Exhibit 10.30





CLOSING ITEM NO.:  A-3




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                COUNTY OF SARATOGA INDUSTRIAL DEVELOPMENT AGENCY


                                       AND


                           STAR BANK, N.A., AS TRUSTEE


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

                                 TRUST INDENTURE

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


                           DATED AS OF OCTOBER 1, 1997


                   ------------------------------------------


                                   $6,000,000
                COUNTY OF SARATOGA INDUSTRIAL DEVELOPMENT AGENCY
                            MULTI-MODE VARIABLE RATE
                      INDUSTRIAL DEVELOPMENT REVENUE BONDS
                (SPURLOCK ADHESIVES, INC. PROJECT), SERIES 1997 A



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                   THIS INSTRUMENT IS INTENDED TO CONSTITUTE A
                 SECURITY AGREEMENT UNDER THE UNIFORM COMMERCIAL
                         CODE OF THE STATE OF NEW YORK.



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                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>


                                                                                                               Page
                                                                                                               ----

<S>                                                                                                             <C>
Recitals..........................................................................................................1
Form of Certificate of Authentication............................................................................13
Form of Assignment ..............................................................................................13
Granting Clause..................................................................................................14


ARTICLE I........................................................................................................16
         DEFINITIONS.............................................................................................16


ARTICLE II.......................................................................................................27
         THE BONDS...............................................................................................27
                  SECTION 2.01. AMOUNT, TERMS AND ISSUANCE OF BONDS; LIMITED OBLIGATIONS.........................27
                  SECTION 2.02. DESIGNATION, DENOMINATIONS AND MATURITY..........................................27
                  SECTION 2.03. REGISTERED BONDS REQUIRED; BOND REGISTRAR AND BOND REGISTER......................32
                  SECTION 2.04. TRANSFER AND EXCHANGE............................................................33
                  SECTION 2.05. DELIVERY OF BONDS................................................................34
                  SECTION 2.06. EXECUTION........................................................................34
                  SECTION 2.07. AUTHENTICATION; AUTHENTICATING AGENT.............................................34
                  SECTION 2.08. PAYMENT OF PRINCIPAL AND INTEREST RIGHTS PRESERVED...............................35
                  SECTION 2.09. PERSONS DEEMED OWNERS............................................................36
                  SECTION 2.10. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.......................................36
                  SECTION 2.11. TEMPORARY BONDS..................................................................37
                  SECTION 2.12. CANCELLATION OF SURRENDERED BONDS................................................37
                  SECTION 2.13. SOURCE OF PAYMENT OF BONDS.......................................................37
                  SECTION 2.14. DELIVERY OF THE BONDS............................................................38


ARTICLE III......................................................................................................39
         PURCHASE AND REMARKETING OF BONDS.......................................................................39
                  SECTION 3.01. PURCHASE OF BONDS ON DEMAND; MANDATORY PURCHASE..................................39
                  SECTION 3.02. REMARKETING OF BONDS.............................................................41
                  SECTION 3.03. PURCHASE OF BONDS; UNDELIVERED BONDS.............................................42
                  SECTION 3.04. DELIVERY OF REMARKETED OR PURCHASED BONDS........................................43
                  SECTION 3.05. BONDS PLEDGED TO THE CREDIT FACILITY ISSUER......................................43
                  SECTION 3.06. DRAWINGS ON CREDIT FACILITY......................................................44
                  SECTION 3.07. DELIVERY OF PROCEEDS OF SALE.....................................................44
                  SECTION 3.08. LIMITATION ON PURCHASE AND REMARKETING...........................................44


                                       i
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ARTICLE IV.......................................................................................................45
         PROJECT FUND; PROCEEDS OF BONDS.........................................................................45
                  SECTION 4.01. CREATION OF PROJECT FUND; PROCEEDS OF BONDS......................................45
                  SECTION 4.02. DISBURSEMENTS FROM AND RECORDS OF PROJECT FUND...................................45
                  SECTION 4.03. INSURANCE AND CONDEMNATION FUND..................................................46


ARTICLE V........................................................................................................48
         BOND FUND; INVESTMENT OF FUNDS; REBATE FUND.............................................................48
                  SECTION 5.01. BOND FUND........................................................................48
                  SECTION 5.02. REVENUES TO BE HELD FOR ALL BONDHOLDERS; CERTAIN EXCEPTIONS......................50
                  SECTION 5.03. INVESTMENT OF PROJECT FUND, INSURANCE AND CONDEMNATION FUND, BOND FUND
                           AND REBATE FUND.......................................................................50
                  SECTION 5.04. MONEYS TO BE HELD IN TRUST.......................................................51
                  SECTION 5.05. CREATION OF REBATE FUND..........................................................51
                  SECTION 5.06. REPAYMENT TO THE COMPANIES OR THE BANK FROM AMOUNTS REMAINING IN THE
                           BOND FUND.............................................................................52


ARTICLE VI.......................................................................................................54
         CREDIT FACILITIES.......................................................................................54
                  SECTION 6.01. INITIAL LETTER OF CREDIT.........................................................54
                  SECTION 6.02. EXPIRATION.......................................................................55
                  SECTION 6.03. ALTERNATE CREDIT FACILITIES......................................................55
                  SECTION 6.04. NOTICES OF EXPIRATION AND/OR REPLACEMENT OF CREDIT FACILITY......................56


ARTICLE VII......................................................................................................57
         INVESTMENT OR DEPOSIT OF MONEYS.........................................................................57
                  SECTION 7.01. DEPOSITS.........................................................................57


ARTICLE VIII.....................................................................................................58
         REDEMPTION OF BONDS.....................................................................................58
                  SECTION 8.01. REDEMPTION DATES AND PRICES......................................................58
                  SECTION 8.02. ISSUER DIRECTION OF OPTIONAL REDEMPTION..........................................59
                  SECTION 8.03. SELECTION OF BONDS TO BE CALLED FOR REDEMPTION...................................60
                  SECTION 8.04. NOTICE OF REDEMPTION.............................................................60
                  SECTION 8.05. BONDS REDEEMED IN PART...........................................................60
                  SECTION 8.06. NO MANDATORY SINKING FUND REQUIREMENTS...........................................61


ARTICLE IX.......................................................................................................62
         COVENANTS AND AGREEMENTS OF THE ISSUER..................................................................62
                  SECTION 9.01.  COVENANTS AND AGREEMENTS OF THE ISSUER..........................................62
                  SECTION 9.02.  OBSERVANCE AND PERFORMANCE OF COVENANTS, AGREEMENTS, AUTHORITY AND
                           ACTIONS...............................................................................63
                  SECTION 9.03.  LIMITATION ON OBLIGATIONS OF THE ISSUER.........................................63

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ARTICLE X........................................................................................................64
         EVENTS OF DEFAULT AND REMEDIES..........................................................................64
                  SECTION 10.01. EVENTS OF DEFAULT DEFINED.......................................................64
                  SECTION 10.02. ACCELERATION AND ANNULMENT THEREOF..............................................65
                  SECTION 10.03. OTHER REMEDIES..................................................................66
                  SECTION 10.04. LEGAL PROCEEDINGS BY TRUSTEE....................................................66
                  SECTION 10.05. DISCONTINUANCE OF PROCEEDINGS BY TRUSTEE........................................67
                  SECTION 10.06. BONDHOLDERS MAY DIRECT PROCEEDINGS..............................................67
                  SECTION 10.07. LIMITATIONS ON ACTIONS BY BONDHOLDERS...........................................67
                  SECTION 10.08. TRUSTEE MAY ENFORCE RIGHTS WITHOUT POSSESSION OF BONDS..........................67
                  SECTION 10.09. REMEDIES NOT EXCLUSIVE..........................................................67
                  SECTION 10.10. DELAYS AND OMISSIONS NOT TO IMPAIR RIGHTS.......................................67
                  SECTION 10.11. APPLICATION OF MONEYS IN EVENT OF DEFAULT.......................................68


ARTICLE XI.......................................................................................................69
         THE TRUSTEE.............................................................................................69
                  SECTION 11.01. ACCEPTANCE OF TRUST.............................................................69
                  SECTION 11.02. NO RESPONSIBILITY FOR RECITALS, ETC.............................................69
                  SECTION 11.03. TRUSTEE MAY ACT THROUGH AGENTS; ANSWERABLE ONLY FOR WILLFUL MISCONDUCT
                           OR NEGLIGENCE.........................................................................69
                  SECTION 11.04. COMPENSATION AND INDEMNITY......................................................70
                  SECTION 11.05. NOTICE OF DEFAULT; RIGHT TO INVESTIGATE.........................................70
                  SECTION 11.06. OBLIGATION TO ACT...............................................................70
                  SECTION 11.07. RELIANCE........................................................................71
                  SECTION 11.08. TRUSTEE MAY DEAL IN BONDS.......................................................71
                  SECTION 11.09. CONSTRUCTION OF AMBIGUOUS PROVISIONS............................................71
                  SECTION 11.10. RESIGNATION OF TRUSTEE..........................................................71
                  SECTION 11.11. REMOVAL OF TRUSTEE..............................................................71
                  SECTION 11.12. APPOINTMENT OF SUCCESSOR TRUSTEE................................................71
                  SECTION 11.13. QUALIFICATION OF SUCCESSOR......................................................72
                  SECTION 11.14. INSTRUMENTS OF SUCCESSION.......................................................72
                  SECTION 11.15. MERGER OF TRUSTEE...............................................................72
                  SECTION 11.16. TRUSTEE NOT REQUIRED TO EXPEND OR RISK OWN FUNDS................................72
                  SECTION 11.17. CONFLICT OF INTEREST PROVISIONS.................................................72


ARTICLE XII......................................................................................................74
         THE REMARKETING AGENT AND THE TENDER AGENT..............................................................74
                  SECTION 12.01. THE REMARKETING AGENT...........................................................74
                  SECTION 12.02. THE TENDER AGENT................................................................74
                  SECTION 12.03. NOTICES.........................................................................75


ARTICLE XIII.....................................................................................................76
         ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP..............................................................76
                  SECTION 13.01. ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP......................................76

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ARTICLE XIV......................................................................................................77
         AMENDMENTS AND SUPPLEMENTS..............................................................................77
                  SECTION 14.01. AMENDMENTS AND SUPPLEMENTS WITHOUT BONDHOLDERS' CONSENT.........................77
                  SECTION 14.02. AMENDMENTS WITH BONDHOLDERS' AND CREDIT FACILITY ISSUER'S CONSENT...............78
                  SECTION 14.03. AMENDMENT OF CREDIT FACILITY....................................................78
                  SECTION 14.04. TRUSTEE AUTHORIZED TO JOIN IN AMENDMENTS AND SUPPLEMENTS; RELIANCE ON
                           COUNSEL...............................................................................78
                  SECTION 14.05.  AMENDMENTS NOT REQUIRING CONSENT OF BONDHOLDERS................................78
                  SECTION 14.06.  AMENDMENT REQUIRING CONSENT OF BONDHOLDERS.....................................79


ARTICLE XV.......................................................................................................80
         DEFEASANCE..............................................................................................80
                  SECTION 15.01. DEFEASANCE......................................................................80
                  SECTION 15.02. RELEASE OF INDENTURE............................................................81
                  SECTION 15.03. SURVIVAL OF CERTAIN PROVISIONS..................................................82


ARTICLE XVI......................................................................................................83
         MISCELLANEOUS PROVISIONS................................................................................83
                  SECTION 16.01. NON-RECOURSE PROVISION..........................................................83
                  SECTION 16.02. DEPOSIT OF FUNDS FOR PAYMENT OF BONDS...........................................84
                  SECTION 16.03. EFFECT OF PURCHASE OF BONDS.....................................................84
                  SECTION 16.04 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS..................................84
                  SECTION 16.05. NO RIGHTS CONFERRED ON OTHERS...................................................84
                  SECTION 16.06. ILLEGAL, ETC.  PROVISIONS DISREGARDED...........................................84
                  SECTION 16.07. SUBSTITUTE NOTICE...............................................................85
                  SECTION 16.08. NOTICES.........................................................................85
                  SECTION 16.09. SUCCESSORS AND ASSIGNS..........................................................86
                  SECTION 16.10. HEADINGS FOR CONVENIENCE ONLY...................................................86
                  SECTION 16.11. COUNTERPARTS....................................................................86
                  SECTION 16.13. APPLICABLE LAW..................................................................87


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                                 TRUST INDENTURE


                  THIS  TRUST  INDENTURE  dated as of October 1, 1997 is made by
and between  the COUNTY OF  SARATOGA  INDUSTRIAL  DEVELOPMENT  AGENCY,  a public
benefit  corporation of the State of New York (the "State") having an office for
the transaction of business at Saratoga  County  Municipal  Center,  40 McMaster
Street,  Ballston Spa, New York 12020 (the  "Issuer"),  and STAR BANK,  N.A., as
trustee (the "Trustee"),  a national banking association  authorized to exercise
corporate  trust  powers in the State,  under the  following  circumstances  and
having an office at 425 Walnut Street, Cincinnati, Ohio 45201-1118;

                              W I T N E S S E T H:

                  WHEREAS,  Title 1 of Article 18-A of the General Municipal Law
of the State (the  "Enabling  Act") was duly enacted into law as Chapter 1030 of
the Laws of 1969 of the State; and

                  WHEREAS,  the  Enabling  Act  authorizes  and provides for the
creation  of  industrial  development  agencies  for the  benefit of the several
counties,  cities,  villages and towns in the State and empowers such  agencies,
among  other  things,  to  acquire,  construct,   reconstruct,  lease,  improve,
maintain,  equip and dispose of land and any building or other improvement,  and
all real and personal properties,  including,  but not limited to, machinery and
equipment  deemed  necessary  in  connection  therewith,  whether  or not now in
existence or under  reconstruction,  which shall be suitable for  manufacturing,
warehousing,  research,  civic,  commercial or industrial purposes,  in order to
advance the job opportunities,  health,  general prosperity and economic welfare
of the people of the State and to improve their standard of living; and

                  WHEREAS,  the Enabling Act further authorizes each such agency
to lease or sell any or all of its  facilities,  to  issue  its  bonds,  for the
purpose of carrying out any of its  corporate  purposes and, as security for the
payment of the principal and redemption  price of and interest on any such bonds
so issued and any  agreements  made in  connection  therewith,  to mortgage  and
pledge any or all of its facilities,  whether then owned or thereafter acquired,
and to pledge the revenues and receipts from the lease or sale thereof to secure
the payment of such bonds and interest thereon; and

                  WHEREAS, the Issuer was created, pursuant to and in accordance
with the  provisions  of the Enabling Act, by Chapter 855 of the Laws of 1971 of
the State  (Collectively,  with the  Enabling  Act,  the "Act") and is empowered
under the Act to undertake the Project (as  hereinafter  defined) in order to so
advance the job opportunities,  health,  general prosperity and economic welfare
of the people of the State and improve their standard of living; and

                  WHEREAS,  the Issuer,  by resolution  adopted on September 16,
1997 (the "Resolution"),  determined to issue its $6,000,000 aggregate principal
amount  of  Multi-Mode  Variable  Rate  Industrial   Development  Revenue  Bonds
(Spurlock Adhesives,  Inc. Project), Series 1997 A (the "Bonds") for the purpose
of financing a portion of the Project Costs (as hereinafter defined); and

                  WHEREAS, said project (the "Project") shall consist of (A) (1)
the acquisition of a certain parcel of land comprising approximately 16.37 acres
constituting Lot #3 located in the Moreau Industrial Park in the Town of Moreau,
Saratoga County, New York (the "Land"),  (2) the construction on the Land of two
(2)  buildings  approximately  10,000  square  feet  each  in  size  and one (1)
approximately 800 square foot building for use in the manufacturing of synthetic
organic  chemicals and related  


<PAGE>

functions (collectively the "Facility") and (3) the acquisition and installation
therein of certain  machinery and equipment (the  "Equipment"  and together with
the Land and the Facility,  the "Project Facility"),  and (B) the financing of a
portion of the costs of the foregoing; and

                  WHEREAS,   contemporaneously   with  the   execution   of  the
Indenture, the Issuer and Spurlock Adhesives,  Inc. (the "Company") have entered
into  an  installment   sale  agreement  dated  as  of  October  1,  1997,  (the
"Installment  Sale Agreement")  specifying the terms and conditions  pursuant to
which the Issuer agrees to acquire,  construct and install the Project  Facility
and to sell the Project Facility to the Company; and

                  WHEREAS,  the  Issuer,  by the terms of the  Indenture  and as
security for the Bonds, has granted the Trustee a first security interest in the
Trust Revenues (as hereinafter defined); and

                  WHEREAS,  to  secure  the  Bonds,  pursuant  to a  pledge  and
assignment  dated as of  October  1, 1997 (the  "Assignment"),  the  Issuer  has
assigned to the Trustee  certain of the Issuer's  rights and remedies  under the
Installment Sale Agreement,  including the right to receive installment purchase
payments and other amounts payable thereunder,  but not including the Unassigned
Rights (as hereinafter defined); and

                  WHEREAS,  as security  for the Bonds,  the Company has entered
into a letter of credit reimbursement agreement dated as of October 1, 1997 (the
"Reimbursement  Agreement")  with KeyBank  National  Association  (the  "Bank"),
pursuant  to which the Bank has issued in favor of the  Trustee  an  irrevocable
transferable  direct-pay  letter of credit (the "Letter of Credit") in an amount
equal to the principal  amount of the Bonds  Outstanding and one hundred and ten
(110) days'  interest  thereon at a maximum rate of ten percent (10%) per annum,
under which the Bank is obligated to pay to the Trustee,  upon presentation of a
sight draft and required accompanying documentation, the amount necessary to pay
the principal of and interest on the Bonds then due and payable;

                  WHEREAS, the Trustee has the power to enter into the Indenture
and to execute the trusts hereby  created and in evidence  thereof has joined in
the execution hereof; and

                  WHEREAS,  the  execution and delivery of the Indenture and the
issuance of the Bonds under the Act as herein provided have been in all respects
approved and duly and validly authorized by the Resolution; and

                  WHEREAS, the providing of the Project Facility is for a proper
purpose,  to wit, to promote the job  opportunities,  the health and the general
prosperity and economic  welfare of the inhabitants of the State pursuant to the
provisions of the Act; and

                  WHEREAS,  the Issuer deems it  appropriate  and necessary that
the proceeds of the sale of the Bonds shall be deposited  with the Trustee,  and
that, upon satisfaction of the requirements set forth herein,  the Trustee shall
disburse such proceeds to pay the Project Costs; and

                  WHEREAS,  the Bonds shall be payable  solely from the Revenues
(as  hereinafter  defined),  which  include,  without  limitation,   installment
purchase payments made by the Company under the Installment Sale Agreement; and

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<PAGE>

                  WHEREAS, the Bonds and the Certificate of Authentication to be
endorsed thereon are to be in  substantially  the following form, with necessary
and appropriate variations, omissions and insertions as permitted or required by
the Indenture:



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<PAGE>


REGISTERED                                                     CUSIP NO.:
NO.  ________________                                          803484 BT 0


                COUNTY OF SARATOGA INDUSTRIAL DEVLEOPMENT AGENCY
         MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT REVENUE BONDS,
                (SPURLOCK ADHESIVES, INC. PROJECT), SERIES 1997 A

                MATURITY DATE                            DATED AS OF:

                April 1, 2008                            October 10, 1997

REGISTERED OWNER:_________________________________________________________

PRINCIPAL AMOUNT:____________________________________________________ DOLLARS

          The County of Saratoga Industrial Development Agency (the "Issuer"), a
public benefit corporation of the State of New York, for value received,  hereby
promises  to pay (but  only out of the  sources  hereinafter  mentioned)  to the
registered owner hereof, or registered  assigns,  on the Maturity Date set forth
above,  unless  this Bond shall have been called for  redemption  in whole or in
part and payment of the  redemption  price shall have been duly made or provided
for, upon  surrender  hereof,  the principal sum set forth above and to pay (but
only out of the sources  hereinafter  mentioned) to the registered owner hereof,
interest  thereon  from the date to which  interest has accrued and been paid or
duly provided  for, or, if prior to the first  Interest  Payment Date,  from the
date of the original issuance of the Bonds,  until payment of said principal sum
has been made or provided  for,  initially  at the Weekly  Rate (as  hereinafter
defined)  determined from time to time and payable on the dates set forth herein
and in the Indenture referred to below,  commencing on the Interest Payment Date
in January, 1998, and interest on overdue principal, and to the extent permitted
by law, on overdue interest, as provided in the Indenture.

          Principal and interest shall be paid in coin or currency of the United
States of America which, at the time of payment, is legal tender for the payment
of public and private debts.  Interest so payable,  and punctually  paid or duly
provided  for,  on any  Interest  Payment  Date will,  except as provided in the
Indenture,  be paid to the person in whose name this Bond is  registered  at the
close of business on the Regular Record Date (as  hereinafter  defined) for such
interest.  Any such interest not so  punctually  paid or duly provided for shall
forthwith  cease to be payable to the  registered  owner on such Regular  Record
Date, and may be paid to the person in whose name this Bond is registered at the
close of  business on a Special  Record  Date for the payment of such  defaulted
interest to be fixed by the Trustee (as hereinafter defined), or may be paid, at
any  time  in any  other  lawful  manner,  all as  more  fully  provided  in the
Indenture.

          The  principal or  redemption  price of this Bond shall be paid at the
principal corporate trust office of Star Bank, N.A., Cincinnati,  Ohio or at the
duly  designated  office of any duly  appointed  alternate or  successor  Paying
Agent.  The  interest  on this  Bond  shall be  payable  by check  mailed to the
registered  owner of this Bond at such owner's address as it appears on the Bond
Register of the Bond  Registrar;  provided that at the request of the registered
owner of at least $1,000,000 in aggregate principal amount of Bonds, interest on
such Bonds shall be payable by wire transfer in immediately  available  funds to
the bank account number of such owner within the United States  appearing on the


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<PAGE>

Bond Register;  and provided  further that interest payable at maturity shall be
paid only upon presentation and surrender of this Bond. Notwithstanding anything
herein to the contrary, when this Bond is registered in the name of a Depository
(as hereinafter  defined) or its nominee,  the principal and redemption price of
and  interest  on this  Bond  shall  be  payable  in next day or  federal  funds
delivered or transmitted to the Depository or its nominee.

          THE BONDS ARE  LIMITED,  SPECIAL  OBLIGATIONS  OF THE  ISSUER  PAYABLE
SOLELY  FROM  PAYMENTS  MADE BY THE  COMPANY  UNDER THE  AGREEMENT,  MONEYS  AND
SECURITIES HELD BY THE TRUSTEE UNDER THE INDENTURE AND THE SECURITY  PROVIDED BY
THE LETTER OF CREDIT AND BY THE LIEN OF THE ASSIGNMENT ON THE PROJECT FACILITY.

          This Bond is one of a duly authorized series of the County of Saratoga
Industrial  Development Agency designated  "Multi-Mode  Variable Rate Industrial
Development Revenue Bonds,  (Spurlock Adhesives,  Inc. Project),  Series 1997 A"
(the "Bonds"),  issuable under the trust indenture,  dated as of October 1, 1997
(the  "Indenture"),  by and between the Issuer and the Trustee,  aggregating  in
principal amount $6,000,000 and issued for the purpose of assisting in providing
financing for a project (the "Project") consisting of (A) (1) the acquisition of
a certain parcel of land comprising  approximately  16.37 acres constituting Lot
#3 located in the Moreau Industrial Park in the Town of Moreau, Saratoga County,
New York (the  "Land"),  (2) the  construction  on the Land of two (2) buildings
approximately  10,000  square  feet each in size and one (1)  approximately  800
square foot building for use in the manufacturing of synthetic organic chemicals
and related functions  (collectively the "Facility") and (3) the acquisition and
installation  therein of certain  machinery and equipment (the  "Equipment"  and
together with the Land and the Facility,  the "Project  Facility"),  and (B) the
financing of a portion of the costs of the foregoing.

          The Project  Facility will be sold on an installment sale basis by the
Issuer to Spurlock  Adhesives,  Inc., a Virginia  corporation  (the  "Company"),
pursuant to the terms of an installment  sale  agreement  dated as of October 1,
1997 (the "Agreement").

          The Bonds are issued under and are equally and ratably  secured by the
Indenture.  The Indenture  grants the Trustee a first  security  interest in the
Revenues (as defined in the Indenture).

         Security  for the  repayment  of the Bonds is provided by the Letter of
Credit, as described below.

         As  additional  security for the payment of principal of,  premium,  if
any,  and  interest  on the Bonds,  the Issuer has  assigned  to the Trustee the
Issuer's rights and remedies under the Agreement (except the Unassigned Issuer's
Rights, as therein defined), including the right to receive installment purchase
payments  and  other  amounts  payable  thereunder  pursuant  to  a  pledge  and
assignment dated as of October 1, 1997 (the "Assignment").

         If an  Event  of  Default  as  defined  in the  Indenture  occurs,  the
principal  of all Bonds issued  under the  Indenture  may become due and payable
upon the  conditions  and in the  manner  and with the  effect  provided  in the
Indenture.

         Reference is made to the Indenture for a more complete  description  of
the Project, the provisions, among others, with respect to the nature and extent
of the security for the Bonds, the rights, duties and obligations of the Issuer,
the Trustee and the  Bondholders,  and the terms and  conditions  upon 


                                       5
<PAGE>

which the Bonds are  issued and  secured.  All terms used  herein  with  initial
capitalization  where the rules of grammar or contest do not  otherwise  require
shall have the meanings as set forth in the Indenture.  Each Bondholder assents,
by its acceptance hereof, to all of the provisions of the Indenture.

         The  Company is  required  by the  Agreement  to make  payments  to the
Trustee in the amounts and at the times  necessary  to pay the  principal of and
interest and any premium (the "Bond Service  Charges") on the Bonds.  To provide
for the payment of the Bond  Service  Charges on the Bonds,  the Issuer,  in the
Indenture,  has  absolutely and  irrevocably  assigned to the Trustee any right,
title and interest in and to the Credit  Facility  Account,  Redemption  Premium
Account,  Remarketing  Proceeds  Account and the Defeasance  Account of the Bond
Fund and all moneys and investments  therein  (including  without limitation the
proceeds  of the  Letter of  Credit  (as  hereinafter  defined))  and  granted a
security  interest in all moneys and  investments  in the  Project  Fund and the
Insurance   and   Condemnation   Fund   and  the   Revenues   (other   than  the
above-referenced  accounts of the Bond Fund, all moneys and investments  therein
and the proceeds of the Credit Facility).

         The Bond  Service  Charges on the Bonds are payable  solely from moneys
held by the Trustee under the Indenture for such purpose, including moneys drawn
by the Trustee under the Letter of Credit referred to below or such other credit
facility, if any, as may then be held by the Trustee under the Indenture for the
benefit  of the  Bondholders  (the  Letter of Credit  or any such  other  credit
facility is hereinafter referred to as the "Credit Facility").


                         DETERMINATION OF INTEREST RATE

         This Bond initially shall bear interest at the Weekly Rate (hereinafter
described),  which rate shall continue in effect until  converted to a different
interest rate or rates  determined  for the  "Interest  Rate Mode" (as described
more  fully in Section  2.02 of the  Indenture)  selected  by the  Company.  The
"Interest Rate Modes" which may be selected are as follows: (i) a Weekly Rate in
which the interest rate is  determined on the 7th day preceding  conversion to a
Weekly Rate and on each  Tuesday  thereafter  or, if not a Business  Day, on the
next succeeding Business Day; (ii) a Semi-Annual Rate in which the interest rate
is determined on the tenth Business Day preceding each  Semi-Annual Rate Period;
(iii) a  Long-Term  Rate for a period of one year or more  ending on an Interest
Payment Date  selected by the Company,  in which the interest rate is determined
not later than the 15th  Business Day  preceding  the 1st day of such  Long-Term
Rate  Period  and (iv) a  Taxable  Weekly  Rate in which  the  interest  rate is
determined on the 7th day preceding conversion to the Taxable Weekly Rate and on
each  Wednesday  thereafter  or, if not a Business  Day, on the next  succeeding
Business  Day. The Company may from time to time convert the Interest  Rate Mode
for the Bonds to another  Interest Rate Mode in accordance with the terms of the
Indenture.

         Interest on this Bond,  at the interest rate or rates for each Interest
Rate Mode,  is payable (a) while the Bonds bear  interest at the Weekly Rate, on
the first  Wednesday of each  January,  April,  July and October,  (b) while the
Bonds bear interest at the Taxable  Weekly Rate,  on the first  Thursday of each
January,  April, July and October,  and (c) while the Bonds bear interest at the
Semi-Annual  Rate or the  Long-Term  Rate, on October 1 and April 1 of each year
(each date on which  interest shall be paid being an "Interest  Payment  Date").
Interest  on this Bond  shall be  computed  on the basis of a year of 365 or 366
days, as appropriate,  for the actual number of days elapsed, while the Interest
Rate Mode is the Weekly Rate or the Taxable  Weekly Rate,  and on the basis of a
360-day year consisting of twelve 30-day months, while the Interest Rate Mode is
the Semi-Annual  Rate or the Long-Term Rate. The interest rate or rates for each
Interest Rate Mode for the Bonds shall be determined by the Remarketing Agent on
the 

                                       6
<PAGE>

dates and at such times as specified in Section  2.02 of the  Indenture.  If the
Remarketing  Agent fails to  determine  the  interest  rate in  accordance  with
Section  2.02 of the  Indenture,  the  interest  rate on this Bond  shall be the
interest  rate in effect for the previous  interest  rate period.  Each interest
rate determined by the  Remarketing  Agent shall be the minimum rate of interest
necessary,  in the judgment of the Remarketing  Agent, to enable the Remarketing
Agent to sell the Bonds at a price equal to the principal  amount thereof,  plus
accrued interest, if any. Notwithstanding the foregoing, the interest rate borne
by this Bond shall not exceed the lesser of (i) fifteen  percent (15%) per annum
or (ii) so long as any Bonds are  entitled to the benefit of a Credit  Facility,
the maximum interest rate specified in the Credit Facility.


                           LETTER OF CREDIT PROVISIONS

         The  Company for itself and on behalf of the Issuer has caused a Letter
of Credit issued by KeyBank National Association (the "Bank") to be delivered to
the Trustee (the "Letter of Credit").  The Trustee  shall be entitled  under the
Letter  of  Credit  to  draw  up to an  amount  equal  to the  principal  of the
outstanding  Bonds plus an amount  equal to 110 days'  accrued  interest  on the
outstanding  Bonds at a rate of ten percent  (10%) per annum to pay principal or
purchase  price (but not the  redemption  premium) of and  interest on the Bonds
(other than Bonds held pursuant to Section 3.05 of the Indenture or owned by the
Company) on or prior to October 17, 2002 or, under certain  circumstances,  such
earlier or later date as may be  permitted  by the Letter of Credit.  Subject to
the  provisions  of the  Indenture,  the Company  may,  but is not  required to,
provide  another Credit Facility upon the termination of the Letter of Credit or
the then current  Credit  Facility.  While the Bonds bear interest at the Weekly
Rate,  the  Taxable  Weekly  Rate or the  Semi-Annual  Rate,  the Bonds shall be
subject to  mandatory  tender for  purchase  upon any change in the then current
Credit  Facility  Issuer.  During any  Long-Term  Rate  Period,  the Company may
substitute any Qualifying  Credit Facility for the then current Letter or Credit
or other  Credit  Facility  and the Trustee  shall give  written  notice of such
substitute to the Registered Owner hereof.


                               REDEMPTION OF BONDS

         Whenever the Interest Rate Mode is the Weekly Rate,  the Taxable Weekly
Rate or the Semi-Annual Rate, this Bond shall be subject to optional redemption,
in whole on any date or in part on any Interest  Payment  Date,  at a redemption
price of 100% of the principal amount hereof. Whenever the Interest Rate Mode is
the Long-Term  Rate, this Bond shall be subject to optional  redemption:  at any
time  during  the then  current  Long-Term  Rate  Period  on or  after  the date
determined  pursuant  to Section  8.01(b)  of the  Indenture  at the  applicable
redemption price set forth in Section 8.01(b) of the Indenture.

         Prior to Conversion to the Taxable Weekly Rate and upon a Determination
of Taxability,  the Bonds are subject to mandatory  redemption in whole pursuant
to Section 8.01(d) of the Indenture.

         The Bonds are  subject to  redemption  prior to maturity in whole or in
part at any time at a redemption  price of par plus accrued interest in whole or
in part, to the extent excess moneys in the Project Fund are  transferred to the
Bond Fund established under the Indenture, or from proceeds of certain insurance
or eminent domain  proceeds  pursuant to the  extraordinary  redemption  without
premium  provisions set forth in the Indenture,  in each case, from moneys drawn
on the  Letter  of  Credit  or  alternatively,  from  other  funds  constituting
Available Moneys.

                                       7
<PAGE>

         Any notice of redemption,  identifying the Bonds or portions thereof to
be redeemed,  shall be given by first class mail to the registered owner of each
Bond to be  redeemed  in  whole  or in part at the  address  shown  on the  Bond
Register of the Bond  Registrar not more than 60 days and not fewer than 30 days
prior to the redemption date. If the source of funds for optional  redemption is
to be derived from the proceeds of refunding bonds,  optional  redemption may be
conditioned  upon the  deposit  of  proceeds  of such  refunding  bonds with the
Trustee before the date fixed for  redemption  and such optional  redemption and
notice  thereof shall be of no effect  unless such moneys are so deposited.  All
Bonds so called for  redemption  will cease to bear  interest  on the  specified
redemption  date,  provided funds for their  redemption and any accrued interest
payable on the redemption  date are on deposit at the principal place of payment
at that time.

         Notice of any  redemption  hereunder with respect to Bonds held under a
book entry  system  shall be given by the  Registrar  or the Trustee only to the
Depository, or its nominee, as the holder of such Bonds. Selection of book entry
interests  in the Bonds  called  for  redemption  is the  responsibility  of the
Depository and any failure of any Direct  Participant,  Indirect  Participant or
Beneficial  Owner to receive  such  notice and its  contents  or effect will not
affect the validity of such notice or any proceedings for the redemption of such
Bonds.

         Except as otherwise  provided herein, if less than all the Bonds are to
be redeemed,  the particular Bonds to be called for redemption shall be selected
by any method  determined  by the Trustee to be fair and  reasonable;  provided,
however, that in connection with any redemption of Bonds the Trustee shall first
select for redemption any Bonds held by the Company or held by or pledged to the
Bank pursuant to Section 3.05 of the Indenture.


                                PURCHASE OF BONDS

         This Bond shall be subject to  mandatory  purchase  in whole (i) on the
effective  date of the  Conversion  of the Interest  Rate Mode for the Bonds and
(ii) if the Bonds are then  bearing  interest at the Weekly,  Taxable  Weekly or
Semi-Annual  Rate,  on the Interest  Payment Date  immediately  preceding (by at
least 15 calendar  days) the date of the  termination of the then current Credit
Facility  (whether by  expiration  according to its terms or upon delivery of an
Alternate  Credit  Facility),  if any,  unless the then current Credit  Facility
Issuer has provided an Alternate  Credit  Facility in accordance with Article VI
of the  Indenture,  at a purchase  price equal to 100% of the  principal  amount
hereof plus accrued interest, if any.

         In addition, this Bond is subject to mandatory purchase in whole if the
Bonds are (1) then  bearing  interest at the  Long-Term  Rate and (2) subject to
optional redemption, upon the delivering of an Alternate Credit Facility, unless
such Alternate Credit Facility is a Qualifying  Alternate Credit Facility,  at a
purchase  price  equal to the  principal  amount  thereof,  plus the  redemption
premium,  if any,  that  would be  payable  if the Bonds  were  redeemed  on the
Purchase Date, plus accrued interest, if any, thereon to the Purchase Date.

         If the  Interest  Rate Mode is the Weekly  Rate or the  Taxable  Weekly
Rate, this Bond shall be purchased at the option of the registered  owner hereof
upon demand by such  registered  owner,  on any Business Day at a purchase price
equal to the principal  amount  hereof,  plus accrued  interest,  if any, to the
Purchase  Date,  upon written  notice to the Tender Agent on or before 4:00 p.m.
(Cincinnati,  Ohio time) on a Business  Day not later than the 7th  calendar day
prior to the Purchase Date. If the Interest Rate Mode is the  Semi-Annual  Rate,
this Bond shall be purchased on the demand of the  


                                       8
<PAGE>

registered owner hereof,  on any Interest Payment Date at a purchase price equal
to the principal  amount  hereof,  upon written  notice to the Tender Agent on a
Business Day not later than the 8th Business Day prior to such Purchase Date. If
the  Interest  Rate Mode is the  Long-Term  Rate,  this Bond shall be subject to
mandatory purchase only as set forth in the immediately preceding paragraphs.

         Any notice in connection with a demand for purchase of this Bond as set
forth in the  preceding  paragraphs  hereof shall be given at the address of the
Tender  Agent  designated  to the  Trustee  and shall (A) state the  number  and
principal amount (or portion thereof in an authorized denomination) of this Bond
to be  purchased;  (B)  state the  Purchase  Date on which  this  Bond  shall be
purchased  and (C)  irrevocably  request such purchase and agree to deliver this
Bond to the  Tender  Agent  on the  Purchase  Date.  ANY  SUCH  NOTICE  SHALL BE
IRREVOCABLE  WITH RESPECT TO THE PURCHASE FOR WHICH SUCH DIRECTION WAS DELIVERED
AND, UNTIL SURRENDERED TO THE TENDER AGENT, THIS BOND OR ANY PORTION HEREOF WITH
RESPECT TO WHICH SUCH DIRECTION WAS DELIVERED  SHALL NOT BE  TRANSFERABLE.  This
Bond must be delivered  (together  with an  appropriate  instrument  of transfer
executed in blank in form  satisfactory  to the Tender  Agent) at the  principal
office of the Tender Agent at or prior to 12:00 noon (Cincinnati,  Ohio time) on
the date  specified  in the  aforesaid  notice in order for the owner  hereof to
receive  payment in same-day  funds of the purchase  price due on such  Purchase
Date. NO REGISTERED OWNER SHALL BE ENTITLED TO PAYMENT OF THE PURCHASE PRICE DUE
ON SUCH  PURCHASE  DATE EXCEPT UPON  SURRENDER OF THIS BOND AS SET FORTH HEREIN.
Notwithstanding  the  foregoing,  this Bond  shall not be  purchased  during the
existence of a Default under Section 10.01 (a), (b) or (f) of the Indenture.  No
purchase of Bonds  pursuant to Section 3.01 of the Indenture  shall be deemed to
be a payment or  redemption  of such  Bonds or any  portion  thereof  within the
meaning of the Indenture.

         BY ACCEPTANCE  OF THIS BOND,  THE  REGISTERED  OWNER HEREOF AGREES THAT
THIS BOND WILL BE PURCHASED,  WHETHER OR NOT SURRENDERED,  (A) ON THE APPLICABLE
PURCHASE  DATE IN CONNECTION  WITH THE  CONVERSION OF THE INTEREST RATE MODE FOR
THE BONDS OR ANY EXPIRATION OF THE CREDIT  FACILITY AS DESCRIBED  ABOVE,  OR ANY
REPLACEMENT OF THE THEN CURRENT CREDIT FACILITY ISSUER,  IF THE BONDS ARE IN THE
WEEKLY RATE MODE OR THE SEMI-ANNUAL  RATE MODE AS DESCRIBED ABOVE, OR (B) ON ANY
PURCHASE DATE  SPECIFIED BY THE  REGISTERED  OWNER HEREOF IN THE EXERCISE OF THE
RIGHT TO DEMAND  PURCHASE OF THIS BOND AS DESCRIBED  ABOVE.  IN SUCH EVENT,  THE
REGISTERED  OWNER OF THIS BOND  SHALL NOT BE  ENTITLED  TO RECEIVE  ANY  FURTHER
INTEREST  HEREON,  SHALL HAVE NO FURTHER RIGHTS UNDER THIS BOND OR THE INDENTURE
EXCEPT TO PAYMENT OF THE PURCHASE PRICE HELD THEREFOR, AND SHALL THEREAFTER HOLD
THIS BOND AS AGENT FOR THE TENDER AGENT.


                               GENERAL PROVISIONS

         The initial  Remarketing  Agent under the Indenture is KeyBank National
Association  and the initial Tender Agent under the Indenture is Star Bank, N.A.
The  Remarketing  Agent  and the  Tender  Agent  may be  changed  at any time in
accordance with the Indenture.

         The  Bonds  are  issuable  only  as  fully   registered  bonds  in  the
denominations  of  $100,000  and in any  integral  multiple  of $5,000 in excess
thereof and shall be originally issued only to a Depository to be held in a book
entry  system  and:  (i)  the  Bonds  shall  be  registered  in the  name of the
Depository or its nominee, as Bondholder,  and immobilized in the custody of the
Depository; (ii) unless 

                                       9
<PAGE>

otherwise requested by the Depository,  there shall be a single Bond certificate
for each  Bond  maturity;  and (iii) the  Bonds  shall  not be  transferable  or
exchangeable,  except for transfer to another Depository or another nominee of a
Depository,  without  further action by the Issuer.  While the Bonds are in book
entry  only  form,  Bonds in the form of  physical  certificates  shall  only be
delivered to the Depository. If any Depository determines not to continue to act
as a Depository for the Bonds for use in a book entry system,  the Issuer at the
request  of  the  Company  may  attempt  to  have   established   a   securities
depository/book  entry system  relationship  with another  qualified  Depository
under the Indenture.  If the Issuer does not or is unable to do so, the Trustee,
after making provision for  notification to the Beneficial  Owners of book entry
interests by the then Depository,  shall permit withdrawal of the Bonds from the
Depository,  and authenticate and deliver Bond  certificates in fully registered
form (in  denominations  of $100,000 and in any  integral  multiple of $5,000 in
excess thereof) to the assignees of the Depository or its nominee.

         While a  Depository  is the  sole  holder  of the  Bonds,  delivery  or
notation of partial redemption or tender for purchase of Bonds shall be effected
in accordance with the provisions of the Letter of  Representations,  as defined
in the Indenture.

         In addition to the words and terms defined  elsewhere in this Bond, the
following terms shall have the following meanings:

         "Beneficial  Owner" means with respect to the Bonds,  a Person owning a
Beneficial  Ownership Interest therein,  as evidenced to the satisfaction of the
Trustee.

         "Beneficial  Ownership  Interest" means the beneficial right to receive
payments and notices with respect to the Bonds which are held by the  Depository
under a book entry system.

         "book entry form" or "book entry  system"  means,  with  respect to the
Bonds, a form or system, as applicable, under which (i) the Beneficial Ownership
Interests  may be  transferred  only through a book entry and (ii) physical Bond
certificates  in  fully  registered  form are  registered  only in the name of a
Depository or its nominee as  Bondholder,  with the physical  Bond  certificates
"immobilized" in the custody of the Depository. The book entry system maintained
by and  the  responsibility  of the  Depository  and  not  maintained  by or the
responsibility  of the Issuer or the Trustee is the record that identifies,  and
records the transfer of the interests of, the owners of book entry  interests in
the Bonds.

         "Depository" means any securities  depository that is a clearing agency
under federal law operating and maintaining, with its participants or otherwise,
a book entry system to record ownership of book entry interests in Bonds, and to
effect  transfers  of book entry  interests  in Bonds,  and  includes  and means
initially The Depository  Trust Company (a limited purpose trust  company),  New
York, New York.

         This Bond is  transferable  by the registered  owner hereof or his duly
authorized  attorney at the principal corporate trust office of Star Bank, N.A.,
as Bond Registrar, in Cincinnati, Ohio, upon surrender of this Bond, accompanied
by a duly executed instrument of transfer in form and with guaranty of signature
satisfactory  to the Bond Registrar,  subject to such reasonable  regulations as
the Company, the Issuer or the Bond Registrar may prescribe,  PROVIDED, THAT, IF
MONEYS FOR THE  MANDATORY  PURCHASE  OF THIS BOND HAVE BEEN  DEPOSITED  WITH THE
TRUSTEE UNDER THE INDENTURE, THIS BOND SHALL NOT BE TRANSFERABLE TO ANYONE UNTIL
DELIVERED TO THE TENDER AGENT.  Upon any such  transfer,  a new Bond or Bonds in
the same aggregate principal amount will be issued to the transferee.  Except as
set forth in this Bond and as 


                                       10
<PAGE>

otherwise  provided  in the  Indenture,  the  person in whose  name this Bond is
registered  shall be deemed the owner hereof for all  purposes,  and the Issuer,
the Company,  any Paying  Agents,  the Bond  Registrar,  the Tender  Agent,  the
Remarketing  Agent and the  Trustee  shall not be  affected by any notice to the
contrary.

         The  Indenture  permits  certain   amendments  or  supplements  to  the
Agreement  and the  Indenture  not  prejudicial  to the  Bondholders  to be made
without the consent of or notice to the  Bondholders,  and other  amendments  or
supplements  thereto to be made with the consent of the  Bondholders of not less
than a majority in aggregate principal amount of the Bonds then outstanding.

         The Bondholders have only those remedies provided in the Indenture.

         NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OR REDEMPTION
PRICE OF OR THE  INTEREST ON THIS BOND OR FOR ANY CLAIM BASED  HEREON OR THEREON
OR ON THE  INDENTURE  AGAINST  ANY  PAST,  PRESENT  OR FUTURE  MEMBER,  OFFICER,
EMPLOYEE OR AGENT  (OTHER THAN THE  COMPANY),  AS SUCH,  OF THE ISSUER OR OF ANY
PREDECESSOR OR SUCCESSOR  CORPORTION,  EITHER DIRECTLY OR THROUGH THE ISSUER, OR
OTHERWISE, 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, EXPRESSLY WAIVED AND RELEASED.

         This Bond shall not be  entitled to any  security or benefit  under the
Indenture or be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been signed.

         This  Bond  is not  valid  unless  the  Certificate  of  Authentication
endorsed hereon is duly executed.

         THE  BONDS  ARE NOT AND SHALL NOT BE A DEBT OF THE STATE OF NEW YORK OR
OF SARATOGA  COUNTY,  NEW YORK,  AND NEITHER THE STATE OF NEW YORK NOR  SARATOGA
COUNTY,  NEW YORK  SHALL BE  LIABLE  THEREON.  THE  BONDS DO NOT GIVE  RISE TO A
PECUNIARY LIABILITY OR CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE
STATE OF NEW YORK OR OF SARATOGA COUNTY, NEW YORK.

         It is  certified  and recited that there have been  performed  and have
happened in regular and due form,  as required by law,  all acts and  conditions
necessary  to be  done or  performed  by the  Issuer  or to  have  happened  (i)
precedent to and in the issuing of the Bonds in order to make them legal,  valid
and  binding  obligations  of  the  Issuer,  and  (ii)  precedent  to and in the
execution and delivery of the Indenture and the Agreement;  that payment in full
for the Bonds has been received; and that the Bonds do not exceed or violate any
constitutional or statutory limitation.

                                       11
<PAGE>

         IN WITNESS WHEREOF,  County of Saratoga  Industrial  Development Agency
has caused this Bond to be duly  executed in its name by the manual or facsimile
signature  of its  Chairman  or  Vice  Chairman  and  its  corporate  seal to be
impressed or reproduced hereon, attested by the manual or facsimile signature of
its Secretary or Assistant Secretary, all as of the date identified above.


                                      COUNTY OF SARATOGA INDUSTRIAL
                                      DEVELOPMENT AGENCY


                                      By:____________________________________
                                                     , (Vice) Chairman


(S E A L)


ATTEST:


_______________________________
(Assistant) Secretary



                                       12
<PAGE>



                          Certificate of Authentication

   This Bond is one of the Bonds described in the within mentioned Indenture.


                                       ________________________________________
                                       as Trustee

                                       By:_____________________________________
                                                Authorized Signer

Date of Registration and Authentication:____________________________

Registrable at:                        Payable by:

_____________________,                 ____________________________
__________, _________                  _____________, _____________


                              [Form of Assignment]

                  For value received,  the undersigned hereby sells, assigns and
transfers  unto  ______________________________________  the within bond and all
rights   thereunder,   and   hereby   irrevocably   constitutes   and   appoints
_______________________________________,  attorney to transfer  the said bond on
the Bond Register, with full power of substitution in the premises.

Dated:                          __________________________________
Social Security Number or
Employer Identification
Number of Transferee:           __________________________________
Signature guaranteed:           __________________________________

NOTICE:           The assignor's  signature to this  Assignment  must correspond
                  with the name as it appears on the face of the within  bond in
                  every particular without alteration, enlargement or any change
                  whatsoever.



                                       13
<PAGE>



         WHEREAS,  all things necessary to make the Bonds, when authenticated by
the  Trustee and issued as in the  Indenture  provided,  the valid,  binding and
legal special obligations of the Issuer according to the import thereof,  and to
constitute the Indenture a valid pledge of and Lien on the Trust Revenues herein
pledged  to the  payment  of the Bonds,  have been done and  performed,  and the
creation,  execution  and  delivery  of the  Indenture,  and the  execution  and
issuance of the Bonds,  subject to the terms  hereof,  have in all respects been
duly authorized;

         NOW,  THEREFORE,  THIS  INDENTURE  WITNESSETH,  that to  secure  in the
following order of priority,  first, the payment of Bond Service Charges on, and
the purchase price of, the Bonds according to their true intent and meaning,  to
secure the  performance  and  observance  of all of the  covenants,  agreements,
obligations  and  conditions  contained  therein and herein,  and to declare the
terms and conditions upon and subject to which the Bonds are and are intended to
be issued,  held,  secured and enforced and, second, the payment to the Bank and
performance by the Company of its  reimbursement and other obligations under the
Reimbursement Agreement, and in consideration of the premises and the acceptance
by the Trustee of the trusts  created  herein and of the purchase and acceptance
of the Bonds by the Bondholders  and for other good and valuable  consideration,
the receipt of which is acknowledged, the Issuer has executed and delivered this
Indenture and (a) absolutely and  irrevocably  assigns hereby to the Trustee and
to its  successors in trust,  and its and their  assigns,  any right,  title and
interest  of the  Issuer  in and to the  Letter of  Credit  Account,  Redemption
Premium Account, Remarketing Proceeds Account and Defeasance Account of the Bond
Fund and all moneys and investments  therein  (including  without limitation the
proceeds  of the  Credit  Facility)  and (b)  grants to the  Trustee  and to its
successors in trust, and its and their assigns,  a security  interest in (i) the
Project Fund, the Insurance and Condemnation Fund and all moneys and investments
therein and (ii) the Revenues (other than the  above-referenced  accounts of the
Bond Fund, all moneys and investments  therein and the proceeds of the Letter of
Credit) (collectively, the "Trust Estate").

         TO HAVE AND TO HOLD unto the Trustee and its  successors  in that trust
and its and their assigns forever;

         BUT IN TRUST, NEVERTHELESS, and subject to the provisions hereof,

                  (a)      except as provided  otherwise herein,  first, for the
         equal and proportionate benefit, security and protection of all present
         and future  Bondholders  of the Bonds  issued or to be issued under and
         secured by this Indenture,

                  (b)      for  the  enforcement  of the  payment  of  the  Bond
         Service  Charges  on the Bonds,  when  payable,  according  to the true
         intent and meaning thereof and of this Indenture, and

                  (c)      to  secure  the  performance  and  observance  of and
         compliance  with the  covenants,  agreements,  obligations,  terms  and
         conditions of this Indenture,

in  each  case,  without  preference,  priority  or  distinction,  as to lien or
otherwise, of any one Bond over any other by reason of designation, number, date
of the Bonds or of authorization,  issuance,  sale,  execution,  authentication,
delivery  or maturity  thereof,  or  otherwise,  so that each Bond and all Bonds
shall have the same right,  lien and privilege under this Indenture and shall be
secured equally and ratably hereby, it being intended that the lien and security
of this Indenture shall take effect from the date hereof,  without regard to the
date of the actual issue,  sale or disposition of the Bonds, as though upon that
date all of the


                                       14
<PAGE>

Bonds were actually  issued,  sold and delivered to purchasers  for value;  and,
second,  for the benefit and security of the Bank with respect to the  Company's
obligations under the Reimbursement Agreement;  provided, however, that the Bank
shall have no right to take any action, other than provided in Article X hereof,
to enforce its rights or interest  in the Trust  Estate  prior to the payment of
all Bond Service Charges on the Bonds; and provided, further, that

                  (i)      if the principal of the Bonds and the interest due or
         to become due thereon  together with any premium required by redemption
         of any of the Bonds prior to maturity  shall be well and truly paid, at
         the times and in the  manner to which  reference  is made in the Bonds,
         according to the true intent and meaning  thereof,  or the  outstanding
         Bonds shall have been paid and discharged in accordance with Article XV
         hereof, and

                  (ii)     if  all of the  covenants,  agreements,  obligations,
         terms and conditions of the Issuer under this Indenture shall have been
         kept,  performed  and  observed  and there  shall have been paid to the
         Trustee, the Registrar, the Paying Agents and the Authenticating Agents
         all sums of money due or to become due to them in  accordance  with the
         terms and provisions hereof, and

                  (iii)    if the  Company  shall pay and perform or cause to be
         paid and performed  all of their  reimbursement  and other  obligations
         under the Reimbursement  Agreement,  then, upon such final payments and
         subject to the provisions of Article XV hereof,

this  Indenture and the rights  assigned and security  interest  granted  hereby
shall cease,  determine and be void,  except as provided in Section 15.03 hereof
with  respect to the  survival of certain  provisions  hereof and except for the
interests absolutely assigned in the Credit Facility Account, Redemption Premium
Account,  Remarketing Proceeds Account and Defeasance Account;  otherwise,  this
Indenture shall be and remain in full force and effect.

         It is declared that all Bonds issued  hereunder and secured  hereby are
to be issued,  authenticated  and delivered,  and that all Revenues  assigned or
pledged hereby are to be dealt with and disposed of under,  upon and subject to,
the terms, conditions, stipulations, covenants, agreements, obligations, trusts,
uses and  purposes  provided  in this  Indenture.  The  Issuer  has  agreed  and
covenanted,  and agrees and  covenants  with the  Trustee  and with each and all
Bondholders, as follows:

                   (Balance of page intentionally left blank)


                                       15
<PAGE>



                                    ARTICLE I

                                   DEFINITIONS

                  In  this  Indenture  and  any  indenture  supplemental  hereto
(except as  otherwise  expressly  provided  for or unless the context  otherwise
requires)  the  singular  includes  the plural and the  masculine  includes  the
feminine.

                  In  addition,  each of the  following  terms  shall  have  the
meaning specified in this Article, unless the context otherwise requires:

                  "Act" means Title I of Article  18-A of the General  Municipal
Law of the State, as amended from time to time, together with Chapter 855 of the
Laws of 1971 of the State, as amended from time to time.

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

                  "Agreement" means the installment sale agreement,  dated as of
even date with this Indenture, between the Issuer and the Company, as amended or
supplemented from time to time.

                  "Alternate  Credit  Facility"  means any  direct pay letter of
credit or other credit  enhancement or support facility that has terms which are
the same in all material respects (except for the term and maximum interest rate
but  including  coverage  of accrued  interest  on the Bonds for 110 days if the
Bonds bear  interest at the Weekly  Rate or the  Taxable  Weekly Rate or for 195
days if the Bonds bear interest at the  Semi-Annual  Rate or the Long-Term Rate)
as the then current  Credit  Facility and (i) shall have a term of not less than
one year (except if the Long-Term Rate shall then be in effect, the term of such
Alternate Credit Facility shall not expire prior to (a) the first par redemption
date plus 15 days or (b) the first redemption date plus 15 days if the Alternate
Credit Facility covers the redemption premium),  (ii) shall be issued by a bank,
a trust company or other financial institution or credit provider, and (iii) the
Trustee shall have received the opinions required by Section 6.03.

                  "Assignment"  means the pledge and assignment dated as of even
date with this  Indenture  from the Issuer to the Trustee  pursuant to which the
Issuer has  assigned to the Trustee its rights under the  Agreement  (except the
Unassigned  Issuer's Rights),  as said pledge and assignment may be supplemented
or amended from time to time.

                  "Authenticating  Agent"  means  the  Trustee  and any agent so
designated in and appointed pursuant to Section 2.07.

                  "Authorized   Newspaper"   means  a   newspaper   in   English
customarily  published each Business Day and generally circulated in the Borough
of Manhattan, City and State of New York.

                  "Authorized Official" means an officer of the Issuer.



                                       16
<PAGE>

                  "Available  Moneys" means, with respect to any date, (a) funds
which (i) have been on deposit  in the  Redemption  Premium  Account of the Bond
Fund for a period of at least  ninety-five  (95)  consecutive days prior to such
date,  (ii) during and prior to which period no Event of Bankruptcy has occurred
and (iii) are  represented by cash or its equivalent as of such date; (b) moneys
drawn under the Letter of Credit and deposited directly into the Credit Facility
Account  of the  Bond  Fund;  (c)  the  proceeds  deposited  directly  into  the
Defeasance Account of the Bond Fund from the sale of refunding obligations other
than,  directly or indirectly,  to the Issuer, the Company,  any Guarantor,  any
Affiliate of the Company or of any Guarantor or any Insider of any of them;  (d)
proceeds  deposited  directly into the Remarketing  Proceeds Account of the Bond
Fund from the marketing or  remarketing  of Bonds to any  purchaser  other than,
directly or indirectly, the Company, the Issuer, any Guarantor, any Affiliate of
the Company or of any Guarantor or any Insider of any of them; (e) proceeds from
investment of the foregoing,  provided such proceeds are retained in the Account
in which they were earned; and (f) any other funds so long as, in the opinion of
nationally  recognized  counsel  experienced  in  bankruptcy  matters,  payments
therefrom will not constitute an avoidable preference under the Bankruptcy Code.

                  "Bank" means initially,  KeyBank National Association, and its
successors  and assigns in its capacity as issuer of the Letter of Credit and in
the  event an  Alternate  Credit  Facility  is  outstanding,  the  issuer of the
Alternate Credit Facility.

                  "Bank Documents" means the Letter of Credit, the Reimbursement
Agreement,  the  Mortgage,  the Pledge and Security  Agreement,  the  Collateral
Mortgage, the Security Agreement, the Guaranty, the Term Loan Note, the Building
Loan Agreement and any other document now or hereafter executed by the Issuer or
the Company or the  Guarantor  in favor of the Bank which  affects the rights of
the  Bank in or to the  Project,  in  whole or in  part,  or  which  secures  or
guarantees any sum due under any Bank Document.

                  "Bankruptcy Code" means Title 11 of the United States Code, as
it is amended from time to time.

                  "Beneficial  Owner" means, with respect to the Bonds, a Person
owning a Beneficial Ownership Interest therein, as evidenced to the satisfaction
of the Trustee.

                  "Beneficial  Ownership Interest" means the beneficial right to
receive  payments  and notices  with  respect to the Bonds which are held by the
Depository under a book entry system.

                  "Bond" or  "Bonds"  means the  County of  Saratoga  Industrial
Development Agency Multi-Mode Variable Rate Industrial Development Revenue Bonds
(Spurlock Adhesives, Inc. Project), Series 1997 A.

                  "Bond  Fund"  means  the  trust  fund so  designated  which is
established pursuant to Section 5.01.

                  "Bondholder"  or "holder  of Bonds" or "owner of Bonds"  means
the  registered  owner of any Bond other than the  registered  owner of any Bond
which has been  purchased  pursuant  to  Section  3.01 and not  surrendered  for
payment of the purchase price thereof.

                  "Bond Register" and "Bond Registrar" shall have the respective
meanings specified in Section 2.03.

                                       17
<PAGE>

                  "Bond  Service  Charges"  means,  during any time period,  the
principal,  interest and redemption premium, if any, and purchase price required
to be paid by the Company on behalf of the Issuer on the Bonds  during such time
period.

                  "Bond  Year"  means  the  annual   period   provided  for  the
computation of Excess Earnings under Section 148(f) of the Code.

                  "book entry form" or "book entry system"  means,  with respect
to the Bonds, a form or system,  as  applicable,  under which (i) the Beneficial
Ownership  Interests  may be  transferred  only  through  a book  entry and (ii)
physical Bond  certificates in fully  registered form are registered only in the
name of a  Depository  or its  nominee as  Bondholder,  with the  physical  Bond
certificates  "immobilized"  in the  custody of the  Depository.  The book entry
system maintained by and the responsibility of the Depository and not maintained
by or the  responsibility  of the  Issuer  or the  Trustee  is the  record  that
identifies,  and records the  transfer of the  interests  of, the owners of book
entry interests in the Bonds.

                  "Building  Loan  Agreement"  means the building loan agreement
dated as of even  date with this  Indenture,  by and  between  the  Issuer,  the
Company and the Bank, as amended or supplemented from time to time.

                  "Business  Day"  means  any day of the year  other  than (i) a
Saturday  or  Sunday,  (ii) any day on which  banks  located in the State or the
principal  corporate  trust  office of the  Trustee is located  are  required or
authorized by law to remain closed, or (iii) any day on which the New York Stock
Exchange is closed.

                  "Code"  means the Internal  Revenue Code of 1986,  as amended,
including,  when  appropriate,  the statutory  predecessor  of the Code, and all
applicable  regulations  (whether proposed,  temporary or final) under that Code
and the statutory predecessor of the Code, and any official rulings and judicial
determinations under the foregoing applicable to the Bonds.

                  "Collateral  Mortgage" means the collateral  mortgage dated as
of even date with  this  Indenture  from the  Company  in favor of the Bank,  as
amended or supplemented from time to time.

                  "Company"  means  Spurlock  Adhesives,  Inc.,  a  corporation,
organized and existing  under the laws of the State of Virginia,  and its lawful
successors and assigns, to the extent permitted by the Agreement.

                  "Condemnation"  means  the  taking of title to, or the use of,
Property under the exercise of the power of eminent  domain by any  Governmental
Authority.

                  "Conversion"  means  (a) any  conversion  from time to time in
accordance  with the terms of this Indenture of the Bonds from one Interest Rate
Mode to another Interest Rate Mode and (b) the end of any Long-Term Rate Period.

                  "Conversion Date" means the first date any Conversion  becomes
effective.

                  "Counsel"  means an  attorney-at-law  or law firm  (who may be
counsel for the Company), acceptable to the Issuer and Trustee.

                                       18
<PAGE>

                  "Credit  Facility" means the Letter of Credit or any Alternate
Credit Facility delivered to the Trustee pursuant to Article VI.

                  "Credit  Facility  Account"  means  the  account  of that name
established in the Bond Fund pursuant to Section 5.01.

                  "Credit  Facility  Issuer"  means the Bank with respect to the
Letter of Credit or the institution issuing any Alternate Credit Facility.

                  "Debt  Service  Payments"  means with  respect to any Interest
Payment Date and/or Purchase Date, (A) the interest payable on the Bonds on such
date,  plus (B) the principal,  if any,  payable on the Bonds on such date, plus
(C) the premium, if any, payable on the Bonds on such date.

                  "Defeasance  Account"  means the  Defeasance  Account  created
under Section 5.01 hereof.

                  "Default Rate" means the Prime Rate plus one percent (1.00%).

                  "Depository"  means  any  securities   depository  that  is  a
clearing  agency  under  federal  law  operating  and   maintaining,   with  its
participants or otherwise, a book entry system to record ownership of book entry
interests in Bonds,  and to effect transfers of book entry interests in Bonds in
book entry form, and includes and means  initially The Depository  Trust Company
(a limited purpose trust company), New York, New York.

                  "Designated  Representative"  means  the  person  at the  time
designated  pursuant to the Agreement to act on behalf of the Company by written
certificate furnished to the Trustee,  containing the specimen signature of that
person and signed on behalf of the Company by a duly  designated  representative
thereof.

                  "Determination  of  Taxability"  means,  with  respect  to the
Bonds, (i) the enactment of legislation or the adoption of final  regulations or
a final  decision,  ruling  or  technical  advice  by any  federal  judicial  or
administrative authority which has the effect of requiring interest on the Bonds
to be included in the gross  income of the  Bondholders  for federal  income tax
purposes (other than a Bondholder who is a "substantial  user" of the Project or
Prior Project or a "related person" as those terms are used in Section 147(a) of
the Code),  (ii) the receipt by the Trustee of a written  opinion of  nationally
recognized  bond counsel  selected by the Company and approved by the Trustee to
the effect that  interest  on the Bonds must be included in the gross  income of
the  Bondholders for federal income tax purposes (other than a Bondholder who is
a  "substantial  user" of the Project or Prior Project or a "related  person" as
those terms are used in Section 147(a) of the Code) or (iii) the delivery to the
Trustee of a written  statement signed by the Designated  Representative  to the
effect that (a) the Company  has  exceeded or will exceed the maximum  amount of
capital  expenditures  permitted under Section 144(a)(4) of the Code or (b) that
the  Company or another  "test-period  beneficiary"  (as said term is defined in
Section  144(a)(10)(D)  of the Code) has  exceeded  or will  exceed the  maximum
amount of  tax-exempt  obligations  permitted to be  outstanding  under  Section
144(a)(10)  of the Code;  provided  that no decision  by any court or  decision,
ruling or technical advice by any  administrative  authority shall be considered
final (a) unless the Bondholder involved in the proceeding or action giving rise
to such  decision,  ruling or  technical  advice (1) gives the  Company  and the
Trustee prompt notice of the commencement thereof and (2) offers the Company the
opportunity  to control the contest  thereof,  provided  the Company  shall

                                       19
<PAGE>

have agreed to bear all expenses in connection  therewith and to indemnify  that
Bondholder  against all liabilities in connection  therewith,  and (b) until the
expiration of all periods for judicial review or appeal.

                  "Direct  Participant"  means a  Participant  as defined in the
Letter of Representations.

                  "Eligible  Investments"  means (i)  Governmental  Obligations;
(ii)  obligations  issued or  guaranteed  by any state or political  subdivision
thereof rated A or higher by Moody's and by S&P; (iii) open market commercial or
finance paper of any  corporation  having a net worth in excess of  $100,000,000
and which is rated either P-l or A-l or an  equivalent  by Moody's and S&P; (iv)
bankers'  acceptances drawn on and accepted by commercial banks; (v) investments
due  within  12  months in  certificates  of  deposit  issued  by,  or  bankers'
acceptances of, the Trustee,  or of banks or trust companies organized under the
laws of the United  States of America  or any state  thereof,  which must have a
reported  capital and surplus of at least  $25,000,000  in dollars of the United
States of America;  (vi) bank  repurchase  agreements,  including the Trustee's,
fully secured by obligations of the type described in (i) above;  (vii) variable
rate  demand  securities  redeemable  within 7 days or able to be  tendered  for
remarketing or purchase upon no more than 7 days' notice and secured by a credit
facility issued by a financial institution,  which financial institution (or its
corporate  parent) maintains a long term debt rating assigned by Moody's and S&P
which is not lower  than the third  highest  long  term debt  category  (without
regard to numerical or other  modifiers  assigned within the category) by either
Rating Service,  or by both Rating  Services,  if rated by both Rating Services;
and (viii)  shares of any so-called  "money  market mutual fund",  including any
"money market mutual fund" which the Trustee or any of its  affiliates  operates
or manages,  which invests solely in obligations  described in items (i) through
(vii) above;  and further  provided  that any such  investment or deposit is not
prohibited by law.

                  "Event of  Bankruptcy"  means  the  filing  of a  petition  in
bankruptcy (or other commencement of a bankruptcy or similar  proceedings) by or
against the Issuer, the Company, any Guarantor,  any Affiliate of the Company or
of any Guarantor or any Insider of any of them as debtor,  under any  applicable
bankruptcy, reorganization,  insolvency or other similar law as now or hereafter
in effect.

                  "Event  of  Default"  means  any of the  events  specified  in
Section 10.01 hereof to be an Event of Default.  "Default" means any event which
with the giving of notice or the lapse of time or both would constitute an Event
of Default.

                  "Excess Earnings" means an amount equal to the sum of (i) plus
(ii) where:

                  (i)      is the excess of

                           (a)      the aggregate amount earned from the date of
issuance of the Bonds on all  nonpurpose  investments in which gross proceeds of
the  Bonds  are  invested  (other  than  investments  attributable  to an excess
described in this clause (i)), over

                           (b)      the amount  that  would have been  earned if
such  nonpurpose  investments  (other  than  amounts  attributable  to an excess
described in this clause (i)) had been  invested at a rate equal to the yield on
the Bonds; and

                  (ii)     is any income attributable to the excess described in
clause (i) of this definition.

                                       20
<PAGE>

The sum of (i) plus (ii) shall be determined in accordance  with Section  148(f)
of  the  Code.  As  used  herein,   the  terms  "gross  proceeds",   "nonpurpose
investments"  and "yield"  have the  meanings  assigned to them for  purposes of
Section 148 of the Code.

                  "Financing  Documents"  means the Bonds,  the  Indenture,  the
Agreement, the Assignment, the Bank Documents, the Tax Regulatory Agreement, the
Remarketing  Agreement and any other  document now or hereafter  executed by the
Issuer, the Company or the Bank in favor of the Bondholders,  the Trustee or the
Bank which affects the rights of the Bondholders,  the Trustee or the Bank in or
to the Project Facility, in whole or in part, or which secures or guarantees any
sum due under the Bonds or any other  Financing  Document,  each as amended from
time to time,  and all  documents  related  thereto and  executed in  connection
therewith.

                  "Governmental Obligations" means (a) direct obligations of the
United  States of America,  (b)  obligations  unconditionally  guaranteed by the
United  States of America and (c)  securities or receipts  evidencing  ownership
interests in obligations  or specified  portions (such as principal or interest)
of obligations described in (a) or (b).

                  "Guarantor" means Spurlock Industries, Inc.

                  "Guaranty" means the guaranty of payment and performance dated
as of even date with this  Indenture from the Guarantor in favor of the Bank, as
amended or supplemented from time to time.

                  "Immediate   Notice"  means  notice   transmitted   through  a
time-sharing  terminal,  if  operative  as between  any two  parties,  or if not
operative, in writing or by telephone (promptly confirmed in writing).

                  "Indenture"   means  this  Trust   Indenture   as  amended  or
supplemented at the time in question.

                  "Indirect Participant" means a Person utilizing the book entry
system of the  Depository  by,  directly  or  indirectly,  clearing  through  or
maintaining a custodial relationship with a Direct Participant.

                  "Insider" means any entity referred to or described in Section
101(31) of the Bankruptcy Code, assuming for this purpose that the Company,  any
Guarantor, or any Affiliate of any of them, as applicable,  is a debtor, and any
limited partner of any of the foregoing.

                  "Insurance  and  Condemnation  Fund"  means the trust  fund so
designated which is established pursuant to Section 4.03 hereof.

                  "Interest  Payment  Date"  means  (a)  while  the  Bonds  bear
interest at the Weekly Rate, the first  Wednesday of each January,  April,  July
and October,  (b) while the Bonds bear interest at the Taxable  Weekly Rate, the
first Thursday of each January, April, July and October, and (c) while the Bonds
bear interest at the Semi-Annual Rate or the Long-Term Rate, October 1 and April
1 of each year.  The first Interest  Payment Date shall be the Interest  Payment
Date in January, 1998. In any case, the final Interest Payment Date shall be the
maturity date.

                  "Interest  Period"  means for all Bonds  the  period  from and
including each Interest Payment Date to and including the day next preceding the
next Interest  Payment Date. The first Interest 

                                       21
<PAGE>

Period  for the  Bonds  shall  begin on (and  include)  the date of the  initial
delivery of the Bonds.  The final Interest  Period shall end on the maturity (or
redemption) date for each Bond.

                  "Interes  Rate Mode" means the Weekly Rate, the Taxable Weekly
Rate, the Semi-Annual Rate or the Long-Term Rate.

                  "Letter of Credit" means the irrevocable, direct-pay Letter of
Credit  issued by the Bank and delivered to the Trustee upon the issuance of the
Bonds.

                  "Letter    of    Representations"    means   the   Letter   of
Representations by and among the Issuer, the Trustee,  the Remarketing Agent and
the Depository.

                  "Lien" means any interest in Property  securing an  obligation
owed to a Person,  whether such interest is based on the common law,  statute or
contract,  and including but not limited to a security  interest  arising from a
mortgage,  encumbrance,  pledge,  conditional  sale or trust receipt or a lease,
consignment  or  bailment  for  security  purposes.  The  term  "Lien"  includes
reservations, exceptions, encroachments,  projections, easements, rights of way,
covenants, conditions,  restrictions,  leases and other similar title exceptions
and  encumbrances,  including  but not  limited  to  mechanics',  materialmen's,
warehousemen's and carriers' liens and other similar encumbrances affecting real
property.  For purposes  hereof, a Person shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional  sale agreement
or other  arrangement  pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.

                  "Long-Term Rate" means the Interest Rate Mode for the Bonds in
which the interest rate on the Bonds is  determined  in accordance  with Section
2.02(c)(iii).

                  "Long-Term  Rate Period"  means any period  beginning  on, and
including,  the  Conversion  Date to the  Long-Term  Rate  and  ending  on,  and
including,  the day preceding the Interest  Payment Date selected by the Company
and each  period of the same  duration  (or as close as  possible)  ending on an
Interest  Payment Date  thereafter  until the earliest of the day  preceding the
change to a different  Long-Term  Rate  Period,  the  Conversion  to a different
Interest Rate Mode or the maturity of the Bonds.

                  "Moody's"  means  Moody's   Investors   Service,   a  Delaware
corporation,  its  successors  and assigns,  and, if such  corporation  shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating  agency,  "Moody's"  shall be  deemed  to refer to any  other  nationally
recognized  securities rating agency designated by the Trustee, with the consent
of the Company.

                  "Mortgage" means the mortgage and security  agreement dated as
of even date with this Indenture from the Issuer and the Company in favor of the
Bank, as amended or supplemented from time to time.

                  "Non-Qualifying  Alternate Credit Facility" means an Alternate
Credit Facility which is not a Qualifying Alternate Credit Facility.

                  "Outstanding",  in connection with Bonds means, as of the time
in question, all Bonds authenticated and delivered under the Indenture, except:

                  A.       Bonds   theretofore   cancelled  or  required  to  be
cancelled under Section 2.12;

                                       22
<PAGE>

                  B.       Bonds   which  are   deemed  to  have  been  paid  in
accordance with Article XV; and

                  C.       Bonds in substitution for which other Bonds have been
authenticated and delivered pursuant to Article II.

In determining  whether the owners of a requisite  aggregate principal amount of
Bonds  Outstanding  have  concurred  in  any  request,  demand,   authorization,
direction,  notice,  consent or waiver under the provisions hereof,  Bonds which
are held by or on behalf of the Company (unless all of the outstanding Bonds are
then owned by the  Company)  shall be  disregarded  for the  purpose of any such
determination.  Notwithstanding  the  foregoing,  Bonds so owned which have been
pledged in good faith  shall not be  disregarded  as  aforesaid  if the  pledgee
established to the  satisfaction of the Bond Registrar the pledgee's right so to
act with respect to such Bonds and that the pledgee is not the Company.

                  "Paying Agent" or "Co-Paying Agent" means any national banking
association,  bank and trust company or trust  company  appointed by the Company
and  meeting  the  qualifications  of, and  subject to the  obligations  of, the
Trustee in Article XI hereof.  "Principal Office" of any Paying Agent shall mean
the office thereof designated in writing to the Trustee.

                  "Pledge  and  Security  Agreement"  means (A) the  pledge  and
security  agreement dated as of even date with this Indenture by and between the
Company and the Bank,  as the same may be  supplemented  or amended from time to
time,  and (B) the pledge and security  agreement by and between the Company and
any  substitute  Bank, as the same may be  supplemented  or amended form time to
time.

                  "Prime Rate" means that interest rate established from time to
time by the Bank as the Bank's Prime Rate,  whether or not such rate is publicly
announced.  The Prime  Rate may not be the lowest  rate  charged by the Bank for
commercial or other extensions of credit.

                  "Project" or "Project Facility" means the Project Facility, as
defined in the Agreement.

                  "Project Costs"  shall have the  meaning  set forth in Section
4.01 of the Indenture.

                  "Project  Fund"  means the trust fund so  designated  which is
established pursuant to Section 4.01.

                  "Purchase  Date"  means (a) if the  Interest  Rate Mode is the
Weekly Rate or the Taxable Weekly Rate, any Business Day as set forth in Section
3.01(a)(i) and Section  3.01(a)(iv)  hereof,  respectively,  (b) if the Interest
Rate  Mode is the  Semi-Annual  Rate,  any  Interest  Payment  Date,  (c) if the
Interest Rate Mode is the Long-Term  Rate, the final  Interest  Payment Date for
each Long-Term Rate Period, and (d) each day that Bonds are subject to mandatory
purchase pursuant to Section 3.01(b).

                  "Qualifying  Alternate  Credit  Facility"  means an  Alternate
Credit Facility in connection with which the Trustee shall have received, (a) if
the Bonds are then rated by a Rating  Service,  written  evidence (or such other
evidence  satisfactory  to the Trustee) from the Rating  Service then rating the
Bonds to the effect that such Rating Service has reviewed the proposed Alternate
Credit Facility and that the  substitution of the Alternate Credit Facility will
not, by itself,  result in (i) a permanent withdrawal of its rating of the Bonds
or (ii) the  reduction of the current  rating of the Bonds,  or (b) if the Bonds
are not then rated by a Rating Service, written evidence (or such other evidence
satisfactory to the Trustee) that the Alternate  Credit Facility would be issued
by a Credit  Facility Issuer which,  or the parent  corporation 

                                       23
<PAGE>

of which,  has a long-term  debt rating  assigned by a Rating  Service  which is
equal to or better than the rating of the Credit Facility Issuer being replaced.

                  "Rate Period" means any period during which a single  interest
rate is in effect for a Bond.

                  "Rating  Service"  means  Moody's,  if the  Bonds are rated by
Moody's  at the time,  and S&P,  if the Bonds are rated by S&P at the time,  and
their successors and assigns.

                  "Rebate Amount" as of any date means the Excess Earnings as of
such date, or such other amount as may be due to the United  States  pursuant to
Section 148(f) of the Code.

                  "Rebate  Fund" means the Rebate Fund  created in Section  5.05
hereof.

                  "Record  Date"  means,  as the  case  may be,  the  applicable
Regular or Special Record Date.

                  "Regular  Record  Date"  means,  with  respect to any Interest
Period, the close of business on the last Business Day of such Interest Period.

                  "Redemption  Premium  Account"  means the  Redemption  Premium
Account created under Section 5.01 hereof.

                  "Reimbursement   Agreement"   means   the   letter  of  credit
reimbursement  agreement dated as of October 1, 1997 between the Company and the
Bank,  as the same may be amended  from time to time and filed with the Trustee,
and any agreement of the Company with a Credit Facility Issuer setting forth the
obligations  of the Company to such Credit  Facility  Issuer  arising out of any
payments  under a Credit  Facility and which provides that it shall be deemed to
be a Reimbursement Agreement for the purpose of this Indenture.

                  "Remarketing Agent" means KeyBank National Association and its
successors as provided in Section 12.01.  "Principal  Office" of the Remarketing
Agent means the office designated as such in writing to the Company, the Trustee
and the Tender Agent.

                  "Remarketing  Agreement" means the Remarketing Agreement dated
as of October 1, 1997 among the Company,  the Issuer and the Remarketing  Agent,
as the same may be  amended  from time to time,  and any  remarketing  agreement
between the Company, the Issuer and a successor Remarketing Agent.

                  "Remarketing  Proceeds Account" means the Remarketing Proceeds
Account created under Section 5.01 hereof.

                  "Resolution"  means the  resolution  of the Issuer  adopted on
September 16, 1997,  authorizing  the Issuer to undertake the Project,  to issue
and sell the Bonds and to execute and deliver the  Financing  Documents to which
the Issuer is a party.

                  "Revenues"  means (a) all amounts  payable to the Trustee with
respect to the principal or  redemption  price of, or interest on, the Bonds (i)
by the Company as required  under the  Agreement,  (ii) upon deposit in the Bond
Fund from the  proceeds of the Bonds,  and (iii) by the Credit  Facility  Issuer


                                       24
<PAGE>

under a Credit  Facility,  and (b) investment  income with respect to any moneys
held by the Trustee in the Bond Fund. The term  "Revenues"  does not include any
moneys or investments in the Rebate Fund.

                  "S&P"  means  Standard  &  Poor's  Ratings  Group,  a New York
corporation,  its successors and assigns, and, if such entity shall be dissolved
or  liquidated or shall no longer  perform the functions of a securities  rating
agency,  "S&P"  shall be  deemed  to refer to any  other  nationally  recognized
securities  rating  agency  designated  by the Trustee,  with the consent of the
Company.

                  "Security  Agreement" means the security agreement dated as of
even date with this  Indenture  from the Company to the Bank,  as said  security
agreement may be supplemented or amended from time to time.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Semi-Annual  Rate" means the Interest Rate Mode for the Bonds
in which the interest rate on the Bonds is determined in accordance with Section
2.02(c)(ii).

                  "Semi-Annual  Rate Period" means any period  beginning on, and
including,  the  Conversion  Date to the  Semi-Annual  Rate and  ending  on, and
including,  the day preceding the next Interest Payment Date thereafter and each
successive six (6) month period thereafter until the day preceding Conversion to
a different Interest Rate Mode or the maturity of the Bonds.

                  "Special  Record Date" means such date as may be fixed for the
payment of defaulted interest in accordance with Section 2.08.

                  "State" means the State of New York.

                  "Taxable  Weekly  Rate" means the  Interest  Rate Mode for the
Bonds in which the interest rate on the Bonds is determined weekly in accordance
with Section 2.02(c)(iv).

                  "Taxable  Weekly Rate Period"  means the period  beginning on,
and including,  the  Conversion  Date to the Taxable Weekly Rate, and ending on,
and including,  the next  Wednesday and thereafter the period  beginning on, and
including, any Thursday and ending on, and including, the next Wednesday.

                  "Tax Regulatory  Agreement" means the tax regulatory agreement
date the  Closing  Date  executed  by the  Company in favor of the  Issuer,  the
Trustee and the Bank regarding,  among other things, the restrictions prescribed
by the Code in order for the  interest  on the Bonds to remain  excludable  from
gross income for federal income tax purposes.

                  "Tender  Agent"  means the  initial and any  successor  tender
agent appointed in accordance with Section 12.02 hereof.  "Principal  Office" of
the Tender Agent means the office  thereof  designated as such in writing to the
Trustee, the Company and the Remarketing Agent.

                  "Term  Loan Note"  means the term loan note dated the  Closing
Date in the principal amount of $1,500,00 from the Company in favor of the Bank.

                                       25
<PAGE>

                  "Trustee" means Star Bank,  N.A. and its successor  hereunder.
"Principal Office" of the Trustee means the principal  corporate trust office of
the Trustee, which office at the date of acceptance by the Trustee of the duties
and obligations imposed on the Trustee by this Indenture is Cincinnati, Ohio.

                  "Unassigned   Issuer's  Rights"  means  Unassigned  Rights  as
defined in the Agreement.

                  "Weekly  Rate" means the  Interest  Rate Mode for the Bonds in
which the interest  rate on the Bonds is determined  weekly in  accordance  with
Section 2.02(c)(i).

                  "Weekly  Rate  Period"  means the  period  beginning  on,  and
including,  the date of issuance of the Bonds, and ending on, and including, the
next  Tuesday  and  thereafter  the  period  beginning  on, and  including,  any
Wednesday and ending on, and including, the next Tuesday.

                  The  words   "hereof",   "herein",   "hereto",   "hereby"  and
"hereunder"  (except in the form of Bond) refer to the entire Indenture.  Unless
otherwise noted, all Section and Article references are to sections and articles
in this Indenture.


                                       26
<PAGE>

                                   ARTICLE II

                                    THE BONDS

                  SECTION  2.01.  AMOUNT,  TERMS AND ISSUANCE OF BONDS;  LIMITED
OBLIGATIONS.  The Bonds shall, except as provided in Section 2.10, be limited to
$6,000,000 in aggregate  principal  amount and shall contain  substantially  the
terms  recited  in the form of Bond  above.  No Bonds may be issued  under  this
Indenture except in accordance with this Article II.

                  It is  determined  to be necessary  to, and the Issuer  shall,
issue,  sell and deliver  $6,000,000  principal  amount of Bonds for the purpose
financing a portion of the Project Costs.

                  The Bonds may bear such endorsement or legend  satisfactory to
the Trustee as may be required to conform to usage or law with respect thereto.

                  The Bonds,  together  with the  premium,  if any, and interest
thereon, shall be limited obligations of the Issuer payable, with respect to the
Issuer, solely from the Revenues, which Revenues are hereby pledged and assigned
for the equal and ratable payment of all sums due under the Bonds,  and shall be
used for no other purpose than to pay the principal of, premium,  if any, on and
interest on the Bonds except as may be otherwise expressly provided herein.

                  THE  BONDS  ARE NOT AND SHALL NOT BE A DEBT OF THE STATE OR OF
SARATOGA COUNTY,  NEW YORK AND NEITHER THE STATE NOR SARATOGA  COUNTY,  NEW YORK
SHALL BE LIABLE THEREON.  THE BONDS DO NOT GIVE RISE TO A PECUNIARY LIABILITY OR
CHARGE  AGAINST THE GENERAL  CREDIT OR TAXING POWERS OF THE STATE OR OF SARATOGA
COUNTY, NEW YORK.

                  No recourse  shall be had for the payment of the  principal of
or  premium,  if any,  on or the  interest  on any Bond or for any  claim  based
thereon  or on this  Indenture  against  any past,  present  or  future  member,
officer,  employee or agent (other than the Company),  as such, of the Issuer or
of any  predecessor  or successor  corporation,  either  directly or through the
Issuer or otherwise,  whether by virtue of any constitution,  statute or rule of
law,  in  equity,  or by  the  enforcement  of any  assessment  or  penalty,  or
otherwise.

                  SECTION 2.02. (a) DESIGNATION, DENOMINATIONS AND MATURITY. The
Bonds shall be  designated  "Multi-Mode  Variable  Rate  Industrial  Development
Revenue Bonds  (Spurlock  Adhesives,  Inc.  Project),  Series 1997 A." The Bonds
shall be issuable only in denominations of $100,000 and any larger  denomination
constituting an integral multiple of $5,000.

                  All  Bonds  shall be dated  the date of their  authentication.
Each Bond shall bear interest from the Interest  Payment Date to which  interest
has accrued and has been paid,  or if prior to the first  Interest  Payment Date
for the Bonds, from the date of the original issuance of the Bonds until payment
of the  principal or  redemption  price thereof shall have been made or provided
for in accordance with the provisions of this Indenture,  whether upon maturity,
redemption or otherwise.

                  The Bonds shall mature on April 1, 2008.

                  The Bonds shall be  originally  issued only to a Depository to
be held in a book entry  system and:  (i) the Bonds shall be  registered  in the
name of the  Depository or its nominee,  as 


                                       27
<PAGE>

Bondholder,  and  immobilized  in the  custody of the  Depository;  (ii)  unless
otherwise requested by the Depository,  there shall be a single Bond certificate
for each  Bond  maturity;  and (iii) the  Bonds  shall  not be  transferable  or
exchangeable,  except for transfer to another Depository or another nominee of a
Depository,  without  further  action  by the  Issuer  as set  forth in the next
succeeding  paragraph  of this  Section.  While the Bonds are in book entry only
form, Bonds in the form of physical  certificates shall only be delivered to the
Depository.

                  So long as a book  entry  system is in effect  for the  Bonds,
except as hereinafter  provided with respect to Beneficial  Ownership Interests,
the Issuer and Trustee shall recognize and treat the Depository, or its nominee,
as the  holder of Bonds for all  purposes,  including  payment  of Bond  Service
Charges,  giving of notices,  and  enforcement  of  remedies.  The  crediting of
payments of Bond Service Charges on the Bonds and the transmittal of notices and
other  communications  by the  Depository  to the Direct  Participants  in whose
Depository account the Bonds are recorded, and such crediting and transmittal by
Direct  Participants  to  Indirect  Participants  or  Beneficial  Owners  and by
Indirect Participants to Beneficial Owners, are the respective  responsibilities
of the Depository and the Direct Participants and Indirect  Participants and are
not the responsibility of the Issuer or the Trustee; provided, however, that the
Issuer and the Trustee  understand  that neither the  Depository  or its nominee
shall  provide  any  consent  requested  of  holders of Bonds  pursuant  to this
Indenture,  and that the Depository will mail an omnibus proxy (including a list
identifying   the  Direct   Participants)   to  the  Issuer  which  assigns  the
Depository's,  or its  nominee's,  voting rights to the Direct  Participants  to
whose  accounts at the  Depository  the Bonds are credited as of the record date
for mailing of requests for such  consents.  Upon receipt of such omnibus proxy,
the Issuer  shall  promptly  provide  such  omnibus  proxy  (including  the list
identifying the Direct Participants  attached thereto) to the Trustee, who shall
then treat such Direct Participants as Bondholders for purposes of obtaining any
consents pursuant to the terms of this Indenture.

                  As  long  as  the  Bonds  are  registered  in  the  name  of a
Depository,  or its  nominee,  the  Trustee  agrees to comply with the terms and
provisions of the Letter of  Representations,  including  the  provisions of the
Letter of  Representations  with  respect  to any  delivery  of the Bonds to the
Trustee,  which provisions shall supersede the provisions of this Indenture with
respect thereto.

                  If  any  Depository  determines  not to  continue  to act as a
Depository for the Bonds held in a book entry system, the Company may attempt to
have established a securities  depository/book  entry system  relationship  with
another Depository under this Indenture. If the Company does not or is unable to
do so, the Company and the  Trustee,  after the Trustee has made  provision  for
notification  of the  Beneficial  Owners  by  appropriate  notice  to  the  then
Depository,  shall permit  withdrawal of the Bonds from the Depository and shall
authenticate  and deliver  Bond  certificates  in fully  registered  form to the
assignees of the  Depository or its nominee or to the  Beneficial  Owners.  Such
withdrawal,  authentication  and  delivery  shall  be at the  cost  and  expense
(including  costs  of  printing  or  otherwise  preparing  and  delivering  such
replacement  Bonds)  of the  Company.  Such  replacement  Bonds  shall be in the
denominations  specified in the first  paragraph of this  Section  2.02,  with a
minimum denomination of $100,000.

                           (b)      Interest Rates on the Bonds. The Bonds shall
bear interest in the same Interest Rate Mode at all times.  The Bonds shall bear
interest  at the Weekly Rate for the period from their  original  issuance  date
until  converted to a different  Interest Rate Mode. The first Interest  Payment
Date shall be the Interest Payment Date in January,  1998.  During each Interest
Period for each  Interest  Rate Mode,  the interest  rate for the Bonds shall be
determined  in  accordance  with  Section  2.02(c)  and shall be  payable on the
Interest Payment Date for such Interest Period;  provided that the interest rate


                                       28
<PAGE>

borne by the Bonds shall not exceed the lesser of (i) fifteen  percent (15%) per
annum or (ii) so long as the  Bonds are  entitled  to the  benefits  of a Credit
Facility,  the maximum  interest rate with respect to the Bonds specified in the
Credit  Facility.  Interest on the Bonds at the  interest  rate or rates for the
Weekly  Rate and the Taxable  Weekly Rate shall be computed  upon the basis of a
365 or 366-day  year,  as  applicable,  for the actual  number of days  elapsed.
Interest on the Bonds at the interest rate or rates for the Semi-Annual Rate and
the  Long-Term  Rate  shall be  computed  upon  the  basis  of a  360-day  year,
consisting  of twelve  30-day  months.  Each Bond shall bear interest on overdue
principal  and,  to the extent  permitted  by law,  on overdue  interest  at the
Default Rate computed from the date of the Default or Event of Default.

                           (c)      Interest Rate Modes.  Interest  Rates on the
Bonds shall be determined as follows:

                                    (i)      If the  Interest  Rate Mode for the
         Bonds  is the  Weekly  Rate,  the  interest  rate  on the  Bonds  for a
         particular  Weekly Rate  Period  shall be the rate  established  by the
         Remarketing Agent no later than 3:00 p.m. (Cleveland, Ohio time) on the
         Tuesday  preceding the Weekly Rate Period (or the 7th day preceding the
         Conversion of the Interest  Rate Mode to the Weekly Rate),  or, if such
         day is not a Business Day, on the next succeeding  Business Day, as the
         minimum rate of interest necessary,  in the judgment of the Remarketing
         Agent,  to  enable  the  Remarketing  Agent to sell  the  Bonds on such
         Business Day at a price equal to the  principal  amount  thereof,  plus
         accrued interest, if any, thereon.

                                    (ii)     If the  Interest  Rate Mode for the
         Bonds is the  Semi-Annual  Rate,  the interest  rate on the Bonds for a
         particular Semi-Annual Rate Period shall be the rate established by the
         Remarketing Agent no later than 3:00 p.m. (Cleveland, Ohio time) on the
         10th Business Day next preceding the first day of such Semi-Annual Rate
         Period as the minimum  rate of interest  necessary,  in the judgment of
         the  Remarketing  Agent,  to enable the  Remarketing  Agent to sell the
         Bonds  on such  first  day at a price  equal  to the  principal  amount
         thereof.

                                    (iii)    If the  Interest  Rate Mode for the
         Bonds is the  Long-Term  Rate,  the  interest  rate on the  Bonds for a
         particular  Long-Term Rate Period shall be the rate  established by the
         Remarketing  Agent not later than the 15th  Business Day  preceding the
         first day of such Long-Term Rate Period as the minimum rate of interest
         necessary,  in the  judgment of the  Remarketing  Agent,  to enable the
         Remarketing  Agent to sell the Bonds on such first day at a price equal
         to the principal amount thereof.

                                    (iv)     If the  Interest  Rate Mode for the
         Bonds is the Taxable  Weekly Rate, the interest rate on the Bonds for a
         particular  Taxable Weekly Rate Period shall be the rate established by
         the Remarketing Agent no later than 3:00 p.m. (Cleveland, Ohio time) on
         the Wednesday  preceding the Taxable Weekly Rate Period (or the 7th day
         preceding  the  Conversion  of the  Interest  Rate Mode to the  Taxable
         Weekly  Rate),  or,  if such  day is not a  Business  Day,  on the next
         succeeding Business Day, as the minimum rate of interest necessary,  in
         the judgment of the Remarketing  Agent, to enable the Remarketing Agent
         to  sell  the  Bonds  on such  Business  Day at a  price  equal  to the
         principal amount thereof, plus accrued interest, if any, thereon.

                                    (v)      The Remarketing Agent shall provide
         the Company,  the Trustee and the Tender Agent with Immediate Notice of
         all interest rates.

                                       29
<PAGE>

                                    (vi)     If for any reason the interest rate
         on a Bond is not determined by the  Remarketing  Agent pursuant to (i),
         (ii) or (iii)  above,  the  interest  rate  for such  Bond for the next
         succeeding  Rate Period shall be the  interest  rate in effect for such
         Bond for the preceding Rate Period.

                           (d)      Long-Term Rate Periods.

                                    (i)      Selection of Long-Term Rate Period.
         The Long-Term  Rate Period shall be  established  by the Company in the
         notice  given  pursuant  to  Section  2.02(e)  hereof  (the  first such
         Long-Term Rate Period  commencing on the Conversion  Date for the Bonds
         to a Long-Term  Rate) and  thereafter  each  successive  Long-Term Rate
         Period shall be the same as that so  established by the Company until a
         different  Long-Term  Rate  Period  is  specified  by  the  Company  in
         accordance  with this Section or until the  occurrence  of a Conversion
         Date.  Each Long-Term Rate Period shall be one year or more in duration
         and shall  end on the day next  preceding  an  Interest  Payment  Date;
         provided  that  if the  first  Long-Term  Rate  Period  commences  on a
         Conversion  Date  other  than an  October  1 and  April 1,  such  first
         Long-Term  Rate  Period  shall be of a duration as close as possible to
         (but not in excess of) such Long-Term  Rate Period and shall  terminate
         on a day preceding an Interest  Payment Date; and further provided that
         no Long-Term  Rate Period shall extend  beyond the maturity date of the
         Bonds.

                                    (ii)     Change of  Long-Term  Rate  Period.
         The  Company  may  change  from one  Long-Term  Rate  Period to another
         Long-Term Rate Period on any Conversion  Date by notifying the Trustee,
         the  Issuer,  the Credit  Facility  Issuer,  the  Tender  Agent and the
         Remarketing  Agent at least 4 Business Days prior to the 30th day prior
         to the proposed effective date of the change. Such notice shall specify
         the last day of the  next  Long-Term  Rate  Period  which  shall be the
         earlier  of the day before  the  maturity  date of the Bonds or the day
         immediately  preceding an October 1 or April 1 and which is one year or
         more after the effective date and, if such change is  conditional,  the
         interest rate  limitations.  Any such notice shall be accompanied by an
         opinion of  Counsel  stating  that such  change is  authorized  by this
         Indenture  and,  if the change is from a  Long-Term  Rate Period of one
         year to a Long-Term  Rate  Period of more than one year,  an opinion of
         nationally recognized bond counsel that such change will not affect the
         exclusion  from gross  income for  federal  income tax  purposes of the
         interest on the Bonds.  Any change by the Company of the Long-Term Rate
         Period  may be made  conditional  on the  interest  rate  being  within
         certain limits established by the Company.  The Remarketing Agent shall
         establish  what would be the interest  rate for the proposed  Long-Term
         Rate Period in accordance  with Section  2.02(c).  If the interest rate
         established  by  the  Remarketing   Agent  is  not  within  the  limits
         established,  then the  change  in the  Long-Term  Rate  Period  may be
         cancelled by the  Company,  in which case the  Company's  notice of the
         proposed  change  shall be of no  effect  and the  Bonds  shall  not be
         subject to any mandatory  purchase pursuant to Section 3.01(b).  Notice
         of such cancellation shall be promptly given to all Bondholders.

                                    (iii)    Notice of  Long-Term  Rate  Period.
         The Trustee shall notify the Bondholders of any change in the Long-Term
         Rate  Period  pursuant  to Section  2.02(d)(ii)  by first  class  mail,
         postage  prepaid,  at  least 30 but not more  than 60 days  before  the
         effective date of such change. The notice will state:

                                             (A)      whether the change in the
                  Long-Term Rate Period is conditional and, if conditional,  the
                  interest rate limitations set by the Company,

                                       30
<PAGE>

                                             (B)      that the interest rate for
                  the  new  Long-Term  Rate  Period  will be  determined  by the
                  Remarketing  Agent  not  later  than  the  15th  Business  Day
                  preceding the first day of the new Long-Term Rate Period, and

                                             (C)      the effective  date of the
                  new Long-Term Rate Period.

                  Any notice provided under this Section  2.02(d)(iii)  shall be
for  informational  purposes  only and shall not waive or  otherwise  affect the
mandatory  purchase of the Bonds at the end of any Long-Term  Rate Period as set
forth in Section 3.01(b) hereof.

                           (e)      Conversion of Interest Rate.

                                    (i)      Conversion Directed by the Company.
         The  Interest  Rate Mode for the Bonds is  subject to  Conversion  to a
         different  Interest  Rate Mode  from time to time in whole  (and not in
         part) by the  Company,  such right to be  exercised  by  notifying  the
         Trustee,   the  Credit  Facility  Issuer,  the  Tender  Agent  and  the
         Remarketing  Agent at least 4 Business Days prior to the 30th day prior
         to the effective  date of such proposed  Conversion.  Such notice shall
         specify (A) the effective  date,  (B) the proposed  Interest Rate Mode,
         (C)  if  the  Conversion  is to  the  Long-Term  Rate,  the  end of the
         Long-Term Rate Period and (D) if such  Conversion is  conditional,  the
         interest rate  limitations.  The notice must be  accompanied  by (i) an
         opinion of Counsel  stating that the  Conversion  is authorized by this
         Indenture  and, if the  Conversion is from a Rate Period of one year or
         less to a Rate  Period of more  than one year or from a Rate  Period of
         more than one year to a Rate Period of one year or less,  an opinion of
         nationally recognized bond counsel that such Conversion will not affect
         the exclusion  from gross income for federal income tax purposes of the
         interest  on  the  Bonds,  (ii)  if the  stated  amount  of the  Credit
         Facility,  if any, to be held by the Trustee  after such  Conversion is
         increased over that of the then current Credit Facility,  an opinion of
         reputable  bankruptcy  counsel  stating that  payments of principal and
         interest on the Bonds from funds drawn on such Credit Facility will not
         constitute avoidable  preferences with respect to the bankruptcy of the
         Company under the  Bankruptcy  Code and (iii) if the Conversion is to a
         Long-Term Rate, an official statement relating to the Bonds executed by
         the Company and the Issuer  together  with an opinion of counsel to the
         effect that such official statement fairly and accurately describes the
         Bonds, the security for the Bonds, and the Financing Documents relating
         to the Bonds and such  security.  Any  Conversion by the Company of the
         Interest Rate Mode to the Long-Term Rate may be made conditional on the
         initial  interest  rate  determined  for such  Interest Rate Mode being
         within certain limits established by the Company. The Remarketing Agent
         shall  establish  what  would be the  interest  rate  for the  proposed
         Interest Rate Mode in accordance with Section 2.02(c).  If the interest
         rate  established  by the  Remarketing  Agent is not  within the limits
         established,  then such Conversion may be cancelled by the Company,  in
         which case,  the Company's  notice of Conversion  shall be of no effect
         and the Bonds shall not be subject to any mandatory  purchase  pursuant
         to Section 3.01(b). Notice of such cancellation shall be given promptly
         to all Bondholders.  Notwithstanding the foregoing, commencing upon the
         day on which the Bonds first bear  interest at the Taxable  Weekly Rate
         and continuing thereafter, the Bonds shall not be subject to Conversion
         to a different Interest Rate Mode.

                                    (ii)     Limitations.  Any Conversion of the
         Interest  Rate Mode for the Bonds  pursuant to paragraph (i) above must
         comply with the following:

                                       31
<PAGE>

                                             (A)      the  Conversion  Date must
                  be an Interest Payment Date which is a date on which the Bonds
                  are  subject  to  optional   redemption  pursuant  to  Section
                  8.01(a), (b) or (c);

                                             (B)      the Conversion  Date  must
                  be a Business Day; and

                                             (C)      the  Credit  Facility,  if
                  any, to be held by the Trustee must cover accrued interest for
                  the Bonds for 110 days,  if the  Conversion  is to the  Weekly
                  Rate or the  Taxable  Weekly  Rate,  or for 195  days,  if the
                  Conversion is to the Semi-Annual Rate or the Long-Term Rate.

                                    (iii)    Notice to Bondholders of Conversion
         of Interest  Rate.  The Trustee  shall notify the  Bondholders  of each
         Conversion by first class mail,  postage prepaid,  at least 30 days but
         not more than 60 days  before the  Conversion  Date.  The  notice  will
         state:

                                             (A)      that the  Interest  Rate 
                  Mode will be  converted  and what the new  Interest  Rate Mode
                  will be;

                                             (B)     the Conversion Date;

                                             (C)      if the Conversion  is  to
                  the Long-Term Rate, whether the conversion is conditional and,
                  if  conditional,  the  interest  rate  limitations  set by the
                  Company; and

                                             (D)      that  the  Bonds  will be
                  subject  to  mandatory  purchase  on the  Conversion  Date  in
                  accordance with Section 3.01(b).

                  If the  Conversion is to the Long-Term  Rate,  the notice will
also state the information required by Section 2.02(d)(iii).

                                    (iv)     Cancellation   of   Conversion   of
         Interest Rate Mode. Notwithstanding any provision of this Section 2.02,
         the Interest  Rate Mode shall not be  converted if (A) the  Remarketing
         Agent has not determined the initial interest rate for the new Interest
         Rate Mode in accordance with this Section 2.02 or (B) the Trustee shall
         receive  written  notice  prior to such  Conversion  that either of the
         opinions required under Section  2.02(e)(i) has been rescinded.  If the
         Trustee  shall  have sent any  notice to the  Bondholders  regarding  a
         Conversion of the Interest Rate Mode under  Section  2.02(e)(iii),  the
         Trustee shall promptly  notify all  Bondholders of such  rescission and
         the cancellation of any mandatory purchase pursuant to Section 3.01(b).

                           (f)      Binding   Effect   of   Determination    and
Computations.  The  determination  of each interest rate in accordance  with the
terms of this  Indenture  shall be conclusive and binding upon the owners of the
Bonds,  the Issuer,  the Company,  the Trustee,  each Paying  Agent,  the Tender
Agent, the Remarketing Agent and the Credit Facility Issuer, if any.

                  SECTION 2.03.  REGISTERED  BONDS REQUIRED;  BOND REGISTRAR AND
BOND  REGISTER.  All Bonds shall be issued in fully  registered  form. The Bonds
shall be  registered  upon  original  issuance and upon  subsequent  transfer or
exchange as provided in this Indenture.

                                       32
<PAGE>

                  The  Company  shall  designate  one or more  persons to act as
"Bond  Registrar" for the Bonds  provided that the Bond Registrar  appointed for
the  Bonds  shall be  either  the  Trustee  or a  person  which  would  meet the
requirements for  qualification as a successor trustee imposed by Section 11.13.
The Company hereby appoints Star Bank, N.A. as Bond Registrar.  Any person other
than the Trustee  undertaking  to act as Bond  Registrar  shall first  execute a
written agreement, in form satisfactory to the Trustee, to perform the duties of
a Bond Registrar under this  Indenture,  which agreement shall be filed with the
Trustee.

                  The Bond  Registrar  shall act as registrar and transfer agent
for the Bonds. There shall be kept at an office of the Bond Registrar a register
(herein sometimes referred to as the "Bond Register") in which,  subject to such
reasonable  regulations  as it, the Trustee or the Bond Registrar may prescribe,
shall  provide for the  registration  of the Bonds and for the  registration  of
transfers  of the  Bonds.  The Bond  Registrar  shall  designate,  by a  written
notification  to the Trustee,  a specific  office location (which may be changed
from time to time,  upon  similar  notification)  at which the Bond  Register is
kept. If the Bond Registrar is the Trustee, such location shall be the principal
corporate trust office of the Trustee.

                  The Bond  Registrar  shall  forthwith  following  each Regular
Record Date and at any other time as  reasonably  requested by the Trustee,  the
Tender Agent or the Remarketing Agent,  certify and furnish to the Trustee,  the
Tender Agent,  the  Remarketing  Agent and any Paying Agent as the Trustee shall
specify,  the  names,  addresses,  and  holdings  of  Bondholders  and any other
relevant information reflected in the Bond Register, and the Trustee, the Tender
Agent, the Remarketing Agent and any such Paying Agent shall for all purposes be
fully entitled to rely upon the  information so furnished to them and shall have
no liability or responsibility in connection with the preparation thereof.

                  SECTION 2.04.  TRANSFER AND  EXCHANGE.  As provided in Section
2.03,  the  Company  shall cause a Bond  Register  to be kept at the  designated
office of the Bond Registrar. Upon surrender for registration of transfer of any
Bond at such office,  the Issuer upon request of the Company  shall  execute and
the Trustee or its  Authenticating  Agent shall  authenticate and deliver in the
name of the transferee or transferees, one or more new fully registered Bonds of
authorized  denomination for the aggregate principal amount which the registered
owner is entitled to receive.

                  At the option of the registered owner,  Bonds may be exchanged
for  other  Bonds of any  other  authorized  denomination,  of a like  aggregate
principal amount, upon surrender of the Bonds to be exchanged at any such office
or agency.  Whenever any Bonds are so surrendered for exchange, the Issuer shall
execute,  and the Trustee or the  Authenticating  Agent shall  authenticate  and
deliver,  the Bonds  which the  Bondholder  making the  exchange  is entitled to
receive.

                  All Bonds presented for  registration  of transfer,  exchange,
redemption or payment (if so required by the Issuer,  the Bond  Registrar or the
Trustee) shall be accompanied by a written instrument or instruments of transfer
or  authorization  for  exchange,   in  form  and  with  guaranty  of  signature
satisfactory  to the  Bond  Registrar,  duly  executed  by the  owner  or by his
attorney duly authorized in writing.

                  No  service  charge  shall  be  made to a  Bondholder  for any
exchange or  registration of transfer of Bonds,  but the Issuer,  the Company or
the Bond  Registrar may require  payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto.

                  Neither  the  Issuer nor the Bond  Registrar  on behalf of the
Issuer  shall be required  (i) to register  the transfer or exchange of any Bond
during a period  beginning at the opening of business 15 

                                       33
<PAGE>

days before the date of redemption of Bonds  selected for  redemption and ending
at the close of business  on the day of such  redemption  (ii) to  register  the
transfer or exchange of any Bond so selected for redemption in whole or in part,
or (iii)  other than  pursuant  to Article  III,  to  register  any  transfer or
exchange of any Bond with respect to which the owner has  submitted a demand for
purchase in accordance with Section 3.01(a) or which has been purchased pursuant
to Section 3.01(b).

                  New Bonds  delivered  upon any  registration  of  transfer  or
exchange shall be valid obligations of the Issuer subject to the limitations set
forth  herein,  evidencing  the same  debt as the  Bonds  surrendered,  shall be
secured by this  Indenture  and shall be  entitled  to all of the  security  and
benefits hereof to the same extent as the Bonds surrendered.

                  SECTION  2.05.  DELIVERY  OF  BONDS.  Upon the  execution  and
delivery of this  Indenture,  and  satisfaction  of the  conditions set forth in
Section 2.14 hereof,  the Issuer upon request of the Company  shall  execute the
Bonds and deliver them to the Trustee. Thereupon, the Trustee shall authenticate
the Bonds and  deliver  them to the  Depository,  as  directed  by the Issuer in
accordance with this Section 2.05.

                  Before the Trustee  delivers any Bonds, the Trustee shall have
received a request  and  authorization  to the  Trustee on behalf of the Issuer,
signed by the Authorized Official,  to authenticate and deliver the Bonds to, or
on the order of, the  Placement  Agent upon payment to the Trustee of the amount
specified therein (including without  limitation,  any accrued interest),  which
amount shall be deposited as provided in Sections 4.01 and 5.01 hereof.

                  SECTION 2.06.  EXECUTION.  The Bonds shall be executed by  the
manual or facsimile  signature of the Chairman (or Vice  Chairman) and Secretary
(or Assistant Secretary) of the Issuer.

                  Bonds executed as above provided may be issued and shall, upon
request of the Issuer,  be  authenticated  by the Trustee or the  Authenticating
Agent,  notwithstanding  that any officer  signing such Bonds or whose facsimile
signature  appears  thereon  shall  have  ceased  to hold  office at the time of
issuance  or  authentication  or shall not have  held  office at the date of the
Bond.

                  SECTION 2.07.  AUTHENTICATION;  AUTHENTICATING  AGENT. No Bond
shall be valid for any purpose until the Certificate of  Authentication  thereon
shall  have  been  duly  executed  as  provided  in  this  Indenture,  and  such
authentication   shall  be  conclusive  proof  that  such  Bond  has  been  duly
authenticated  and delivered  under this Indenture and that the owner thereof is
entitled to the benefit of the trust hereby created.

                  If the Bond  Registrar is other than the Trustee,  the Trustee
may appoint the Bond Registrar as an Authenticating  Agent with the power to act
on the Trustee's behalf and subject to its direction in the  authentication  and
delivery of Bonds in connection with the registration of transfers and exchanges
under Section 2.04 hereof,  and the  authentication  and delivery of Bonds by an
Authenticating  Agent pursuant to this Section  shall,  for all purposes of this
Indenture, be deemed to be the authentication and delivery "by the Trustee". The
Trustee  shall,  however,  itself  authenticate  all Bonds  upon  their  initial
issuance  and any Bonds  issued in  substitution  for other  Bonds  pursuant  to
Sections  2.10 and 2.11.  The Trustee  shall be entitled  to be  reimbursed  for
payments made to any  Authenticating  Agent as reasonable  compensation  for its
services.

                                       34
<PAGE>

                  Any  corporation  into which any  Authenticating  Agent may be
merged or converted  or with which it may be  consolidated,  or any  corporation
resulting   from  any  merger,   consolidation   or   conversion  to  which  any
Authenticating  Agent shall be a party,  or any  corporation  succeeding  to the
corporate trust business of any Authenticating  Agent, shall be the successor of
the Authenticating Agent hereunder,  if such successor  corporation is otherwise
eligible as a Bond Registrar under Section 2.03, without the execution or filing
or the  taking  of any  further  act on the part of the  parties  hereto  or the
Authenticating Agent or such successor corporation.

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

                  SECTION  2.08.   PAYMENT  OF  PRINCIPAL  AND  INTEREST  RIGHTS
PRESERVED.  The principal or redemption price of any Bond shall be payable, upon
surrender of such Bond,  in any coin or currency of the United States of America
which,  at the time of  payment,  is legal  tender for the payment of public and
private  debts,  at the Principal  Office of any Paying Agent,  including  funds
evidenced by wire transfer.  Interest on any Bond on each Interest  Payment Date
in respect thereof shall be payable by check mailed to the address of the person
entitled  thereto as such address  shall appear in the Bond  Register;  provided
that at the  written  request  of the  owner  of at least  $1,000,000  aggregate
principal  amount of Bonds  received by the Bond Registrar at least one Business
Day before the corresponding  Record Date, interest accrued on the Bonds will be
payable by wire transfer within the United States in immediately available funds
to the bank account  number of such owner  specified in such request and entered
by the Bond Registrar on the Bond Register;  and provided  further that interest
payable at maturity (or  redemption)  shall be paid only upon  presentation  and
surrender of such Bond.

                  Interest on any Bond which is payable,  and is punctually paid
or duly provided  for, on any Interest  Payment Date shall be paid to the person
in whose name that Bond is  registered  at the close of  business on the Regular
Record Date for such interest.

                  Notwithstanding anything herein to the contrary, when any Bond
is  registered  in the name of a Depository  or its nominee,  the  principal and
redemption  price of and  interest  on such Bond shall be payable in next day or
federal funds delivered or transmitted to the Depository or its nominee.

                  Any  interest  on  any  Bond  which  is  payable,  but  is not
punctually  paid or provided  for, on any Interest  Payment Date (herein  called
"Defaulted  Interest")  shall forthwith cease to be payable to the owner of such
Bond on the  relevant  Regular  Record Date by virtue of having been such owner,
and such  Defaulted  Interest shall be paid to the person in whose name the Bond
is registered  at the close of business on a Special  Record Date to be fixed by
the Trustee, such date to be no more than 15 nor fewer than 10 days prior to the
date of proposed payment. The Trustee 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 Bondholder at his address as it appears in
the Bond Register, not fewer than 10 days prior to such Special Record Date.

                                       35
<PAGE>

                  Subject to the foregoing provisions of this Section 2.08, each
Bond delivered under this Indenture upon registration of transfer of or exchange
for or in lieu of any other Bond shall carry the rights to interest  accrued and
unpaid, and to accrue, which were carried by such other Bond.

                  SECTION 2.09.  PERSONS DEEMED OWNERS. The Issuer, the Company,
the Trustee,  any Paying  Agent,  the Bond  Registrar,  the Tender Agent and any
Authenticating  Agent may deem and treat  the  person in whose  name any Bond is
registered  as the  absolute  owner  thereof  (whether or not such Bond shall be
overdue and  notwithstanding  any notation of ownership or other writing thereon
made by anyone  other than the Issuer,  the  Company,  the  Trustee,  any Paying
Agent, the Bond Registrar, the Tender Agent or the Authenticating Agent) for the
purpose of receiving  payment of or on account of the principal of (and premium,
if any, on), and (subject to Section 2.08)  interest on, such Bond,  and for all
other purposes,  and neither the Issuer,  the Company,  the Trustee,  the Tender
Agent, any Paying Agent, the Bond Registrar nor the  Authenticating  Agent shall
be affected by any notice to the contrary. All such payments so made to any such
registered  owner,  or upon his 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 Bond.

                  SECTION 2.10.  MUTILATED, DESTROYED, LOST OR STOLEN BONDS.

                           (a)      If any Bond shall  become  mutilated,  lost,
stolen or destroyed,  the affected  Bondholder shall be entitled to the issuance
of a substitute Bond only as follows:

                                    (1)      in the  case of a lost,  stolen  or
         destroyed  Bond, the  Bondholder  shall (i) provide notice of the loss,
         theft or destruction to the Issuer,  the Company and the Trustee within
         a reasonable  time after the  Bondholder  receives  notice of the loss,
         theft or  destruction,  (ii) request the issuance of a substitute  Bond
         and  (iii)  provide  evidence,  satisfactory  to the  Company  and  the
         Trustee,  of the ownership and the loss,  theft or  destruction  of the
         affected Bond;

                                    (2)      in the  case of a  mutilated  Bond,
         the   Bondholder   shall   surrender   the  Bond  to  the  Trustee  for
         cancellation; and

                                    (3)      in all cases,  the Bondholder shall
         provide  indemnity  against  any  and  all  claims  arising  out  of or
         otherwise  related to the issuance of substitute Bonds pursuant to this
         Section  satisfactory to the Issuer,  the Company,  the Trustee and any
         Credit Facility Issuer.

Upon compliance with the foregoing,  a new Bond of like tenor and  denomination,
executed by the Issuer,  shall be  authenticated by the Trustee and delivered to
the Bondholder, all at the expense of the Bondholder to whom the substitute Bond
is delivered.  Notwithstanding the foregoing,  the Trustee shall not be required
to authenticate and deliver any substitute Bond for a Bond which has been called
for redemption or which has matured or is about to mature and, in any such case,
the principal or redemption price and interest then due or becoming due shall be
paid by the  Trustee  or a Paying  Agent  in  accordance  with the  terms of the
mutilated, lost, stolen or destroyed Bond without substitution therefor.

                           (b)      Every  substituted  Bond issued  pursuant to
this Section 2.10 shall constitute an additional  contractual  obligation of the
Issuer  (subject  to Section  16.01  hereof)  and shall be  entitled  to all the
benefits of this Indenture  equally and  proportionately  with any and all other
Bonds duly issued hereunder unless the Bond alleged to have been destroyed, lost
or stolen shall be at any time  enforceable  by a bona fide  purchaser for value
without notice. In the event the Bond alleged to have

                                       36
<PAGE>

been  destroyed,  lost or stolen shall be enforceable by anyone,  the Issuer may
recover the  substitute  Bond from the  Bondholder to whom it was issued or from
anyone  taking  under  the  Bondholder  except a bona fide  purchaser  for value
without notice.

                           (c)      All Bonds  shall be held and owned  upon the
express  condition  that the foregoing  provisions are exclusive with respect to
the replacement or payment of mutilated,  destroyed,  lost or stolen Bonds,  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   instrument  or  investment  or  other
securities without their surrender.

                  SECTION  2.11.   TEMPORARY  BONDS.   Pending   preparation  of
definitive  Bonds, or by agreement with the purchasers of all Bonds,  the Issuer
may issue,  and, upon its request,  the Trustee shall  authenticate,  in lieu of
definitive  Bonds  one  or  more  temporary  printed  or  typewritten  Bonds  of
substantially  the tenor  recited  above in any  denomination  authorized  under
Section  2.02.  Upon  request of the  Issuer,  the  Trustee  shall  authenticate
definitive Bonds in exchange for and upon surrender of an equal principal amount
of temporary  Bonds.  Until so  exchanged,  temporary  Bonds shall have the same
rights, remedies and security hereunder as definitive Bonds.

                  SECTION  2.12.   CANCELLATION  OF  SURRENDERED   BONDS.  Bonds
surrendered for payment, redemption,  transfer or exchange and Bonds surrendered
to the  Trustee by the Issuer,  or by the  Company on behalf of the Issuer,  for
cancellation shall be cancelled by the Trustee and returned to the Company.

                  SECTION  2.13.  SOURCE  OF  PAYMENT  OF BONDS.  To the  extent
provided  in and  except  as  otherwise  permitted  by  this  Indenture,  (i) as
specified in Section 16.01 hereof, the Bonds shall be special obligations of the
Issuer and the Bond Service Charges thereon shall be payable equally and ratably
solely from the Revenues,  (ii) the payment of Bond Service Charges on the Bonds
shall be secured by the assignment of the Credit  Facility  Account,  Redemption
Premium Account, Remarketing Proceeds Account and Defeasance Account of the Bond
Fund and the grant of a security  interest in all moneys and  investments in the
Project Fund, the Insurance and  Condemnation  Fund and the Revenues (other than
such  accounts  of the Bond Fund,  all moneys and  investments  therein  and the
proceeds of the Credit  Facility)  hereunder  and by this  Indenture,  and (iii)
payments due on the Bonds also shall be secured by the  assignment by the Issuer
of its rights under the Agreement  (other than the Unassigned  Issuer's  Rights)
pursuant to the Assignment.  The principal of, and any accrued  interest on, the
Bonds shall also be payable  from moneys  derived by the Trustee  from  drawings
under the Credit Facility related to the Bonds.  Notwithstanding anything to the
contrary in the Act, the Bonds or this Indenture, the Bonds do not and shall not
represent  or  constitute a debt or pledge of the faith and credit or the taxing
power  of  the  Issuer  or  of  the  State  or  of  any  political  subdivision,
municipality  or other local agency  thereof and are not and will not be secured
by an obligation or pledge of any moneys raised by taxation.

                  SECTION  2.14.  DELIVERY OF THE BONDS.  Upon the execution and
delivery of this  Indenture,  the Issuer shall  execute and deliver the Bonds to
the Trustee,  and the Trustee  shall  authenticate  and deliver the Bonds to the
purchasers thereof against payment of the purchase price therefor,  plus accrued
interest to the day preceding the date of delivery,  upon receipt by the Trustee
of the following:

                           (A)      a certified copy of the Resolution;

                           (B)      the executed original Letter of Credit;

                                       37
<PAGE>

                           (C)      executed counterparts of the  Indenture  and
the other Financing Documents;

                           (D)      a request and  authorization  to the Trustee
on behalf  of the  Issuer  signed by an  Authorized  Official  of the  Issuer to
deliver the Bonds to the purchasers  thereof upon payment to the Trustee for the
account of the Issuer of the purchase price therefor;

                           (E)      signed  copies of the opinions of counsel to
the Issuer, the Company and the Bank, and of Bond Counsel;

                           (F)      an   executed    copy   of   the   arbitrage
certificate of the Issuer and the Tax Regulatory Agreement;

                           (G)      such other  documents  as the  Trustee,  the
Bank or Bond Counsel may reasonably require.


                                       38
<PAGE>


                                   ARTICLE III

                        PURCHASE AND REMARKETING OF BONDS

                  SECTION 3.01. PURCHASE OF BONDS ON DEMAND; MANDATORY PURCHASE.

                           (a)      Purchase of Bonds on Demand of Owner.

                                    (i)      During   Weekly   Rate  Period  and
         Taxable Weekly Rate Period.  If the Interest Rate Mode for the Bonds is
         the Weekly Rate or the Taxable Weekly Rate, any Bond shall be purchased
         on the demand of the owner  thereof,  on any Business Day at a purchase
         price equal to the principal amount thereof,  plus accrued interest, if
         any, to the Purchase Date,  upon written notice to the Tender Agent, at
         its Principal Office on or before 4:00 p.m. (Cincinnati,  Ohio time) on
         a  Business  Day not  later  than  the 7th  calendar  day  prior to the
         Purchase Date,  which notice (A) states the number and principal amount
         (or portion thereof in an authorized  denomination)  of such Bond to be
         purchased,  (B)  states the  Purchase  Date on which such Bond shall be
         purchased  and (C)  irrevocably  requests  such  purchase and agrees to
         deliver  such  Bond,  duly  endorsed  in blank for  transfer,  with all
         signatures  guaranteed,  to the Tender  Agent at or prior to 12:00 Noon
         (Cincinnati, Ohio time) on such Purchase Date.

                                             The Tender  Agent  shall  promptly,
         but in no event  later  than 4:00 p.m.  (Cincinnati,  Ohio time) on the
         next succeeding  Business Day,  provide the  Remarketing  Agent and the
         Trustee with Immediate  Notice of the receipt of the notice referred to
         in the preceding  paragraph.  Upon its receipt of such Immediate Notice
         from the Tender Agent, the Remarketing Agent shall promptly provide the
         Company with Immediate  Notice of the receipt of the notice referred to
         in the preceding paragraph.


                                    (ii)     During  Semi-Annual Rate Period. If
         the Interest Rate Mode for the Bonds is the Semi-Annual  Rate, any Bond
         shall be purchased, on the demand of the owner thereof, on any Interest
         Payment Date for a Semi-Annual Rate Period at a purchase price equal to
         the principal amount thereof,  upon written notice to the Tender Agent,
         at its  Principal  Office  on a  Business  Day not  later  than the 8th
         Business Day prior to such Purchase  Date,  which notice (A) states the
         number and  principal  amount  (or  portion  thereof  in an  authorized
         denomination)  of such Bond to be  purchased,  (B) states the  Purchase
         Date on which such Bond shall be purchased and (C) irrevocably requests
         such  purchase and agrees to deliver such Bond,  duly endorsed in blank
         for transfer, with all signatures guaranteed, to the Tender Agent at or
         prior to 12:00 Noon (Cincinnati, Ohio time) on such Purchase Date.

                                             The Tender  Agent  shall  promptly,
         but in no event  later  than 4:00 p.m.  (Cincinnati,  Ohio time) on the
         next succeeding Business Day, provide the Remarketing Agent and Trustee
         with Immediate  Notice of the receipt of the notice  referred to in the
         preceding paragraph.

                                    (iii)    During Long-Term Rate Period. Bonds
         shall not be purchased  upon the demand of the owner thereof during any
         Long-Term Rate Period in whole or in part. At the end of each Long-Term
         Rate Period,  the Bonds shall be subject to  mandatory  purchase as set
         forth in Section 3.01(b) hereof.

                                       39
<PAGE>

                                    (iv)     Purchase   of  Portions  of  Bonds.
         Notwithstanding any other provision of this Section 3.01(a),  the owner
         of a Bond may  demand  purchase  of a portion  of such Bond only if the
         portion to be  purchased  and the  portion to be  retained by the owner
         will be in authorized denominations.

                           (b)      Mandatory Purchases of Bonds.

                                    (i)      Mandatory  Purchase  on  Conversion
         Date.  The Bonds shall be subject to  mandatory  purchase at a purchase
         price equal to the principal amount thereof, plus, if the Interest Rate
         Mode is the  Long-Term  Rate,  the  redemption  premium  which would be
         payable under Section  8.01(b) hereof if the Bonds were redeemed on the
         Purchase Date, plus accrued  interest,  if any, thereon to the Purchase
         Date on each Conversion Date for any Conversion.

                                    (ii)     Mandatory  Purchase  for Failure to
         Provide Alternate Credit Facility. While the Bonds bear interest at the
         Weekly,  Semi-Annual or Taxable Weekly Rate, the Bonds shall be subject
         to mandatory purchase at a purchase price equal to the principal amount
         thereof plus accrued  interest,  if any,  thereon to the Purchase Date,
         upon  termination  of the  term of the  then  current  Credit  Facility
         (whether by  expiration  according to its terms or upon  delivery of an
         Alternate  Credit  Facility) unless such Credit Facility is extended or
         replaced prior to its  termination  with an Alternate  Credit  Facility
         issued by the then current Credit  Facility  Issuer.  The Purchase Date
         will be the Interest Payment Date immediately preceding (by at least 15
         calendar  days)  the  date of  expiration  or  replacement  of the then
         current Credit Facility.

                                    (iii)    Mandatory  Purchase  for Failure to
         Provide  Qualifying  Alternate  Credit  Facility.  While the Bonds bear
         interest at the Long-Term  Rate and are subject to optional  redemption
         by the  Issuer  upon  direction  of the  Company  pursuant  to  Section
         8.01(b), the Bonds shall be subject to mandatory purchase at a purchase
         price  equal to the  principal  amount  thereof,  plus  the  redemption
         premium,  if any,  which would be payable under Section  8.01(b) if the
         Bonds were redeemed on the Purchase  Date,  plus accrued  interest,  if
         any,  thereon to the Purchase  Date,  upon the delivery of an Alternate
         Credit Facility,  unless such Alternate Credit Facility is a Qualifying
         Alternate  Credit  Facility.  Any premium to be paid in connection with
         such  mandatory  purchase,  if not covered by the then  current  Credit
         Facility,  shall be paid from Available Moneys deposited by the Company
         into the Redemption  Premium  Account of the Bond Fund. If there are no
         such  Available  Moneys,  the then current  Credit  Facility may not be
         replaced unless replaced with a Qualifying  Alternate  Credit Facility.
         While the Bonds bear  interest at the Long-Term  Rate,  but are not yet
         subject  to  optional  redemption  by the  Issuer  pursuant  to Section
         8.01(b),  the Company may not replace the then current Credit  Facility
         with an Alternate Credit Facility unless such alternate Credit Facility
         is a Qualifying Alternate Credit Facility.


                                    (iv)     Notice   of   Mandatory   Purchase.
         Notice of any mandatory purchase pursuant to this Section 3.01(b) shall
         be given by the Trustee  thirty (30) days prior to the date of purchase
         in the same manner as a notice of  redemption  pursuant to Section 8.04
         hereof;  provided  that  failure to receive  notice by mailing,  or any
         defect in that notice,  as to any Bond shall not affect the validity of
         the proceedings for the purchase of any other Bond.

                                       40
<PAGE>

                           (c)      Payment  of  Purchase  Price.  The  purchase
         price of Bonds purchased pursuant to Section 3.01 shall be payable upon
         delivery of such Bond to the Tender Agent; provided that such Bond must
         be delivered to the Tender Agent on or prior to 12:00 Noon (Cincinnati,
         Ohio time) for payment by the close of business on the Purchase Date in
         immediately  available funds;  provided,  however, that if the Purchase
         Date is not a Business Day, the purchase  price shall be payable on the
         next succeeding Business Day.

                  Any Bond  delivered for payment of the purchase price shall be
accompanied  by an instrument of transfer  thereof in form  satisfactory  to the
Tender  Agent  executed in blank by the owner  thereof  and with all  signatures
guaranteed  by a bank,  trust  company  or  member  firm of The New  York  Stock
Exchange,  Inc. The Tender  Agent may refuse to accept  delivery of any Bond for
which an  instrument  of transfer  satisfactory  to it has not been provided and
shall  have no  obligation  to pay the  purchase  price  of  such  Bond  until a
satisfactory instrument is delivered.

                  The Tender  Agent shall hold all Bonds  delivered  pursuant to
this  Section 3.01 in trust for the benefit of the owners  thereof  until moneys
representing  the purchase  price of such Bonds shall have been  delivered to or
for the account of or to the order of such  Bondholders,  and  thereafter  shall
deliver  such Bonds to the  purchasers  thereof.  All  amounts  received  by the
Trustee  from a drawing  under a Credit  Facility for purchase of Bonds shall be
transferred  immediately  to the Tender Agent.  The Tender Agent shall also hold
all such  amounts  from a drawing  under a Credit  Facility  that it shall  have
received from the Trustee in a separate and segregated  account  pending payment
of the  purchase  price of Bonds as set forth in Section  3.03 and  neither  the
Issuer,  the  Company,  any  Guarantor,  any  Affiliate of the Company or of any
Guarantor,  nor any Insider of any of them shall have any right to take, control
or receive the moneys and investments therein.

                  SECTION 3.02.  REMARKETING OF BONDS.

                           (a)      Upon the receipt by the Remarketing Agent of
any notice pursuant to Section 3.01(a),  the Remarketing  Agent,  subject to the
terms of the Remarketing Agreement, shall offer for sale, and shall use its best
efforts to sell (other than to the Issuer, the Company or their Affiliates), the
Bonds  in  respect  of  which  such  notice  has been  given.  Unless  otherwise
instructed by the Issuer or the Company,  the  Remarketing  Agent will offer for
sale and use its best  efforts to sell any Bonds  purchased  pursuant to Section
3.01(b).  Any such Bonds shall be offered:  (i) at 100% of the principal  amount
thereof,  plus interest accrued, if any, to the Purchase Date, and (ii) pursuant
to terms calling for payment of the purchase price on such Purchase Date against
delivery of such Bonds;  provided that the Remarketing  Agent shall not sell any
Bond if the amount to be received from the sale of such Bond (including  accrued
interest, if any) plus the amount available to be drawn by the Trustee under the
Credit  Facility with respect to the Available  Moneys  available to the Trustee
for such purpose is less than the purchase price (including accrued interest, if
any) to be paid for such Bond. The Remarketing  Agent shall direct any person to
whom such Bonds (or authorized portions thereof) are remarketed pursuant to this
Section to deliver the purchase price thereof in immediately  available funds to
the Trustee at its principal  office on or before 10:00 a.m.  (Albany,  New York
time) on the Purchase Date. Upon receipt and pending  disbursement  thereof, the
Trustee  shall  deposit such moneys in the  Remarketing  Proceeds  Account.  The
Trustee,  the Tender Agent or the Credit  Facility Issuer may purchase any Bonds
offered  pursuant to this Section  3.02 for its own account.  Each of the Issuer
and the Company acknowledges that they shall have no interest in any proceeds of
the remarketing of Bonds,  all of which shall be held in trust by the Trustee or
the Tender  Agent for the sole  benefit of the  holders of the Bonds and, to the
extent that the holders  have been paid with draws on the Credit  Facility,  for
the benefit of the Credit Facility Issuer. The Remarketing Agent shall, no later
than  10:30 a.m.  (Albany,  New York time) on the  Purchase  Date,  

                                       41
<PAGE>

give oral or telephonic  notice to the Tender Agent and the Trustee of the Bonds
remarketed pursuant to this Section and the Purchase Date therefor,  such notice
to be promptly confirmed by telex, telegram or telecopier to the Company and the
Credit Facility Issuer.

                           (b)      The Remarketing Agent shall,  subject to the
terms of the Remarketing Agreement,  offer for sale, and use its best efforts to
sell, on behalf of the Issuer,  Bonds held  pursuant to Section  3.05.  Any such
Bonds shall be offered at 100% of the principal  amount  thereof,  plus interest
accrued to the sale date.

                  SECTION 3.03.  PURCHASE OF BONDS; UNDELIVERED BONDS.

                           (a)      On  each  date  Bonds  are  to be  purchased
pursuant to Section  3.01,  the Tender Agent shall  purchase,  but only from the
funds listed below, such Bonds from the owners thereof. Funds for the payment of
such purchase price shall be derived from the following  sources in the order of
priority indicated, provided that funds derived from Section 3.03(a)(i) and (ii)
shall not be combined with funds derived from Section  3.03(a)(iii)  to purchase
any one Bond (or authorized denomination thereof):

                                    (i)      Proceeds     deposited    in    the
         Remarketing  Proceeds  Accounts from the  remarketing  of such Bonds to
         persons  other than the Issuer,  the  Company,  any  Guarantor,  or any
         Affiliate of any of them or any Insider of the foregoing  (exclusive of
         any premium) pursuant to Section 3.02(a);

                                    (ii)     Available  Moneys  furnished by the
         Trustee to the Tender Agent  representing  proceeds of a drawing by the
         Trustee under the Credit Facility;

                                    (iii)    Available  Moneys  deposited by the
         Company into the Redemption Premium Account,  if necessary,  to pay any
         premium included in the purchase price; and

                                    (iv)     Moneys  paid by the  Company to pay
         the purchase price furnished by the Trustee to the Tender Agent.

                           (b)      In the event  that any  holder of a Bond who
shall have given notice demanding purchase pursuant to Section 3.01(a), or which
is subject to  mandatory  purchase  pursuant to Section  3.01(b),  shall fail to
deliver  such Bond to the Tender Agent at the place and on the  applicable  date
and time specified,  or shall fail to deliver such Bond properly endorsed,  such
Bond  shall  constitute  an  Undelivered  Bond.  If funds in the  amount  of the
purchase price of the  Undelivered  Bond are available for payment to the holder
thereof on the date and at the time specified,  from and after the date and time
of that required delivery, (i) the Undelivered Bond shall no longer be deemed to
be  Outstanding  under this  Indenture;  (ii)  interest  shall no longer  accrue
thereon;  and (iii) funds in the amount of the purchase price of the Undelivered
Bonds shall be held by the Tender Agent, without liability for interest thereon,
for the  benefit of the holder  thereof  (and in no event for the benefit of the
Issuer, the Company, any Guarantor, any Affiliate of any of them, any Insider of
the  foregoing,  the  Remarketing  Agent,  the Tender Agent or any other party).
Neither the Issuer, the Company, any Guarantor, any Affiliate of any of them nor
any Insider of the foregoing shall have any right whatsoever to take, control or
receive  moneys held by the Tender Agent.  Any funds held by the Tender Agent as
described in clause (iii) of the preceding  sentence  shall be held  uninvested.
Any moneys  deposited  with and held by the  Tender  Agent not so applied to the
payment of Bonds, if any, within two years after the Purchase Date of such Bonds
shall be paid by the  Tender  Agent to the  Company  and  thereafter  the former
holders of such Bonds shall 

                                       42
<PAGE>

be entitled to look only to the Company for payment, and then only to the extent
of the amount so repaid,  and the Company  shall not be liable for any  interest
thereon and shall not be regarded as a trustee of such money.

                  SECTION 3.04.  DELIVERY OF REMARKETED OR PURCHASED BONDS.

                           (a)      Bonds  and  Beneficial  Ownership  Interests
purchased pursuant to Section 3.03 shall be delivered as follows:

                                    (i)      Bonds sold by the Remarketing Agent
         to persons or entities  other than the Issuer or the  Company  shall be
         delivered  to  the  purchasers  thereof.  With  respect  to  Beneficial
         Ownership  Interests sold by the Remarketing  Agent pursuant to Section
         3.02  hereof,  the  Remarketing  Agent and the Trustee  shall take such
         actions as may be necessary to reflect the transfer of such  Beneficial
         Ownership  Interests to the purchasers thereof in the book entry system
         maintained by the Depository.

                                    (ii)     Bonds  purchased or to be purchased
         with moneys described in Section  3.03(a)(ii) shall be delivered to the
         Tender  Agent to be held  pursuant  to Section  3.05.  With  respect to
         Beneficial  Ownership  Interests  purchased  with moneys  described  in
         Section  3.03(a)(ii),  the Remarketing Agent and the Trustee shall take
         such  actions as may be  necessary  to  reflect  the  transfer  of such
         Beneficial  Ownership  Interests to the purchasers  thereof in the book
         entry system maintained by the Depository.

                                    (iii)    Bonds    purchased    with   moneys
         described  in  Section  3.03(a)(iii)  shall,  at the  direction  of the
         Company,  be (A)  delivered  to or held  by the  Tender  Agent  for the
         account of the Company,  (B) delivered to the Trustee for  cancellation
         or (C) delivered to the Company.  With respect to Beneficial  Ownership
         Interests purchased with moneys described in Section 3.03(a)(iii),  the
         Remarketing  Agent and the  Trustee  shall take such  actions as may be
         necessary  to  reflect  the  transfer  of  such  Beneficial   Ownership
         Interests to the purchasers thereof in the book entry system maintained
         by the Depository.

                           (b)      If,  on any  date  prior to the  release  of
Bonds  held  by  or  for  the  account  of  the  Company   pursuant  to  Section
3.04(a)(iii), all Bonds are called for redemption pursuant to Section 8.01 or an
acceleration of the Bonds pursuant to Section 10.02 occurs,  such Bonds shall be
deemed to have been paid and shall thereupon be cancelled by the Trustee.

                           (c)      Bonds  or  Beneficial   Ownership  Interests
(other than Bonds pledged to the Credit Facility  Issuer)  delivered as provided
in this Section shall be registered (or recorded  through the Depository) in the
manner directed by the recipient thereof.

                  SECTION 3.05. BONDS PLEDGED TO THE CREDIT FACILITY ISSUER. The
Bond Registrar  shall  register (or the Depository  shall record) in the name of
the  Company  any Bonds  delivered  to the  Tender  Agent  pursuant  to  Section
3.04(a)(ii). Thereafter, the Tender Agent shall hold such Bonds unless and until
the Tender Agent shall have received  from the Credit  Facility  Issuer  written
notice or telephonic notice, promptly confirmed in writing, which specifies that
the Tender  Agent shall  deliver  such Bonds to the  Company or the  Remarketing
Agent. Upon receipt of such notice, the Tender Agent shall deliver such Bonds to
the Company or the Remarketing Agent.

                                       43
<PAGE>

                  SECTION 3.06. DRAWINGS ON CREDIT FACILITY.  Except as provided
in Section 3.08 hereof, on each day on which Bonds are to be purchased  pursuant
to  Section  3.01  hereof,  except to the  extent  that the  Trustee  shall have
received telephonic notification from the Remarketing Agent on or prior to 10:30
a.m. (Albany,  New York time) on the Purchase Date to the effect that such Bonds
shall have been  remarketed  pursuant to Section 3.02 hereof and that the moneys
described in Section  3.03(a)(i)  hereof will be  sufficient to pay the purchase
price of such Bonds, the Trustee shall by 11:00 a.m. (Albany,  New York time) on
the Purchase Date draw under the Credit Facility an amount equal to the purchase
price of such Bonds which cannot be purchased  from the proceeds of  remarketing
then on deposit in the Remarketing Proceeds Account and immediately upon receipt
of such proceeds  furnish the proceeds of such drawing to the Tender Agent,  and
shall  further  provide  Immediate  Notice of such drawing to the Issuer and the
Company. If less than the full purchase price is received for the Bonds that are
to be remarketed,  the Trustee shall, by 11:00 a.m.  (Albany,  New York time) on
the Purchase Date, draw under the Credit Facility an amount which, together with
the remarketing proceeds of the Bonds sold by the Remarketing Agent and received
by the  Trustee,  will  be  equal  to the  purchase  price  of  such  Bonds  and
immediately  upon the  receipt of such  proceeds  furnish  the  proceeds of such
drawing to the Tender Agent.

                  SECTION  3.07.  DELIVERY OF PROCEEDS OF SALE.  The proceeds of
the sale by the Remarketing Agent of any Bonds held by it for the account of the
Company,  or delivered to it by any  Bondholder  or the Tender  Agent,  shall be
deposited in the Remarketing Proceeds Account.

                  SECTION 3.08. LIMITATION ON PURCHASE AND REMARKETING. Anything
in this Indenture to the contrary notwithstanding, there shall be no remarketing
of Bonds pursuant to Section 3.02 if there shall have occurred and be continuing
an Event of Default.  Any purchase of Bonds pursuant to Section 3.01(a) after an
Event of Default shall have  occurred and be continuing  shall be made only with
proceeds  of a drawing  under the Credit  Facility,  and any Bonds so  purchased
shall  remain  pledged  to the  Credit  Facility  Issuer  until (a) the Event of
Default  shall  have been  cured or  waived  or (b) the  Bonds  are  accelerated
pursuant to Section 10.02 hereof.



                                       44
<PAGE>


                                   ARTICLE IV

                         PROJECT FUND; PROCEEDS OF BONDS

                  SECTION  4.01.  CREATION OF PROJECT  FUND;  PROCEEDS OF BONDS.
There is hereby  created  by the  Issuer and  ordered  maintained  as a separate
deposit account (except when invested as provided hereinafter) in the custody of
the Trustee, a trust fund designated "County of Saratoga Industrial  Development
Agency - Spurlock Adhesives, Inc. Project Fund." There shall be deposited in the
Project  Fund,  the  proceeds of the sale of the Bonds,  other than any proceeds
representing  accrued  interest,  which  shall be  deposited  in the  Bond  Fund
pursuant to Section 5.01 hereof,  and applied to the acquisition,  construction,
furnishing,  equipment and  improvement  of the Project and costs of issuance of
the Bonds (collectively, the "Project Costs")

                  SECTION 4.02.  DISBURSEMENTS FROM AND RECORDS OF PROJECT FUND.
Moneys in the Project Fund shall be disbursed in accordance  with the provisions
of the Reimbursement  Agreement and the Building Loan Agreement.  The Trustee is
hereby authorized to make each disbursement  required by the provisions thereof.
Disbursements  from the Project  Fund shall be made only to reimburse or pay the
Company,  or any person  designated by the Company,  for the Project Costs.  Any
disbursements  from the Project  Fund for the payment of Project  Costs shall be
made by the  Trustee  only  upon the  written  order  signed  by the  Designated
Representative  and approved by the Bank.  Each such  written  order shall be in
substantially  the form of the disbursement  request attached as Schedule "D" to
the  Building  Loan  Agreement,  shall  be  consecutively  numbered  and  may be
accompanied  by  invoices  or other  documentation  supporting  the  payments or
reimbursements  requested.  That amount shall be released to the Company, or the
person  designated  by the  Company,  upon  receipt by the  Trustee of a written
direction from the Bank to release that amount.

                  Any moneys  remaining in the Project Fund after the payment in
full of the Project Costs and after any required  transfer to the Rebate Fund in
accordance with the provisions of the Tax Regulatory  Agreement and Section 5.05
hereof,  promptly  shall be used to  redeem  the  Bonds in  accordance  with the
provisions of Section 8.01 hereof.

                  The  Trustee  shall cause to be kept and  maintained  adequate
records  pertaining  to the Project  Fund and all  disbursements  therefrom.  If
reasonably  requested  by the  Company,  the  Trustee  shall file  copies of the
records  pertaining  to the Project Fund and  disbursements  therefrom  with the
Company.

                  The completion of the Project and payment of all Project Costs
shall be evidenced by the filing with the Trustee of a certificate signed by the
Designated  Representative  as  provided  in Section  4.4 of the  Agreement  and
approved by the Bank  directing the use of all  remaining  moneys in the Project
Fund.  That  certificate  may state that it is given  without  prejudice  to any
rights  against  third parties  which then exist or  subsequently  may come into
being.  Pending  disbursement   pursuant  to  the  Agreement,   the  moneys  and
investments  to the credit of the Project  Fund shall  constitute  a part of the
Revenues in which the Trustee has a security interest  hereunder as security for
the payment of the Bond Service Charges.

                  SECTION 4.03. INSURANCE AND CONDEMNATION FUND. There is hereby
created by the Issuer  and  ordered  maintained  as a separate  deposit  account
(except when invested as provided  hereinafter) in the custody of the Trustee, a
trust  fund  designated  "County of  Saratoga  Industrial  Development  Agency -
Spurlock  Adhesives,  Inc. Insurance and Condemnation Fund." The net 

                                       45
<PAGE>

proceeds of any  insurance  settlement  or  Condemnation  award  received by the
Trustee in connection  with damage to or destruction of or the taking of part or
all of the Project shall be paid into the Insurance and Condemnation Fund.

                  (B)      If,  pursuant  to  Section  7.1(B)  or  7.2(B) of the
Agreement,  the  Company  does not  repair,  rebuild or restore  the Project and
redemption of the Bonds is required, or if a taking in Condemnation as described
in  Section  7.2(C)  of the  Agreement  occurs,  or if  the  Company  (with  the
concurrence of the Bank)  exercises its options under Sections 7.1(B) and 7.2(B)
of the  Agreement to require the  redemption  of the Bonds,  the Trustee  shall,
after  making any  transfer  to the Rebate Fund  required by the Tax  Regulatory
Agreement and by Section 5.05 hereof,  transfer all moneys held in the Insurance
and  Condemnation  Fund to the Bond Fund to be applied to the  redemption of the
Bonds then Outstanding pursuant to Section 8.01(C) hereof, except as provided in
Section 4.03 hereof.

                  (C)      If  redemption  of the Bonds is not  mandated and the
Company elects to repair,  rebuild or restore the Project, and provided no Event
of Default has  occurred and is  continuing,  moneys held in the  Insurance  and
Condemnation  Fund and  attributable  to the damage to or  destruction of or the
taking of the Project  shall,  after any transfer to the Rebate Fund required by
the Tax Regulatory  Agreement and Section 5.05 hereof is made, be applied to pay
the cost of such repairs, rebuilding or restoration in accordance with the terms
and conditions set forth in Section 4.03(D) hereof.

                  (D)      The  Trustee is hereby  authorized  to and shall make
such disbursements, at the Company's request, either upon the completion of such
repairs,  rebuilding or restoration or periodically as such repairs,  rebuilding
or  restoration  progress,  upon  receipt by the Trustee of a  certificate  of a
Designated  Representative  of the  Company,  approved  in  writing by the Bank,
stating with respect to each payment to be made: (i) the amount or amounts to be
paid, the Person or Persons (which may include the Company for  reimbursement of
such  costs)  to whom an  amount  is to be paid  and the  total  sum of all such
amounts; (ii) that the Company has expended, or is expending,  concurrently with
the  delivery  of such  certificate,  such amount or amounts on account of costs
incurred  in  connection  with the  repair,  rebuilding  or  restoration  of the
Project; (iii) that all contractors,  workmen and suppliers have been or will be
paid through the date of such certificate  from the funds to be disbursed;  (iv)
that there exists no Event of Default and no condition, event or act which, with
notice or the lapse of time or both, would  constitute an Event of Default;  (v)
that such  Designated  Representative  of the  Company has no  knowledge,  after
diligent  inquiry and after searching the records of the  appropriate  state and
local filing offices, of any vendor's Lien, mechanic's Lien or security interest
which  should  be  satisfied,   discharged  or  bonded  before  the  payment  as
requisitioned is made or which will not be discharged by such payment; (vi) that
no certificate  with respect to such  expenditures has previously been delivered
to the Trustee;  and (vii) that there remain  sufficient moneys in the Insurance
and Condemnation Fund attributable to the damage to, destruction of or taking of
the Project to complete the repair,  rebuilding or  restoration  of the Project.
Each certificate of the Company shall be accompanied by bills, invoices or other
evidences  reasonably  satisfactory to the Trustee or any other items reasonably
required  by the  Trustee.  The  Trustee  shall  be  entitled  to  rely  on such
certificate.

                  (E)      Upon   completion   of  the  repair,   rebuilding  or
restoration  of the Project,  a Designated  Representative  of the Company shall
deliver to the Issuer,  the Trustee and the Bank a  certificate  stating (1) the
date of such completion,  (2) that all labor,  services,  materials and supplies
used therefor and all costs and expenses in connection therewith have been paid,
(3)  that  the  Project  has  been  restored  to  substantially   its  condition
immediately prior to the damage or Condemnation thereof, or to a condition of at
least equivalent value,  operating efficiency and function,  (4) that the Issuer
or the Company has good and valid title to all Property constituting part of the
restored Project, and that the 

                                       46
<PAGE>

Project is subject to the Agreement and the Liens and security  interests of the
Indenture  and the  Mortgage  and (5) that the  restored  Project  is ready  for
occupancy,  use and operation  for its intended  purposes.  Notwithstanding  the
foregoing,  such certificate may state (a) that it is given without prejudice to
any rights of the Company  against third parties which exist at the date of such
certificate or which may subsequently come into being, (b) that it is given only
for the  purposes of this  Section  4.03,  and (c) that no Person other than the
Issuer  or  the  Trustee  may  benefit  therefrom.  Such  certificate  shall  be
accompanied by (i) an unconditional  certificate of occupancy,  if required, and
any  and  all  permissions,   licenses  or  consents  required  of  Governmental
Authorities for the occupancy, operation and use of the Project for its intended
purposes, (ii) an opinion of counsel to the Company addressed to the Issuer, the
Trustee and the Bank that the Mortgage  constitutes a valid mortgage Lien on and
a valid  perfected  security  interest in the Project  subject only to Permitted
Encumbrances,  and that the  Project,  as  restored,  will  serve  the  purposes
contemplated   by  the   Agreement  and  the  Indenture  and  (iii)  such  other
documentation as the Trustee may reasonably require.

                  (F)      If the cost of the repairs, rebuilding or restoration
of the  Project  effected  by the  Company  shall be less than the amount in the
Insurance  and  Condemnation  Fund,  then on the  completion  of  such  repairs,
rebuilding or  restoration  and provided that there has been no Event of Default
under any of the  Financing  Documents  notice of which has been received by the
Trustee in accordance with Section 11.05 hereof, the Trustee shall transfer such
difference to the Company for its purposes if (1) a Designated Representative of
the Company so  requests,  (2) the Bank  consents in writing to such and (3) the
Company obtains and delivers to the Trustee an opinion of Bond Counsel in a form
reasonably  satisfactory  to the Trustee that such  transfer  will not cause the
Bonds to be "arbitrage  bonds" as defined in Section 148 of the Code;  otherwise
such  difference  shall be deposited by the Trustee in the Bond Fund and applied
to redeem the Bonds in accordance with Article VIII hereof.

                  (G)      If the cost of the repair,  rebuilding or restoration
of the  Project  shall be in  excess of the  moneys  held in the  Insurance  and
Condemnation Fund, the Company shall immediately  deposit such additional moneys
in the  Insurance  and  Condemnation  Fund as are  necessary  to pay the cost of
completing such repair, rebuilding or restoration.


                                       47
<PAGE>


                                    ARTICLE V

                   BOND FUND; INVESTMENT OF FUNDS; REBATE FUND

                  SECTION 5.01.  BOND FUND.

                           (a)      There is hereby  created  by the  Issuer and
ordered  established as a separate deposit account with the Trustee a trust fund
to be designated  "County of Saratoga  Industrial  Development Agency - Spurlock
Adhesives,  Inc.  Project Bond Fund," the moneys in which,  in  accordance  with
Section 5.01(c), the Trustee shall make available to the Paying Agent or Agents,
to pay (i) the principal or  redemption  price of Bonds as they mature or become
due,  upon  surrender  thereof  and (ii)  the  interest  on Bonds as it  becomes
payable.  There are hereby established with the Trustee within the Bond Fund the
following  separate  and  segregated  accounts,  to be  designated  the  "Credit
Facility Account",  "Remarketing Proceeds Account", "Redemption Premium Account"
and "Defeasance Account".

                           (b)      The Trustee shall deposit into the Bond Fund
all  payments  by the Company in respect to Bond  Service  Charges and all other
moneys  received by the Trustee  under and  pursuant to the  provisions  of this
Indenture,  the  Agreement  or  any  of  the  provisions  of  the  Reimbursement
Agreement, when accompanied by directions from the person depositing such moneys
that such  moneys are to be paid into the Bond Fund and shall  deposit  into the
following specified accounts of the Bond Fund the following:

                                    (i)      into the Credit  Facility  Account,
         all moneys drawn by the Trustee under the Credit Facility which account
         shall hold no other moneys;

                                    (ii)     into   the   Remarketing   Proceeds
         Account,  all amounts  representing  the proceeds from a remarketing of
         the Bonds which account shall hold no other moneys;

                                    (iii)    into   the    Redemption    Premium
         Account,  all  amounts  deposited  to pay  premiums  on the Bonds which
         account shall hold no other moneys; and

                                    (iv)     into the  Defeasance  Account,  all
         amounts  deposited to pay and discharge  the Bonds  pursuant to Section
         15.01 hereof which account shall hold no other moneys.

Neither the Issuer, the Company, any Guarantor,  any Affiliate of the Company or
of any  Guarantor  nor any Insider of any of them shall have any interest in nor
any right  whatsoever to take or control (other than the right of the Company to
direct investments pursuant to Section 5.03 hereof) the Credit Facility Account,
the Credit Facility,  the Redemption Premium Account,  the Remarketing  Proceeds
Account,  the  Defeasance  Account or any  subaccounts  of any of the  foregoing
accounts, or the moneys and Eligible Investments therein, including any proceeds
thereof, all of which shall be held in trust by the Trustee for the sole benefit
of the  Bondholders,  until all Bond Service Charges are paid and thereafter for
the benefit of the Credit Facility Issuer;  provided,  however, that any amounts
which were deposited in the Redemption  Premium Account of the Bond Fund for the
purpose of causing such amounts to constitute  Available Moneys and which remain
after all of the  outstanding  Bonds shall be deemed paid and  discharged  under
this Indenture, shall be retained by the Trustee and shall not be paid to or for
the benefit of the Company,  any  Guarantor,  any Affiliate of the Company or of
any  Guarantor or any Insider of any of them,  which shall have no right to take
or control  such  amounts.  If the Bonds are then  rated by a 

                                       48
<PAGE>

Rating Service or Rating Services,  no moneys in the Redemption  Premium Account
or the Defeasance  Account may be used to pay Bond Service  Charges on the Bonds
until the Company  delivers to such Rating Service or Rating Services an opinion
of nationally recognized counsel experienced in bankruptcy matters to the effect
that  payments  on the  Bonds  from such  moneys  will not  constitute  voidable
preferences under the U.S. Bankruptcy Code in the event a petition in bankruptcy
is subsequently filed by or against the Company or the Issuer.

                  The Trustee shall establish  separate  subaccounts  within the
Redemption   Premium  Account  and  the  Defeasance  Account  for  each  deposit
(including  any investment  income  thereon) made into the Bond Fund so that the
Trustee may at all times  ascertain  the date and source of deposit of the funds
in such accounts and the Trustee shall assure moneys having  different  dates of
deposit and held in separate subaccounts shall not be commingled.

                           (c)      Except as provided in Section 10.11,  moneys
in the Bond Fund  shall be used  solely  for the  payment  of the  principal  or
redemption  price of the Bonds and  interest  on the  Bonds  from the  following
source or sources but only in the following order of priority:

                                    (i)      Available Moneys held in the Credit
         Facility Account,  provided that, in no event, shall moneys held in the
         Credit  Facility  Account be used to pay any amount which may be due on
         Bonds held pursuant to Section 3.05;

                                    (ii)     Available Moneys held on deposit in
         the Redemption Premium Account;

                                    (iii)    any other  Available  Moneys in the
         Bond Fund; and

                                    (iv)     any other amounts  available in the
         Bond Fund.

                           (d)      To the extent moneys described under Section
5.01(c)(i)  are not  available in the Bond Fund to pay  principal or  redemption
price of the Bonds and  interest  on the Bonds on any  maturity  date,  Interest
Payment Date,  redemption  date or Purchase Date (other than Bonds held pursuant
to  Section  3.05,  except  for  interest  payments  on Bonds that were not held
pursuant  to Section  3.05 on the Record  Date for such  payment),  the  Trustee
shall, on or before 11:00 a.m., Albany, New York time, on the Business Day prior
to such due date,  or 11:00  a.m.  on such  Purchase  Date,  draw upon or demand
payment under the Credit Facility,  if any, then held by the Trustee in a manner
so as to provide  immediately  available  funds by the close of business on such
date in an amount  necessary to make the required  payments of the  principal of
and premium,  if applicable  and if payable from a draw on the Credit  Facility,
and  interest  on the  Bonds  on such  maturity  date,  Interest  Payment  Date,
redemption  date or to purchase  the Bonds  tendered or deemed  tendered on such
Purchase Date. Upon receipt of such moneys from the Credit Facility Issuer,  the
Trustee  shall (i)(a)  deposit the amount  representing  a drawing on the Credit
Facility for the payment of principal of and interest on the Bonds in the Credit
Facility  Account  of the Bond Fund,  and apply the same to the  payment of such
principal  and interest due on the Bonds or, (b) use the proceeds of the draw to
the pay the purchase price of the Bonds in accordance  with Section 3.06 hereof,
and (ii) pay, on behalf of the  Company,  but only from and to the extent of any
amounts  described  in Section  5.01(c)(iii)  and  Section  5.01(c)(iv)  then on
deposit in the Bond Fund,  any and all amounts  then due and  payable  under the
Reimbursement  Agreement.  Any  payment  made by the  Trustee  on  behalf of the
Company described in clause (ii) of the immediately  preceding sentence shall be
made by wire  transfer  of  immediately  available  funds to the  account of the
Credit  Facility  Issuer on the date the Trustee  receives  moneys pursuant to a
drawing upon the Credit Facility.

                                       49
<PAGE>

                  SECTION 5.02. REVENUES TO BE HELD FOR ALL BONDHOLDERS; CERTAIN
EXCEPTIONS.  Until applied as provided in this Indenture to the payment of Bonds
or  transferred  to the  Company  pursuant  to Section  16.02 or  Section  5.06,
Revenues  shall be held by the Trustee in trust in the Bond Fund for the benefit
of the  owners of all  Outstanding  Bonds,  except  that (i) any  portion of the
Revenues  representing  principal or redemption price of any Bonds, and interest
on any Bonds  previously  matured or called for  redemption in  accordance  with
Article VIII of this  Indenture,  shall be held for the benefit of the owners of
such Bonds only.  Anything in this  Indenture to the  contrary  notwithstanding,
neither the  Company,  any  Guarantor,  any  Affiliate  of the Company or of any
Guarantor, nor any Insider of any of the foregoing shall have any right to take,
control or receive moneys from the Credit Facility Account, the Credit Facility,
the Redemption Premium Account, the Remarketing Proceeds Account, the Defeasance
Account,  or in any  subaccounts of any of the foregoing  accounts or the moneys
and Eligible  Investments  therein,  which shall be held in trust by the Trustee
first,  for the sole benefit of the holders of the Bonds and then, to the extent
that the holders of the Bonds are paid  through  draws under a Credit  Facility,
for the Credit Facility Issuer to the extent of such draws.

                  SECTION  5.03.  INVESTMENT  OF  PROJECT  FUND,  INSURANCE  AND
CONDEMNATION  FUND,  BOND FUND AND  REBATE  FUND.  Moneys in the  Project  Fund,
Insurance and Condemnation Fund, Bond Fund (except moneys in the Credit Facility
Account, Defeasance Account or Remarketing Proceeds Account) and the Rebate Fund
shall be invested and reinvested by the Trustee in Eligible Investments,  at the
oral   (confirmed   in  writing)  or  written   direction   of  the   Designated
Representative.  At no time shall any funds  constituting  gross proceeds of the
Bonds be used in any  manner to cause or result in a  prohibited  payment  under
applicable  regulations  pertaining  to,  or  in  any  other  fashion  as  would
constitute failure of compliance with,  Section 148 of the Code.  Investments of
moneys  in the Bond Fund  shall  mature or be  redeemable  at the  option of the
Trustee at the times and in the amounts  necessary to provide moneys to pay Bond
Service  Charges as they become due at stated  maturity or by  redemption.  Each
investment  of moneys in the Rebate Fund shall mature or be  redeemable  at such
time as may be necessary to make payments from the Rebate Fund.

                  Subject to any directions  from the Designated  Representative
with respect thereto,  from time to time, the Trustee may sell those investments
and  reinvest  the  proceeds  therefrom  in  Eligible  Investments  maturing  or
redeemable as aforesaid.  Any of those investments may be purchased from or sold
to the Trustee,  the Bond Registrar,  an Authenticating Agent or a Paying Agent,
or any bank, trust company or savings and loan  association  affiliated with any
of the foregoing.  The Trustee shall sell or redeem investments  credited to the
Bond Fund to produce sufficient moneys applicable  hereunder to and at the times
required for the purposes of paying Bond Service  Charges when due as aforesaid,
and shall do so  without  necessity  for any order on behalf of the  Issuer  and
without  restriction  by reason of any order.  An  investment  made from  moneys
credited to the Project Fund,  Insurance and Condemnation Fund, Bond Fund or the
Rebate Fund shall constitute part of that respective Fund. The Project Fund, the
Insurance  and  Condemnation  Fund,  the Bond Fund and the Rebate  Fund shall be
credited with all proceeds of sale and income from investment of moneys credited
thereto.  For purposes of this Indenture,  those  investments shall be valued at
face amount or market value, whichever is less.

                  Moneys  deposited in the Credit  Facility  Account in the Bond
Fund shall be invested by the Trustee only in obligations described under clause
(i) of the  definition  of  Eligible  Investments.  Proceeds  received  from the
remarketing of the Bonds and deposited in the Remarketing Proceeds Account shall
be invested by the Trustee  only in  obligations  described  under clause (i) or
(ii) of the definition of Eligible  Investments  (provided that if the Bonds are
then rated by a Rating Service or Rating Services,  obligations  described under
clause (ii) of such  definition must be prerefunded or 

                                       50
<PAGE>

escrowed to maturity with obligations described in clause (i) of such definition
and be rated  "AAA" by Moody's  Investors  Service  and/or  "AAA" by  Standard &
Poor's  Ratings Group,  as applicable to the Rating  Service or Rating  Services
then rating the Bonds). Such obligations shall be noncallable,  and shall mature
in 30  days  or less  and at the  times  and in the  amounts  necessary  to make
payments of Bond Service Charges on, or the purchase price of, Bonds when due or
the  aforesaid  moneys shall be held  uninvested  in their  respective  accounts
pending application pursuant to the terms of Article III or Section 5.04 hereof,
as  applicable,  provided  that the holding of such moneys  uninvested  will not
cause the Bonds to be deemed "arbitrage bonds" within the meaning of Section 148
of the Code.  Moneys deposited in the Defeasance  Account in the Bond Fund shall
be invested by the Trustee in accordance with Section 9.01 hereof.

                  SECTION 5.04. MONEYS TO BE HELD IN TRUST.  Except where moneys
have  been  deposited  with or paid to the  Trustee  pursuant  to an  instrument
restricting  their  application  to  particular  Bonds,  all moneys  required or
permitted to be deposited  with or paid to the Trustee or any Paying Agent under
any provision of this Indenture,  the Agreement or the Credit Facility,  and any
investments thereof,  shall be held by the Trustee or that Paying Agent in trust
pursuant to the terms of this Indenture. Except for (i) moneys deposited with or
paid to the Trustee or any Paying Agent for the  redemption of Bonds,  notice of
the  redemption  of which  shall have been duly  given,  (ii) moneys held by the
Trustee pursuant to Section 3.03(b) hereof, and (iii) moneys in the Rebate Fund,
all moneys described in the preceding sentence held by the Trustee or any Paying
Agent shall be subject to the provisions hereof while so held.

                  SECTION 5.05. CREATION OF REBATE FUND. There is created by the
Issuer and ordered  maintained as a separate  deposit  account in the custody of
the Trustee a fund to be designated "County of Saratoga  Industrial  Development
Agency - Spurlock Adhesives,  Inc. Project Rebate Fund." Any provision hereof to
the contrary notwithstanding,  amounts credited to the Rebate Fund shall be free
and clear of any lien hereunder.

                  The Trustee shall cause to be calculated, within 30 days after
the end of each 5th Bond Year for each  series of Bonds and within 30 days after
Conversion of the interest on the Bonds to the Taxable Weekly Rate and within 30
days after payment in full of all outstanding  Bonds of each series,  the Rebate
Amount  as of the end of that  Bond  Year or the date of such  payment  in full;
provided,  that the Trustee  shall,  at the expense of the  Company,  engage and
furnish  information to an independent  certified public accounting firm or firm
of attorneys or a recognized rebate  calculation firm designated and approved by
the  Designated  Representative  and  approved  by the  Trustee,  to  make  such
calculations on behalf of the Trustee and the Company.  The Trustee shall notify
the  Company in writing of that  amount and of the amount then on deposit in the
applicable  accounts  in the Rebate  Fund.  If the amount then on deposit in the
account in the Rebate  Fund is in excess of the Rebate  Amount  (less the Rebate
Amounts, if any, previously paid to the United States pursuant to this Section),
the Trustee shall forthwith pay that excess amount to the Company. If the amount
then on deposit in the  applicable  account in the Rebate  Fund is less than the
Rebate Amount (less the Rebate  Amounts,  if any,  previously paid to the United
States pursuant to this Section), the Company shall, within 5 days after receipt
of the aforesaid notice from the Trustee,  pay to the Trustee for deposit in the
Rebate Fund an amount  sufficient to cause the applicable  account in the Rebate
Fund to contain an amount equal to the Rebate  Amount (less the Rebate  Amounts,
if any,  previously paid to the United States pursuant to this Section).  Within
45 days  after the end of the 5th Bond Year and every 5th Bond Year  thereafter,
the Trustee,  acting on behalf of the Issuer,  shall pay to the United States in
accordance  with  Section  148(f) of the Code from the moneys then on deposit in
the  applicable  account  in the  Rebate  Fund an  amount  equal to 90% (or such
greater  percentage  not in excess of 100% as the Company may direct the Trustee
to pay) of the  Rebate  Amount  as of the end of such 5th Bond  Year  (less  the
Rebate  Amounts,  if any,  previously paid to the United States pursuant to 

                                       51
<PAGE>

this  Section).  Within 60 days after the Conversion of the interest rate on the
Bonds to the Taxable Weekly Rate or the payment in full of all outstanding Bonds
of each series,  the Trustee shall pay to the United  States in accordance  with
Section  148(f) of the Code from the moneys  then on  deposit in the  applicable
account in the Rebate  Fund an amount  equal to 100% of the Rebate  Amount as of
the date of such payment (less the Rebate  Amounts,  if any,  previously paid to
the  United  States  pursuant  to this  Section).  Any moneys  remaining  in the
applicable  account in the Rebate Fund  following  such payment shall be paid to
the Company.  All  computations  of Rebate Amounts  pursuant to this Section and
Section  3.8 of the  Agreement  shall  treat  the  amount  or  amounts,  if any,
previously paid to the United States pursuant to this Section and Section 3.8 of
the Agreement as amounts on deposit in the Rebate Fund.

                  The  Trustee  shall  obtain  and  keep  such  records  of  the
computations  made pursuant to this Section as are required under Section 148(f)
of the Code.

                  If all the gross  proceeds of the Bonds of any series,  within
the meaning of Section  148(f) of the Code (other than gross  proceeds in a bona
fide debt  service  fund  within the  meaning of Section  148 of the Code),  are
expended for the governmental  purpose for which that series of Bonds was issued
so as to meet the  exceptions  to the rebate  requirements  set forth in Section
148(f)(4)(B)  of  the  Code  (6-month  exception)  or  in  Treasury  Regulations
ss.1.148-7(d)  (18-month  exception) as further  described in the Tax Compliance
Agreement,  the provisions of this Section 5.06 and Section 3.8 of the Agreement
shall be deemed as met.

                  The procedures provided in this Section may be modified to the
extent necessary to comply with relevant regulations,  temporary regulations and
proposed  regulations under Section 148 of the Code, as determined in an opinion
of nationally  recognized bond counsel  delivered to the Trustee;  provided that
the Trustee shall not be relieved of its  obligation to calculate or cause to be
calculated  the Rebate  Amount under  Section 148 of the Code and to ensure that
sufficient moneys to pay that amount are on deposit in the Rebate Fund.

                  SECTION  5.06.  REPAYMENT  TO THE  COMPANY  OR THE  BANK  FROM
AMOUNTS  REMAINING IN THE BOND FUND. Any amounts  remaining in the Bond Fund (i)
after all of the outstanding Bonds shall be deemed paid and discharged under the
provisions of this  Indenture,  and (ii) after payment of all fees,  charges and
expenses of the Trustee,  the Registrar and any Paying Agents or  Authenticating
Agents and of all other amounts required to be paid under this Indenture and the
Agreement, shall be paid to the Bank and to the extent that those amounts are in
excess of those  necessary to effect the payment and  discharge of the Company's
obligations  under  the  Reimbursement  Agreement  and any sum owing to the Bank
under the other Financing  Documents and otherwise shall be paid to the Company;
provided,  however,  that  notwithstanding any provision to the contrary in this
Indenture  or  elsewhere,  any  moneys  in  the  Credit  Facility  Account,  the
Defeasance Account,  the Remarketing  Proceeds Account or the Redemption Premium
Account may not be paid to the Company; and provided,  further, that any amounts
which were deposited in the Redemption  Premium Account of the Bond Fund for the
purpose of causing such amounts to constitute  Available Moneys and which remain
after all of the  Outstanding  Bonds shall be deemed paid and  discharged  under
this Indenture, shall be retained by the Trustee and shall not be paid to or for
the  benefit of the  Company,  who shall  have no right to take or control  such
amounts.



                                       52
<PAGE>


                                   ARTICLE VI

                                CREDIT FACILITIES

                  SECTION 6.01.  INITIAL LETTER OF CREDIT.  The Letter of Credit
shall  provide  for  direct  payments  to or upon the  order of the  Trustee  as
hereinafter set forth and shall be the irrevocable obligation of the Bank to pay
to or upon the order of the  Trustee,  upon request and in  accordance  with the
terms  thereof,  up to (a) an amount equal to the principal  amount of the Bonds
(i) to pay the principal of the Bonds when due whether at stated maturity,  upon
redemption  or  acceleration  or (ii) to  enable  the  Tender  Agent  to pay the
purchase price or portion of the purchase price equal to the principal amount of
Bonds purchased pursuant to Section 3.01 to the extent remarketing  proceeds are
not available for such purpose,  plus (b) an amount equal to 110 days'  interest
accrued  on the  Bonds  at a rate of ten  percent  (10%)  per  annum  (i) to pay
interest  on the Bonds when due or (ii) to enable  the  Tender  Agent to pay the
portion of the purchase  price of the Bonds  purchased  pursuant to Section 3.01
equal to the interest accrued,  if any, on such Bonds to the extent  remarketing
proceeds are not available for such purpose.

                  The  Letter of Credit  shall  terminate  automatically  on the
earliest  of (i) the  payment by the Bank to the  Trustee  of the final  drawing
available to be made under the Letter of Credit; (ii) receipt by the Bank of the
Letter of Credit and a  certificate  signed by an officer of the Trustee and the
Designated   Representative   of  the  Company  stating  that  no  Bonds  remain
Outstanding; (iii) receipt by the Bank of the Letter of Credit and a certificate
signed by an officer of the Trustee and the  Designated  Representative  stating
that an Alternate  Credit Facility in substitution  for the Letter of Credit has
been  accepted by the Trustee  and is in effect;  or (iv) the stated  expiration
date of the Letter of Credit.

                  The  Bank's  obligation  under the  Letter  of Credit  will be
reduced  to the extent of any  drawing  thereunder.  The Letter of Credit  shall
provide  that,  with  respect to a drawing by the Trustee to pay interest on the
Bonds on any Interest Payment Date or the portion of the purchase price of Bonds
corresponding  to interest on the Bonds,  if the Trustee shall not have received
from the Bank on or before the close of  business  on the 5th day after the date
of such  drawing a notice by  telephonic  facsimile  (confirmed  in writing by a
certificate  of the Bank) that the Letter of Credit will not be reinstated as of
the date of such notice to an amount equal to 110 days' interest  accrued on the
Bonds at the rate of ten percent (10%) per annum,  the  Trustee's  right to draw
under the  Letter of Credit  with  respect  to the  payment  of  interest  on an
Interest  Payment Date shall be  reinstated  on and  effective as of the 5th day
after such drawing to an amount equal to 110 days' interest accrued on the Bonds
at a rate of ten  percent  (10%) per annum.  With  respect to any drawing by the
Trustee to pay a portion of the  purchase  price  corresponding  to principal of
Bonds purchased  pursuant to Section 3.01, the amount available under the Letter
of Credit for payment of principal  or purchase  price of the Bonds due shall be
reinstated  in an amount  equal to any such  drawing but only to the extent that
the  Bank is  reimbursed  in  accordance  with the  terms  of the  Reimbursement
Agreement for the amounts so drawn.  In no event will the Trustee be entitled to
make  drawings  under the Letter of Credit for the  payment of any amount due on
any Bond held  pursuant to Section 3.05,  except for interest  payments on Bonds
that were not held pursuant to Section 3.05 on the Record Date for such payment.
In  calculating  the amount to be drawn on the Letter of Credit for the purchase
of the Bonds, the Trustee shall take into account only the remarketing proceeds,
if any,  deposited  into the  Remarketing  Proceeds  Account with respect to the
remarketing of such Bonds on or before 10:00 a.m.,  Albany, New York time on the
Purchase  Date,  including  proceeds  from  the  purchase  of the  Bonds  by the
Remarketing  Agent or the Tender Agent for its own account but not including the
remarketing of the Bonds to the Issuer or the Company.

                                       53
<PAGE>

                  The Letter of Credit shall provide that if, in accordance with
the terms of the Indenture,  the Bonds shall become  immediately due and payable
pursuant to any  provision of the  Indenture,  the Trustee  shall be entitled to
draw on the Letter of Credit to the extent of the aggregate  principal amount of
the Bonds then  Outstanding  plus, to the extent  available  under the Letter of
Credit,  an amount  sufficient to pay interest on all  Outstanding  Bonds,  less
amounts for which the Letter of Credit shall not have been reinstated.

                  SECTION 6.02. EXPIRATION.  If at any time there shall cease to
be any Bonds  Outstanding  hereunder,  the Trustee shall promptly  surrender the
current Credit  Facility to the Credit  Facility  Issuer for  cancellation.  The
Trustee  shall  comply  with the  procedures  set forth in the  Credit  Facility
relating to the termination thereof.

                  SECTION 6.03. ALTERNATE CREDIT FACILITIES. The Company may, at
their  option,  provide for the delivery to the Trustee of an  Alternate  Credit
Facility  which,  if the Interest  Rate Mode is the Long-Term  Rate,  shall be a
Qualified Alternate Credit Facility. Such Alternate Credit Facility shall have a
term of not less than 1 year and set forth a maximum  interest rate on the Bonds
with respect to which  drawings may be made.  The Company shall give the Trustee
an  irrevocable  written  notice of their  intention to replace the then current
Credit Facility with an Alternate Credit Facility prior to the stated expiration
date of the then  current  Credit  Facility at least 35 days before the Interest
Payment Date  preceding  (by at least 15 calendar  days) the date of delivery of
such Alternate  Credit Facility stated in such notice.  On or before the date of
delivery of an  Alternate  Credit  Facility to the  Trustee,  the Company  shall
provide the Trustee with (a) an opinion of Counsel  stating that the delivery of
such Alternate Credit Facility to the Trustee is authorized under this Indenture
and complies with the terms  hereof,  (b) an opinion of counsel to the issuer or
provider of such Alternate  Credit Facility stating that such Credit Facility is
a legal, valid, binding and enforceable  obligation of such issuer or obligor in
accordance with its terms,  and (c) if the stated amount of the Alternate Credit
Facility  is  increased  over that of the Credit  Facility  being  replaced,  an
opinion of Counsel  stating that payments of principal and interest on the Bonds
from  funds  drawn  on  such  Credit  Facility  will  not  constitute  avoidable
preferences  with  respect  to the  subsequent  bankruptcy  of the Issuer or the
Company under the Bankruptcy Code.

                  The Trustee shall then accept such Alternate  Credit  Facility
and  surrender  the  previously  held Credit  Facility,  if any, to the previous
Credit  Facility Issuer for  cancellation  promptly on or after the 5th Business
Day after the Alternate Credit Facility becomes effective,  but not earlier than
the 5th Business Day  following  the last  Interest  Payment Date covered by the
Credit  Facility to be cancelled.  Each Alternate  Credit  Facility shall have a
term of not less than 1 year.

                  Unless all of the  conditions  of this Section 6.03 shall have
been  satisfied,  and  the  expiring  Credit  Facility  (whether  by  expiration
according to its terms or upon delivery of an Alternate  Credit  Facility) shall
have been replaced with an Alternate Credit Facility, which if the Interest Rate
Mode is the Long-Term Rate, shall be a Qualifying Alternate Credit Facility, and
if the  Interest  Rate Mode is the Weekly Rate,  the Taxable  Weekly Rate or the
Semi-Annual Rate, shall be issued by the then current Credit Facility Issuer, at
least 35 days before the Interest  Payment  Date  immediately  preceding  (by at
least 15  calendar  days)  the  expiration  date of the  Credit  Facility  being
replaced,  the  Trustee  shall call the Bonds for  purchase  pursuant to Section
3.01(b) and Section  6.04.  In any event,  the Trustee  shall not give notice of
purchase of the Bonds on account of a failure to provide a Qualifying  Alternate
Credit Facility until the time specified in the preceding  sentence for delivery
of such Qualifying Alternate Credit Facility.

                                       54
<PAGE>

                  SECTION 6.04.  NOTICES OF EXPIRATION AND/OR REPLACEMENT OF 
CREDIT FACILITY.

                           (a)      The Trustee shall notify the  Bondholders of
the  expiration  of the  term of the  Credit  Facility  (whether  by  expiration
according to its terms or upon delivery of an Alternate  Credit  Facility) which
will subject the Bonds to mandatory  purchase in accordance with Section 3.01(b)
by first class mail delivered to each Bondholder's  registered  address at least
30 days but not more than 60 days before any Purchase Date  resulting  from such
expiration.  The  notice  will state (i) that the Credit  Facility  is  expiring
according  to its terms or will expire  upon  delivery  of an  Alternate  Credit
Facility, and (ii) the Purchase Date for the Bonds.

                           (b)      The Trustee shall notify  Bondholders of the
replacement  of a Credit  Facility with any Alternate  Credit  Facility by first
class mail delivered to each  Bondholder's  registered  address at least 30 days
but not more than 60 days prior to the effective date of such replacement.



                                       55
<PAGE>


                                   ARTICLE VII

                         INVESTMENT OR DEPOSIT OF MONEYS

                  SECTION  7.01.  DEPOSITS.  All moneys  received by the Trustee
under  this  Indenture  shall be  deposited  with the  Trustee,  until or unless
invested or deposited as provided in Section 5.03. All deposits with the Trustee
shall be secured as  required by  applicable  law for such trust  deposits.  The
Trustee may deposit such moneys with any other depository which is authorized to
receive them and is subject to supervision by public banking authorities.



                                       56
<PAGE>


                                  ARTICLE VIII

                               REDEMPTION OF BONDS

                  SECTION 8.01.  REDEMPTION DATES AND PRICES. The Bonds shall be
subject to redemption prior to maturity in the amounts,  at the times and in the
manner  provided in this Article VIII.  Payments of the redemption  price of any
Bond shall be made in immediately  available  funds on the redemption  date only
upon the surrender to the Paying Agent of any Bond so redeemed.

                           (a)      Whenever  the  Interest  Rate  Mode  for the
Bonds is the Weekly Rate, the Taxable Weekly Rate or the  Semi-Annual  Rate, the
Bonds  shall be subject to  redemption  at the  option of the  Issuer,  upon the
direction  of the  Company,  in  whole  on any  date or in part on any  Interest
Payment Date, at a redemption price of 100% of the principal amount thereof.

                           (b)      Whenever  the  Interest  Rate  Mode  for the
Bonds is the Long-Term  Rate, the Bonds shall be subject to redemption  prior to
the end of the then current  Long-Term  Rate Period at the option of the Issuer,
upon the direction of the Company, at any time during the redemption periods and
at  the  redemption  prices  set  forth  below,  plus  interest  accrued  to the
redemption date (which  redemption price and accrued interest shall be paid only
from Available Moneys):

<TABLE>
<CAPTION>

    Length of Current Long-                    Commencement of                      Redemption Price as
   Term Rate Period (Years)                   Redemption Period                   Percentage of Principal
   ------------------------                   -----------------                   -----------------------

<S>                                    <C>                                      <C>                          
More than 9 years                      5th anniversary of commencement          102%, declining by 1% on each
                                       of Long-Term Rate Period                 succeeding  anniversary of the 
                                                                                first day of the redemption 
                                                                                period until reaching 100% and 
                                                                                thereafter 100%

More than 7, but not more               4th anniversary of commencement         of 101%,declining by 1% on each 
than 9 years                            of Long-Term Rate Period                succeeding  anniversary of the 
                                                                                first day of the redemption  
                                                                                period until reaching 100% and 
                                                                                thereafter 100%

More than 5, but not more               3rd anniversary of commencement         101%,declining by 1% on each 
than 7 years                            of Long-Term Rate Period                succeeding  anniversary of the 
                                                                                first day of the redemption  
                                                                                period until reaching 100% and 
                                                                                thereafter 100%

</TABLE>

If, at the time of the Company's  notice of Conversion of the Interest Rate Mode
for the Bonds to the  Long-Term  Rate pursuant to Section  2.02(e),  the Company
provides a certification of the Remarketing  Agent to the Trustee and the Issuer
that the foregoing schedule is not consistent with prevailing market conditions,
the foregoing redemption periods and redemption prices may be revised, effective
as of the  Conversion  Date,  as  determined  by the  Remarketing  Agent  in its
judgment,  taking  into  account  the  then  prevailing  market  conditions,  as
stipulated in such certification,  which shall be appended by the Trustee to its
counterpart of this Indenture.

                                       57
<PAGE>

                           (c)      Extraordinary  Redemption  Without  Premium.
The Bonds  shall be  subject to  redemption  prior to  maturity  (1) as a whole,
without  premium,  as provided  in Section  4.03  hereof,  in the event of (a) a
taking in Condemnation of, or failure of title to, all or  substantially  all of
the Project Facility, (b) damage to or destruction of part or all of the Project
Facility and (x) election by the Company to redeem the Bonds in accordance  with
Section 7.1 of the  Agreement  or (y) election by the Bank to cause a redemption
of the Bonds in accordance with Section 7.1 of the Agreement, or (c) a taking in
Condemnation of part of the Project  Facility and (x) election by the Company to
redeem the Bonds in accordance with Section 7.2 of the Agreement or (y) election
by the Bank to cause a redemption of the Bonds in accordance with Section 7.2 of
the Agreement,  or (2) in part, without premium, (a) as provided in Section 4.03
hereof,  in the  event  that (i)  excess  moneys  remain  in the  Insurance  and
Condemnation  Fund following  damage or condemnation of a portion of the Project
Facility and completion of the repair,  rebuilding or restoration of the Project
Facility  by the  Company,  and (ii)  such  moneys  are not paid to the  Company
pursuant to Section 4.03 hereof,  or (b) as provided in Section 4.02 hereof,  in
the event excess moneys remain in the Project Fund after the Completion Date. In
any such event, the Bonds shall be redeemed,  as a whole or in part, as the case
may be, in the manner  provided in this Article III, at such time as the Trustee
determines,  at a redemption price equal to the principal  amount thereof,  plus
accrued interest to the redemption date, without premium.

                           (d)      Mandatory Redemption Upon a Determination of
Taxability.  Prior  to  Conversion  to the  Taxable  Weekly  Rate  and  upon the
occurrence of a Determination of Taxability,  the Bonds are subject to mandatory
redemption in whole from the proceeds of the Company paying advance  installment
purchase  payments at a redemption  price equal to one hundred percent (100%) of
the  outstanding   principal  amount  thereof,  plus  interest  accrued  to  the
redemption date, at the earliest practicable date selected by the Trustee, after
consultation with the Company,  but in no event later than 90 days following the
Trustee's being notified of or otherwise  becoming aware of a  Determination  of
Taxability.

                           (e)      Redemption  Premium.  Any premium payable on
redemption may be paid only from moneys  satisfying the  requirements of Section
5.01(c)(iii).  The  Company may call any Bonds for  redemption  pursuant to this
subsection  (e) which would  require a payment of a premium  only if the Trustee
can draw under the Credit  Facility and has in the  Redemption  Premium  Account
moneys that satisfy the  requirements  of Section  5.01(c)(iii),  which together
constitute an aggregate amount  sufficient to pay such premium and the principal
of and interest on the Bonds so called to the date of redemption.

                  SECTION 8.02.  ISSUER  DIRECTION OF OPTIONAL  REDEMPTION.  The
Trustee shall call the Bonds for optional redemption when and only when it shall
have been notified by the Issuer to do so, at the  direction of the Company,  or
by written  notice from the Company to the Trustee and the Bank on behalf of the
Issuer.  So long as a Credit  Facility is then held by the Trustee,  the Trustee
shall only call Bonds for optional  redemption if it has Available Moneys in the
Redemption  Premium  Account of the Bond Fund or will receive  Available  Moneys
from the proceeds of refunding bonds or from drawings under the Credit Facility,
in the  aggregate,  sufficient  to pay the  redemption  price of the Bonds to be
called for redemption,  plus accrued  interest  thereon.  Notice of any optional
redemption  shall specify the  principal  amount of Bonds to be redeemed and the
redemption date. The Issuer upon written request of the Company will give notice
to the Trustee at least 5 days prior to the day on which the Trustee is required
to give notice of such optional redemption to the Bondholders.

                  SECTION 8.03.  SELECTION OF BONDS TO BE CALLED FOR REDEMPTION.
Except as otherwise  provided herein or in the Bonds, if less than all the Bonds
are to be redeemed,  the 

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particular  Bonds to be called for  redemption  shall be  selected by any method
determined by the Trustee to be fair and reasonable;  provided, however, that in
connection  with any  redemption  of Bonds the Trustee  shall  first  select for
redemption  any Bonds held  pursuant to Section  3.05 prior to any  selection by
lot. The Trustee shall treat any Bond of a  denomination  greater than $5,000 as
representing that number of separate Bonds each of the denomination of $5,000 as
can be obtained by dividing the actual  principal amount of such Bond by $5,000;
provided that at any time,  no $5,000  portion of a Bond shall be redeemed if it
results in the unredeemed portion of the Bond being less than $100,000.

                  SECTION 8.04.  NOTICE OF REDEMPTION.

                           (a)      When  required  to  redeem  Bonds  under any
provision of this  Article  VIII,  or when  directed to do so by the Issuer upon
written request or the Company on behalf of the Issuer,  the Trustee shall cause
notice of the redemption to be given by first class mail,  postage  prepaid,  to
all registered owners of Bonds to be redeemed at their registered  addresses not
more than 60 and not fewer than 30 days prior to the redemption date. Failure to
mail any such  notice or defect in the  mailing  thereof  in respect of any Bond
shall not affect the validity of the  redemption  of any other Bond.  Notices of
such redemptions shall also be mailed to the Remarketing Agent, the Tender Agent
and the Credit Facility  Issuer,  if any, (and the Rating Service,  if the Bonds
are then rated by a Rating Service).  Any such notice shall be given in the name
of the Company,  shall  identify the Bonds to be redeemed  (and,  in the case of
partial redemption of any Bonds, the respective  principal amounts thereof to be
redeemed),  shall specify the redemption date and the redemption  price and when
any interest  accrued to the  redemption  date will be payable,  and shall state
that on the  redemption  date the  redemption  price  of the  Bonds  called  for
redemption  will be  payable  at the  principal  corporate  trust  office of the
Trustee  and/or of one or more Paying  Agents and from that date  interest  will
cease to accrue. The Trustee shall at all reasonable times make available to any
interested  party  complete  information as to Bonds which have been redeemed or
called for redemption.

                           (b)      If at the time of  mailing  of notice of any
optional  redemption  in  connection  with a refunding  of the Bonds the Company
shall not have deposited  with the Trustee  moneys  sufficient to redeem all the
Bonds called for  redemption,  such notice may state that it is  conditional  in
that it is subject to the deposit of the  proceeds of  refunding  notes with the
Trustee not later than the  redemption  date,  and such notice and such optional
redemption shall be of no effect unless such moneys are so deposited.

                           (c)      Notice  of  any  redemption  hereunder  with
respect to Bonds held under a book entry system shall be given by the  Registrar
or the Trustee only to the  Depository,  or its  nominee,  as the holder of such
Bonds.  Selection of book entry  interests in the Bonds called for redemption is
the responsibility of the Depository and any failure of any Direct  Participant,
Indirect Participant or Beneficial Owner to receive such notice and its contents
or effect will not affect the validity of such notice or any proceedings for the
redemption of such Bonds.

                  SECTION 8.05.  BONDS REDEEMED IN PART. Any Bond which is to be
redeemed only in part shall be  surrendered  at a place stated for the surrender
of Bonds called for redemption in the notice  provided for in Section 8.04 (with
due endorsement by, or a written  instrument of transfer in form satisfactory to
the Trustee duly executed by, the owner thereof or his attorney duly  authorized
in writing) and the Issuer shall execute and the Trustee shall  authenticate and
deliver to the owner of such Bond without service  charge,  a new Bond or Bonds,
of any authorized denomination as requested by such owner in aggregate principal
amount equal to and in exchange for the  unredeemed  portion of the principal of
the  Bond  so  surrendered,  provided  further  that,  if  less  than  all of an
outstanding  Bond of one  

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<PAGE>

maturity  in a book entry  system is to be called for  redemption,  the  Trustee
shall give notice to the Depository or the nominee of the Depository that is the
holder of such Bond, and the selection of the beneficial  interests in that Bond
to be  redeemed  shall  be at the  sole  discretion  of the  Depository  and its
participants.

                  SECTION  8.06.  NO MANDATORY  SINKING FUND  REQUIREMENTS.  The
Bonds are not subject to mandatory  redemption prior to stated maturity pursuant
to any mandatory sinking fund requirements.



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                                   ARTICLE IX

                     COVENANTS AND AGREEMENTS OF THE ISSUER

                  SECTION  9.01.  COVENANTS  AND  AGREEMENTS  OF THE ISSUER.  In
addition to any other  covenants and agreements of the Issuer  contained in this
Indenture  or the  Act,  the  Issuer  further  covenants  and  agrees  with  the
Bondholders and the Trustee as follows:

                           (a)      Payment of Bond Service Charges. The Issuer,
subject to the  provisions of Section 2.01 and 16.01  hereof,  will pay all Bond
Service  Charges,  or cause them to be paid,  solely from the  sources  provided
herein,  on  the  dates,  at the  places  and in the  manner  provided  in  this
Indenture.

                           (b)      Revenues and  Assignment  of  Revenues.  The
Issuer  will not assign the  Revenues or create or  authorize  to be created any
debt,  lien or charge  thereon,  other than the  assignment  thereof  under this
Indenture.

                           (c)      Recordings  and  Filings.  The  Lien  on the
Project  Facility created by the Mortgage shall be perfected by the recording by
the Issuer, at the expense of the Company,  of the Mortgage in the office of the
County Clerk of Saratoga County, New York. The security interests of the Trustee
created by the  Indenture  and the other  Financing  Documents  and the security
interests of the Issuer assigned to the Trustee shall be perfected by the filing
by the Company,  the Issuer and the Trustee in the office of the County Clerk of
Saratoga County,  New York and the office of the Secretary of State of the State
of financing and  continuation  statements  (which  continuation  statements the
Trustee is hereby expressly authorized to sign) required to be filed pursuant to
the  Uniform  Commercial  Code of the  State in order to  perfect  the  security
interests created herein and therein. Such financing statements and continuation
statements  shall be filed  without the necessity of the signature of the Issuer
or the Company as debtor from time to time by the Trustee, at the expense of the
Company,  as are  required by law to  preserve  the Lien of the  Indenture.  The
Trustee shall be entitled to receive, no less frequently than each five (5) year
anniversary  of the date of the  issuance  of the Bonds,  an opinion of Counsel,
addressed to the Trustee,  stating that all such necessary recordings or filings
have been completed.

                           (d)      Inspection  of  Project  Books.  All  books,
instruments and documents in the Issuer's possession relating to the Project and
the  Revenues  shall be open to  inspection  at all times  during  the  Issuer's
regular  business hours by any accountants or other agents of the Trustee or the
Credit  Facility  Issuer  which the  Trustee or the Credit  Facility  Issuer may
designate from time to time.

                           (e)      Register.  At  reasonable  times  and  under
reasonable  regulations  established  by  the  Registrar,  the  Register  may be
inspected and copied by the Company,  the Trustee, by Bondholders of 25% or more
in   principal   amount  of  the  Bonds  then   outstanding,   or  a  designated
representative thereof.

                           (f)      Rights and Enforcement of the Agreement. The
Trustee may enforce, in its name or in the name of the Issuer, all rights of the
Issuer  for and on behalf of the  Bondholders,  except for  Unassigned  Issuer's
Rights, and may enforce all covenants, agreements and obligations of the Company
under and  pursuant  to the  Agreement,  regardless  of whether the Issuer is in
default in the pursuit or enforcement of those rights, covenants,  agreements or
obligations.  Subject to the  provisions of Sections 9.03 and 16.01 hereof,  the
Issuer,  however,  will do all things and take all actions on its part necessary
to comply with covenants,  agreements,  obligations, duties and responsibilities
on its part to be observed or performed  under the Agreement,  and will take all
actions within its authority to keep the Agreement in effect in accordance  with
the terms thereof.

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<PAGE>

                           (g)      Issuer  Not to  Adversely  Affect  Exclusion
From Gross  Income of Interest on the Bonds.  The Issuer  covenants  that it (i)
will not take any action (or omit to take any  action  which the  Trustee or the
Company, together with Bond Counsel, advise the Issuer in writing to take) which
action (or omission) would in any way adversely  affect the exclusion from gross
income for federal income tax purposes of interest on the Bonds.

                  SECTION  9.02.   OBSERVANCE  AND   PERFORMANCE  OF  COVENANTS,
AGREEMENTS,   AUTHORITY  AND  ACTIONS.  The  Issuer  will  observe  and  perform
faithfully  at  all  times  all  covenants,   agreements,   authority,  actions,
undertakings,  stipulations  and  provisions  to be observed or performed on its
part  under the  Agreement,  this  Indenture,  the Act and the  Bonds  which are
executed, authenticated and delivered under this Indenture.

                  The Issuer represents and warrants that

                                    (a)      It  is  duly   authorized   by  the
                  Constitution and laws of the State, including particularly and
                  without limitation the Act, to issue the Bonds, to execute and
                  deliver this  Indenture  and the  Agreement and to provide the
                  security for payment of the Bond Service Charges in the manner
                  and to the extent set forth in this Indenture.

                                    (b)      All actions required on its part to
                  be performed for the issuance,  sale and delivery of the Bonds
                  and for the execution  and delivery of this  Indenture and the
                  Agreement have been or will be taken duly and effectively.

                                    (c)      The   Bonds   will  be  valid   and
                  enforceable  special  obligations  of the Issuer  according to
                  their terms.

                  SECTION  9.03.   LIMITATION  ON  OBLIGATIONS  OF  THE  ISSUER.
Notwithstanding any provision of the Indenture to the contrary, the Issuer shall
not be  obligated to take any action or execute any  instrument  pursuant to any
provision hereof, unless (A) it shall have been requested to do so in writing by
the Trustee, the holders of not less than twenty-five percent (25%) in aggregate
principal  amount of the  Bonds  then  Outstanding  or the  Company,  and (B) if
compliance with such request is reasonably  expected to result in the incurrence
by the Issuer (or any member,  officer, agent [other than the Company],  servant
or employee of the Issuer) of any liability,  fees, expenses or other costs, the
Issuer shall have received from the Trustee, such holders or the Company, as the
case may be,  security or indemnity  reasonably  satisfactory  to the Issuer for
protection against such liability,  however remote, and for the reimbursement of
all such fees, expenses and other costs;  provided,  however, that no limitation
on the obligations of the Issuer contained in this Section 9.03 by virtue of any
lack of  assurance  provided  in (B)  hereof  shall be  deemed  to  prevent  the
occurrence and full force and effect of any Event of Default hereunder.

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<PAGE>


                                    ARTICLE X

                         EVENTS OF DEFAULT AND REMEDIES

                  SECTION  10.01.  EVENTS  OF  DEFAULT  DEFINED.   Each  of  the
following shall be an "Event of Default" hereunder:

                           (a)      Payment of the principal or redemption price
of any Bond is not made when it becomes due and payable at maturity or upon call
for redemption; or

                           (b)      Payment of any  interest  on any Bond is not
made when it becomes due and payable; or

                           (c)      If no  Credit  Facility  is then held by the
Trustee, failure by the Issuer to observe and perform any covenant, condition or
agreement on its part to be observed or performed hereunder, other than any such
failure which results in an Event of Default under Section 10.01(a),  (b) or (f)
of this Indenture,  for a period of 30 days after written notice of such failure
requesting  such failure to be remedied,  given to the Issuer and the Company by
the Trustee,  unless the Trustee  shall agree in writing to an extension of such
time prior to its  expiration,  which  notice may be given by the Trustee in its
discretion  and shall be given by the  Trustee  at the  written  request  of the
Bondholders of not less than 25 percent in aggregate  principal  amount of Bonds
then outstanding; or

                           (d)      The Trustee  receives notice from the Credit
Facility Issuer, if any, of the Credit Facility then held by the Trustee that an
Event  of  Default  under  the  Reimbursement  Agreement  has  occurred  and  is
continuing and the Trustee is to accelerate the maturity of the Bonds; or

                           (e)      If a  Credit  Facility  is then  held by the
Trustee,  receipt by the Trustee,  on or before the close of business on the 5th
day following a drawing under such Credit  Facility to pay interest on the Bonds
on an  Interest  Payment  Date or the  portion  of the  purchase  price of Bonds
corresponding  to  interest  on the  Bonds,  of  notice by  telephone  (promptly
confirmed  in writing) or  facsimile  from the Credit  Facility  Issuer that the
interest  component of the Credit Facility will not be reinstated as of the date
of  such  notice  to the  amount  required  to be  maintained  pursuant  to this
Indenture; or

                           (f)      If payment of the purchase price of any Bond
required to be purchased  pursuant to Section 3.01 is not made when such payment
has become due and payable; or

                           (g)      If a  Credit  Facility  is then  held by the
Trustee,  the Credit Facility Issuer fails to honor any proper drawing under the
Credit Facility; or

                           (h)      If a  Credit  Facility  is then  held by the
Trustee, a decree or order of a court or agency or supervisory authority, having
jurisdiction in the premises for the appointment of a conservator or receiver or
liquidator in any insolvency,  readjustment  of debt,  marshalling or assets and
liabilities or similar  proceeding,  or for the winding-up or liquidation of its
affairs,  shall have been  entered  against  the Credit  Facility  Issuer or the
Credit  Facility Issuer shall have consented to the appointment of a conservator
or receiver or liquidator in any insolvency,  readjustment of debt,  marshalling
of assets and  liabilities  or similar  proceedings of or relating to the Credit
Facility  Issuer or of or relating to all or  substantially  all of its property
and the  lapse of 60 days  during  which an  Alternate  Credit  Facility  Issuer
complying with the terms hereof has not been delivered to the Trustee; or

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<PAGE>

                           (i)      The occurrence  and  continuance of an Event
of Default as defined in Section 10.1 of the Agreement.

                  SECTION  10.02.  ACCELERATION  AND ANNULMENT  THEREOF.  If any
Event of Default under Section  10.01(d),  Section  10.01(e) or 10.01(h) occurs,
then the principal of all Bonds then Outstanding, together with interest accrued
thereon to the date of  acceleration  (which date shall be within the period for
which an interest drawing sufficient to pay the interest accrued on the Bonds to
such date is available under the Credit Facility),  shall become immediately due
and  payable  at  the  place  of  payment   provided   therein  without  notice,
declaration,  or  demand,  anything  in this  Indenture  or in the  Bonds to the
contrary  notwithstanding.   If  any  other  Event  of  Default  occurs  and  is
continuing,  the Trustee may, and upon request of the owners of 25% in principal
amount of all Bonds then  Outstanding  shall, by notice in writing to the Issuer
and the  Company,  declare the  principal  of all Bonds then  Outstanding  to be
immediately  due and  payable;  and upon such  declaration  the said  principal,
together with interest  accrued thereon to the date of acceleration  (which date
shall be within the  period for which  principal  and  interest  on the Bonds is
covered by the amounts  available under the Letter of Credit),  shall become due
and payable  immediately at the place of payment provided  therein,  anything in
the  Indenture  or in  the  Bonds  to the  contrary  notwithstanding.  Upon  the
occurrence of any acceleration hereunder, the Trustee shall immediately exercise
such  rights as it may have under (i) this  Indenture  to declare  all  payments
hereunder and under the Bonds to be due and payable  immediately  and (ii) under
the  Agreement  to  declare  all  payments  thereunder  to be  due  and  payable
immediately,  and to the extent it has not already  done so,  shall  immediately
draw upon the Credit  Facility,  if any,  to the extent  permitted  by the terms
thereof.

                  Immediately after any acceleration hereunder,  the Trustee, to
the extent it has not already done so,  shall notify in writing the Issuer,  the
Company,  the Credit Facility Issuer, the Tender Agent and the Remarketing Agent
of the occurrence of such  acceleration.  Within 5 days of the occurrence of any
acceleration  hereunder,  the Trustee shall notify by first class mail,  postage
prepaid,  the  owners  of all  Bonds  Outstanding  of  the  occurrence  of  such
acceleration.

                  If,  after  the  principal  of the Bonds  has  become  due and
payable, all arrears of interest upon the Bonds are paid by the Company, and the
Company also performs all other things in respect to which they may have been in
default  hereunder  and pays  the  reasonable  charges  of the  Trustee  and the
Bondholders, including reasonable attorneys' fees, then, and in every such case,
the owners of a majority in principal amount of the Bonds then  Outstanding,  by
notice to the Company and to the Trustee,  may annul such  acceleration  and its
consequences,  and such annulment shall be binding upon the Trustee and upon all
owners of Bonds issued hereunder;  provided, however, that the Trustee shall not
annul  any  declaration  resulting  from (i) an Event of  Default  specified  in
Section 10.01(e), (ii) an Event of Default specified in Section 10.01(d) without
the prior written  consent of the Credit  Facility  Issuer or (iii) any Event of
Default  which has resulted in a drawing  under the Credit  Facility  unless the
Trustee has received written  confirmation  from the Credit Facility Issuer that
the Credit Facility has been reinstated to an amount equal to the amount thereof
prior  to  such  drawing.  No such  annulment  shall  extend  to or  affect  any
subsequent default or impair any right or remedy consequent thereon. The Trustee
shall forward a copy of any notice from  Bondholders  received by it pursuant to
this  paragraph to the Company and to the Credit  Facility  Issuer.  Immediately
upon such  annulment,  the Trustee  shall cancel,  by notice to the Issuer,  the
Company  and to the Credit  Facility  Issuer,  any demand  for  acceleration  of
payments  hereunder  and under the Bonds made by the  Trustee  pursuant  to this
Section 10.02.  The Trustee shall promptly give written notice of such annulment
to the Issuer,  the Company,  the Credit Facility Issuer,  the 

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<PAGE>

Tender Agent, the Remarketing  Agent,  and, if notice of the acceleration of the
Bonds shall have been given to the Bondholders, shall give notice thereof to the
Bondholders.

                  SECTION 10.03. OTHER REMEDIES.  If any Event of Default occurs
and is  continuing,  the  Trustee,  before or after the  principal  of the Bonds
becomes immediately due and payable, may enforce each and every right granted to
it under this Indenture and under any  supplements  or amendments  hereto or the
Agreement.  In exercising such rights, the Trustee shall take such action as, in
the judgment of the Trustee  applying the standards  described in Section 11.06,
would best serve the interests of the Bondholders.

                  As  assignee  of the  Agreement  (except  for  the  Unassigned
Issuer's  Rights),  the Trustee is empowered  to enforce each remedy,  right and
power granted to the Issuer under the Agreement. In exercising any remedy, right
or power thereunder or hereunder,  the Trustee shall take any action which would
best serve the interests of the Bondholders in the judgment of the Trustee.

                  Notwithstanding  anything to the contrary  herein,  so long as
the Letter of Credit is in effect and the Bank is making all  required  payments
with respect to the Letter of Credit in accordance  with the terms of the Letter
of Credit,  the Trustee shall not exercise any remedies under this Article X and
the Trustee shall not,  without the prior written  consent of the Bank, take any
actions  which the Trustee is required or entitled to take under this  Article X
unless and until the Trustee shall have accelerated the Bonds and drawn upon the
Letter of Credit in accordance with Section 10.02 hereof and the Bank shall have
defaulted in the performance of its obligations  under the Letter of Credit,  in
which case the Bank shall have no  authority  to  exercise  any  further  rights
hereunder unless and until said default shall have been cured by the Bank to the
reasonable satisfaction of the Trustee.

                  In the event of a default  by the Bank in the  performance  of
its obligations  under the Letter of Credit,  notwithstanding  the provisions of
the above subparagraph, the Bank shall have no authority to exercise any further
rights  hereunder,  unless and until said  default  shall have been cured by the
Bank to the reasonable satisfaction of the Trustee.

                  SECTION 10.04.  LEGAL PROCEEDINGS BY TRUSTEE.  If any Event of
Default has occurred and is continuing,  the Trustee in its discretion  may, and
upon the written  request of the owners of 25% in principal  amount of all Bonds
then Outstanding and receipt of indemnity to its satisfaction  shall, in its own
name:

                  A.       By mandamus,  or other suit,  action or proceeding at
law or in equity, enforce all rights of the Bondholders;

                  B.       Bring suit upon the Bonds or the Credit Facility,  if
any;

                  C.       By action or suit in equity  require  the  Company to
account as if it were the trustee of an express trust for the Bondholders; and

                  D.       By action or suit in equity enjoin any acts or things
which may be unlawful or in violation of the rights of the Bondholders.

                  SECTION 10.05.  DISCONTINUANCE  OF PROCEEDINGS BY TRUSTEE.  If
any  proceeding   commenced  by  the  Trustee  on  account  of  any  default  is
discontinued or is determined  adversely to the Trustee,  then the Company,  the
Credit  Facility  Issuer,  if any,  the  Trustee  and the  

                                       65
<PAGE>

Bondholders  shall be restored to their former positions and rights hereunder as
though no such proceedings had been commenced.

                  SECTION 10.06. BONDHOLDERS MAY DIRECT PROCEEDINGS.  Subject to
the  provisions of Section  10.03 hereof,  the owners of a majority in principal
amount of the Bonds Outstanding shall have the right, after furnishing indemnity
satisfactory  to the Trustee,  to direct the method and place of conducting  all
remedial  proceedings  by the Trustee  hereunder,  provided that such  direction
shall not be in conflict  with any rule of law or with this  Indenture or unduly
prejudice the rights of minority Bondholders.

                  SECTION  10.07.  LIMITATIONS  ON  ACTIONS BY  BONDHOLDERS.  No
Bondholder  shall  have any  right  to bring  suit on the  Credit  Facility.  No
Bondholder shall have any right to pursue any other remedy hereunder unless:

                           (a)      the  Trustee  shall have been given  written
notice of an Event of Default,

                           (b)      the  owners  of at  least  25% in  principal
amount of all Bonds  then  Outstanding  shall have  requested  the  Trustee,  in
writing,  to exercise the powers hereinabove granted or to pursue such remedy in
its or their name or names,

                           (c)      the   Trustee   shall   have  been   offered
indemnity  satisfactory to it against costs,  expenses and  liabilities,  except
that no  offer  of  indemnification  shall  be  required  for a  declaration  of
acceleration under Section 10.02 or for a drawing under the Credit Facility,  if
any, and

                           (d)      the Trustee shall have failed to comply with
such request within a reasonable time.

                  SECTION 10.08.  TRUSTEE MAY ENFORCE RIGHTS WITHOUT  POSSESSION
OF BONDS.  All rights under the  Indenture  and the Bonds may be enforced by the
Trustee  without the  possession of any Bonds or the  production  thereof at the
trial or other proceedings  relative thereto,  and any proceeding  instituted by
the Trustee  shall be brought in its name for the ratable  benefit of the owners
of the Bonds.

                  SECTION  10.09.  REMEDIES  NOT  EXCLUSIVE.  No  remedy  herein
conferred is intended to be exclusive of any other remedy or remedies,  and each
remedy is in addition to every other remedy given  hereunder or now or hereafter
existing at law or in equity or by statute.

                  SECTION 10.10.  DELAYS AND OMISSIONS NOT TO IMPAIR RIGHTS.  No
delays or omission in respect of exercising any right or power accruing upon any
default  shall  impair such right or power or be a waiver of such  default,  and
every remedy  given by this Article X may be exercised  from time to time and as
often as may as deemed expedient.

                  SECTION 10.11.  APPLICATION OF MONEYS IN EVENT OF DEFAULT. Any
moneys  received  by the  Trustee  under this  Article X shall be applied in the
following order; provided that any moneys received by the Trustee from a drawing
on the Credit  Facility  shall be applied to the extent  permitted  by the terms
thereof  only as provided  in (B) below with  respect to the  principal  of, and
interest  accrued on, Bonds other than Bonds held by the Company after  purchase
thereof  pursuant to Section  3.04(a)(iii) and other than Bonds held pursuant to
Section 3.05:

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                  A.       To  the  payment  of  the  reasonable  costs  of  the
Trustee, including counsel fees, any disbursements of the Trustee; and

                  B.       To the payment of principal or  redemption  price (as
the case may be) and interest  then owing on the Bonds,  and in case such moneys
shall be  insufficient to pay the same in full, then to the payment of principal
or redemption price and interest ratably,  without preference or priority of one
over another or of any  installment  of interest over any other  installment  of
interest;

                  C.       To the  reimbursement  of the Credit  Facility Issuer
for unreimbursed draws under the Credit Facility; and

                  D.       To the payment of  reasonable  costs and  expenses of
the Credit Facility Issuer,  including counsel fees, incurred in connection with
the Event of Default.

                  The  surplus,  if any,  shall  be paid to the  Company  or the
person  lawfully   entitled  to  receive  the  same  as  a  court  of  competent
jurisdiction may direct.

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                                   ARTICLE XI

                                   THE TRUSTEE

                  SECTION 11.01.  ACCEPTANCE OF TRUST.  The Trustee  accepts and
agrees to execute the trusts hereby created,  but only upon the additional terms
set  forth  in  this  Article,  to all of  which  the  parties  hereto  and  the
Bondholders agree.

                  SECTION  11.02.  NO  RESPONSIBILITY  FOR  RECITALS,  ETC.  The
recitals,  statements and representations in the Indenture or in the Bonds, save
only the Trustee's  Certificate of Authentication upon the Bonds, have been made
by the  Issuer  and not by the  Trustee;  and the  Trustee  shall  be  under  no
responsibility  for the  correctness  thereof,  or for the  validity,  priority,
recording or re-recording,  filing or re-filing of this Indenture, the Agreement
or the Reimbursement  Agreement or any financing statements,  amendments thereto
or  continuation  statements,  or for  insuring  the Project or  collecting  any
insurance  moneys,  or for the  validity of the  execution by the Issuer of this
Indenture or of any supplements thereto or instruments of further assurance,  or
for the validity or  sufficiency  of the security  afforded by this Indenture or
the Bonds  issued  hereunder  or  intended  to be secured  hereby,  or as to the
maintenance of the security hereof.  The Trustee shall not be bound to ascertain
or inquire as to the  performance or observance of any covenants,  conditions or
agreements  on the part of the Issuer or on the part of the Issuer  hereunder or
under the Reimbursement Agreement, except as expressly provided herein or in the
Reimbursement Agreement. Except as otherwise expressly provided herein or in the
Agreement,  the Trustee shall have no obligation to perform any of the duties of
the Issuer under the Agreement.

                  The Trustee shall not be  accountable  for the  application of
the proceeds of any Bonds  authenticated  or delivered  hereunder which has been
made by or on behalf of the Issuer or the Company.

                  The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.

                  Unless otherwise  provided herein,  all moneys received by the
Trustee under this  Indenture  shall be held in trust for the purposes for which
those moneys were received,  until those moneys are used, applied or invested as
provided  herein;  provided,  that those  moneys  (other than such moneys as are
required by the terms hereof to be deposited into the Credit  Facility  Account,
Redemption  Premium Account or Defeasance  Account in the Bond Fund and proceeds
received from the  remarketing  of the Bonds) need not be segregated  from other
moneys,  except to the extent  required by this Indenture or by law. The Trustee
shall not have any  liability  for  interest on any moneys  received  hereunder,
except to the extent expressly  provided herein or agreed with the Issuer or the
Company.

                  SECTION 11.03. TRUSTEE MAY ACT THROUGH AGENTS; ANSWERABLE ONLY
FOR WILLFUL  MISCONDUCT  OR  NEGLIGENCE.  The Trustee  may  exercise  any powers
hereunder  and perform  any duties  required  of it through  attorneys,  agents,
officers or employees, and shall be entitled to advice of Counsel concerning all
questions  hereunder.  The Trustee  shall not be  answerable  for the default or
misconduct of any attorney or agent selected by it with reasonable care.  Except
as  otherwise  provided  herein,  the Trustee  shall not be  answerable  for the
exercise  of any  discretion  or power  under  the  Indenture  nor for  anything
whatsoever in connection with the trust  hereunder,  except only its own willful
misconduct or negligence.

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                  SECTION 11.04.  COMPENSATION  AND  INDEMNITY.  (a) The Company
shall pay the Trustee reasonable  compensation for its services  hereunder,  and
also all its  reasonable  expenses and  disbursements,  including the reasonable
fees and out-of-pocket  expenses of counsel for the Trustee,  as provided in the
Agreement.  If the  Company  shall  have  failed to make any such  payment,  the
Trustee shall have, in addition to any other rights hereunder, a claim, prior to
the Bondholders, for the payment of its compensation and indemnification and the
reimbursement  of its expenses  and any advances  made by it upon the moneys and
obligations in the Bond Fund,  except for (i) moneys or obligations  held by the
Trustee for the payment of particular  Bonds or (ii) the proceeds of any drawing
under the Credit  Facility  or (iii)  moneys  held in the  Remarketing  Proceeds
Account of the Bond Fund or in the Rebate Fund.

                           (b)      The Company  agrees to indemnify the Trustee
for and to hold the Trustee  harmless against all  liabilities,  claims,  costs,
losses and expenses incurred without  negligence or bad faith on the part of the
Trustee on account of any action  taken or omitted to be taken by the Trustee in
accordance  with the terms of this Indenture or the Bonds,  or at the request of
or with the consent of the Company, including, without limitation, the costs and
expenses  of the  Trustee in  defending  itself  against  any  action,  claim or
proceeding in connection with any of the foregoing.

                  SECTION 11.05.  NOTICE OF DEFAULT;  RIGHT TO INVESTIGATE.  The
Trustee shall, within 10 days after the occurrence of an Event of Default,  give
written  notice by first  class  mail to  registered  owners of Bonds and to the
Issuer  and the  Company  of all  Defaults  known to the  Trustee,  unless  such
Defaults  have  been  remedied;  provided  that in the case of a  Default  under
Section 10.01,  the Trustee may withhold such notice so long as it in good faith
determines  that such  withholding  is in the interest of the  Bondholders.  The
Trustee  shall not be deemed to have notice of any Default  under  Section 10.01
(other than payment  Defaults) unless notified in writing of such Default by the
owners of at least 25% in principal  amount of all Bonds than  Outstanding.  The
Trustee  may,  however,  at any  time  require  of the  Issuer,  subject  to the
provisions of Section 9.03 hereof, or the Company on behalf of the Issuer,  full
information as to the performance of any covenant hereunder; and, if information
satisfactory to it is not forthcoming, the Trustee may make or cause to be made,
at the expense of the Company,  an investigation into the affairs of the Company
related to this Indenture.

                  SECTION   11.06.   OBLIGATION   TO  ACT.   Except  during  the
continuance  of an Event of Default,  the  Trustee  undertakes  to perform  such
duties and only such duties as are specifically set forth in this Indenture, and
no implied  covenants or obligations  shall be read into this Indenture  against
the Trustee. If any Event of Default shall have occurred and be continuing,  the
Trustee  shall  exercise  such of the rights and  remedies  vested in it by this
Indenture  and shall use the same degree of care in their  exercise as a prudent
person  would  exercise  or use in the  circumstances  in the conduct of his own
affairs.  The Trustee shall be under no obligation to exercise any of the rights
or powers  vested in it by this  Indenture at the request or direction of any of
the Bondholders  pursuant to this Indenture (other than the Trustee's obligation
to draw under a Credit  Facility,  make  payments when due to  Bondholders  from
funds  available  under this Indenture and accelerate the Bonds when required by
Article X of this Indenture)  unless such Bondholders  shall have offered to the
Trustee  reasonable  security  or  indemnity  against  the costs,  expenses  and
liabilities  which  might  be  incurred  in  compliance  with  such  request  or
direction.

                  SECTION   11.07.   RELIANCE.   The  Trustee  may  act  on  any
requisition,   resolution,   notice,   telegram,   request,   consent,   waiver,
certificate,  statement,  affidavit,  voucher,  note, or other paper or document
which it in good faith  believes to be genuine and to have been passed or signed
by the proper persons or to have been prepared and furnished  pursuant to any of
the provisions of the Indenture,  including without limitation, any direction of
the Tender Agent or the Remarketing  Agent to draw on the 

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<PAGE>

Credit  Facility;   and  the  Trustee  shall  be  under  no  duty  to  make  any
investigation  as to any  statement  contained in any such  instrument,  but may
accept the same as conclusive evidence of the accuracy of such statement.

                  SECTION 11.08.  TRUSTEE MAY DEAL IN BONDS.  The Trustee may in
good faith buy, sell, own, hold and deal in any of the Bonds and may join in any
action which any  Bondholders may be entitled to take with like effect as if the
Trustee were not a party to this Indenture. The Trustee may also engage in or be
interested in any financial or other transaction with the Company; provided that
if the Trustee  determines that any such relation is in conflict with its duties
under this Indenture, it shall eliminate the conflict or resign as Trustee.

                  SECTION  11.09.  CONSTRUCTION  OF  AMBIGUOUS  PROVISIONS.  The
Trustee may construe any ambiguous or inconsistent  provisions of the Indenture,
and any construction by the Trustee shall be binding upon the Bondholders.

                  SECTION 11.10.  RESIGNATION OF TRUSTEE. The Trustee may resign
and be discharged of the trusts created by the Indenture by written  resignation
filed  with the Issuer and the  Company  not fewer than 30 days  before the date
when it is to take effect;  provided notice of such resignation is mailed to the
owners  of the  Bonds  not fewer  than  three  weeks  prior to the date when the
resignation is to take effect.  Such resignation shall take effect only upon the
appointment of a successor trustee.

                  SECTION 11.11.  REMOVAL OF TRUSTEE.  Any Trustee hereunder may
be removed at any time by an instrument appointing a successor to the Trustee so
removed,  executed by the owners of a majority in principal  amount of the Bonds
then Outstanding and filed with the Trustee, the Company and the Issuer.

                  The  Trustee may also be removed at any time for any breach of
trust or for acting or  proceeding  in  violation  of, or for  failing to act or
proceed in accordance  with, any provision of this Indenture with respect to the
duties and  obligations  of the Trustee by any court of  competent  jurisdiction
upon the  application of the Issuer or the owners of not less than 20 percent in
aggregate principal amount of the Bonds Outstanding.

                  No removal  shall take effect  until a  successor  Trustee has
been appointed pursuant to Section 11.12 hereof.

                  SECTION  11.12.  APPOINTMENT  OF  SUCCESSOR  TRUSTEE.  If  the
Trustee or any successor  trustee resigns or is removed or dissolved,  or if its
property or business is taken under the control of any state or federal court or
administrative  body,  a  vacancy  shall  forthwith  exist in the  office of the
Trustee, and the Company on behalf of the Issuer, with the consent of the Credit
Facility Issuer, which consent shall not be unreasonably withheld, shall appoint
a successor and shall mail notice of such  appointment  to registered  owners of
the Bonds. If the Company fails to make such appointment promptly, the owners of
a majority in principal amount of the Bonds then Outstanding may do so.

                  If  no  appointment  of a  successor  Trustee  shall  be  made
pursuant to the foregoing  provisions of this Section  11.12,  the Holder of any
Bond  outstanding  hereunder or any  retiring  Trustee may apply to any court of
competent jurisdiction to appoint a successor Trustee. Such court may thereupon,
after such notice, if any as such court may deem proper and prescribe, appoint a
successor Trustee.

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<PAGE>

                  SECTION 11.13. QUALIFICATION OF SUCCESSOR. A successor trustee
shall be a national  banking  association  with trust powers or a bank and trust
company or a trust company  having  capital and surplus of at least  $20,000,000
(or a combined  capital and surplus in excess of $5,000,000 and the  obligations
of which,  whether now in existence or hereafter incurred,  are fully guaranteed
by a  corporation  organized  and doing  business  under the laws of the  United
States, and State or Territory thereof or of the District of Columbia,  that has
a combined  capital and surplus of at least  $50,000,000),  if there be one able
and willing to accept the trust on reasonable and customary terms.

                  SECTION  11.14.  INSTRUMENTS  OF  SUCCESSION.   Any  successor
trustee  shall  execute,  acknowledge  and  deliver to the Issuer an  instrument
accepting such  appointment  hereunder;  and thereupon  such successor  trustee,
without any further act, deed or conveyance,  shall become fully vested with all
the estates,  properties,  rights, powers, trusts, duties and obligations of its
predecessor  in the trust  hereunder,  with like effect as if  originally  named
Trustee  herein.  The  Trustee  ceasing to act  hereunder  shall pay over to the
successor  trustee all moneys held by it  hereunder;  and,  upon  request of the
successor  trustee,  the Trustee ceasing to act and the Issuer shall execute and
deliver an instrument  transferring  to the  successor  trustee all the estates,
properties, rights, powers and trusts hereunder of the Trustee ceasing to act.

                  SECTION 11.15.  MERGER OF TRUSTEE.  Any corporation into which
any Trustee hereunder may be merged or with which it may be consolidated, or any
corporation  resulting  from any merger or  consolidation  to which any  Trustee
hereunder shall be a party,  shall be the successor trustee under the Indenture,
without the  execution  or filing of any paper or any further act on the part of
the parties hereto, anything herein to the contrary notwithstanding.

                  SECTION  11.16.  TRUSTEE  NOT  REQUIRED  TO EXPEND OR RISK OWN
FUNDS.  No provision of this  Indenture  shall  require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its  duties  hereunder,  or in the  exercise  of any of its  rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate  indemnity  against such risk or  liability is not  reasonably
assured to it.

                  SECTION 11.17.  CONFLICT OF INTEREST  PROVISIONS.  The Trustee
shall comply with the  provisions  contained in Section 127 of the New York Real
Property  Law to the extent to which  that  Section  applies  by its  terms.  In
addition and notwithstanding anything to the contrary set forth herein or in any
other  Financing  Document and to the extent  required by law, the provisions of
Sections  126 and 130-k of the New York Real  Property Law (as amended from time
to time and including any successor statutes thereto) are hereby incorporated by
reference herein with the same force and effect as if the same were set forth in
full herein.  To the extent of any conflict  between the provisions of said Real
Property  Law and the  provisions  of the  Indenture  or of any other  Financing
Document, the provisions of said Real Property Law shall govern.



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                                   ARTICLE XII

                   THE REMARKETING AGENT AND THE TENDER AGENT

                  SECTION 12.01.  THE REMARKETING AGENT.

                           (a)      The Issuer hereby appoints  KeyBank National
Association as Remarketing Agent under this Indenture.  The Company on behalf of
the Issuer may appoint a different Remarketing Agent. Each Remarketing Agent, by
written  instrument  delivered  to the Trustee and the Issuer,  shall accept the
duties and  obligations  imposed on it under this  Indenture  and shall become a
party to the Remarketing Agreement.

                           (b)      In addition to the other obligations imposed
on the Remarketing  Agent hereunder,  the Remarketing  Agent shall agree to keep
such books and records as shall be consistent with prudent industry practice and
make such  books and  records  available  for  inspection  by the Issuer and the
Trustee at all reasonable times.

                           (c)      If at any time a Remarketing Agent is unable
or unwilling to act as a Remarketing  Agent,  such  Remarketing  Agent,  upon 60
days' prior written notice to the Issuer, the Trustee, the Tender Agent, and any
other Remarketing Agent, may resign. Any Remarketing Agent may be removed at any
time by the Company on behalf of the  Issuer,  by written  notice  signed by the
Issuer and delivered to the Trustee and such Remarketing Agent. Upon resignation
or removal of a  Remarketing  Agent,  the Company on behalf of the Issuer  shall
either  appoint  a  successor  Remarketing  Agent  or  authorize  the  remaining
Remarketing  Agent or Agents to act alone in such  capacity,  in which  case all
reference in this  Indenture to the  Remarketing  Agent shall mean the remaining
Remarketing  Agent or Agents.  If the remaining  Remarketing Agent resigns or is
removed,  the  Company  on  behalf of the  Issuer  shall  appoint  a  substitute
Remarketing Agent or Agents.

                           (d)      In the event  that the  Company on behalf of
the Issuer shall fail to appoint a successor  Remarketing Agent or Agents,  upon
the  resignation  or removal of the remaining  Remarketing  Agents or upon their
dissolution,  insolvency  or  bankruptcy,  the  Trustee  may  either  appoint  a
Remarketing  Agent or  Agents  or  itself  act as  Remarketing  Agent  until the
appointment of a successor  Remarketing  Agent or Agents in accordance with this
Section  12.01;  provided,  however,  that  the  Trustee,  in  its  capacity  as
Remarketing Agent, shall not be required to sell Bonds.

                  SECTION 12.02.  THE TENDER AGENT.

                           (a)      The Tender  Agent shall be Star Bank,  N.A.,
having its Principal  Office at  Cincinnati,  Ohio. The Company on behalf of the
Issuer shall  appoint any  successor  Tender Agent for the Bonds,  as necessary,
subject to the conditions set forth in Section  12.02(b)  hereof.  Any successor
Tender Agent shall designate its Principal  Office and signify its acceptance of
the duties and obligations  imposed upon it hereunder by a written instrument of
acceptance  delivered to the Trustee,  the Issuer and the Credit Facility Issuer
in which the Tender Agent will agree, particularly:

                                    (i)      to hold all Bonds  delivered  to it
         pursuant to Section 3.01 hereof,  as agent and bailee of, and in escrow
         for  the  benefit  of,  the  respective  owners  thereof  until  moneys
         representing the purchase price of such Bonds shall have been delivered
         to or for the account of or to the order of such owners;

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<PAGE>

                           (ii)     to  hold  all  moneys  (without   investment
         thereof)  delivered to it hereunder for the purchase of Bonds  pursuant
         to  Section  3.01  hereof as agent and bailee of, and in escrow for the
         benefit  of, the person or entity  which shall have so  delivered  such
         moneys  until the Bonds  purchased  with such  moneys  shall  have been
         delivered to or for the account of such person or entity;

                           (iii)    to hold Bonds for the  account of the Issuer
         as contemplated by Section 3.04(a)(iii) hereof;

                           (iv)     to hold Bonds purchased  pursuant to Section
         3.01 with  moneys  representing  the  proceeds  of a drawing  under the
         Credit  Facility  to be held  pursuant  to  Section  3.05 as agent  and
         bailee; and

                           (v)      to keep such  books and  records as shall be
         consistent  with prudent  industry  practice and to make such books and
         records  available for  inspection by the Trustee and the Issuer at all
         reasonable times.

                  (b)      The  Tender  Agent  shall  be  a   corporation   duly
organized  under  the laws of the  United  States  of  America  or any  state or
territory thereof,  and, if the Bonds are rated by Moody's and, if not a bank or
trust company, rated at least Baa3/P3 or otherwise qualified by Moody's,  having
a combined  capital and surplus of at least  $20,000,000 (or a combined  capital
and surplus in excess of $5,000,000 and the obligations of which, whether now in
existence or hereafter incurred, are fully guaranteed by a corporation organized
and doing business  under the laws of the United States,  and State or Territory
thereof or of the District of Columbia,  that has a combined capital and surplus
of at least $50,000,000) and authorized by law to perform all the duties imposed
upon it by this  Indenture.  The  Tender  Agent  may at any time  resign  and be
discharged of the duties and obligations  created by this Indenture by giving at
least 60 days' notice to the Trustee, the Issuer, the Credit Facility Issuer and
the  Remarketing  Agent.  In the event that the  Company on behalf of the Issuer
shall fail to appoint a successor Tender Agent,  upon the resignation or removal
of the Tender Agent,  the Trustee shall either  appoint a Tender Agent or itself
act as Tender  Agent until the  appointment  of a successor  Tender  Agent.  The
Tender Agent may be removed at any time by an  instrument  signed by the Company
on behalf of the Issuer,  filed with the Trustee,  the Remarketing Agent and the
Credit Facility Issuer, if any.

                  In the  event of the  resignation  or  removal  of the  Tender
Agent,  the Tender  Agent shall  deliver any Bonds and moneys held by it in such
capacity to its successor or, if there is no successor, to the Trustee.

                  SECTION 12.03.  NOTICES.  The Trustee shall, within 10 days of
receipt of written notice of the resignation or removal of the Remarketing Agent
or the Tender Agent or the appointment of successor  Remarketing Agent or Tender
Agent, give notice thereof by first class mail,  postage prepaid,  to the owners
of the Bonds.



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                                  ARTICLE XIII

                   ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP

                  SECTION 13.01. ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP. Any
action to be taken by  Bondholders  may be evidenced  by one or more  concurrent
written  instruments of similar tenor signed or executed by such  Bondholders in
person or by agent  appointed in writing.  The fact and date of the execution by
any  person of any such  instrument  may be proved  by  acknowledgment  before a
notary  public  or other  officer  empowered  to take  acknowledgments  or by an
affidavit of a witness to such execution.  Where such execution is by an officer
of a corporation or a member of a partnership,  on behalf of such corporation or
partnership,  such  certificate or affidavit  shall also  constitute  sufficient
proof  of his  authority.  The  fact  and  date  of the  execution  of any  such
instrument or writing,  or the authority of the person  executing the same,  may
also be proved in any other  manner  which the  Trustee  deems  sufficient.  The
ownership of the Bonds shall be proved by the Bond  Register.  Any action by the
owner of any Bond shall  bind all  future  owners of the same Bond in respect of
anything done or suffered by the Issuer or the Trustee in pursuance thereof.





                                       74
<PAGE>



                                   ARTICLE XIV

                           AMENDMENTS AND SUPPLEMENTS

                  SECTION 14.01. AMENDMENTS AND SUPPLEMENTS WITHOUT BONDHOLDERS'
CONSENT. This Indenture may be amended or supplemented at any time and from time
to time,  without  the consent of the  Bondholders,  but with the consent of the
Credit   Facility   Issuer,   if  any,  which  consent  shall  not  be  withheld
unreasonably,  by a  supplemental  indenture  authorized  by a resolution of the
Issuer,  executed by the Issuer and the Trustee and filed with the Trustee,  for
one or more of the following purposes:

                           (a)      to add additional covenants of the Issuer or
to surrender any right or power herein conferred upon the Issuer;

                           (b)      for any  purpose not  inconsistent  with the
terms of this Indenture or 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  which shall not, in the opinion of the
Trustee, materially adversely affect the interests of the owners of the Bonds;

                           (c)      to  permit  the  Bonds  to be  converted  to
certificateless  securities or securities  represented  by a master  certificate
held in trust,  ownership of which, in either case, is evidenced by book entries
on the books of the Bond Registrar, for any period of time;

                           (d)      to permit the  appointment  of a  co-trustee
under this Indenture;

                           (e)      to    authorize     different     authorized
denominations of the Bonds and to make correlative  amendments and modifications
to this Indenture  regarding  exchangeability  of Bonds of different  authorized
denominations,  redemptions  of  portions  of  Bonds  of  particular  authorized
denominations and similar amendments and modifications of a technical nature;

                           (f)      to modify,  alter,  supplement or amend this
Indenture  in such manner as shall  permit the  qualification  hereof  under the
Trust Indenture Act of 1939, as from time to time amended;

                           (g)      to modify,  alter,  amend or supplement this
Indenture  in  any  other  respect  which  is  not  materially  adverse  to  the
Bondholders; or

                           (h)      To make amendments to the provisions  hereof
relating to arbitrage  matters under Section 148 of the Code, if, in the opinion
of nationally  recognized  bond counsel  selected by the Company and approved by
the  Trustee,  those  amendments  would  not  cause  the  interest  on the Bonds
outstanding to be included in gross income of the Bondholders for federal income
tax purposes which amendments may, among other things, change the responsibility
for making the relevant calculations.

                  The Company  shall pay to the Trustee the  reasonable  fees of
any attorneys or counsel retained by the Trustee for the purposes of researching
and rendering the opinion described in (b) above.

                                       75
<PAGE>

                  Before  the  Issuer  and the  Trustee  shall  enter  into  any
supplemental  indenture  pursuant to this Section  14.01,  there shall have been
delivered to the Trustee an opinion of Counsel  stating  that such  supplemental
indenture  is  authorized  under  this  Indenture,  and that  such  supplemental
indenture  will, upon the execution and delivery  thereof,  be valid and binding
upon the Issuer in accordance with its terms.

                  SECTION  14.02.   AMENDMENTS  WITH   BONDHOLDERS'  AND  CREDIT
FACILITY  ISSUER'S  CONSENT.  This  Indenture  may be amended from time to time,
except with respect to (1) the  principal,  redemption  price,  purchase  price,
interest  payable upon any Bonds,  (2) the Interest  Payment Dates, the dates of
maturity or the  redemption or purchase  provisions  of any Bonds,  and (3) this
Article XIV, by a  supplemental  indenture  consented to by the Credit  Facility
Issuer and by the Issuer and  approved  by the owners of at least a majority  in
aggregate principal amount of the Bonds then Outstanding which would be affected
by the action  proposed to be taken.  This Indenture may be amended with respect
to the matters  enumerated in clauses (l) through (3) of the preceding  sentence
with the unanimous  consent of all  Bondholders,  the Credit Facility Issuer and
the Issuer.

                  SECTION 14.03. AMENDMENT OF CREDIT FACILITY. The Trustee shall
notify  Bondholders of a proposed  amendment of the Credit  Facility which would
materially  adversely  affect the interests of the  Bondholders  and may consent
thereto  with the  consent  of the owners of at least a  majority  in  aggregate
principal  amount of the Bonds then  Outstanding  which would be affected by the
action  proposed to be taken;  provided,  that the Trustee shall not,  while the
Interest Rate Mode is the Long-Term Rate,  without the unanimous  consent of the
owners of all Bonds then  Outstanding,  consent to any amendment which would (1)
decrease the amount payable under the Credit  Facility or (2) reduce the term of
the Credit Facility.

                  SECTION  14.04.  TRUSTEE  AUTHORIZED TO JOIN IN AMENDMENTS AND
SUPPLEMENTS;  RELIANCE ON COUNSEL.  The Trustee is  authorized  to join with the
Issuer in the execution and delivery of any supplemental  indenture or amendment
permitted  by this  Article XIV and in so doing shall be fully  protected  by an
opinion of Counsel that such supplemental indenture or amendment is so permitted
and has been duly authorized by the Issuer and that all things necessary to make
it a  valid  and  binding  agreement  have  been  done;  provided  that  certain
amendments may, by agreement between the Trustee and the Credit Facility Issuer,
require the prior consent of the Credit Facility Issuer.

                  SECTION   14.05.   AMENDMENTS   NOT   REQUIRING   CONSENT   OF
BONDHOLDERS. Without the consent of or notice to the Bondholders, the Issuer and
the Trustee may, with the written  consent of the Credit  Facility Issuer (which
shall be  required  only if there  exists no  wrongful  dishonor  of any drawing
presented  under the  Credit  Facility  or  Alternate  Credit  Facility  then in
effect),  consent to any amendment,  change or  modification of the Agreement as
may be required (i) by the provisions of the Agreement or this  Indenture,  (ii)
for the  purpose  of curing any  ambiguity,  inconsistency  or formal  defect or
omission in the  Agreement,  (iii) in connection  with an amendment or to effect
any purpose for which there could be an amendment of this Indenture  pursuant to
Section 14.01 hereof,  or (v) in connection  with any other change therein which
is not to the material prejudice of the Trustee or the Bondholders of the Bonds,
in the judgment of the Trustee.

                  SECTION 14.06.  AMENDMENT  REQUIRING  CONSENT OF  BONDHOLDERS.
Except for the  amendments,  changes or  modifications  contemplated  in Section
14.05 hereof, neither the Issuer nor the Trustee shall consent to

                                       76
<PAGE>

                           (a)      any amendment, change or modification of the
Agreement which would change the amount or time as of which installment purchase
payments  are  required to be paid,  without the giving of notice as provided in
this Section of the proposed  amendment,  change or modification  and receipt of
the  written  consent  thereto of the Credit  Facility  Issuer  (which  shall be
required  only if there  exists no wrongful  dishonor  of any drawing  presented
under the Credit  Facility or Alternate  Credit Facility then in effect) and the
Bondholders of all of the then outstanding Bonds, or

                           (b)      any other amendment,  change or modification
of the Agreement or the Credit Facility without the giving of notice as provided
in this Section of the proposed amendment, change or modification and receipt of
the written consent thereto of the Credit Facility Issuer and the Bondholders of
not less than a  majority  in  aggregate  principal  amount  of the  Bonds  then
outstanding.

The consent of the  Bondholders  shall be obtained as provided in Section  14.02
hereof with respect to Supplemental Indentures.

                  If the Issuer and the  Company  shall  request at any time the
consent of the Trustee to any proposed amendment,  change or modification of the
Agreement  contemplated in subparagraphs  (a) or (b), upon being  indemnified by
the Company  satisfactorily  with respect to expenses,  the Trustee  shall cause
notice of the proposed  amendment,  change or modification to be provided in the
manner  which is required  by Section  14.02  hereof  with  respect to notice of
Supplemental  Indentures.  The notice shall set forth  briefly the nature of the
proposed  amendment,  change or modification  and shall state that copies of the
instrument or document embodying it are on file at the principal corporate trust
office of the Trustee for inspection by all Bondholders.


                                       77
<PAGE>


                                   ARTICLE XV

                                   DEFEASANCE

                  SECTION 15.01.  DEFEASANCE.

                           (a)      When the principal or  redemption  price (as
the case may be) of, and interest on, all Bonds issued hereunder have been paid,
or  provision  has  been  made  for  payment  of the  same,  together  with  the
compensation  of the Trustee and all other sums payable  hereunder by the Issuer
when  provision  also shall be made for the  payment  of all other sums  payable
under the Agreement,  then,  the right,  title and interest of the Trustee shall
thereupon  cease and the  Trustee,  on demand  of the  Company  on behalf of the
Issuer,  shall  release  this  Indenture  and shall  execute  such  documents to
evidence such release as may be reasonably  required by the Company on behalf of
the  Issuer  and  shall  turn  over to the  Issuer  or to such  person,  body or
authority  as may be entitled to receive the same all  balances  then held by it
hereunder.  If payment or  provision  therefor is made with respect to less than
all of the Bonds,  the particular Bonds (or portion thereof) for which provision
for  payment  shall have been  considered  made shall be  selected by lot by the
Trustee,  and thereupon the Trustee shall take similar action for the release of
this Indenture with respect to such Bonds.

                           (b)      Provision  for the payment of Bonds shall be
deemed to have been made when the Trustee holds in the  Defeasance  Account,  in
trust and irrevocably  set aside  exclusively for such payment in the Defeasance
Account,  (i) moneys  sufficient  to make such  payment  and any  payment of the
purchase  price of Bonds  pursuant to Section 3.01;  provided,  that if a Credit
Facility is then held by the Trustee,  any such moneys necessary for the payment
of Bonds not yet due shall constitute  Available Moneys and/or (ii) Governmental
Obligations  maturing as to  principal  and interest in such amounts and at such
times  as  will  provide   sufficient  moneys  (without   consideration  of  any
reinvestment thereof) to make such payment and any payment of the purchase price
of Bonds  pursuant to Section  3.01,  and which are not  subject to  prepayment,
redemption or call prior to their stated  maturity;  provided,  that if a Credit
Facility is then held by the Trustee,  such Governmental  Obligations shall have
been on deposit  with the  Trustee in a separate  and  segregated  account for a
period of 95 days during which no Event of  Bankruptcy  has  occurred,  or shall
have been purchased with Available Moneys.

                  No Bonds in  respect  of which a deposit  under  clause (i) or
(ii) above has been made shall be deemed paid within the meaning of this Article
unless the Trustee is satisfied  that the amounts  deposited  are  sufficient to
make  all  payments   that  might  become  due  on  the  Bonds;   provided  that
notwithstanding any other provision of this Indenture,  any Bonds purchased with
such moneys  pursuant to Section  3.01 shall be  surrendered  to the Trustee for
cancellation  and shall not be remarketed.  Notwithstanding  the  foregoing,  no
delivery to the Trustee under this  subsection  (b) shall be deemed a payment of
any Bonds which are to be redeemed  prior to their  stated  maturity  until such
Bonds shall have been irrevocably  called or designated for redemption on a date
thereafter on which such Bonds may be redeemed in accordance with the provisions
of this Indenture and proper notice of such redemption  shall have been given in
accordance  with Article  VIII or the Issuer  following  written  request of the
Company  shall have given the  Trustee,  in form  satisfactory  to the  Trustee,
irrevocable  instructions to give, in the manner and at the times  prescribed by
Article VIII, notice of redemption. Neither the obligations nor moneys deposited
with the Trustee  pursuant to this  Section  shall be  withdrawn or used for any
purpose other than,  and shall be segregated  and held in trust for, the payment
of the principal of,  redemption price of and interest on the Bonds with respect
to which  such  deposit  has  been  made.  In the  event  that  such  moneys  or
obligations are to be applied to the payment of principal or redemption price of
any Bonds more than 60 days following the deposit thereof with the Trustee,  the
Trustee shall publish 

                                       78
<PAGE>

once in an Authorized Newspaper a notice stating that such moneys or obligations
have been  deposited  and  identifying  the Bonds for the  payment of which such
moneys or  obligations  are being held and shall mail copies of all such notices
to all owners of Bonds for the payment of which such moneys or  obligations  are
being held at their registered addresses and to the Rating Service, if the Bonds
are then rated by a Rating Service.

                           (c)      Anything  in  Article  XIV to  the  contrary
notwithstanding,  if moneys or Governmental  Obligations  have been deposited or
set aside with the  Trustee  pursuant  to this  Article  for the  payment of the
principal  or  redemption  price of the Bonds and the  interest  thereon and the
principal or redemption  price of such Bonds and the interest  thereon shall not
have in fact been actually paid in full, no amendment to the  provisions of this
Article  shall be made  without  the  consent  of the owner of each of the Bonds
affected thereby.

                  Notwithstanding  the foregoing,  those provisions  relating to
the  purchase of Bonds,  the  maturity  of Bonds,  interest  payments  and dates
thereof,  and the  Trustee's  remedies  with  respect  thereto,  and  provisions
relating  to  exchange,  transfer  and  registration  of Bonds,  replacement  of
mutilated,  destroyed, lost or stolen Bonds, the safekeeping and cancellation of
Bonds,  non-presentment of Bonds, the holding of moneys in trust, and repayments
to the  Issuer  from the Bond Fund and the duties of the  Trustee in  connection
with all of the foregoing and the fees, expenses and indemnities of the Trustee,
shall remain in effect and shall be binding upon the  Trustee,  the Issuer,  for
itself,  and the  Bondholders  notwithstanding  the release and discharge of the
lien of this Indenture.

                  SECTION 15.02.  RELEASE OF INDENTURE.  If (i) the Issuer shall
pay all of the outstanding Bonds, or shall cause them to be paid and discharged,
or if there otherwise shall be paid to the Bondholders of the outstanding Bonds,
all Bond Service  Charges due or to become due thereon,  and (ii) provision also
shall be made for the payment of all other sums  payable  hereunder or under the
Agreement,  then, this Indenture shall cease, determine and become null and void
(except for those  provisions  surviving by reason of Section 9.03 hereof in the
event the Bonds are deemed paid and discharged pursuant to Section 9.02 hereof),
and the covenants,  agreements and obligations of the Issuer  hereunder shall be
released, discharged and satisfied.

                  Thereupon,  and  subject to the  provisions  of Section  15.03
hereof if applicable,

                                    (i)      the  Trustee   shall  release  this
         Indenture  (except for those provisions  surviving by reason of Section
         15.03  hereof in the event the  Bonds are  deemed  paid and  discharged
         pursuant to Section 15.01 hereof), and shall execute and deliver to the
         Issuer any instruments or documents in writing as shall be requisite to
         evidence that release and  discharge or as reasonably  may be requested
         by the Issuer,

                                    (ii)     the  Trustee  and any other  Paying
         Agents shall  assign and deliver to the Issuer any property  subject at
         the  time to the  lien of this  Indenture  which  then  may be in their
         possession,  except amounts in the Bond Fund required (a) to be paid to
         the Company or the Bank under Section 5.06 hereof, or (b) to be held by
         the  Trustee  and the  Paying  Agents  under  Section  5.06  hereof  or
         otherwise for the payment of Bond Service Charges, and

                                    (iii)    the Trustee shall return the Credit
         Facility to the Bank.

                  SECTION 15.03. SURVIVAL OF CERTAIN PROVISIONS. Notwithstanding
the foregoing,  any provisions of the Act and this Indenture which relate to the
maturity of Bonds,  interest 

                                       79
<PAGE>

payments  and dates  thereof,  optional  and  mandatory  redemption  provisions,
exchange,   transfer  and  registration  of  Bonds,  replacement  of  mutilated,
destroyed,  lost or stolen Bonds,  the  safekeeping  and  cancellation of Bonds,
non-presentment  of Bonds, the holding of moneys in trust, and repayments to the
Company  and the Bank from the Bond  Fund,  the  rebate of moneys to the  United
States in accordance with Section 5.05 hereof, and the duties of the Trustee and
the Registrar in connection  with all of the  foregoing,  shall remain in effect
and be binding upon the  Trustee,  the  Registrar,  the  Authenticating  Agents,
Paying Agents and the Bondholders  notwithstanding  the release and discharge of
this  Indenture.  The  provisions  in this  Article  shall  survive the release,
discharge and satisfaction of this Indenture.



                                       80
<PAGE>


                                   ARTICLE XVI

                            MISCELLANEOUS PROVISIONS

                  SECTION 16.01. NON-RECOURSE PROVISION. (A) The obligations and
agreements of the Issuer contained  herein and in the other Financing  Documents
and any other instrument or document executed in connection  therewith,  and any
other instrument or document supplemental hereto or thereto, shall be deemed the
obligations and agreements of the Issuer and not of any member,  officer,  agent
(other than the Company) or employee of the Issuer in his  individual  capacity,
and the members,  officers, agents (other than the Company) and employees of the
Issuer  shall not be liable  personally  hereon or be  subject  to any  personal
liability or accountability based upon or in respect hereof or thereof or on any
transaction contemplated hereby or thereby.

                           (B)      The obligations and agreements of the Issuer
contained  herein  shall  not  constitute  or give  rise to any  obligations  of
Saratoga County,  New York or the State,  and neither Saratoga County,  New York
nor the  State  shall be liable  thereon,  and  further,  such  obligations  and
agreements  shall not  constitute  or give rise to a general  obligation  of the
Issuer, but rather shall constitute  limited,  special obligations of the Issuer
payable  solely from the  revenues of the Issuer  derived and to be derived from
the sale or other  disposition  of the Project  Facility and the other  security
pledged for payment of the Bonds (except for revenues derived by the Issuer with
respect to the Unassigned Rights).

                           (C)      No order or decree of  specific  performance
with  respect to any of the  obligations  of the Issuer  hereunder  (other  than
pursuant to Section  10.02  hereof,  and then only to the extent of the Issuer's
obligations  thereunder)  shall be sought or enforced  against the Issuer unless
the party  seeking such order or decree shall first have  complied  with Section
9.03 hereof.

                           (D)      The Issuer  shall be  entitled to the advice
of counsel (who may be counsel to any party or to any  Bondholder)  and shall be
wholly  protected as to any action taken or omitted to be taken in good faith in
reliance  upon such  advice.  The Issuer may rely  conclusively  on any  notice,
certificate or other document  furnished to it under any Financing  Document and
reasonably believed by it to be genuine.  The Issuer shall not be liable for any
action taken by it in good faith and reasonably  believed by it to be within the
discretion or power  conferred  upon it, or in good faith omitted to be taken by
it and reasonably believed to be beyond such discretion or power, or taken by it
pursuant to any  direction  or  instruction  by which it is  governed  under any
Financing  Document,  or  omitted  to be  taken by it by  reason  of the lack of
direction or instruction  required for such action under any Financing Document,
and shall  not be  responsible  for the  consequences  of any error of  judgment
reasonably  made by it. When any payment,  consent or other action by the Issuer
is called for by the  Indenture,  the Issuer  may defer such  action  pending an
investigation  or  inquiry  or  receipt  of such  evidence,  if  any,  as it may
reasonably  require in support thereof. A permissive right or power to act shall
not be  construed  as a  requirement  to act,  and no delay in the exercise of a
right or power shall affect the subsequent exercise thereof. The Issuer shall in
no event be liable for (i) the  application or  misapplication  of funds or (ii)
other acts or  defaults,  by any  Person,  except,  in either  case,  by its own
members, officers and employees.

                           (E)      In approving, concurring in or consenting to
any action or in exercising any discretion or in making any determination  under
the Indenture,  the Issuer may consider the interests of the public, which shall
include  the  anticipated   effect  of  any  transaction  on  tax  revenues  and
employment,  as  well as the  interests  of the  other  parties  hereto  and the
Bondholders;  provided,  however,  that  nothing  herein  shall be  construed as
conferring on any Person other than the Trustee and the Bondholders any right to
notice, hearing or participation in the Issuer's  consideration,  and nothing in
this Section  16.01 shall be construed  as  conferring  on any of them any right
additional to those conferred elsewhere herein and provided further that nothing
in this  


                                       81
<PAGE>

Section 16.01 shall be construed as affecting the existence or  non-existence of
an Event of Default. Subject to the foregoing, the Issuer shall not unreasonably
withhold any approval or consent to be given by it hereunder.

                  SECTION 16.02.  DEPOSIT OF FUNDS FOR PAYMENT OF BONDS.  If the
principal or redemption  price of any Bonds becoming due,  either at maturity or
by call for redemption or otherwise, together with all interest accruing thereon
to the due date,  has been paid or provision  therefor made in  accordance  with
Section 15.01,  all interest on such Bonds shall cease to accrue on the due date
and all liability of the Issuer with respect to such Bonds shall likewise cease,
except as  hereinafter  provided.  Thereafter  the owners of such Bonds shall be
restricted  exclusively  to the funds so deposited  for any claim of  whatsoever
nature  with  respect to such Bonds,  and the  Trustee  shall hold such funds in
trust for such owners.

                  Moneys so deposited with the Trustee which remain  unclaimed 2
years after the date payment  thereof  becomes due shall,  at the request of the
Issuer and if the Issuer is not at the time to the  knowledge  of the Trustee in
default with respect to any covenant in the Indenture or the Bonds contained, be
paid to the  Issuer,  and,  upon the  request  of,  and  provision  of  adequate
indemnification  from the  Issuer,  the  Trustee  shall  pay such  moneys to the
Issuer;  and the  owners  of the Bonds for  which  the  deposit  was made  shall
thereafter be limited to a claim against the Issuer; provided, however, that the
Trustee, before making payment to the Issuer, may, at the expense of the Issuer,
cause a notice to be published once in an Authorized Newspaper, stating that the
moneys  remaining  unclaimed  will be returned  to the Issuer  after a specified
date.

                  SECTION  16.03.  EFFECT OF PURCHASE  OF BONDS.  No purchase of
Bonds  pursuant to Section 3.01 shall be deemed to be a payment or redemption of
such  Bonds or any  portion  thereof  and such  purchase  will  not  operate  to
extinguish or discharge the indebtedness evidenced by such Bonds.

                  SECTION 16.04 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS.
If any Interest Payment Date, maturity date, or date fixed for redemption of any
Bonds is a  Saturday,  Sunday  or a day on which  the  Trustee  is  required  or
authorized  or not  prohibited,  by law to close and is closed,  then payment of
interest,  principal and any redemption  premium need not be paid by the Trustee
on that date, but that payment may be made on the next  succeeding  Business Day
on which the Trustee is open for  business  with the same force and effect as if
that payment were made on the Interest Payment Date, maturity date or date fixed
for redemption and no interest shall accrue for the period after that date.

                  SECTION 16.05. NO RIGHTS  CONFERRED ON OTHERS.  Nothing herein
contained  shall confer any right upon any person other than the parties hereto,
the Issuer, the Credit Facility Issuer and the owners of the Bonds.

                  SECTION 16.06.  ILLEGAL, ETC. PROVISIONS  DISREGARDED.  If any
term or provision of this Indenture or the Bonds or the application  thereof for
any reason or circumstance shall to any extent be held invalid or unenforceable,
the remaining provisions or the application of such term or provision to persons
and situations other than those as to which it is held invalid or unenforceable,
shall not be affected  thereby,  and each term and provision  hereof and thereof
shall be valid and enforced to the fullest extent permitted by law.

                                       82
<PAGE>

                  SECTION 16.07.  SUBSTITUTE  NOTICE. If for any reason it shall
be impossible to make  publication of any notice  required hereby in a newspaper
or newspapers, then such publication or other notice in lieu thereof as shall be
made with the approval of the Trustee  shall  constitute a sufficient  giving of
such notice.

                  SECTION 16.08.  NOTICES. Any notice to the Issuer, the Company
or the  Trustee  shall be given in writing,  either by  registered  mail,  to be
deemed  effective  2  days  after  mailing,  or by  telegram,  or by  telephone,
confirmed in writing, to:

<TABLE>
<CAPTION>

<S>                                 <C>
         The Company:               Spurlock Adhesives, Inc.
                                    5090 General Mahone Highway
                                    Waverly, Virginia  23890
                                    Attention:  Phillip S. Sumpter, Executive Vice President
                                    Telephone:  (804) 834-3113
                                    Telecopy:  (804) 834-2860

         With a Copy to:            Williams Mullen Christian & Dobbins, P.C.
                                    1021 East Cary Street
                                    Richmond, Virginia  23219
                                    Attention:  David L. Dallas, Jr., Esq.
                                    Telephone:  (804) 643-1991
                                    Telecopy:  (804) 783-6456


         The Issuer:                County of Saratoga Industrial Development Agency
                                    Saratoga County Municipal Center
                                    40 McMaster Street
                                    Ballston Spa, New York  12020
                                    Attention:  Administrator
                                    Telephone:  (518) 884-4705
                                    Telecopy:  (518) 885-2220

         With a Copy to:            Snyder, Kiley, Toohey & Corbett, LLP
                                    160 West Avenue
                                    P.O. Box 4367
                                    Saratoga Springs, New York  12866
                                    Attention:  Michael J. Toohey, Esq.
                                    Telephone:  (518) 584-1500
                                    Telecopy:  (518) 584-1503


         The Trustee:               Star Bank, N.A.
                                    425 Walnut Street
                                    6th Floor
                                    Cincinnati, Ohio  45202
                                    Attention:  Corporate Trust Services
                                    Telephone:  (513) 632-2047
                                    Telecopy:  (513) 632-5511


                                       83
<PAGE>

         If to the Bank:            KeyBank National Association
                                    66 South Pearl Street
                                    Albany, New York  12207-1501
                                    Attention:  Corporate Banking Division
                                    Telephone:  (518) 486-8181
                                    Telecopy:  (518) 487-4285

         With a Copy to:            KeyBank National Association
                                    66 South Pearl Street
                                    Albany, New York  12207
                                    Attention:  International Division, Letter of Credit Department
                                    Telephone:  (518) 486-8144
                                    Telecopy:  (518) 487-4998

                                    and

                                    Crane Kelley Greene & Parente
                                    90 State Street
                                    Albany, New York  12207
                                    Attention:  Kevin J. Kelley, Esq.
                                    Telephone:  (518) 432-8000
                                    Telecopy:  (518) 432-0086
</TABLE>


                  SECTION  16.09.  SUCCESSORS  AND ASSIGNS.  All the  covenants,
promises  and  agreements  in this  Indenture  contained  by or on behalf of the
Issuer,  or by or on behalf of the Trustee,  shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed or not.

                  SECTION 16.10.  HEADINGS FOR CONVENIENCE ONLY. The descriptive
headings in this  Indenture  are  inserted  for  convenience  only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                  SECTION 16.11. COUNTERPARTS.  The Indenture may be executed in
any number of  counterparts,  each of which when so executed and delivered shall
constitute an original, but all of which, when taken together,  shall constitute
but one and the same  instrument,  and shall become effective when copies hereof
shall be  delivered  to each of the parties  hereto,  which  copies,  when taken
together, bear the signatures of each of the parties hereto.

                  SECTION  16.12.   APPLICABLE  LAW.  This  Indenture  shall  be
governed by and construed in accordance with the laws of the State of New York.
                                       84
<PAGE>


                  IN WITNESS WHEREOF, the Issuer has caused these presents to be
signed in its name and behalf of its Chairman, and to evidence its acceptance of
the trusts hereby created, the Trustee has caused these presents to be signed in
its name and behalf by one of its duly authorized trust officers,  all as of the
day and year first hereinabove written.

                                   COUNTY OF SARATOGA INDUSTRIAL
                                   DEVELOPMENT AGENCY


                                   By: /s/ Floyd H. Rourke
                                       ------------------------------------
                                       Floyd H. Rourke, Chairman



                                   STAR BANK, N.A., as Trustee


                                   By: /s/ Keith A. Maurmeier
                                       ------------------------------------
                                   Name: Keith A. Maurmeier
                                         ----------------------------------
                                   Title: Senior Trust Officer
                                          ---------------------------------

         The Company hereby approves,  consents to and agrees to be bound by all
of  the  terms  and  provisions  of the  Indenture  insofar  as  such  terms  or
provisions,  directly or  indirectly,  relate to, apply to,  require or prohibit
action by or deal with the  Company,  or  Property  of the  Company,  including,
without limitation, the Project Facility, and including, but not limited to, all
provisions  for the  deposit or  payment of moneys to funds held by the  Trustee
under the Indenture.  The Company hereby  agrees,  at its own expense,  to do al
things  and take all  actions  as shall be  necessary  to enable  the  Issuer to
perform its  obligations  under the  Indenture.  This  paragraph  shall bind the
Company and its successors and assigns.

                                   SPURLOCK ADHESIVES, INC.


                                   By: /s/ Phillip S. Sumpter
                                       ------------------------------------
                                   Name: Phillip S. Sumpter
                                         ----------------------------------
                                   Title: Executive Vice President
                                          ---------------------------------


STATE OF NEW YORK   )
                    ) SS.:
COUNTY OF SARATOGA  )

         On the 7th day of October,  1997,  before me  personally  came FLOYD H.
ROURKE,  to me known,  who being by me duly  sworn,  did  depose and say that he
resides in  Northumberland,  New York,  that he is the CHAIRMAN of the COUNTY OF
SARATOGA  INDUSTRIAL  DEVELOPMENT  AGENCY, the public benefit corporation of the
State of New York described in and which executed the foregoing instrument,  and
that he signed his name thereto by authority of said public benefit corporation.


                                    /s/ Theresa C. Priest
                                    ---------------------------------------
                                    Notary Public

                                              THERESA C. PRIEST
                                       Notary Public, State of New York
                                        Washington County #01PR4921971
                                       Commission Expires Feb. 28, 1998



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STATE OF NEW YORK   )
                    ) SS.:
COUNTY OF SARATOGA  )

         On this 9th day of October,  1997,  before me personally  came Keith A.
Maurmeier,  to me known,  who being by me duly sworn, did depose and sat that he
resides in  Cincinnati  Ohio,  that he is the Senior Trust Officer of STAR BANK,
N.A.  the  national  banking  association  described  in and which  executed the
foregoing instrument,  and that he signed his name thereto by order of the Board
of Directors of said national banking association.


                                    /s/ Theresa C. Priest
                                    ---------------------------------------
                                    Notary Public

                                              THERESA C. PRIEST
                                       Notary Public, State of New York
                                        Washington County #01PR4921971
                                       Commission Expires Feb. 28, 1998


STATE OF NEW YORK   )
                    ) SS.:
COUNTY OF SARATOGA  )

         On this 9th day of October,  1997, before me personally came Phillip S.
Sumpter,  to me known,  who being by me duly  sworn,  did depose and sat that he
resides in Waverly  Virginia,  that he is the Exec V.P. of  SPURLOCK  ADHESIVES,
INC., the corporation  described in and which executed the foregoing instrument,
and that he signed his name  thereto by order of the Board of  Directors of said
corporation.

                                    /s/ Theresa C. Priest
                                    ---------------------------------------
                                    Notary Public

                                              THERESA C. PRIEST
                                       Notary Public, State of New York
                                        Washington County #01PR4921971
                                       Commission Expires Feb. 28, 1998



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