006 until April 7, 2011 (the "Fixed Rate Period"),
     the  interest  shall be computed  on the basis of a 360-day  year of twelve
     30-day  months and the  amount  payable  for any  partial  period  shall be
     computed  on the basis of the number of days  elapsed in a 360-day  year of
     twelve 30-day months.  Upon expiration of the Fixed Rate Period, the amount
     of interest  payable for any interest  period will be computed on the basis

                                      -14-
<PAGE>


     of a 360-day  year and the actual  number of days  elapsed in the  relevant
     interest period;  provided,  however, that upon the occurrence of a Special
     Event Redemption  pursuant to Section 10.02 the amounts payable pursuant to
     this  Indenture  shall be  calculated  as set  forth in the  definition  of
     Special Redemption Price.

          (b)  Upon  expiration  of  the  Fixed  Rate  Period,  LIBOR  shall  be
     determined  by the  Calculation  Agent in  accordance  with  the  following
     provisions:

               (1) On the second LIBOR Business Day (provided,  that on such day
          commercial banks are open for business  (including dealings in foreign
          currency  deposits) in London (a "LIBOR Banking  Day"),  and otherwise
          the next  preceding  LIBOR  Business Day that is also a LIBOR  Banking
          Day) prior to January  15,  April 15,  July 15 and October 15 (except,
          with respect to the first interest  payment period upon  expiration of
          the Fixed Rate  Period,  on April 7,  2011),  (each such day, a "LIBOR
          Determination  Date"),  LIBOR shall equal the rate, as obtained by the
          Calculation  Agent for  three-month  U.S.  Dollar  deposits in Europe,
          which appears on Telerate  Page 3750 (as defined in the  International
          Swaps  and  Derivatives  Association,  Inc.  1991  Interest  Rate  and
          Currency Exchange  Definitions) or such other page as may replace such
          Telerate  Page  3750,  as of 11:00  a.m.  (London  time) on such LIBOR
          Determination   Date,  as  reported  by  Bloomberg  Financial  Markets
          Commodities  News;  provided,  however,  that in the case of the first
          interest  payment period,  LIBOR will be  interpolated  from LIBOR for
          three-month  U.S.  Dollar  deposits in Europe and LIBOR for four-month
          U.S.  Dollar  deposits  in Europe  on a  straight-line  basis.  "LIBOR
          Business  Day" means any day that is not a  Saturday,  Sunday or other
          day on which commercial banking  institutions in New York, New York or
          Wilmington,  Delaware are  authorized or obligated by law or executive
          order to be closed.  If such rate is  superseded on Telerate Page 3750
          by a corrected  rate before 12:00 noon (London time) on the same LIBOR
          Determination  Date, the corrected rate as so substituted  will be the
          applicable LIBOR for that LIBOR Determination Date.

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

                                      -15-
<PAGE>


               (3) If the  Calculation  Agent  is  required  but  is  unable  to
          determine  a rate in  accordance  with at least one of the  procedures
          provided  above,  LIBOR shall be LIBOR in effect on the previous LIBOR
          Determination  Date  (whether or not LIBOR for such period was in fact
          determined on such LIBOR Determination Date).

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

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

     SECTION 2.11. Extension of Interest Payment Period.
                   -------------------------------------

          So long as no Event of Default has  occurred  and is  continuing,  the
Company shall have the right,  from time to time and without causing an Event of
Default,  to defer payments of interest on the Debt  Securities by extending the
interest payment period on the Debt Securities at any time and from time to time
during the term of the Debt Securities,  for up to twenty consecutive  quarterly
periods (each such extended  interest  payment period,  an "Extension  Period"),
during which  Extension  Period no interest shall be due and payable (except any
Additional Interest that may be due and payable). No Extension Period may end on
a date  other than an  Interest  Payment  Date.  During  any  Extension  Period,
interest  will continue to accrue on the Debt  Securities,  and interest on such
accrued  interest (such accrued interest and interest thereon referred to herein
as "Deferred Interest") will accrue at an annual rate equal to the Interest Rate
in effect for such  Extension  Period,  compounded  quarterly from the date such
Deferred  Interest would have been payable were it not for the Extension Period,
to the extent  permitted by law. No interest or Deferred  Interest  shall be due
and payable during an Extension Period, except at the end thereof. At the end of
any such  Extension  Period the Company  shall pay all  Deferred  Interest  then
accrued and unpaid on the Debt Securities;  provided, however, that no Extension
Period may extend beyond the Maturity Date; and provided further,  however, that
during  any  such  Extension  Period,  the  Company  shall  be  subject  to  the
restrictions  set  forth  in  Section  3.08  of  this  Indenture.  Prior  to the

                                      -16-
<PAGE>


termination of any Extension Period, the Company may further extend such period,
provided,  that  such  period  together  with  all  such  previous  and  further
consecutive  extensions  thereof shall not exceed twenty  consecutive  quarterly
periods,  or extend  beyond  the  Maturity  Date.  Upon the  termination  of any
Extension Period and upon the payment of all Deferred Interest,  the Company may
commence a new  Extension  Period,  subject to the foregoing  requirements.  The
Company  must give the Trustee  notice of its  election to begin such  Extension
Period ("Notice") at least one Business Day prior to the earlier of (i) the next
succeeding date on which interest on the Debt Securities would have been payable
except for the  election  to begin such  Extension  Period or (ii) the date such
interest is payable,  but in any event not later than the related regular record
date.  The Notice shall  describe,  in  reasonable  detail,  why the Company has
elected to begin an Extension  Period.  The Notice shall  acknowledge and affirm
the Company's  understanding  that it is prohibited  from issuing  dividends and
other distributions during the Extension Period. Upon receipt of the Notice, the
Placement Agent has the right, at its sole  discretion,  to disclose the name of
the Company,  the fact that the Company has elected to begin an Extension Period
and other  information  that the Initial  Purchaser  (as defined in the Purchase
Agreement  by and between the  Company and the Initial  Purchaser),  at its sole
discretion,  deems  relevant to the  Company's  election  to begin an  Extension
Period.  The Trustee shall give notice of the Company's  election to begin a new
Extension Period to the Securityholders.

     SECTION 2.12. CUSIP Numbers.
                   --------------

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

     SECTION 2.13. Global Debentures.
                   -----------------

          (a) Upon the election of the holder of  Outstanding  Debt  Securities,
     which election need not be in writing,  the Debt  Securities  owned by such
     holder  shall  be  issued  in the  form  of one or more  Global  Debentures
     registered  in the  name of the  Depositary  or its  nominee.  Each  Global
     Debenture  issued under this  Indenture  shall be registered in the name of
     the  Depositary  designated  by the Company for such Global  Debenture or a
     nominee  thereof and delivered to such  Depositary or a nominee  thereof or
     custodian  therefor,  and each such Global  Debenture  shall  constitute  a
     single Debt Security for all purposes of this Indenture.

          (b) Notwithstanding  any other provision in this Indenture,  no Global
     Debenture  may be  exchanged  in  whole  or in  part  for  Debt  Securities
     registered,  and no transfer of a Global  Debenture in whole or in part may
     be registered, in the name of any Person other than the Depositary for such
     Global  Debenture or a nominee thereof unless (i) such  Depositary  advises
     the Trustee and the Company in writing  that such  Depositary  is no longer
     willing or able to properly  discharge its  responsibilities  as Depositary
     with  respect to such  Global  Debenture,  and no  qualified  successor  is
     appointed by the Company  within ninety (90) days of receipt by the Company
     of such  notice,  (ii)  such  Depositary  ceases  to be a  clearing  agency
     registered  under the  Exchange  Act and no  successor  is appointed by the
     Company  within ninety (90) days after  obtaining  knowledge of such event,

                                      -17-
<PAGE>


     (iii) the Company  executes  and  delivers  to the Trustee a Company  Order
     stating that the Company elects to terminate the book-entry  system through
     the  Depositary  or (iv) an Event of  Default  shall have  occurred  and be
     continuing. Upon the occurrence of any event specified in clause (i), (ii),
     (iii) or (iv) above,  the Trustee shall notify the  Depositary and instruct
     the Depositary to notify all owners of beneficial  interests in such Global
     Debenture of the occurrence of such event and of the  availability  of Debt
     Securities to such owners of beneficial interests requesting the same. Upon
     the  issuance  of such Debt  Securities  and the  registration  in the Debt
     Security  Register of such Debt  Securities  in the names of the holders of
     the beneficial  interests therein, the Trustee shall recognize such holders
     of beneficial interests as holders thereof.

          (c)  If  any  Global  Debenture  is to be  exchanged  for  other  Debt
     Securities  or  canceled  in part,  or if another  Debt  Security  is to be
     exchanged  in whole  or in part for a  beneficial  interest  in any  Global
     Debenture,  then either (i) such Global  Debenture  shall be so surrendered
     for  exchange or  cancellation  as provided in this  Article II or (ii) the
     principal  amount  thereof shall be reduced or increased by an amount equal
     to the portion  thereof to be so  exchanged  or  canceled,  or equal to the
     principal  amount of such  other Debt  Security  to be so  exchanged  for a
     beneficial interest therein, as the case may be, by means of an appropriate
     adjustment  made on the records of the Debt Security  registrar,  whereupon
     the Trustee, in accordance with the Applicable Depository Procedures, shall
     instruct  the  Depositary  or  its  authorized  representative  to  make  a
     corresponding  adjustment  to its  records.  Upon  any  such  surrender  or
     adjustment  of  a  Global  Debenture  by  the  Depositary,  accompanied  by
     registration instructions,  the Company shall execute and the Trustee shall
     authenticate and deliver any Debt Securities  issuable in exchange for such
     Global   Debenture  (or  any  portion   thereof)  in  accordance  with  the
     instructions  of the  Depositary.  The Trustee  shall not be liable for any
     delay in delivery of such  instructions and may  conclusively  rely on, and
     shall be fully protected in relying on, such instructions.

          (d) Every Debt Security  authenticated and delivered upon registration
     of transfer of, or in exchange for or in lieu of, a Global Debenture or any
     portion  thereof shall be  authenticated  and delivered in the form of, and
     shall be, a Global  Debenture,  unless such Debt  Security is registered in
     the name of a Person other than the Depositary for such Global Debenture or
     a nominee thereof.

          (e) Debt  Securities  distributed  to  holders of  Book-Entry  Capital
     Securities (as defined in the Trust  Agreement) upon the dissolution of the
     Trust shall be  distributed  in the form of one or more  Global  Debentures
     registered in the name of a Depositary or its nominee,  and deposited  with
     the Debt Securities  registrar,  as custodian for such Depositary,  or with
     such Depositary, for credit by the Depositary to the respective accounts of
     the beneficial owners of the Debt Securities  represented  thereby (or such
     other accounts as they may direct). Debt Securities  distributed to holders
     of Capital  Securities  other than Book-Entry  Capital  Securities upon the
     dissolution  of the  Trust  shall  not be  issued  in the  form of a Global
     Debenture or any other form  intended to facilitate  book-entry  trading in
     beneficial interests in such Debt Securities.

                                      -18-
<PAGE>


          (f) The Depositary or its nominee, as the registered owner of a Global
     Debenture,  shall be the holder of such Global  Debenture  for all purposes
     under this  Indenture  and the Debt  Securities,  and owners of  beneficial
     interests in a Global  Debenture shall hold such interests  pursuant to the
     Applicable Depository Procedures.  Accordingly, any such owner's beneficial
     interest in a Global  Debenture shall be shown only on, and the transfer of
     such interest  shall be effected only  through,  records  maintained by the
     Depositary  or  its  nominee  or  its  Depositary  Participants.  The  Debt
     Securities  registrar  and the  Trustee  shall be entitled to deal with the
     Depositary  for  all  purposes  of  this  Indenture  relating  to a  Global
     Debenture  (including the payment of principal and interest thereon and the
     giving of  instructions  or directions  by owners of  beneficial  interests
     therein and the giving of notices) as the sole holder of the Debt  Security
     and  shall  have no  obligations  to the  owners  of  beneficial  interests
     therein.  Neither the Trustee nor the Debt Securities  registrar shall have
     any liability in respect of any transfers affected by the Depositary.

          (g) The rights of owners of beneficial interests in a Global Debenture
     shall be  exercised  only  through the  Depositary  and shall be limited to
     those  established  by law  and  agreements  between  such  owners  and the
     Depositary and/or its Depositary Participants.

          (h) No holder of any beneficial  interest in any Global Debenture held
     on its behalf by a Depositary  shall have any rights  under this  Indenture
     with respect to such Global  Debenture,  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 Debenture for all purposes whatsoever. None of the
     Company,  the Trustee nor any agent of the Company or the Trustee will have
     any  responsibility  or liability for any aspect of the records relating to
     or payments made on account of beneficial  ownership  interests of a Global
     Debenture or maintaining,  supervising or reviewing any records relating to
     such beneficial ownership interests. 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 the rights of the Depositary
     (or its nominee) as holder of any Debt Security.



                                  ARTICLE III

                       PARTICULAR COVENANTS OF THE COMPANY

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

          (a) The Company  covenants and agrees that it will duly and punctually
     pay or cause  to be paid all  payments  due on the Debt  Securities  at the
     place, at the respective times and in the manner provided in this Indenture
     and the Debt Securities.  At the option of the Company, each installment of
     interest on the Debt  Securities may be paid (i) by mailing checks for such
     interest  payable to the order of the holders of Debt  Securities  entitled
     thereto  as they  appear  on the  Debt  Security  Register  or (ii) by wire
     transfer to any account  with a banking  institution  located in the United
     States  designated  by such  Person to the  Paying  Agent no later than the
     related record date.

                                      -19-
<PAGE>


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

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

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

     SECTION 3.02. Offices for Notices and Payments, etc.
                   --------------------------------------

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

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

                                      -20-
<PAGE>


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

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

     SECTION 3.04. Provision as to Paying Agent.
                   -----------------------------

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

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

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

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

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

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

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

                                      -21-
<PAGE>


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

          (e) The Company hereby initially appoints the Trustee to act as Paying
     Agent (the "Paying Agent").

     SECTION 3.05. Certificate to Trustee.
                   -----------------------

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

     SECTION 3.06. Additional Interest.
                   --------------------

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

     SECTION 3.07. Compliance with Consolidation Provisions.
                   -----------------------------------------

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

                                      -22-
<PAGE>


     SECTION 3.08. Limitation on Dividends.
                   ------------------------

          If Debt  Securities are initially  issued to the Trust or a trustee of
such Trust in  connection  with the  issuance of Trust  Securities  by the Trust
(regardless  of whether Debt  Securities  continue to be held by such Trust) and
(i) there shall have occurred and be  continuing  an Event of Default,  (ii) the
Company shall be in default with respect to its payment of any obligations under
the Capital Securities Guarantee or (iii) the Company shall have given notice of
its election to defer  payments of interest on the Debt  Securities by extending
the interest payment period as provided herein and such period, or any extension
thereof,  shall have commenced and be  continuing,  then the Company may not (A)
declare or pay any dividends or distributions on, or redeem, purchase,  acquire,
or make a  liquidation  payment  with respect to, any of the  Company's  capital
stock or (B) make any payment of principal of or interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Debt  Securities  (other
than (a)  repurchases,  redemptions or other  acquisitions  of shares of capital
stock of the Company (I) in connection  with any  employment  contract,  benefit
plan  or  other  similar  arrangement  with or for  the  benefit  of one or more
employees,  officers,  directors  or  consultants,  (II)  in  connection  with a
dividend  reinvestment or stockholder stock purchase plan or (III) in connection
with the  issuance of capital  stock of the Company (or  securities  convertible
into or exercisable for such capital stock),  as consideration in an acquisition
transaction  entered into prior to the  occurrence  of (i), (ii) or (iii) above,
(b) as a result  of any  exchange  or  conversion  of any class or series of the
Company's  capital  stock (or any capital  stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or series
of the Company's  indebtedness for any class or series of the Company's  capital
stock,  (c) the  purchase of  fractional  interests  in shares of the  Company's
capital stock pursuant to the conversion or exchange  provisions of such capital
stock or the security  being  converted or exchanged,  (d) any  declaration of a
dividend in connection  with any  stockholder's  rights plan, or the issuance of
rights,  stock or other  property  under any  stockholder's  rights plan, or the
redemption or repurchase of rights pursuant thereto,  or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock  issuable upon exercise of such  warrants,  options or other rights is the
same stock as that on which the  dividend is being paid or ranks pari passu with
or junior to such stock).

     SECTION 3.09. Covenants as to the Trust.
                   --------------------------

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

                                      -23-
<PAGE>


                                   ARTICLE IV

                LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

     SECTION 4.01. Securityholders' Lists.
                   -----------------------

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

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

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

          (c) except  that no such lists need be  furnished  under this  Section
     4.01 so long as the  Trustee  is in  possession  thereof  by  reason of its
     acting as Debt Security registrar.

     SECTION 4.02. Preservation and Disclosure of Lists.
                   -------------------------------------

          (a) The Trustee shall preserve,  in as current a form as is reasonably
     practicable,  all  information as to the names and addresses of the holders
     of Debt Securities (1) contained in the most recent list furnished to it as
     provided  in Section  4.01 or (2)  received  by it in the  capacity of Debt
     Securities registrar (if so acting) hereunder.  The Trustee may destroy any
     list furnished to it as provided in Section 4.01 upon receipt of a new list
     so furnished.

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

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

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

                                      -24-
<PAGE>


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

          (c) Each and every holder of Debt Securities, by receiving and holding
     the same,  agrees with the Company and the Trustee that neither the Company
     nor the Trustee nor any Paying Agent shall be held accountable by reason of
     the disclosure of any such information as to the names and addresses of the
     holders of Debt  Securities in accordance with the provisions of subsection
     (b) of  this  Section  4.02,  regardless  of the  source  from  which  such
     information was derived, and that the Trustee shall not be held accountable
     by reason of mailing any  material  pursuant  to a request  made under said
     subsection (b).

                                   ARTICLE V

      REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT

     SECTION 5.01. Events of Default.
                   ------------------

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

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

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

                                      -25-
<PAGE>


          (c) the Company  defaults in the performance  of, or breaches,  any of
     its covenants or agreements in Sections  3.06,  3.07,  3.08 or 3.09 of this
     Indenture   (other  than  a  covenant  or  agreement  a  default  in  whose
     performance or whose breach is elsewhere in this Section specifically dealt
     with),  and  continuance  of such default or breach for a period of 90 days
     after there has been given, by registered or certified mail, to the Company
     by the Trustee or to the Company and the Trustee by the holders of not less
     than 25% in aggregate  principal amount of the outstanding Debt Securities,
     a written notice  specifying  such default or breach and requiring it to be
     remedied and stating  that such notice is a "Notice of Default"  hereunder;
     or

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

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

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

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

          The foregoing  provisions,  however, are subject to the condition that
if, at any time after the  principal of the Debt  Securities  shall have been so
declared due and  payable,  and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided,  (i)
the Company shall pay or shall deposit with the Trustee a sum  sufficient to pay
all  matured  installments  of  interest  upon all the Debt  Securities  and all
payments on the Debt  Securities  which shall have become due otherwise  than by

                                      -26-
<PAGE>


acceleration (with interest upon all such payments and Deferred Interest, to the
extent  permitted  by law) and such  amount  as  shall  be  sufficient  to cover
reasonable  compensation  to the Trustee  and each  predecessor  Trustee,  their
respective  agents,  attorneys  and  counsel,  and all other  amounts due to the
Trustee  pursuant to Section  6.06, if any, and (ii) all Events of Default under
this  Indenture,  other than the  non-payment of the payments on Debt Securities
which shall have become due by  acceleration,  shall have been cured,  waived or
otherwise  remedied as provided herein,  then and in every such case the holders
of a  majority  in  aggregate  principal  amount  of the  Debt  Securities  then
outstanding,  by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such  declaration  and its  consequences,  but no
such waiver or  rescission  and  annulment  shall  extend to or shall affect any
subsequent default or shall impair any right consequent thereon.

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

     SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.
                   -----------------------------------------------------

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

          In case there shall be pending  proceedings  for the bankruptcy or for
the  reorganization  of the Company or any other obligor on the Debt  Securities
under Bankruptcy Law, or in case a receiver or trustee shall have been appointed
for the  property  of the Company or such other  obligor,  or in the case of any
other similar judicial proceedings relative to the Company or other obligor upon
the Debt  Securities,  or to the  creditors  or  property of the Company or such
other obligor,  the Trustee,  irrespective  of whether the principal of the Debt
Securities shall then be due and payable as therein  expressed or by declaration
of acceleration or otherwise and  irrespective of whether the Trustee shall have
made any demand  pursuant  to the  provisions  of this  Section  5.02,  shall be
entitled and empowered,  by  intervention in such  proceedings or otherwise,  to
file and prove a claim or claims for the whole amount of principal  and interest

                                      -27-
<PAGE>


owing and unpaid in respect of the Debt  Securities and, in case of any judicial
proceedings,  to file such proofs of claim and other  papers or documents as may
be necessary or advisable in order to have the claims of the Trustee  (including
any  claim for  reasonable  compensation  to the  Trustee  and each  predecessor
Trustee,   and  their  respective  agents,   attorneys  and  counsel,   and  for
reimbursement of all other amounts due to the Trustee under Section 6.06) and of
the Securityholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Debt Securities,  or to the creditors or property of
the Company or such other  obligor,  unless  prohibited  by  applicable  law and
regulations,  to vote on behalf of the  holders  of the Debt  Securities  in any
election  of a trustee  or a standby  trustee  in  arrangement,  reorganization,
liquidation or other bankruptcy or insolvency  proceedings or Person  performing
similar  functions  in  comparable  proceedings,  and to collect and receive any
moneys or other  property  payable or  deliverable  on any such  claims,  and to
distribute  the same after the  deduction of its charges and  expenses;  and any
receiver,  assignee  or  trustee  in  bankruptcy  or  reorganization  is  hereby
authorized by each of the  Securityholders to make such payments to the Trustee,
and, in the event that the Trustee  shall consent to the making of such payments
directly to the Securityholders,  to pay to the Trustee such amounts as shall be
sufficient to cover  reasonable  compensation to the Trustee,  each  predecessor
Trustee  and their  respective  agents,  attorneys  and  counsel,  and all other
amounts due to the Trustee under Section 6.06.

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

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

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

     SECTION 5.03. Application of Moneys Collected by Trustee.
                   -------------------------------------------

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

                                      -28-
<PAGE>


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

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

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

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

     SECTION 5.04. Proceedings by Securityholders.
                   -------------------------------

          No holder of any Debt  Security  shall have any right to institute any
suit,  action  or  proceeding  for any  remedy  hereunder,  unless  such  holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to the Debt  Securities and unless the holders of not less than 25%
in aggregate principal amount of the Debt Securities then outstanding shall have
given the Trustee a written request to institute such action, suit or proceeding
and shall have  offered  to the  Trustee  such  reasonable  indemnity  as it may
require against the costs,  expenses and liabilities to be incurred thereby, and
the Trustee for 60 days after its receipt of such  notice,  request and offer of
indemnity  shall have failed to institute any such action,  suit or  proceeding;
provided,  that no holder of Debt  Securities  shall have any right to prejudice
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this  Indenture  except in
the manner herein provided and for the equal,  ratable and common benefit of all
holders of Debt Securities.

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

     SECTION 5.05. Proceedings by Trustee.
                   -----------------------

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

                                      -29-
<PAGE>


     SECTION 5.06. Remedies Cumulative and Continuing.
                   -----------------------------------

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

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

          The holders of a majority in  aggregate  principal  amount of the Debt
Securities affected (voting as one class) at the time outstanding shall have the
right to direct the time,  method and place of conducting any proceeding for any
remedy  available to the Trustee,  or exercising any trust or power conferred on
the  Trustee  with  respect to such Debt  Securities;  provided,  however,  that
(subject to the  provisions of Section 6.01) the Trustee shall have the right to
decline to follow any such  direction if the Trustee  shall  determine  that the
action so directed would be unjustly  prejudicial to the holders not taking part
in such direction or if the Trustee being advised by counsel determines that the
action or  proceeding  so directed may not lawfully be taken or if a Responsible
Officer  of the  Trustee  shall  determine  that the  action or  proceedings  so
directed  would  involve  the  Trustee  in  personal  liability.  Prior  to  any
declaration  accelerating the maturity of the Debt Securities,  the holders of a
majority  in  aggregate  principal  amount  of the Debt  Securities  at the time
outstanding may on behalf of the holders of all of the Debt Securities waive (or
modify any  previously  granted  waiver of) any past default or Event of Default
and its  consequences,  except a default  (a) in the  payment of  principal  of,
premium,  if any, or interest on any of the Debt  Securities,  (b) in respect of
covenants or provisions  hereof which cannot be modified or amended  without the
consent of the holder of each Debt Security  affected,  or (c) in respect of the
covenants  contained  in  Section  3.09;  provided,  however,  that if the  Debt
Securities  are held by the Trust or a trustee  of such  trust,  such  waiver or
modification  to such  waiver  shall not be  effective  until the  holders  of a
majority in  liquidation  preference of the Trust  Securities of the Trust shall
have consented to such waiver or modification to such waiver; provided, further,
that if the consent of the holder of each outstanding Debt Security is required,
such waiver shall not be effective until each holder of the Trust  Securities of
the Trust shall have consented to such waiver. Upon any such waiver, the default
covered  thereby shall be deemed to be cured for all purposes of this  Indenture
and the  Company,  the Trustee and the holders of the Debt  Securities  shall be
restored to their former positions and rights  hereunder,  respectively;  but no
such waiver shall extend to any  subsequent or other default or Event of Default
or impair any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 5.07, said default
or Event of  Default  shall for all  purposes  of the Debt  Securities  and this
Indenture be deemed to have been cured and to be not continuing.

                                      -30-
<PAGE>


     SECTION 5.08. Notice of Defaults.
                   -------------------

          The Trustee shall,  within 90 days after a Responsible  Officer of the
Trustee shall have actual knowledge or received written notice of the occurrence
of a default with respect to the Debt Securities,  mail to all  Securityholders,
as the  names  and  addresses  of such  holders  appear  upon the Debt  Security
Register,  notice of all defaults with respect to the Debt  Securities  known to
the  Trustee,  unless such  defaults  shall have been cured before the giving of
such notice (the term  "defaults"  for the  purpose of this  Section  5.08 being
hereby defined to be the events  specified in subsections (a), (b), (c), (d) and
(e) of Section  5.01,  not  including  periods of grace,  if any,  provided  for
therein);  provided,  that,  except in the case of default in the payment of the
principal of, premium,  if any, or interest on any of the Debt  Securities,  the
Trustee  shall be  protected  in  withholding  such  notice  if and so long as a
Responsible Officer of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Securityholders.

     SECTION 5.09. Undertaking to Pay Costs.
                   -------------------------

          All  parties  to this  Indenture  agree,  and each  holder of any Debt
Security by such  holder's  acceptance  thereof  shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee,  the filing by any party  litigant
in such  suit of an  undertaking  to pay the costs of such  suit,  and that such
court  may in its  discretion  assess  reasonable  costs,  including  reasonable
attorneys'  fees and expenses,  against any party litigant in such suit,  having
due regard to the merits and good faith of the claims or  defenses  made by such
party  litigant;  but the provisions of this Section 5.09 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder, or
group of  Securityholders,  holding in the aggregate  more than 10% in principal
amount of the Debt  Securities  outstanding,  or to any suit  instituted  by any
Securityholder  for the  enforcement  of the  payment  of the  principal  of (or
premium,  if any) or  interest  on any Debt  Security  against the Company on or
after the same shall have become due and payable.

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE

     SECTION 6.01. Duties and Responsibilities of Trustee.
                   ---------------------------------------

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

                                      -31-
<PAGE>


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

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

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

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

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

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

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

          (e) in the  absence  of bad  faith  on the  part of the  Trustee,  the
     Trustee may seek and rely on reasonable instructions from the Company.

                                      -32-
<PAGE>


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

     SECTION 6.02. Reliance on Documents, Opinions, etc.
                   -------------------------------------

          Except as otherwise provided in Section 6.01:

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

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

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

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

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

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

                                      -33-
<PAGE>


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

     SECTION 6.03. No Responsibility for Recitals, etc.
                   ------------------------------------

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

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

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

     SECTION 6.05. Moneys to be Held in Trust.
                   ---------------------------

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

     SECTION 6.06. Compensation and Expenses of Trustee.
                   -------------------------------------

          Unless otherwise set forth in the Fee Agreement, the Company covenants
and agrees to pay to the Trustee  from time to time,  and the  Trustee  shall be
entitled  to,  such  compensation  as shall be agreed to in writing  between the
Company and the Trustee  (which shall not be limited by any  provision of law in
regard to the  compensation of a trustee of an express  trust),  and the Company
will pay or reimburse  the Trustee upon its written  request for all  documented
reasonable expenses,  disbursements and advances incurred or made by the Trustee
in  accordance  with any of the  provisions  of this  Indenture  (including  the
reasonable  compensation  and the reasonable  expenses and  disbursements of its
counsel and of all Persons not regularly in its employ) except any such expense,

                                      -34-
<PAGE>


disbursement or advance that arises from Trustee's  negligence or bad faith. The
Company  also  covenants  to  indemnify  each of the Trustee  (including  in its
individual  capacity) and any  predecessor  Trustee (and its  officers,  agents,
directors and employees) for, and to hold it harmless against, any and all loss,
damage,  claim,  liability or expense including taxes (other than taxes based on
the income of the  Trustee),  except to the extent  such  loss,  damage,  claim,
liability  or  expense  results  from  the  negligence  or  bad  faith  of  such
indemnitee,   arising  out  of  or  in   connection   with  the   acceptance  or
administration  of this Trust,  including  the costs and  expenses of  defending
itself  against any claim or liability in the premises.  The  obligations of the
Company under this Section 6.06 to  compensate  and indemnify the Trustee and to
pay or reimburse the Trustee for documented expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness
shall  be  secured  by a lien  prior  to that of the  Debt  Securities  upon all
property and funds held or  collected by the Trustee as such,  except funds held
in trust for the benefit of the holders of particular Debt Securities.

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

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

     SECTION 6.07. Officers' Certificate as Evidence.
                   ----------------------------------

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

     SECTION 6.08. Eligibility of Trustee.
                   -----------------------

          The Trustee  hereunder  shall at all times be a U.S.  Person that is a
banking corporation or national  association  organized and doing business under
the laws of the United States of America or any state thereof or of the District
of Columbia and authorized  under such laws to exercise  corporate trust powers,
having a combined  capital and surplus of at least fifty  million  U.S.  dollars
($50,000,000)  and subject to supervision or examination by federal,  state,  or

                                      -35-
<PAGE>


District of Columbia  authority.  If such  corporation  or national  association
publishes  reports of  condition  at least  annually,  pursuant to law or to the
requirements of the aforesaid  supervising or examining authority,  then for the
purposes  of  this  Section  6.08  the  combined  capital  and  surplus  of such
corporation or national  association  shall be deemed to be its combined capital
and surplus as set forth in its most recent records of condition so published.

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

          In  case at any  time  the  Trustee  shall  cease  to be  eligible  in
accordance  with the  provisions of this Section 6.08,  the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.09.

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

SECTION 6.09. Resignation or Removal of Trustee, Calculation Agent, Paying Agent
              or Debt Security Registrar.
              ---------------------------

          (a) The Trustee, or any trustee or trustees hereafter  appointed,  the
     Calculation  Agent, the Paying Agent and any Debt Security Registrar may at
     any time resign by giving written notice of such resignation to the Company
     and by mailing notice thereof,  at the Company's expense, to the holders of
     the Debt  Securities  at their  addresses  as they shall appear on the Debt
     Security Register.  Upon receiving such notice of resignation,  the Company
     shall promptly appoint a successor or successors by written instrument,  in
     duplicate,  executed by order of its Board of Directors,  one copy of which
     instrument  shall be delivered to the  resigning  party and one copy to the
     successor.  If no successor  shall have been so appointed and have accepted
     appointment  within 30 days after the mailing of such notice of resignation
     to the affected Securityholders, the resigning party may petition any court
     of  competent  jurisdiction  for the  appointment  of a  successor,  or any
     Securityholder  who has been a bona fide holder of a Debt  Security or Debt
     Securities  for at least six  months  may,  subject  to the  provisions  of
     Section  5.09,  on behalf of himself or  herself  and all others  similarly
     situated,  petition any such court for the appointment of a successor. Such
     court may thereupon,  after such notice,  if any, as it may deem proper and
     prescribe, appoint a successor.

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

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

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

                                      -36-
<PAGE>


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

then, in any such case, the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and have accepted appointment within 30 days of the occurrence of any of (1),
(2) or (3) above, any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months may, on behalf of himself or
herself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor Trustee.

          (c) Upon prior  written  notice to the  Company and the  Trustee,  the
     holders of a majority in aggregate  principal amount of the Debt Securities
     at the time  outstanding  may at any time remove the Trustee and nominate a
     successor  Trustee,  which shall be deemed  appointed as successor  Trustee
     unless within ten Business Days after such  nomination the Company  objects
     thereto,  in which  case or in the case of a  failure  by such  holders  to
     nominate a successor Trustee, the Trustee so removed or any Securityholder,
     upon the terms and  conditions  and otherwise as in subsection  (a) of this
     Section 6.09 provided, may petition any court of competent jurisdiction for
     an appointment of a successor.

          (d) Any resignation or removal of the Trustee,  the Calculation Agent,
     the Paying  Agent and any Debt  Security  Registrar  and  appointment  of a
     successor  pursuant to any of the  provisions  of this  Section  6.09 shall
     become  effective  upon  acceptance  of  appointment  by the  successor  as
     provided in Section 6.10.

     SECTION 6.10. Acceptance by Successor.
                   ------------------------

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

                                      -37-
<PAGE>


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

          No  successor  Trustee  shall accept  appointment  as provided in this
Section 6.10 unless at the time of such acceptance such successor  Trustee shall
be eligible and qualified under the provisions of Section 6.08.

          In no event shall a retiring Trustee,  Calculation Agent, Paying Agent
or Debt Security  Registrar be liable for the acts or omissions of any successor
hereunder.

          Upon  acceptance of  appointment by a successor  Trustee,  Calculation
Agent, Paying Agent or Debt Security Registrar as provided in this Section 6.10,
the  Company  shall  mail  notice  of the  succession  to the  holders  of  Debt
Securities  at  their  addresses  as they  shall  appear  on the  Debt  Security
Register.  If the Company  fails to mail such notice  within ten  Business  Days
after the acceptance of appointment by the successor,  the successor shall cause
such notice to be mailed at the expense of the Company.

     SECTION 6.11. Succession by Merger, etc.
                   --------------------------

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

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

                                      -38-
<PAGE>


     SECTION 6.12. Authenticating Agents.
                   ----------------------

          There  may be one  or  more  Authenticating  Agents  appointed  by the
Trustee  upon the  request  of the  Company  with power to act on its behalf and
subject to its direction in the  authentication  and delivery of Debt Securities
issued upon exchange or registration of transfer thereof as fully to all intents
and  purposes  as  though  any such  Authenticating  Agent  had  been  expressly
authorized  to  authenticate  and deliver Debt  Securities;  provided,  that the
Trustee  shall have no liability to the Company for any acts or omissions of the
Authenticating  Agent with  respect to the  authentication  and delivery of Debt
Securities.  Any  such  Authenticating  Agent  shall  at all  times  be a Person
organized and doing business under the laws of the United States or of any state
or territory  thereof or of the District of Columbia  authorized under such laws
to act as  Authenticating  Agent,  having a combined  capital  and surplus of at
least  $50,000,000  and being subject to  supervision or examination by federal,
state,  territorial or District of Columbia authority.  If such Person publishes
reports of condition at least annually  pursuant to law or the  requirements  of
such authority,  then for the purposes of this Section 6.12 the combined capital
and  surplus  of such  Person  shall be deemed to be its  combined  capital  and
surplus as set forth in its most recent report of condition so published.  If at
any time an  Authenticating  Agent shall cease to be eligible in accordance with
the  provisions of this Section,  it shall resign  immediately in the manner and
with the effect herein specified in this Section.

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

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

                                      -39-
<PAGE>


          The  Company  agrees to pay to any  Authenticating  Agent from time to
time reasonable  compensation for its services.  Any Authenticating  Agent shall
have no  responsibility  or  liability  for any  action  taken  by it as such in
accordance  with the directions of the Trustee and shall receive such reasonable
indemnity as it may require against the costs, expenses and liabilities incurred
in furtherance of its duties under this Section 6.12.

                                  ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

     SECTION 7.01. Action by Securityholders.
                   --------------------------

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

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

     SECTION 7.02. Proof of Execution by Securityholders.
                   --------------------------------------

          Subject to the  provisions of Sections 6.01,  6.02 and 8.05,  proof of
the execution of any  instrument by a  Securityholder  or such  Securityholder's
agent or proxy shall be sufficient if made in  accordance  with such  reasonable
rules and  regulations  as may be prescribed by the Trustee or in such manner as
shall be satisfactory to the Trustee.  The ownership of Debt Securities shall be
proved by the Debt Security  Register or by a  certificate  of the Debt Security
registrar.  The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.

                                      -40-
<PAGE>


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

     SECTION 7.03. Who Are Deemed Absolute Owners.
                   -------------------------------

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

     SECTION 7.04. Debt Securities Owned by Company Deemed Not Outstanding.
                   --------------------------------------------------------

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

     SECTION 7.05. Revocation of Consents; Future Holders Bound.
                   ---------------------------------------------

          At any time prior to (but not after) the evidencing to the Trustee, as
provided  in Section  7.01,  of the  taking of any action by the  holders of the
percentage in aggregate  principal  amount of the Debt  Securities  specified in
this  Indenture in  connection  with such action,  any holder (in cases where no
record  date has been set  pursuant  to  Section  7.01) or any  holder  as of an
applicable  record date (in cases  where a record date has been set  pursuant to
Section  7.01) of a Debt  Security (or any Debt  Security  issued in whole or in
part in exchange or  substitution  therefor) the serial number of which is shown
by the evidence to be included in the Debt  Securities the holders of which have

                                      -41-
<PAGE>


consented to such action may, by filing  written  notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02,  revoke such action so far as concerns  such Debt  Security  (or so far as
concerns the principal  amount  represented by any exchanged or substituted Debt
Security).  Except as aforesaid  any such action taken by the holder of any Debt
Security  shall be  conclusive  and binding upon such holder and upon all future
holders and owners of such Debt  Security,  and of any Debt  Security  issued in
exchange or  substitution  therefor  or on  registration  of  transfer  thereof,
irrespective  of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.

                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

     SECTION 8.01. Purposes of Meetings.
                   ---------------------

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

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

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

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

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

     SECTION 8.02. Call of Meetings by Trustee.
                   ----------------------------

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

                                      -42-
<PAGE>


     SECTION 8.03. Call of Meetings by Company or Securityholders.
                   -----------------------------------------------

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

     SECTION 8.04. Qualifications for Voting.
                   --------------------------

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

     SECTION 8.05. Regulations.
                   ------------

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

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

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

                                      -43-
<PAGE>


     SECTION 8.06. Voting.
                   -------

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

     SECTION 8.07. Quorum; Actions.
                   ----------------

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

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

                                      -44-
<PAGE>


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

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

     SECTION 9.01. Supplemental Indentures without Consent of Securityholders.
                   -----------------------------------------------------------

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

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

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

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

          (d) to add to,  delete from,  or revise the terms of Debt  Securities,
     including,   without  limitation,  any  terms  relating  to  the  issuance,
     exchange, registration or transfer of Debt Securities, including to provide
     for transfer  procedures and  restrictions  substantially  similar to those
     applicable  to the Capital  Securities,  as  required by Section  2.05 (for
     purposes of assuring that no  registration  of Debt  Securities is required

                                      -45-
<PAGE>


     under the  Securities  Act of 1933,  as amended);  provided,  that any such
     action shall not adversely  affect the interests of the holders of the Debt
     Securities  then  outstanding  (it being  understood,  for purposes of this
     proviso,  that  transfer  restrictions  on  Debt  Securities  substantially
     similar to those  applicable to Capital  Securities  shall not be deemed to
     adversely affect the holders of the Debt Securities);

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

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

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

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

          Any  supplemental  indenture  authorized  by the  provisions  of  this
Section 9.01 may be executed by the Company and the Trustee  without the consent
of the  holders  of  any  of  the  Debt  Securities  at  the  time  outstanding,
notwithstanding any of the provisions of Section 9.02.

     SECTION 9.02. Supplemental Indentures with Consent of Securityholders.
                   --------------------------------------------------------

          With the  consent  (evidenced  as  provided  in  Section  7.01) of the
holders of not less than a majority in  aggregate  principal  amount of the Debt
Securities  at the time  outstanding  affected  by such  supplemental  indenture
(voting as a class), the Company, when authorized by a Board Resolution, and the
Trustee  may from  time to time  and at any  time  enter  into an  indenture  or
indentures  supplemental  hereto (which shall  conform to the  provisions of the
Trust  Indenture  Act,  then  in  effect,  applicable  to  indentures  qualified
thereunder)  for the  purpose of adding any  provisions  to or  changing  in any
manner  or  eliminating  any of  the  provisions  of  this  Indenture  or of any
supplemental  indenture  or of modifying in any manner the rights of the holders
of the Debt Securities;  provided,  however, that no such supplemental indenture
shall without such consent of the holders of each Debt Security then outstanding
and  affected  thereby (i) extend the fixed  maturity of any Debt  Security,  or
reduce the principal amount thereof or any premium  thereon,  or reduce the rate
or extend the time of payment of interest thereon,  or reduce any amount payable
on redemption  thereof or make the principal  thereof or any interest or premium
thereon  payable in any coin or  currency  other than that  provided in the Debt
Securities,  or impair or affect the right of any  Securityholder  to  institute
suit for payment thereof or impair the right of repayment, if any, at the option

                                      -46-
<PAGE>


of the holder,  or (ii) reduce the aforesaid  percentage of Debt  Securities the
holders of which are required to consent to any such supplemental indenture; and
provided,  further,  that if the  Debt  Securities  are  held by the  Trust or a
trustee of such trust, such supplemental  indenture shall not be effective until
the  holders of a majority in  liquidation  preference  of the Trust  Securities
shall have consented to such supplemental indenture;  provided, further, that if
the consent of the Securityholder of each outstanding Debt Security is required,
such  supplemental  indenture  shall not be  effective  until each holder of the
Trust Securities shall have consented to such supplemental indenture.

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

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

          It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the  particular  form of any proposed  supplemental
indenture,  but it  shall  be  sufficient  if such  consent  shall  approve  the
substance thereof.

     SECTION 9.03. Effect of Supplemental Indentures.
                   ----------------------------------

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

     SECTION 9.04. Notation on Debt Securities.
                   ----------------------------

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

                                      -47-
<PAGE>


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

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

                                   ARTICLE X

                            REDEMPTION OF SECURITIES

     SECTION 10.01. Optional Redemption.
                    --------------------

          At any time  the  Company  shall  have the  right to  redeem  the Debt
Securities,  in whole or in part, on any January 7, April 7, July 7 or October 7
on or after April 7, 2011 (the "Redemption Date"), at the Redemption Price.

     SECTION 10.02. Special Event Redemption
                    ------------------------

          If a Special  Event shall occur and be  continuing,  the Company shall
have the right to redeem the Debt  Securities,  in whole but not in part, at any
time within 90 days following the occurrence of such Special Event (the "Special
Redemption Date"), at the Special Redemption Price.

     SECTION 10.03. Notice of Redemption; Selection of Debt Securities.
                    ---------------------------------------------------

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

                                      -48-
<PAGE>


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

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

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

     SECTION 10.04. Payment of Debt Securities Called for Redemption.
                    -------------------------------------------------

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

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

                                      -49-
<PAGE>


                                   ARTICLE XI

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

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

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

     SECTION 11.02. Successor Entity to be Substituted.
                    -----------------------------------

          In case of any such consolidation,  merger, sale, conveyance, transfer
or other  disposition  and upon  the  assumption  by the  successor  entity,  by
supplemental  indenture,  executed and  delivered to the Trustee and  reasonably
satisfactory  in form to the  Trustee,  of the due and  punctual  payment of the
principal of and premium, if any, and interest on all of the Debt Securities and
the due and punctual  performance  and  observance  of all of the  covenants and
conditions  of this  Indenture to be performed or observed by the Company,  such
successor  entity shall succeed to and be substituted for the Company,  with the
same effect as if it had been named herein as the  Company,  and  thereupon  the
predecessor  entity  shall be relieved of any further  liability  or  obligation
hereunder or upon the Debt Securities. Such successor entity thereupon may cause
to be  signed,  and  may  issue  either  in its own  name or in the  name of the
Company,  any or all of the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company  and  delivered  to the Trustee or the
Authenticating  Agent;  and, upon the order of such successor  entity instead of
the Company and subject to all the terms,  conditions  and  limitations  in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and  deliver any Debt  Securities  which  previously  shall have been signed and
delivered by the officers of the Company,  to the Trustee or the  Authenticating
Agent for  authentication,  and any Debt Securities  which such successor entity
thereafter  shall  cause  to be  signed  and  delivered  to the  Trustee  or the
Authenticating  Agent for that purpose.  All the Debt Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Debt Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Debt Securities had been issued at the date
of the execution hereof.

                                      -50-
<PAGE>


     SECTION 11.03. Opinion of Counsel to be Given to Trustee.
                    ------------------------------------------

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

                                  ARTICLE XII

                     SATISFACTION AND DISCHARGE OF INDENTURE

     SECTION 12.01. Discharge of Indenture.
                    -----------------------

          When (a) the Company shall deliver to the Trustee for cancellation all
Debt Securities theretofore  authenticated (other than any Debt Securities which
shall have been destroyed,  lost or stolen and which shall have been replaced or
paid as provided in Section 2.06) and not theretofore  canceled,  or (b) all the
Debt  Securities  not  theretofore  canceled  or  delivered  to the  Trustee for
cancellation shall have become due and payable,  or are by their terms to become
due and payable  within one year or are to be called for  redemption  within one
year under arrangements  satisfactory to the Trustee for the giving of notice of
redemption,  and the Company  shall deposit with the Trustee,  in trust,  funds,
which shall be  immediately  due and payable,  sufficient  to pay at maturity or
upon redemption all of the Debt Securities (other than any Debt Securities which
shall have been destroyed,  lost or stolen and which shall have been replaced or
paid as provided in Section 2.06) not  theretofore  canceled or delivered to the
Trustee for cancellation,  including principal and premium, if any, and interest
due or to become due to such date of maturity or  redemption  date,  as the case
may be, but  excluding,  however,  the  amount of any moneys for the  payment of
principal  of, and  premium,  if any,  or interest  on the Debt  Securities  (1)
theretofore  repaid to the Company in accordance  with the provisions of Section
12.04,  or (2) paid to any state or to the District of Columbia  pursuant to its
unclaimed  property or similar laws,  and if in the case of either clause (a) or
clause (b) the Company shall also pay or cause to be paid all other sums payable
hereunder  by the  Company,  then this  Indenture  shall  cease to be of further
effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02, 3.04, 6.06,
6.09 and 12.04  hereof,  which shall survive  until such Debt  Securities  shall
mature or are redeemed, as the case may be, and are paid.  Thereafter,  Sections
6.06,  6.09 and 12.04 shall survive,  and the Trustee,  on demand of the Company
accompanied by an Officers'  Certificate and an Opinion of Counsel, each stating
that all conditions  precedent  herein provided for relating to the satisfaction
and discharge of this  Indenture  have been complied  with,  and at the cost and
expense  of  the  Company,   shall  execute  proper  instruments   acknowledging
satisfaction of and discharging  this Indenture,  the Company,  however,  hereby
agreeing  to  reimburse  the  Trustee  for  any  costs  or  expenses  thereafter
reasonably  and  properly  incurred  by the  Trustee  in  connection  with  this
Indenture or the Debt Securities.

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

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

                                      -51-
<PAGE>


     SECTION 12.03. Paying Agent to Repay Moneys Held.
                    ----------------------------------

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

     SECTION 12.04. Return of Unclaimed Moneys.
                    ---------------------------

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

                                  ARTICLE XIII

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

     SECTION 13.01. Indenture and Debt Securities Solely Corporate Obligations.
                    -----------------------------------------------------------

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

                                      -52-
<PAGE>


                                  ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

     SECTION 14.01. Successors.
                    -----------

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

     SECTION 14.02. Official Acts by Successor Entity.
                    ----------------------------------

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

     SECTION 14.03. Surrender of Company Powers.
                    ----------------------------

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

     SECTION 14.04. Addresses for Notices, etc.
                    ---------------------------

          Any  notice or demand  which by any  provision  of this  Indenture  is
required  or  permitted  to be  given  or  served  by  the  Trustee  or  by  the
Securityholders  on the  Company  may be given or  served  in  writing  by being
deposited  postage  prepaid by  registered  or  certified  mail in a post office
letter box  addressed  (until  another  address is filed by the Company with the
Trustee for such purpose) to the Company at:

                                Tower Group, Inc.
                            120 Broadway, 14th Floor
                          New York, New York 10271-1699
                        Attention: Francis M. Colalucci]

          Any notice, direction,  request or demand by any Securityholder or the
Company to or upon the Trustee shall be deemed to have been  sufficiently  given
or made,  for all  purposes,  if given or made in writing at the office of Wells
Fargo Bank, National Association at:

                                919 Market Street
                                    Suite 700
                              Wilmington, DE 19801
                       Attention: Corporate Trust Division

                                      -53-
<PAGE>


     SECTION 14.05. Governing Law.
                    --------------

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

     SECTION 14.06. Evidence of Compliance with Conditions Precedent.
                    -------------------------------------------------

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

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

     SECTION 14.07. Non-Business Days.
                    ------------------

          In any case where the date of payment of interest on or  principal  of
the Debt  Securities  is not a Business  Day, the payment of such interest on or
principal of the Debt  Securities  need not be made on such date but may be made
on the next  succeeding  Business Day, with the same force and effect as if made
on the date of payment,  except if such  Business Day is in the next  succeeding
calendar year, such payment will be made on the immediately  preceding  Business
Day.

     SECTION 14.08. Table of Contents, Headings, etc.
                    ---------------------------------

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

     SECTION 14.09. Execution in Counterparts.
                    --------------------------

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

                                      -54-
<PAGE>


     SECTION 14.10. Severability.
                    -------------

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

     SECTION 14.11. Assignment.
                    -----------

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

     SECTION 14.12. Acknowledgment of Rights.
                    -------------------------

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

                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

     SECTION 15.01. Agreement to Subordinate.
                    -------------------------

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

                                      -55-
<PAGE>


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

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

     SECTION 15.02. Default on Senior Indebtedness.
                    -------------------------------

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

          In the event that, notwithstanding the foregoing, any payment shall be
received  by the  Trustee  when such  payment  is  prohibited  by the  preceding
paragraph of this Section 15.02,  such payment shall,  subject to Section 15.06,
be held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior  Indebtedness or their respective  representatives,  or to the
trustee or  trustees  under any  indenture  pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the  extent  that the  holders  of the  Senior  Indebtedness  (or  their
representative  or  representatives  or a trustee) notify the Trustee in writing
within 90 days of such  payment of the amounts  then due and owing on the Senior
Indebtedness and only the amounts  specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.

     SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
                    -------------------------------------

          Upon any  payment  by the  Company  or  distribution  of assets of the
Company of any kind or character,  whether in cash,  property or securities,  to
creditors upon any  dissolution or winding- up or liquidation or  reorganization
of the Company,  whether voluntary or involuntary or in bankruptcy,  insolvency,
receivership or other proceedings,  all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment  thereof  provided for in
money in accordance with its terms, before any payment is made by the Company on
the Debt Securities;  and upon any such dissolution or winding-up or liquidation
or reorganization,  any payment by the Company, or distribution of assets of the
Company of any kind or character,  whether in cash,  property or securities,  to
which the  Securityholders  or the Trustee would be entitled to receive from the
Company,  except for the  provisions  of this  Article XV,  shall be paid by the
Company, or by any receiver,  trustee in bankruptcy,  liquidating trustee, agent

                                      -56-
<PAGE>


or other Person making such payment or distribution,  or by the  Securityholders
or by the Trustee  under this  Indenture if received by them or it,  directly to
the holders of Senior  Indebtedness  of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders,
as calculated by the Company) or their representative or representatives,  or to
the trustee or trustees  under any indenture  pursuant to which any  instruments
evidencing such Senior  Indebtedness  may have been issued,  as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth,  after giving effect to any concurrent  payment
or  distribution to or for the holders of such Senior  Indebtedness,  before any
payment or distribution is made to the Securityholders.

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

          For  purposes  of this  Article  XV,  the  words  "cash,  property  or
securities"  shall not be deemed to  include  shares of stock of the  Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization  or readjustment,  the payment of which
is  subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
is  assumed  by  the  new   corporation,   if  any,   resulting  from  any  such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness  are not,  without  the  consent of such  holders,  altered by such
reorganization  or readjustment.  The  consolidation of the Company with, or the
merger  of  the  Company  into,  another   corporation  or  the  liquidation  or
dissolution of the Company  following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions  provided for in Article IX of this Indenture  shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of  this  Section  15.03  if such  other  corporation  shall,  as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article IX of this  Indenture.  Nothing in Section  15.02 or in this  Section
15.03 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.06 of this Indenture.

     SECTION 15.04. Subrogation.
                    ------------
                  ------------

          Subject  to the  payment  in full of all  Senior  Indebtedness  of the
Company, the Securityholders shall be subrogated to the rights of the holders of
such Senior  Indebtedness to receive payments or distributions of cash, property
or securities of the Company  applicable to such Senior  Indebtedness  until all
payments due on the Debt Securities shall be paid in full; and, for the purposes
of such subrogation,  no payments or distributions to the holders of such Senior

                                      -57-
<PAGE>


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

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

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

     SECTION 15.05. Trustee to Effectuate Subordination.
                    ------------------------------------

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

     SECTION 15.06. Notice by the Company.
                    ----------------------

          The Company shall give prompt written notice to a Responsible  Officer
of the Trustee at the  Principal  Office of the Trustee of any fact known to the
Company  that would  prohibit  the making of any  payment of moneys to or by the
Trustee in respect of the Debt  Securities  pursuant to the  provisions  of this
Article  XV.  Notwithstanding  the  provisions  of this  Article XV or any other
provision of this Indenture or any Additional Provisions,  the Trustee shall not
be charged with  knowledge of the existence of any facts that would prohibit the
making of any  payment  of moneys to or by the  Trustee  in  respect of the Debt
Securities  pursuant to the  provisions  of this Article XV,  unless and until a

                                      -58-
<PAGE>


Responsible  Officer of the Trustee at the Principal Office of the Trustee shall
have received  written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor;  and before the receipt of any
such written  notice,  the Trustee,  subject to the  provisions of Article VI of
this  Indenture,  shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section  15.06 at least two Business Days prior to the date
upon  which by the terms  hereof any money may become  payable  for any  purpose
(including,  without limitation, the payment of the principal of (or premium, if
any) or interest on any Debt Security),  then,  anything herein contained to the
contrary  notwithstanding,  the Trustee  shall have full power and  authority to
receive  such  money and to apply the same to the  purposes  for which they were
received,  and shall not be affected by any notice to the  contrary  that may be
received by it within two Business Days prior to such date.

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

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

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

          With respect to the holders of Senior Indebtedness of the Company, the
Trustee  undertakes  to  perform or to observe  only such of its  covenants  and
obligations  as are  specifically  set forth in this  Article XV, and no implied
covenants or obligations with respect to the holders

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

                                      -59-
<PAGE>


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

     SECTION 15.08. Subordination May Not Be Impaired.
                    ----------------------------------

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

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

          Wells Fargo Bank,  National  Association,  in its capacity as Trustee,
hereby  accepts the trusts in this  Indenture  declared and  provided,  upon the
terms and conditions herein above set forth.

                                      -60-
<PAGE>


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

                                    Tower Group, Inc.

                                    By: ________________________________________
                                    Name:_______________________________________
                                    Title:______________________________________


                                    Wells Fargo Bank, National Association, as
                                    Trustee

                                    By: ________________________________________
                                    Name: ______________________________________
                                    Title: _____________________________________



                                      -61-
<PAGE>


                                    EXHIBIT A


                    FORM OF JUNIOR SUBORDINATED DEBT SECURITY
                                    DUE 2036

                           [FORM OF FACE OF SECURITY]
                           --------------------------

          THIS  SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY
OTHER  APPLICABLE  SECURITIES  LAWS.  NEITHER THIS  SECURITY NOR ANY INTEREST OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH  TRANSACTION  IS EXEMPT  FROM,  OR NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT.  THE  HOLDER  OF  THIS  SECURITY  BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY
(A) TO THE COMPANY,  (B) PURSUANT TO AND IN ACCORDANCE  WITH RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"),  TO A PERSON THE HOLDER  REASONABLY  BELIEVES IS A
"QUALIFIED  INSTITUTIONAL  BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,  (C) PURSUANT
TO AN EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED  INVESTOR"  WITHIN THE MEANING OF SUBPARAGRAPH  (a) (1), (2), (3) OR
(7) OF RULE 501 UNDER THE  SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT,  OR FOR THE ACCOUNT OF AN  "ACCREDITED  INVESTOR,"  FOR  INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN  CONNECTION  WITH,  ANY
DISTRIBUTION  IN  VIOLATION  OF THE  SECURITIES  ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE  EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT  TO THE  COMPANY'S  RIGHT  PRIOR TO ANY  SUCH  OFFER,  SALE OR  TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE,  A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

          THE  HOLDER  OF  THIS  SECURITY  BY  ITS  ACCEPTANCE   HEREOF  AGREES,
REPRESENTS  AND  WARRANTS  THAT IT  WILL  NOT  ENGAGE  IN  HEDGING  TRANSACTIONS
INVOLVING  THIS SECURITY  UNLESS SUCH  TRANSACTIONS  ARE IN COMPLIANCE  WITH THE
SECURITIES ACT.

                                      A-1
<PAGE>


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

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

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

                                      A-2
<PAGE>


               Form of Junior Subordinated Debt Security due 2036

                                       of

                                Tower Group, Inc.

          Tower Group, Inc., a company incorporated in Delaware (the "Company"),
for value received  promises to pay to Wells Fargo Bank,  National  Association,
not in its  individual  capacity but solely as  Institutional  Trustee for Tower
Group  Statutory  Trust  V,  a  Delaware  statutory  trust  (the  "Holder"),  or
registered  assigns,  the principal sum of Twenty  Million Six Hundred  Nineteen
Thousand  Dollars  ($20,619,000)  on April 7, 2036 and to pay  interest  on said
principal sum from March 31, 2006, or from the most recent interest payment date
(each such date, an "Interest  Payment Date") to which interest has been paid or
duly  provided  for,  quarterly  (subject to  deferral  as set forth  herein) in
arrears on January 7, April 7, July 7 and October 7 of each year commencing July
7, 2006, at the rate of 8.5625% (the "Fixed Rate") per annum until April 7, 2011
(the "Fixed Rate  Period") and  thereafter at a variable per annum rate equal to
LIBOR (as  defined  in the  Indenture)  plus 3.30% (the  "Variable  Rate")  (the
"Interest  Rate" is defined to include  the Fixed  Rate and  Variable  Rate,  as
applicable) until the principal hereof shall have become due and payable, and on
any overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest  at an annual rate equal to the  Interest  Rate in effect for each such
Extension  Period  compounded  quarterly.  The amount of interest payable on any
Interest  Payment  Date shall be  computed  during the Fixed Rate  Period on the
basis of a 360-day year of twelve 30-day  months and the amount  payable for any
partial period shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day  months,  and thereafter on the basis of a 360-day
year and the actual number of days elapsed in the relevant  interest period.  In
the event that any date on which the  principal  or  interest is payable on this
Debt Security is not a Business  Day, then payment  payable on such date will be
made on the next  succeeding  day that is a Business  Day,  except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately  preceding Business Day, in each case with the same force and
effect  as if made on such  date.  The  interest  installment  so  payable,  and
punctually  paid or duly  provided  for, on any Interest  Payment Date will,  as
provided  in the  Indenture,  be paid to the  Person  in whose  name  this  Debt
Security (or one or more Predecessor  Securities,  as defined in said Indenture)
is  registered  at the close of  business  on the  regular  record date for such
interest installment,  except that interest and any Deferred Interest payable on
the Maturity  Date shall be paid to the Person to whom  principal  is paid.  Any
such  interest  installment  not  punctually  paid or duly  provided  for  shall
forthwith  cease to be payable to the registered  holders on such regular record
date and may be paid to the Person in whose name this Debt  Security  (or one or
more  Predecessor  Debt  Securities) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted
interest,  notice whereof shall be given to the  registered  holders of the Debt
Securities  not less than 10 days prior to such special record date, all as more
fully  provided in the  Indenture.  The  principal  of and interest on this Debt
Security  shall be  payable  at the  office or agency of the  Trustee  (or other
Paying Agent  appointed by the Company)  maintained for that purpose in any coin
or currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided,  however, that payment
of  interest  may be made at the option of the  Company  by check  mailed to the
registered  holder at such address as shall appear in the Debt Security Register
or by wire transfer to an account appropriately designated by the holder hereof.
Notwithstanding  the  foregoing,  so long as the holder of this Debt Security is
the Institutional  Trustee, the payment of the principal of and interest on this
Debt Security will be made in immediately  available  funds at such place and to
such account as may be designated by the Trustee.

                                      A-3
<PAGE>


          Unless  otherwise  defined  herein,  capitalized  terms shall have the
meaning  set forth in the  Indenture  of even date  herewith  by and between the
Company and the Trustee.

          Upon  submission  of  Notice  and so long as no Event of  Default  has
occurred and is continuing,  the Company shall have the right, from time to time
and without  causing an Event of Default,  to defer  payments of interest on the
Debt Securities by extending the interest  payment period on the Debt Securities
at any time and from time to time during the term of the Debt Securities, for up
to 20 consecutive quarterly periods (each such extended interest payment period,
an "Extension  Period"),  during which Extension Period no interest shall be due
and payable (except any Additional Interest that may be due and payable). During
any Extension  Period,  interest will continue to accrue on the Debt Securities,
and  interest on such  accrued  interest  (such  accrued  interest  and interest
thereon referred to herein as "Deferred Interest") will accrue at an annual rate
equal to the Interest Rate in effect for each such Extension Period,  compounded
quarterly  from the date such Deferred  Interest would have been payable were it
not for the  Extension  Period,  to the extent  permitted  by law. No  Extension
Period may end on a date other than an Interest  Payment Date. At the end of any
such Extension  Period the Company shall pay all Deferred  Interest then accrued
and unpaid on the Debt Securities;  provided,  however, that no Extension Period
may extend beyond the Maturity Date; and provided,  further, however, during any
such Extension  Period,  the Company may not (i) declare or pay any dividends or
distributions on, or redeem,  purchase,  acquire,  or make a liquidation payment
with respect to, any of the Company's  capital stock or (ii) make any payment on
or repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Debt  Securities  (other
than (a)  repurchases,  redemptions or other  acquisitions  of shares of capital
stock of the Company (A) in connection  with any  employment  contract,  benefit
plan  or  other  similar  arrangement  with or for  the  benefit  of one or more
employees, officers, directors or consultants, (B) in connection with a dividend
reinvestment  or stockholder  stock purchase plan or (C) in connection  with the
issuance  of capital  stock of the Company (or  securities  convertible  into or
exercisable  for  such  capital  stock),  as  consideration  in  an  acquisition
transaction  entered into prior to the  applicable  Extension  Period,  (b) as a
result of any  exchange or  conversion  of any class or series of the  Company's
capital  stock (or any capital  stock of a  subsidiary  of the  Company) for any
class or series of the Company's  capital stock or of any class or series of the
Company's  indebtedness for any class or series of the Company's  capital stock,
(c) the  purchase of  fractional  interests in shares of the  Company's  capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged,  (d) any declaration of a dividend in
connection with any stockholder's  rights plan, or the issuance of rights, stock
or other  property  under any  stockholder's  rights plan, or the  redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon  exercise of such  warrants,  options or other  rights is the same stock as
that on which the  dividend  is being paid or ranks pari passu with or junior to
such stock).  Prior to the termination of any Extension Period,  the Company may
further extend such period,  provided,  that such period  together with all such

                                      A-4
<PAGE>


previous  and  further  consecutive  extensions  thereof  shall  not  exceed  20
consecutive  quarterly  periods,  or extend beyond the Maturity  Date.  Upon the
termination  of any  Extension  Period  and upon  the  payment  of all  Deferred
Interest,  the  Company  may  commence a new  Extension  Period,  subject to the
foregoing  requirements.  No  interest  or  Deferred  Interest  shall be due and
payable  during an Extension  Period,  except at the end  thereof,  but Deferred
Interest  shall accrue upon each  installment  of interest that would  otherwise
have been due and payable during such Extension Period until such installment is
paid.  The Company  must give the Trustee  notice of its  election to begin such
Extension  Period at least one Business Day prior to the earlier of (i) the next
succeeding date on which interest on the Debt Securities would have been payable
except for the  election  to begin such  Extension  Period or (ii) the date such
interest is payable,  but in any event not later than the related regular record
date.

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

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

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

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

                                      A-5
<PAGE>


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

                                        Tower Group, Inc.


                                        By:  /s/ Francis M. Colalucci
                                            ------------------------------------
                                        Name:  Francis M. Colalucci
                                              ----------------------------------
                                        Title:  Senior Vice President and Chief
                                               ---------------------------------
                                                Financial Officer
                                               ---------------------------------



Dated:_________________________

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

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

                                        Wells Fargo Bank, National  Association,
                                        not  in  its  individual   capacity  but
                                        solely as the Trustee


                                        By:Edward L. Truitt
                                           -------------------------------------
                                           Authorized Officer


Dated:__________________________


                                      A-6
<PAGE>


                          [FORM OF REVERSE OF SECURITY]

          This  Debt  Security  is one  of a  duly  authorized  series  of  Debt
Securities of the Company,  all issued or to be issued  pursuant to an Indenture
(the  "Indenture"),  dated as of March 31, 2006,  duly  executed  and  delivered
between the Company and Wells Fargo Bank, National Association,  as Trustee (the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is  hereby  made  for a  description  of  the  rights,  limitations  of  rights,
obligations,  duties and immunities  thereunder of the Trustee,  the Company and
the holders of the Debt Securities (referred to herein as the "Debt Securities")
of which this Debt  Security  is a part.  The  summary of the terms of this Debt
Security  contained  herein does not purport to be complete  and is qualified by
reference to the Indenture.

          Upon the occurrence and  continuation  of a Tax Event or an Investment
Company  Event (each a "Special  Event"),  this Debt Security may become due and
payable,  in whole but not in part,  at any time,  within 90 days  following the
occurrence  of such Tax  Event or an  Investment  Company  Event  (the  "Special
Redemption  Date"),  as the case may be, at the Special  Redemption  Price.  The
Company  shall also have the right to redeem this Debt Security at the option of
the Company, in whole or in part, on any January 7, April 7, July 7 or October 7
on or after April 7, 2011 (a "Redemption Date"), at the Redemption Price.

          Any redemption  pursuant to the preceding  paragraph will be made upon
not less than 30 days' nor more than 60 days' notice. If the Debt Securities are
only partially redeemed by the Company, the Debt Securities will be redeemed pro
rata or by lot or by any other method utilized by the Trustee.

          "Redemption  Price"  means  100% of the  principal  amount of the Debt
Securities  being  redeemed  plus  accrued  and  unpaid  interest  on such  Debt
Securities  to the  Redemption  Date or, in the case of a redemption  due to the
occurrence of a Special Event,  to the Special  Redemption  Date if such Special
Redemption Date is on or after April 7, 2011.

          "Special Redemption Price" means (1) if the Special Redemption Date is
before April 7, 2011,  One Hundred  Seven and One Half  Percent  (107.5%) of the
principal  amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such  redemption  and (2) if the  Special  Redemption  Date is on or
after April 7, 2011, the Redemption Price for such Special Redemption Date.

          In the event of  redemption  of this Debt Security in part only, a new
Debt  Security or Debt  Securities  for the  unredeemed  portion  hereof will be
issued in the name of the holder hereof upon the cancellation hereof.

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

                                      A-7
<PAGE>


          The  Indenture  contains  provisions  permitting  the  Company and the
Trustee,  with the  consent  of the  holders  of not  less  than a  majority  in
aggregate  principal  amount  of the Debt  Securities  at the  time  outstanding
affected  thereby,  as  specified  in the  Indenture,  to  execute  supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or  eliminating  any of the  provisions of the Indenture or of any  supplemental
indenture  or of  modifying  in any manner the rights of the holders of the Debt
Securities;  provided, however, that no such supplemental indenture shall, among
other  things,  without the consent of the  holders of each Debt  Security  then
outstanding  and  affected  thereby  (i) extend the fixed  maturity  of the Debt
Securities,  or reduce the principal  amount thereof or any  redemption  premium
thereon,  or reduce the rate or extend the time of payment of interest  thereon,
or make  payments  due on the Debt  Securities  payable in any coin or  currency
other than that provided in the Debt  Securities,  or impair or affect the right
of any holder of Debt Securities to institute suit for the payment  thereof,  or
(ii) reduce the aforesaid  percentage of Debt  Securities,  the holders of which
are required to consent to any such supplemental  indenture.  The Indenture also
contains provisions  permitting the holders of a majority in aggregate principal
amount of the Debt Securities at the time  outstanding,  on behalf of all of the
holders of the Debt Securities,  to waive any past default in the performance of
any of the covenants contained in the Indenture,  or established pursuant to the
Indenture, and its consequences,  except a default in payments due on any of the
Debt  Securities.  Any such consent or waiver by the  registered  holder of this
Debt Security  (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this Debt
Security and of any Debt Security issued in exchange  herefor or in place hereof
(whether by registration  of transfer or otherwise),  irrespective of whether or
not any notation of such consent or waiver is made upon this Debt Security.

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

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

          Prior to due  presentment  for  registration  of transfer of this Debt
Security,  the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any  transfer  agent  and the Debt  Security  registrar  may deem and  treat the
registered  holder hereof as the absolute owner hereof (whether or not this Debt
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon) for the purpose of receiving  payment of or on account of the  principal
hereof and  interest  due hereon and for all other  purposes,  and  neither  the
Company nor the Trustee nor any  Authenticating  Agent nor any Paying  Agent nor
any  transfer  agent nor any Debt  Security  registrar  shall be affected by any
notice to the contrary.

                                      A-8
<PAGE>


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

          The Debt Securities are issuable only in registered  certificated form
without coupons. As provided in the Indenture and subject to certain limitations
herein and  therein  set forth,  Debt  Securities  are  exchangeable  for a like
aggregate  principal  amount  of  Debt  Securities  of  a  different  authorized
denomination, as requested by the holder surrendering the same.

          All terms used in this Debt Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

          THE LAW OF THE STATE OF NEW YORK SHALL  GOVERN THE  INDENTURE  AND THE
DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

                                      A-9