AMENDED AND RESTATED TRUST AGREEMENT

                                      among


                                HSB GROUP, INC.,
                                  as Depositor


                       THE FIRST NATIONAL BANK OF CHICAGO
                               as Property Trustee


                           FIRST CHICAGO DELAWARE INC.
                               as Delaware Trustee


                                       and


                    THE ADMINISTRATIVE TRUSTEES NAMED HEREIN


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



                            Dated as of July 15, 1997


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



                                  HSB CAPITAL I






<PAGE>



                                  HSB CAPITAL I


               Certain Sections of this Trust Agreement relating
               to Sections 310 through 318 of the Trust Indenture
                                  Act of 1939:


Trust Indenture Act Section                             Trust Agreement Section

((ss.))  310   (a)(1)............................................     8.7
               (a)(2)............................................     8.7
               (a)(3)............................................     8.9
               (a)(4)............................................     2.7(a)(ii)
               (b)...............................................     8.8
((ss.))  311   (a)...............................................     8.13
               (b)...............................................     8.13
((ss.))  312   (a)...............................................     5.8
               (b)...............................................     5.8
               (c)...............................................     5.8
((ss.))  313   (a)...............................................     8.15
               (a)(4)............................................     8.15
               (b)...............................................     8.15
               (c)...............................................    10.8
               (d)...............................................    15
((ss.))  314   (a)...............................................     8.16
               (b)............................................... Not Applicable
               (c)(1)............................................     8.17
               (c)(2)............................................     8.17
               (c)(3)............................................ Not Applicable
               (d)............................................... Not Applicable
               (e)...............................................    1.1, 8.17
((ss.))  315   (a)............................................... 8.1(a), 8.3(a)
               (b)...............................................   8.2, 10.8
               (c)...............................................     8.1(a)
               (d)...............................................    8.1, 8.3
               (e)............................................... Not Applicable
((ss.))  316   (a)............................................... Not Applicable
               (a)(1)(A)......................................... Not Applicable
               (a)(1)(B)......................................... Not Applicable
               (a)(2)............................................ Not Applicable
               (b)...............................................     5.15
               (c)...............................................     6.7
((ss.))  317   (a)(1)............................................ Not Applicable
               (a)(2)............................................ Not Applicable
               (b)...............................................     5.10
((ss.))  318   (a)...............................................    10.10

-----------------------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement.


<PAGE>



                                TABLE OF CONTENTS


                                    ARTICLE I

                                  DEFINED TERMS

SECTION 1.1.   Definitions.................................................... 1


                                   ARTICLE II

                        CONTINUATION OF THE ISSUER TRUST

SECTION 2.1.   Name ......................................................... 12
SECTION 2.2.   Office of the Delaware Trustee; 
               Principal Place of Business................................... 12
SECTION 2.3.   Initial Contribution of Trust 
               Property; Organizational Expenses............................. 12
SECTION 2.4.   Issuance of the Capital Securities............................ 13
SECTION 2.5.   Issuance of the Common Securities; 
               Subscription and Purchase of Debentures....................... 13
SECTION 2.6.   Continuation of Trust......................................... 13
SECTION 2.7.   Authorization to Enter into 
               Certain Transactions.......................................... 14
SECTION 2.8.   Title to Trust Property....................................... 17


                                   ARTICLE III

                                 PAYMENT ACCOUNT

SECTION 3.1.   Payment Account............................................... 18

                                   ARTICLE IV

                            DISTRIBUTIONS; REDEMPTION

SECTION 4.1.   Distributions................................................. 18
SECTION 4.2.   Redemption.................................................... 20
SECTION 4.3.   Subordination of Common Securities............................ 22
SECTION 4.4.   Payment Procedures............................................ 23
SECTION 4.5.   Tax Returns and Reports....................................... 23
SECTION 4.6.   Payment of Taxes, Duties, Etc. of the Issuer Trust............ 23
SECTION 4.7.   Payments under Indenture or Pursuant to Direct Actions........ 24



                                        i

<PAGE>



                                    ARTICLE V

                          TRUST SECURITIES CERTIFICATES

SECTION 5.1.   Initial Ownership............................................. 24
SECTION 5.2.   The Trust Securities Certificates............................. 24
SECTION 5.3.   Execution and Delivery of Trust 
               Securities Certificates....................................... 26
SECTION 5.4.   Global Securities; Non-Global Securities; 
               Common Securities Certificate................................. 26
SECTION 5.5.   Registration, Transfer and Exchange Generally; 
               Certain Transfers and Exchanges; Securities Act Legends....... 27
SECTION 5.6.   Mutilated, Destroyed, Lost or Stolen Trust 
               Securities Certificates....................................... 33
SECTION 5.7.   Persons Deemed Holders........................................ 33
SECTION 5.8.   Access to List of Holders' Names and Addresses................ 33
SECTION 5.9.   Maintenance of Office or Agency............................... 34
SECTION 5.10.  Appointment of Paying Agents.................................. 34
SECTION 5.11.  Ownership of Common Securities by Depositor................... 34
SECTION 5.12.  Notices to Clearing Agency.................................... 35
SECTION 5.13.  Definitive Capital Securities Certificates.................... 35
SECTION 5.14.  Restrictive Legends........................................... 35
SECTION 5.15.  Rights of Holders; Waivers of Past Defaults................... 37


                                   ARTICLE VI

                        ACTS OF HOLDERS; MEETINGS; VOTING

SECTION 6.1.   Limitations on Voting Rights.................................. 39
SECTION 6.2.   Notice of Meetings............................................ 40
SECTION 6.3.   Meetings of Holders of the Capital Securities................. 40
SECTION 6.4.   Voting Rights................................................. 40
SECTION 6.5.   Proxies, etc.................................................. 41
SECTION 6.6.   Holder Action by Written Consent.............................. 41
SECTION 6.7.   Record Date for Voting and Other Purposes..................... 41
SECTION 6.8.   Acts of Holders............................................... 41
SECTION 6.9.   Inspection of Records......................................... 42

                                   ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

SECTION 7.1.   Representations and Warranties of the Property Trustee and the
               Delaware Trustee.............................................. 43
SECTION 7.2.   Representations and Warranties of Depositor................... 44
                                                    
                                       ii

<PAGE>



                                  ARTICLE VIII

                       THE ISSUER TRUSTEES; PAYING AGENTS

SECTION 8.1.   Certain Duties and Responsibilities........................... 44
SECTION 8.2.   Certain Notices............................................... 47
SECTION 8.3.   Certain Rights of Property Trustee............................ 47
SECTION 8.4.   Not Responsible for Recitals or Issuance of Securities........ 49
SECTION 8.5.   May Hold Securities........................................... 50
SECTION 8.6.   Compensation; Indemnity; Fees................................. 50
SECTION 8.7.   Corporate Property Trustee Required; Eligibility 
               of Issuer Trustees............................................ 51
SECTION 8.8.   Conflicting Interests......................................... 52
SECTION 8.9.   Co-Trustees and Separate Trustee.............................. 52
SECTION 8.10.  Resignation and Removal; Appointment of Successor............. 54
SECTION 8.11.  Acceptance of Appointment by Successor........................ 55
SECTION 8.12.  Merger, Conversion, Consolidation or Succession
               to Business................................................... 56
SECTION 8.13.  Preferential Collection of Claims Against 
               Depositor or Issuer Trust..................................... 56
SECTION 8.14.  Property Trustee May File Proofs of Claim..................... 56
SECTION 8.15.  Reports by Property Trustee................................... 57
SECTION 8.16.  Reports to the Property Trustee............................... 58
SECTION 8.17.  Evidence of Compliance with Conditions Precedent.............. 58
SECTION 8.18.  Number of Issuer Trustees..................................... 58
SECTION 8.19.  Delegation of Power........................................... 58
SECTION 8.20.  Appointment of Administrative Trustees........................ 59

                                   ARTICLE IX

                       DISSOLUTION, LIQUIDATION AND MERGER

SECTION 9.1.   Dissolution Upon Expiration Date.............................. 59
SECTION 9.2.   Early Dissolution............................................. 60
SECTION 9.3.   Termination................................................... 60
SECTION 9.4.   Liquidation................................................... 60
SECTION 9.5.   Mergers, Consolidations, Amalgamations or Replacements 
               of Issuer Trust............................................... 62

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

SECTION 10.1.  Limitation of Rights of Holders............................... 63
SECTION 10.2.  Amendment..................................................... 63
SECTION 10.3.  Separability.................................................. 64
SECTION 10.4.  Governing Law................................................. 64
SECTION 10.5.  Payments Due on Non-Business Day.............................. 65


                                       iii

<PAGE>



SECTION 10.6.  Successors.................................................... 65
SECTION 10.7.  Headings...................................................... 65
SECTION 10.8.  Reports, Notices and Demands.................................. 65
SECTION 10.9.  Agreement Not to Petition..................................... 66
SECTION 10.10. Trust Indenture Act; Conflict with Trust 
               Indenture Act................................................. 67
SECTION 10.11. Acceptance of Terms of Trust Agreement, 
               Guarantee Agreement and Indenture............................. 67
SECTION 10.12. Registration Rights........................................... 67

Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Capital Securities Certificate
Exhibit E Form of Regulation S Certificate
Exhibit F Form of Restricted Securities Certificate
Exhibit G Form of Unrestricted Securities Certificate


                                       iv

<PAGE>



         AMENDED AND RESTATED TRUST AGREEMENT,  dated as of July 15, 1997, among
(i) HSB Group,  Inc.,  a  Delaware  corporation  (including  any  successors  or
assigns,  the "Depositor"),  (ii) The First National Bank of Chicago, a national
banking  association  as  property  trustee  (in such  capacity,  the  "Property
Trustee"  and, in its  separate  corporate  capacity  and not in its capacity as
Property  Trustee,  the "Bank"),  (iii) First Chicago  Delaware Inc., a Delaware
corporation, as Delaware trustee (in such capacity, the "Delaware Trustee"), and
(iv) Saul L. Basch, an individual, R. Kevin Price, an individual,  and Robert C.
Walker, an individual,  each of whose address is c/o HSB Group,  Inc., One State
Street,  Hartford,  Connecticut 06102 (each an "Administrative  Trustee"),  (the
Property  Trustee,  the Delaware Trustee and the  Administrative  Trustees being
referred to collectively as the "Issuer Trustees").


                                   WITNESSETH

         WHEREAS,  the Depositor,  the Delaware  Trustee and the  Administrative
Trustees have  heretofore duly declared and created a business trust pursuant to
the Delaware  Business Trust Act by entering into the Trust Agreement,  dated as
of July 10, 1997 (the "Original Trust  Agreement"),  and by the execution of the
Certificate of Trust by the Delaware Trustee and the Administrative Trustees and
the filing of such Certificate of Trust with the Secretary of State of the State
of Delaware on July 10, 1997, attached as Exhibit A; and

         WHEREAS,  the  Depositor  and the Issuer  Trustees  desire to amend and
restate the  Original  Trust  Agreement  in its  entirety as set forth herein to
provide for,  among other things,  (i) the issuance of the Common  Securities by
the Issuer  Trust to the  Depositor,  (ii) the  issuance and sale of the Capital
Securities  by the Issuer Trust  pursuant to the Purchase  Agreement,  (iii) the
acquisition  by the Issuer Trust from the  Depositor of all of the right,  title
and interest in the Debentures, and (iv) the appointment of the Property Trustee
and certain additional Administrative Trustees;

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


                                    ARTICLE I

                                  DEFINED TERMS

         SECTION 1.1. Definitions.

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




<PAGE>



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

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

          (c) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without  limitation";  

          (d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted  accounting
principles;
 
          (e)  Unless  the  context  otherwise  requires,  any  reference  to an
"Article",  a "Section"  or an "Exhibit"  refers to an Article,  a Section or an
Exhibit, as the case may be, of or to this Trust Agreement; and

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

          "Act" has the meaning specified in Section 6.8.

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

          "Additional  Sums" has the meaning  specified  in Section  10.6 of the
Indenture.

          "Administrative  Trustee"  means each Person  appointed in  accordance
with Section 8.20 solely in such Person's capacity as Administrative  Trustee of
the Issuer Trust  heretofore  created and  continued  hereunder  and not in such
Person's individual capacity, or any successor  Administrative Trustee appointed
as herein provided.

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

          "Applicable  Procedures"  means,  with  respect  to  any  transfer  or
transaction involving a Book-Entry Capital Security, the rules and procedures of
the Clearing Agency for such Book- Entry Capital  Security,  in each case to the
extent applicable to such transaction and as in effect from time to time. 2

<PAGE>




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

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

          (a) the entry of a decree or order by a court having  jurisdiction  in
the  premises  judging  such Person a bankrupt or  insolvent,  or  approving  as
properly filed a petition seeking reorganization,  arrangement,  adjudication or
composition  of or in respect of such  Person  under any  applicable  Federal or
State bankruptcy, insolvency, reorganization or other similar law, or appointing
a  receiver,  liquidator,  assignee,  trustee,  sequestrator  (or other  similar
official) of such Person or of any substantial  part of its property or ordering
the winding up or  liquidation of its affairs,  and the  continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or

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

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

          "Board of Directors"  means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any other
committee  of the  board  of  directors  of  the  Depositor  performing  similar
functions) or a committee  designated by the board of directors of the Depositor
(or any  such  committee),  comprised  of two or more  members  of the  board of
directors of the Depositor or officers of the Depositor, or both.

          "Business Day" means a day other than (a) a Saturday or Sunday,  (b) a
day on which banking  institutions in The City of New York are authorized by law
or  executive  order  to  remain  closed,  or (c) a day on  which  the  Property
Trustee's  corporate trust office or the corporate trust office of the Debenture
Trustee is closed for business.

          "Capital  Securities   Certificate"  means  a  certificate  evidencing
ownership of Capital  Securities,  substantially in the form attached as Exhibit
D.
    
          "Capital Securities  Guarantee Agreement" means the Capital Securities
Guarantee  Agreement  executed  and  delivered  by the  Depositor  and The First
National  Bank of Chicago,  as  guarantee  trustee,  contemporaneously  with the
execution and delivery of this Trust

                                        3

<PAGE>



Agreement, for the benefit of the Holders of the Capital Securities,  as amended
from time to time.

          "Capital Security" means any Initial Capital Security,  together with,
if issued pursuant to the Registration  Rights  Agreement,  any Exchange Capital
Securities.

          "CEDEL" means  Centrale de Livraison de Valeurs  Mobilieres,  S.A., or
its successor.

          "Certificate  Depository  Agreement"  means  the  agreement  among the
Issuer Trust, the Depositor and DTC, as the initial Clearing Agency, dated as of
the Closing Date,  substantially  in the form attached as Exhibit B, as the same
may be amended and supplemented from time to time.

          "Certificated Capital Securities" has the meaning specified in Section
     5.2.

          "Clearing  Agency"  means an  organization  registered  as a "clearing
agency"  pursuant  to Section 17A of the  Securities  Exchange  Act of 1934,  as
amended. DTC will be the initial Clearing Agency.

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

          "Closing Date" means the Time of Delivery, which date is also the date
of execution and delivery of this Trust Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended.

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

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

          "Common Security" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $1,000 and having the rights
provided  therefor  in this  Trust  Agreement,  including  the right to  receive
Distributions and a Liquidation Distribution to the extent provided herein.

          "Corporate  Trust  Office"  means (i) when used  with  respect  to the
Property  Trustee,  the  principal  office of the  Property  Trustee  located in
Chicago, Illinois, and (ii) when used with

                                                         4

<PAGE>



respect to the Debenture Trustee,  the principal office of the Debenture Trustee
located in Chicago, Illinois.

          "Debenture Event of Default" means any "Event of Default" specified in
Section 5.1 of the Indenture.

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

          "Debenture  Trustee"  means the Person  identified as the "Trustee" in
the Indenture,  solely in its capacity as Trustee  pursuant to the Indenture and
not in its individual  capacity,  or its successor in interest in such capacity,
or any successor Trustee appointed as provided in the Indenture.

          "Debentures"   means  the  Depositor's  Global  Floating  Rate  Junior
Subordinated  Deferrable Interest  Debentures,  Series A, issued pursuant to the
Indenture.

          "Definitive Capital Securities  Certificates" means either or both (as
the  context  requires)  of  (i)  Capital  Securities   Certificates  issued  as
Book-Entry  Capital  Securities  Certificates as provided in Section 5.2 or 5.5,
and  (ii)  Capital  Securities   Certificates  issued  in  certificated,   fully
registered form as provided in Section 5.2, 5.5 or 5.6.

          "Delaware  Business  Trust  Act"  means  Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., or any successor  statute thereto,
in each case as amended from time to time.

          "Delaware  Trustee"  means  the  Person  identified  as the  "Delaware
Trustee" in the  preamble  to this Trust  Agreement,  solely in its  capacity as
Delaware Trustee of the trust heretofore created and continued hereunder and not
in its individual  capacity,  or its successor in interest in such capacity,  or
any successor Delaware trustee appointed as herein provided.

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

          "Distribution  Amount"  means,  with respect to any Trust Security and
any Distribution  period, the amount of Distribution  payable in respect of such
Distribution   period,   which  amount  shall  be  calculated  by  applying  the
Distribution Rate to the Liquidation  Amount of each Trust Security  Outstanding
at the commencement of the Distribution  period, by multiplying each such amount
by the actual number of days in the Distribution  period concerned (which actual
number of days  shall  include  the first day but  exclude  the last day of such
Distribution Period) divided by 360 and rounding the resultant figure upwards to
the nearest cent (half a cent being rounded  upwards).  The determination of the
Distribution  Rate and the  Distribution  Amount by or on  behalf of the  Issuer
Trust  shall (in the  absence  of  manifest  error) be final and  binding on all
parties.



                                        5

<PAGE>



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

          "Distribution  Period"  means  the  period  for  payment  on the Trust
Securities set forth in Section 4.1(a).

          "Distribution Rate" means, with respect to any Distribution  period, a
rate per annum  equal to the  Interest  Rate (as  defined in and  determined  in
accordance with the Supplemental  Indenture) with respect to the Interest Period
under (and as defined in the  Supplemental  Indenture)  that  begins on the same
date as such  Distribution  Period  begins  and  ends on the  same  date as such
Distribution Period ends.

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

          "DTC" means The Depository Trust Company.

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

          "Euroclear" means Morgan Guaranty Trust Company of New York,  Brussels
Office, or its successor as operator of the Euroclear System.

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

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

               (b)   default  by  the  Issuer   Trust  in  the  payment  of  any
          Distribution when it becomes due and payable, and continuation of such
          default for a period of 30 days  (subject  to the  deferral of any due
          date in the case of an  Extension  Period,  as such term is defined in
          the Indenture); or

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

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

                                        6

<PAGE>




               (e) the  occurrence  of a  Bankruptcy  Event with  respect to the
          Property  Trustee  if  a  successor  Property  Trustee  has  not  been
          appointed within 90 days thereof.

          "Exchange Capital Security" means an undivided beneficial preferred
interest in the assets of the Trust,  having a Liquidation  Amount of $1,000 and
having the rights provided therefor in this Trust Agreement, including the right
to receive Distributions and a Liquidation Distribution, as provided herein, and
to be issued  hereunder  in  connection  with the offer to exchange  the Initial
Capital  Securities  for a new  series  of  capital  securities  of the Trust as
contemplated by the Registration Rights Agreement.

          "Exchange Offer" has the meaning specified in the Registration  Rights
Agreement.

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

          "Global Capital  Security" means the Capital  Securities  Certificates
representing Global Capital Securities.

          "Global  Certificate"  means a Capital  Security that is registered in
the Securities Register in the name of a nominee thereof.

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

          "Indenture" means the Junior Subordinated Indenture,  dated as of July
15, 1997,  between the  Depositor  and the  Debenture  Trustee,  as trustee,  as
amended or supplemented from time to time.

          "Initial Capital Security" means an undivided  beneficial  interest in
the assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having
the rights  provided  therefor in this Trust  Agreement,  including the right to
receive  Distributions  and a Liquidation  Distribution  to the extent  provided
herein, and designated as Global Floating Rate Capital Securities, Series A.

          "Institutional  Accredited Investor" means an institutional accredited
investor within the meaning of Rule  501(a)(1),  (2), (3) or (7) of Regulation D
under the Securities Act.

          "Issuer Trust" means the Delaware business trust known as "HSB Capital
I", which was created on July 10, 1997,  under the Delaware  Business  Trust Act
pursuant to the Original Trust Agreement and is continued pursuant to this Trust
Agreement.

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


                                        7

<PAGE>



          "Investment  Company Act" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.

          "Lead Manager" means Goldman, Sachs & Co.

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

          "Like  Amount"  means (i) with  respect  to a  redemption  of  Capital
Securities,  Capital  Securities having a Liquidation  Amount (as defined below)
equal to that portion of the principal amount of Junior Subordinated  Debentures
to be  contemporaneously  redeemed in  accordance  with the Junior  Subordinated
Debentures,  allocated to the Common  Securities  and to the Capital  Securities
based upon the relative  Liquidation Amounts of such classes and the proceeds of
which will be used to pay the  Redemption  Price of the Capital  Securities  and
(ii) with respect to a distribution of Junior Subordinated Debentures to holders
of Capital  Securities in connection  with a dissolution  or  liquidation of the
Issuer Trust, Junior Subordinated  Debentures having a principal amount equal to
the  Liquidation  Amount of the  Capital  Securities  of the holder to whom such
Junior Subordinated Debentures are distributed.

          "Liquidated  Damages  Distribution"  means,  with respect to the Trust
Securities of a given  Liquidation  Amount and/or a given period,  the amount of
Liquidated Damages (as defined in the Indenture) paid by the Depositor on a Like
Amount  of  Debentures  for  such  period  in  accordance   with  terms  of  the
Registration Rights Agreement.

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

          "Liquidation  Date" means the date of the  dissolution,  winding-up or
termination of the Issuer Trust pursuant to Section 9.4.

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

          "Majority  in  Liquidation  Amount of the Capital  Securities"  means,
except as provided by the Trust Indenture Act, Capital  Securities  representing
more  than 50% of the  aggregate  Liquidation  Amount  of all  then  Outstanding
Capital Securities.

          "Officers'  Certificate"  means  a  certificate  signed  by the  Chief
Executive  Officer,  the President or one of the Senior Vice Presidents,  and by
the Treasurer,  an Assistant Treasurer,  the Corporate Secretary or an Assistant
Secretary, of the Depositor, and delivered to the Issuer Trustees. Any Officers'
Certificate  delivered  with respect to compliance  with a condition or covenant
provided for in this Trust Agreement shall include:

               (a) a statement by each officer signing the Officers' Certificate
          that  such  officer  has  read  the  covenant  or  condition  and  the
          definitions relating thereto;
                                                         8

<PAGE>




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

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

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

          "Opinion of Counsel"  means a written  opinion of counsel,  who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.

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

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

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

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

               (c) Trust Securities that have been paid or in exchange for or in
          lieu  of  which  other  Capital  Securities  have  been  executed  and
          delivered pursuant to Sections 5.4, 5.5, 5.6 and 5.11;

provided,  however,  that in  determining  whether the Holders of the  requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand,  authorization,  direction, notice, consent or waiver hereunder, Capital
Securities  owned by the  Depositor,  any Issuer Trustee or any Affiliate of the
Depositor  or any  Issuer  Trustee  shall be  disregarded  and  deemed not to be
Outstanding,  except that (a) in determining whether any Issuer Trustee shall be
protected in relying upon any such request,  demand,  authorization,  direction,
notice,  consent or waiver,  only Capital  Securities  that such Issuer  Trustee
knows to be so owned shall be so disregarded,  and (b) the foregoing  clause (a)
shall not apply at any time when all of the Outstanding  Capital  Securities are
owned by the  Depositor,  one or more of the  Issuer  Trustees  and/or  any such
Affiliate.  Capital Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative


                                        9

<PAGE>



Trustees the pledgee's  right so to act with respect to such Capital  Securities
and that the pledgee is not the Depositor or any Affiliate of the Depositor.

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

          "Paying  Agent" means any paying agent or  co-paying  agent  appointed
pursuant to Section 5.11 and shall initially be the Property Trustee.

          "Payment  Account" means a segregated  non-interest-bearing  corporate
trust  account  maintained  by the  Property  Trustee with the Bank in its trust
department  for the benefit of the Holders in which all amounts  paid in respect
of the Debentures will be held and from which the Property Trustee,  through the
Paying Agent, shall make payments to the Holders in accordance with Sections 4.1
and 4.2.

          "Person" means a legal person, including any individual,  corporation,
estate, partnership,  joint venture, association,  joint stock company, company,
limited liability company, trust,  unincorporated  association, or government or
any agency or  political  subdivision  thereof,  or any other entity of whatever
nature.

          "Plan"  means an employee  benefit or other plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended, or Section 4975
of the Code.

          "Plan Asset Entity" means any Person whose  underlying  assets include
"plan assets" by reason of any Plan's investment in such Person.

          "Property  Trustee"  means  the  Person  identified  as the  "Property
Trustee" in the  preamble  to this Trust  Agreement,  solely in its  capacity as
Property Trustee of the trust heretofore created and continued hereunder and not
in its individual  capacity,  or its successor in interest in such capacity,  or
any successor property trustee appointed as herein provided.

          "PTCE" means a U.S.  Department of Labor Prohibited  Transaction Class
Exemption.

          "Purchase  Agreement" means the Purchase  Agreement,  dated as of July
10, 1997, among the Issuer Trust, the Depositor and the Purchasers,  as the same
may be amended from time to time.

          "Purchasers" has the meaning  specified in the Purchase  Agreement and
Schedule I thereto.

          "QIB" means a "qualified institutional buyer", as such term is defined
under Rule 144A.


                                       10

<PAGE>



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

          "Redemption  Price"  means,  with respect to any Trust  Security,  the
Liquidation  Amount  of  such  Trust  Security,   plus  accumulated  and  unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor  upon the  concurrent  redemption of a Like Amount of
Debentures.

          "Registered   Exchange  Offer"  has  the  meaning   specified  in  the
Registration Rights Agreement.

          "Registration   Rights   Agreement"  means  the  Registration   Rights
Agreement dated as of July 15, 1997 among the Initial Purchasers,  the Depositor
and the Trust, as such agreement may be amended,  modified or supplemented  from
time to time in accordance with the terms thereof.

          "Regulation  D" means  Regulation D under the  Securities  Act (or any
successor provision), as it may be amended from time to time.

          "Regulation S Capital Security" means all Capital Securities  required
pursuant to Section 5.4(c) to bear a Regulation S Legend. Such term includes the
Regulation S Global Certificate.

          "Regulation  S  Certificate"  has the  meaning  specified  in  Section
5.5(b).

          "Regulation S Global Certificate" has the meaning specified in Section
5.2.

          "Relevant Trustee" has the meaning specified in Section 8.10.

          "Restricted  Capital  Securities"  means all  Capital  Securities  the
Capital  Securities   Certificate,   including   Book-Entry  Capital  Securities
Certificate,  for  which  is  required  pursuant  to  Section  5.6(c)  to bear a
Restricted Capital Securities Legend.

          "Restricted Capital Securities Legend" means a legend substantially in
the form of the legend  required in the form of Capital  Securities  Certificate
set forth in Exhibit D to be placed upon a Restricted Securities Certificate.

          "Restricted  Certificated  Securities"  has the meaning  specified  in
Section 5.2.

          "Restricted  Global  Certificate" has the meaning specified in Section
5.2.
          "Restricted  Period"  means  the  40-day  period  following  the  last
original issue date of the Capital Securities  (including any Capital Securities
issued to cover over-allotments).

                                       11

 <PAGE>



          "Restricted  Securities  Certificate"  has the  meaning  specified  in
Section 5.5(b).

          "Restricted  Securities  Legend" has the meaning  specified in Section
5.14(a).

          "Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

          "Rule 144A Securities" has the meaning specified in Section 5.2.

          "Securities  Act" means the  Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.

          "Securities  Act Legend"  means a  Restricted  Securities  Legend or a
Regulation S Legend.

          "Securities  Register" and "Securities  Registrar" have the respective
meanings specified in Section 5.5.

          "Shelf Registration Statement" has the meaning assigned thereto in the
Registration Rights Agreement.

          "Successor  Capital  Securities" of any particular  Capital Securities
Certificate  means  every  Capital  Securities  Certificate  issued  after,  and
evidencing all or a portion of the same beneficial  interest in the Issuer Trust
as that evidenced by, such particular Capital Securities  Certificate;  and, for
the purposes of this definition, any Capital Securities Certificate executed and
delivered  under  Section  5.7  in  exchange  for  or in  lieu  of a  mutilated,
destroyed,  lost or stolen  Capital  Securities  Certificate  shall be deemed to
evidence  the same  beneficial  interest in the Issuer  Trust as the  mutilated,
destroyed, lost or stolen Capital Securities Certificate.

          "Time  of  Delivery"  has  the  meaning   specified  in  the  Purchase
Agreement.

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

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

          "Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Payment Account,  and (c) all proceeds and rights in respect of
the foregoing and any other
                                       
                                       12

<PAGE>



property and assets for the time being held or deemed to be held by the Property
Trustee pursuant to the trusts of this Trust Agreement.

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

          "Trust Security" means any one of the Common Securities or the Capital
Securities.

          "Unrestricted  Securities  Certificate"  has the meaning  specified in
Section 5.5(c).

                                   ARTICLE II

                        CONTINUATION OF THE ISSUER TRUST

          SECTION 2.1. Name.

          The trust continued  hereby shall be known as "HSB Capital I", as such
name may be modified from time to time by the Administrative  Trustees following
written notice to the Holders of Trust Securities and the other Issuer Trustees,
in which name the Issuer Trustees (other than the Delaware  Trustee) may conduct
the  business  of the  Issuer  Trust,  make  and  execute  contracts  and  other
instruments on behalf of the Issuer Trust and sue and be sued.

          SECTION  2.2.  Office  of the  Delaware  Trustee;  Principal  Place of
Business.

          The  address of the  Delaware  Trustee in the State of Delaware is 300
King  Street,  Wilmington,  DE  19801,  or such  other  address  in the State of
Delaware as the Delaware Trustee may designate by written notice to the Holders,
the  Depositor,  the  Property  Trustee  and the  Administrative  Trustees.  The
principal executive office of the Issuer Trust is c/o HSB Group, Inc., One State
Street, Hartford, Connecticut 06102, Attention: Corporate Secretary.

          SECTION 2.3.  Initial  Contribution of Trust Property;  Organizational
Expenses.

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

          SECTION 2.4. Issuance of the Capital Securities.

          As of July 10,  1997,  the  Depositor,  on  behalf  of the  Trust  and
pursuant to the Original  Trust  Agreement,  executed and delivered the Purchase
Agreement. On the Closing Date, an

                                       13

<PAGE>



Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Sections  5.2 and 5.3,  cause to be  authenticated,  and  deliver to the Capital
Securities Certificates in respect of the Initial Capital Securities, registered
in the name of the  nominee of the  initial  Depository,  or in the name of such
Persons as such Initial Purchasers shall have designated, in an aggregate amount
of  110,000  Capital  Securities  having  an  aggregate  Liquidation  Amount  of
$110,000,000,  against receipt of an aggregate  purchase price plus  accumulated
distributions  from July 15, 1997 on such Capital  Securities  of  $110,000,000,
which amount such Administrative  Trustee shall promptly deliver to the Property
Trustee.

          SECTION  2.5.  Issuance  of the Common  Securities;  Subscription  and
Purchase of Debentures.

          Contemporaneously  with  the  execution  and  delivery  of this  Trust
Agreement,  an  Administrative  Trustee,  on behalf of the Issuer  Trust,  shall
execute in  accordance  with Section 5.2 and 5.3 and the Property  Trustee shall
deliver to the Depositor Common Securities Certificates,  registered in the name
of the Depositor,  evidencing an aggregate of 3,403 Common  Securities having an
aggregate  Liquidation  Amount of  $3,403,000  against  receipt of the aggregate
purchase   price  of  such  Common   Securities  of  $3,403,000   (plus  accrued
Distributions,  if any), to the Property Trustee.  Contemporaneously  therewith,
the  Depositor  shall issue and sell to the Issuer  Trust,  and the Issuer Trust
shall  purchase from the  Depositor,  Debentures  having an aggregate  principal
amount equal to $113,403,000  registered in the name of the Property  Trustee on
behalf of the Issuer Trust and, in  satisfaction  of the purchase price for such
Debentures,  the Property Trustee,  on behalf of the Issuer Trust, shall deliver
to the Depositor the sum of $113,403,000  (plus accrued  Distributions,  if any)
(being the sum of the amounts  delivered to the Property Trustee pursuant to (i)
the second  sentence of Section 2.4, and (ii) the first sentence of this Section
2.5).
         
          SECTION 2.6. Continuation of Trust.

          The  exclusive  purposes and  functions of the Issuer Trust are (a) to
issue and sell Trust  Securities  and use the proceeds from such sale to acquire
the Debentures,  (b) to make Distributions to holders, and (c) to engage in only
those activities  necessary or incidental thereto. The Depositor hereby appoints
the Issuer  Trustees as trustees  of the Issuer  Trust,  to have all the rights,
powers  and duties to the extent set forth  herein,  and the  respective  Issuer
Trustees hereby accept such  appointment.  The Property  Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth  herein  for the  benefit  of the Issuer  Trust and the  Holders.  The
Administrative  Trustees  shall  have all  rights,  powers  and duties set forth
herein and in accordance with applicable law. The Delaware  Trustee shall not be
entitled to exercise any powers,  nor shall the Delaware Trustee have any of the
duties and responsibilities,  of the Issuer Trustees set forth herein, except as
required by the Delaware  Business Trust Act. The Delaware  Trustee shall be one
of the  trustees  of the  Issuer  Trust  for the sole  and  limited  purpose  of
fulfilling the  requirements of Section 3807 of the Delaware  Business Trust Act
and for taking such  actions as are  required to be taken by a Delaware  trustee
under the Delaware Business Trust Act.
                                                        
                                       14

<PAGE>




          SECTION 2.7. Authorization to Enter into Certain Transactions.

          (a) The Issuer  Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in  paragraph  (b) of this Section  2.7,  and in  accordance  with the
following  provisions (i) and (ii), the Property Trustee and the  Administrative
Trustees shall have the authority to enter into all  transactions and agreements
determined by the Property Trustee and Administrative Trustees to be appropriate
in  exercising  the  authority,  express or implied,  otherwise  granted to such
Issuer Trustees, as the case may be, under this Trust Agreement,  and to perform
all acts in furtherance thereof, including the following:

               (i) As among the Issuer Trustees,  each  Administrative  Trustee,
          acting individually or jointly,  shall have the power and authority to
          act on  behalf of the  Issuer  Trust  with  respect  to the  following
          matters:
                    (A) the  issuance  and  sale of the  Trust  Securities;  

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

                    (C) causing the Trust to enter into, and to execute, deliver
               and  perform  on behalf of the  Trust,  the  Registration  Rights
               Agreement  and  assisting  in the  registration  of  the  Capital
               Securities, as contemplated by the Registration Rights Agreement,
               under the Securities  Act and under state  securities or blue sky
               laws, and the  qualifications  of this Trust Agreement as a trust
               indenture under the Trust Indenture Act;
                           
                    (D) assisting in compliance  with the duties and obligations
               of the  Issuer  Trust  under  and the  Securities  Act and  under
               applicable  state securities or blue sky laws (including by means
               of registration of the Capital Securities thereunder from time to
               time) and the Trust Indenture Act;

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

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

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

                                       15

<PAGE>




                    (H) executing and delivering closing  certificates,  if any,
               pursuant to the Purchase Agreement and application for a taxpayer
               identification number for the Issuer Trust;

                    (I) unless  otherwise  determined by the Property Trustee or
               Holders  of at least a  Majority  in  Liquidation  Amount  of the
               Capital  Securities  or as  otherwise  required  by the  Delaware
               Business  Trust  Act or the Trust  Indenture  Act,  executing  on
               behalf of the Issuer Trust (either  acting alone or together with
               any  other   Administrative   Trustee)  any  documents  that  the
               Administrative  Trustees  have the power to execute  pursuant  to
               this Trust Agreement; and

                    (J) taking any action  incidental  to the  foregoing  as the
               Issuer  Trustees may from time to time  determine is necessary or
               advisable to give effect to the terms of this Trust Agreement.

               (ii)  The  Property  Trustee  shall  have  the  power,  duty  and
          authority  to act on behalf of the Issuer  Trust  with  respect to the
          following matters: 

                    (A) establishing the Payment Account;

                    (B) receiving the Debentures;

                    (C)  collecting  interest,  principal and any other payments
               made in respect of the Debentures and the holding of such amounts
               in the Payment Account;

                    (D)  distributing   through  any  Paying  Agent  of  amounts
               distributable to the Holders in respect of the Trust Securities;

                    (E) exercising all of the rights, powers and privileges of a
               holder of the Debentures;

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

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

                    (H) to the extent provided in this Trust Agreement,  winding
               up the affairs of and liquidating the Issuer Trust and preparing,
               executing and filing the  certificate  of  cancellation  with the
               Secretary of State of the State of Delaware;

                    (I) after an Event of Default  (other  than under  paragraph
               (b), (c), (d) or (e) of the definition of such term if such Event
               of Default is by or with respect


                                       16

<PAGE>



               to the Property  Trustee) taking of any action  incidental to the
               foregoing as the Property Trustee may from time to time determine
               is  necessary  or  advisable  to give effect to the terms of this
               Trust  Agreement  and to protect and conserve the Trust  Property
               for the  benefit of the  Holders  (without  consideration  of the
               effect of any such action on any particular Holder);

          (b) So long as this Trust  Agreement  remains  in  effect,  the Issuer
Trust (or the Issuer  Trustees  acting on behalf of the Issuer  Trust) shall not
undertake any business,  activities or transaction  except as expressly provided
herein or contemplated  hereby.  In particular,  the Issuer Trustees,  acting in
their capacity as such,  shall not (i) acquire any  investments or engage in any
activities not authorized by this Trust Agreement,  (ii) sell, assign, transfer,
exchange,  mortgage,  pledge,  set-off or otherwise  dispose of any of the Trust
Property  or  interests  therein,  including  to  Holders,  except as  expressly
provided  herein,  (iii) take any action  that would  reasonably  be expected to
cause the Issuer Trust to become taxable as a corporation or classified as other
than a grantor trust for United States Federal  income tax purposes,  (iv) incur
any  indebtedness  for  borrowed  money or issue any other debt,  or (v) take or
consent to any action that would result in the placement of a Lien on any of the
Trust Property. The Administrative  Trustees shall defend all claims and demands
of all  Persons  at any  time  claiming  any Lien on any of the  Trust  Property
adverse to the interest of the Issuer Trust or the Holders in their  capacity as
Holders.

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

               (i) the  preparation by the Issuer Trust of an Offering  Circular
          in  relation  to the  Capital  Securities,  including  any  amendments
          thereto and the taking of any action  necessary  or  desirable to sell
          the Capital  Securities in a transaction  or a series of  transactions
          exempt from the registration requirements of the Securities Act;

               (ii) the  preparation and filing by the Trust with the Commission
          and the execution on behalf of the Trust of a  registration  statement
          on the  appropriate  form in relation to the  Capital  Securities,  as
          contemplated  by the  Registration  Rights  Agreement,  including  any
          amendments thereto;

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


                                       17

<PAGE>




               (iv) the  negotiation  of the terms  of,  and the  execution  and
          delivery of, the Purchase Agreement; and

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

          (d)   Notwithstanding   anything   herein   to   the   contrary,   the
Administrative  Trustees are  authorized  and directed to conduct the affairs of
the Issuer  Trust and to operate the Issuer  Trust so that the Issuer Trust will
not be deemed to be an "investment  company" required to be registered under the
Investment  Company Act, and will not be taxable as a corporation  or classified
as other than a grantor trust for United States  Federal income tax purposes and
so that the  Debentures  will be treated as  indebtedness  of the  Depositor for
United  States  Federal   income  tax  purposes.   In  this   connection,   each
Administrative Trustee and the Holder of the Common Securities are authorized to
take any action,  not inconsistent with applicable law, the Certificate of Trust
or this  Trust  Agreement,  that such  Administrative  Trustee  or Holder of the
Common Securities  determines in its discretion to be necessary or desirable for
such purposes,  as long as such action does not adversely affect in any material
respect the interests of the Holders of the Outstanding Capital  Securities.  In
no event shall the Issuer  Trustees be liable to the Issuer Trust or the Holders
for any failure to comply with this section that results from a change in law or
regulation or in the interpretation thereof.

          SECTION 2.8. Assets of Trust.

          The assets of the Issuer Trust shall consist of the Trust Property.

          SECTION 2.9. Title to Trust Property.

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


                                   ARTICLE III

                                 PAYMENT ACCOUNT

          SECTION 3.1. Payment Account.

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

                                       18

<PAGE>



distribution  as herein  provided,  including  (and  subject to) any priority of
payments provided for herein.

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


                                   ARTICLE IV

                            DISTRIBUTIONS; REDEMPTION

          SECTION 4.1. Distributions.

          (a) The Trust Securities  represent undivided  beneficial interests in
the Trust Property,  and distributions  ("Distributions"),  comprised of (i) the
Distribution  Amount,  (ii) any Additional  Distributions,  (iii) any Liquidated
Damages  Distribution,  (iv) any Additional  Sums, and (v) and other payments in
respect of the  Debentures,  will be made on the Trust  Securities  on the dates
that payments of interest  (including  any  Additional  Interest and  Liquidated
Damages,  in each case, as defined in the Indenture) are made on the Debentures.
Accordingly:

               (i)  Distributions  on the Trust  Securities shall be cumulative,
          and shall  accumulate  whether  or not  there are funds of the  Issuer
          Trust available for the payment of Distributions.  Distributions shall
          accumulate  from July 15, 1997,  and,  except in the event (and to the
          extent) that the Depositor exercises its right to defer the payment of
          interest on the Debentures pursuant to the Indenture, shall be payable
          quarterly  in arrears on January 15,  April 15, July 15 and October 15
          of each year,  commencing  on October 15, 1997. If any date on which a
          Distribution  is otherwise  payable on the Trust  Securities  is not a
          Business Day, then the payment of such  Distribution  shall be made on
          the next  succeeding  day that is a  Business  Day  (and  without  any
          interest or other payment in respect of any such  delay),except  that,
          if such next  succeeding  Business Day falls within the next  calendar
          year, such payment will be made on the immediately  preceding Business
          Day,  in each  case,  with the same force and effect as if made on the
          date on which such payment was originally  payable (each date on which
          distributions  are payable in accordance with this Section  4.1(a),  a
          "Distribution Date").

               (ii) The Trust  Securities  shall be  entitled  to  Distributions
          (before  giving  effect to any  Additional  Distributions,  Liquidated
          Damages  Distributions  and  Additional  Sums) payable at the variable
          Distribution  Rate, as in effect from time to time,  multiplied by the
          Liquidation   Amount  of  the   Trust   Securities.   The   amount  of
          Distributions  and Additional  Distribution,  if any,  payable for any
          period will be  computed on the basis of the actual  number of days in
          the applicable  Distribution period (which actual number of days shall
          include the first day but  exclude  the last day of such  Distribution
          period)

                                       19

<PAGE>



          divided by 360. The period  beginning on, and  including,  the date of
          original   issuance,   and  ending  on,  but   excluding,   the  first
          Distribution  Date,  and each  successive  period  beginning  on,  and
          including, a Distribution Date, and ending on, but excluding, the next
          succeeding   Distribution   Date  is  herein  called  a  "Distribution
          period").  Distributions  to which  holders  of Trust  Securities  are
          entitled will accumulate Additional  Distributions at the Distribution
          Rate,  compounded  quarterly  from the relevant  payment date for such
          Distributions.  The  amount of  Distributions  payable  for any period
          shall also include any Additional  Distributions,  Liquidated  Damages
          Distributions,  and Additional  Sums, if any are so payable in respect
          of such period. 

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

          (b)   Distributions   on  the  Trust  Securities  with  respect  to  a
Distribution  Date shall be payable to the Holders thereof as they appear on the
Securities  Register  for the Trust  Securities  at the close of business on the
January 1, April 1, July 1 or October 1 (whether or not a Business Day) next
preceding the relevant Distribution Date.

          (c) (i) The  Issuer  Trust  shall  cause the  Distribution  Rate,  the
Distribution  Amount in respect of each Trust Security and the Distribution Date
for each Distribution period to be notified to the Property Trustee, each Paying
Agent  appointed  by the Issuer Trust and any  securities  exchange or automated
quotation  system on which the Trust Securities are listed or quoted and also to
be  notified  to the  Holders of the Trust  Securities  in  accordance  with the
provisions  of  Section  10.8,  in each  case as soon as  practicable  after the
determination  thereof but in no event later than the second  Business Day after
the Determination Date in respect of such Distribution period.

               (ii)  All   calculations  of  the   Distribution   Rate  and  the
Distribution Amount by or on behalf of the Issuer Trust shall (in the absence of
manifest  error) be final and  binding  on all  parties,  and all  certificates,
communications, opinions, determinations, calculations, quotations and decisions
given,  expressed,  made or obtained for the purposes of the  provisions of this
Section 4.1(c) or the provisions of the Supplemental  Indenture  relating to the
calculation  of the Interest  Rate (as defined in the  Supplemental  Indenture),
whether by the  Reference  Banks (or any of them) or the  Debenture  Trustee (in
each case as  defined  in the  Indenture),  shall  (in the  absence  of  willful
default,  bad faith or  manifest  error) be  binding on the  Issuer  Trust,  the
Depositor, the Debenture Trustee and all of the Holders of the Trust Securities,
and no liability shall (in the absence of willful default, bad faith or manifest
error)  attach to the  Debenture  Trustee in  connection  with the  exercise  or
non-exercise by it of its powers, duties and discretions.


                                       20

<PAGE>



          SECTION 4.2. Redemption.

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

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

               (i) the  Redemption  Date; 

               (ii) the Redemption  Price or if the  Redemption  Price cannot be
          calculated  prior to the time the notice is required  to be sent,  the
          estimate of the Redemption Price provided  pursuant to (and as defined
          in) the Indenture together with a statement that it is an estimate and
          that the  actual  Redemption  Price  will be  calculated  on the third
          Business  Day prior to the  Redemption  Date (and,  if an  estimate is
          provided, that a further notice shall be sent of the actual Redemption
          Price on the date on which such Redemption Price is calculated);
                
               (iii) the CUSIP number or CUSIP numbers of the Capital Securities
          affected;

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

               (v) that on the Redemption Date the Redemption  Price will become
          due and payable upon each such Trust  Security to be redeemed and that
          Distributions thereon will cease to accumulate on and after such date,
          except as provided in Section 4.2(d) below; and

               (vi) the place or places  where  the Trust  Securities  are to be
          surrendered for the payment of the Redemption Price.

          The Issuer  Trust in issuing the Trust  Securities  may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private  placement"  numbers of the Trust
Securities in notices of redemption  and related  materials as a convenience  to
Holders;  provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust  Securities
or as contained in any notice of redemption and related materials.

          (c) The Trust  Securities  redeemed on each  Redemption  Date shall be
redeemed at the  Redemption  Price with the  proceeds  from the  contemporaneous
redemption of Debentures.

                                       21

<PAGE>



Redemptions of the Trust Securities shall be made and the Redemption Price shall
be payable on each  Redemption Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment  Account for the payment of such
Redemption Price.

          (d) If the Property Trustee gives a notice of redemption in respect of
any  Capital  Securities,  then,  by 12:00  noon,  New York  City  time,  on the
Redemption  Date,  subject to Section  4.2(c),  the Property  Trustee will, with
respect to Book-Entry Capital Securities,  irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available therefor,
funds  sufficient  to pay the  applicable  Redemption  Price  and will give such
Clearing  Agency  irrevocable  instructions  and authority to pay the Redemption
Price  to the  Holders  of the  Capital  Securities.  With  respect  to  Capital
Securities that are not Book-Entry  Capital  Securities,  the Property  Trustee,
subject to Section  4.2(c),  will  irrevocably  deposit with the Paying Agent or
Paying Agents,  to the extent  available  therefor,  funds sufficient to pay the
applicable  Redemption  Price and will give the  Paying  Agent or Paying  Agents
irrevocable  instructions  and  authority  to pay the  Redemption  Price  to the
Holders of the Capital  Securities  upon  surrender of their Capital  Securities
Certificates.  Notwithstanding the foregoing,  Distributions payable on or prior
to the Redemption Date for any Trust  Securities  called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register on the relevant  record dates for the related  Distribution  Dates.  If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Holders holding Trust Securities so
called for  redemption  will cease,  except the right of such Holders to receive
the  Redemption  Price and any  Distribution  payable  in  respect  of the Trust
Securities on or prior to the Redemption  Date, but without  interest,  and such
Securities will cease to be Outstanding. In the event that any date on which any
Redemption  Price  is  payable  is  not a  Business  Day,  then  payment  of the
Redemption  Price payable on such date will be made on the next  succeeding  day
that is a Business Day (without any interest or other  payment in respect of any
such delay),  except that, if such Business Day falls in the next calendar year,
such payment will be made on the  immediately  preceding  Business  Day, in each
case,  with the same force and effect as if made on such date. In the event that
payment of the Redemption  Price in respect of any Trust  Securities  called for
redemption is  improperly  withheld or refused and not paid either by the Issuer
Trust or by the Depositor pursuant to the Guarantee Agreement,  Distributions on
such Trust Securities will continue to accumulate,  as set forth in Section 4.1,
from the  Redemption  Date  originally  established by the Issuer Trust for such
Trust  Securities to the date such  Redemption  Price is actually paid, in which
case the actual  payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.

          (e) Subject to Section 4.3(a),  if less than all the Outstanding Trust
Securities  are  to  be  redeemed  on a  Redemption  Date,  then  the  aggregate
Liquidation  Amount of Trust  Securities  to be redeemed  shall be allocated pro
rata to the Common Securities and the Capital Securities based upon the relative
Liquidation  Amounts of such classes.  The particular  Capital  Securities to be
redeemed  shall be  selected  on a pro rata basis  based  upon their  respective
Liquidation  Amounts not more than 60 days prior to the  Redemption  Date by the
Property Trustee from the Outstanding  Capital  Securities not previously called
for  redemption,  provided  that  so  long  as  the  Capital  Securities  are in
book-entry-only form, such selection shall be made in accordance with

                                       22

<PAGE>



the customary procedures for the Clearing Agency for the Capital Securities, and
provided further that,  after giving effect to such redemption,  no Holder shall
hold  Capital  Securities  with an  aggregate  Liquidation  Amount  of less than
$1,000.  The Property Trustee shall promptly notify the Securities  Registrar in
writing of the Capital  Securities  selected for redemption  and, in the case of
any Capital Securities selected for partial  redemption,  the Liquidation Amount
thereof to be  redeemed.  For all purposes of this Trust  Agreement,  unless the
context otherwise requires, all provisions relating to the redemption of Capital
Securities shall relate, in the case of any Capital Securities redeemed or to be
redeemed  only in part, to the portion of the  aggregate  Liquidation  Amount of
Capital Securities that has been or is to be redeemed.

          SECTION 4.3. Subordination of Common Securities.

          (a) Payment of Distributions (including any Additional  Distributions)
on, the Redemption Price of, and the Liquidation  Distribution in respect of the
Trust Securities,  as applicable,  shall be made, subject to Section 4.2(e), pro
rata  among  the  Common  Securities  and the  Capital  Securities  based on the
Liquidation Amount of the Trust Securities;  provided,  however,  that if on any
Distribution  Date,  Redemption  Date or  Liquidation  Date any Event of Default
resulting  from a  Debenture  Event of Default  specified  in Section  5.1(1) or
5.1(2) of the Indenture shall have occurred and be continuing, no payment of any
Distribution  (including any Additional  Distributions) on, Redemption Price of,
or  Liquidation  Distribution  in respect of any Common  Security,  and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities,  shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including any Additional Distributions) on all Outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or in the case of  payment  of the  Redemption  Price  the full  amount  of such
Redemption  Price  on  all  Outstanding   Capital  Securities  then  called  for
redemption,  or in the case of payment of the Liquidation  Distribution the full
amount of such Liquidation  Distribution on all Outstanding  Capital Securities,
shall have been made or provided for, and all funds immediately available to the
Property  Trustee  shall  first be applied to the payment in full in cash of all
Distributions (including any Additional  Distributions) on, the Redemption Price
of or the Liquidation Distribution in respect of the Capital Securities then due
and payable.

          (b) In the case of the  occurrence  of any Event of Default  resulting
from any Debenture Event of Default,  the Holder of the Common  Securities shall
have no right to act with respect to any such Event of Default  under this Trust
Agreement  until the effects of all such Events of Default  with  respect to the
Capital Securities have been cured,  waived or otherwise  eliminated.  Until all
such Events of Default  under this Trust  Agreement  with respect to the Capital
Securities  have been so cured,  waived or  otherwise  eliminated,  the Property
Trustee shall act solely on behalf of the Holders of the Capital  Securities and
not on behalf of the Holder of the Common  Securities,  and only the  Holders of
the Capital Securities will have the right to direct the Property Trustee to act
on their behalf.


                                       23

<PAGE>



          SECTION 4.4. Payment Procedures.

          Payments of Distributions (including any Additional  Distributions) or
of the Redemption Price,  Liquidation  Amount or any other amounts in respect of
the  Capital  Securities  shall be made by check  mailed to the  address  of the
Person entitled thereto as such address shall appear on the Securities  Register
or, if the Capital Securities are held by a Clearing Agency,  such Distributions
shall be made to the Clearing Agency in immediately available funds. Payments in
respect  of the  Common  Securities  shall  be made in such  manner  as shall be
mutually  agreed  between the Property  Trustee and the Holder of all the Common
Securities.

          SECTION 4.5. Tax Returns and Reports.

          The  Administrative  Trustees shall prepare (or cause to be prepared),
at the Depositor's expense, and file all United States Federal,  state and local
tax and information returns and reports required to be filed by or in respect of
the Issuer Trust. In this regard, the Administrative  Trustees shall (a) prepare
and file (or cause to be prepared and filed) all Internal  Revenue Service forms
required to be filed in respect of the Issuer  Trust in each taxable year of the
Issuer  Trust,  and (b)  prepare  and  furnish  (or  cause  to be  prepared  and
furnished)  to each Holder all Internal  Revenue  Service  forms  required to be
provided by the Issuer  Trust.  The  Administrative  Trustees  shall provide the
Depositor  and the Property  Trustee with a copy of all such returns and reports
promptly after such filing or furnishing.  The Issuer Trustees shall comply with
United  States  Federal   withholding  and  backup   withholding  tax  laws  and
information reporting requirements with respect to any payments to Holders under
the Trust Securities.

          SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.

          Upon receipt under the  Debentures of  Additional  Sums,  the Property
Trustee  shall  promptly  pay any  taxes,  duties  or  governmental  charges  of
whatsoever nature (other than withholding  taxes) imposed on the Issuer Trust by
the  United  States or any other  taxing  authority  with  respect to which such
Additional Sums were paid.

          SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.

          Any amount payable hereunder to any Holder of Capital Securities shall
be reduced by the amount of any  corresponding  payment such Holder has directly
received  pursuant to Section 5.9 of the Indenture or Section 5.16 of this Trust
Agreement. 24
<PAGE>



                                    ARTICLE V

                          TRUST SECURITIES CERTIFICATES

          SECTION 5.1. Initial Ownership.

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

          SECTION 5.2. The Trust Securities Certificates.

          (a)  Unless  otherwise  set  forth  herein,   the  Capital  Securities
Certificates  shall be issued in fully registered form in minimum  denominations
of $1,000 Liquidation Amount and integral multiples of $1,000 in excess thereof,
and the  Common  Securities  Certificates  shall be issued in  denominations  of
$1,000  Liquidation  Amount and integral  multiples  thereof.  The consideration
received by the Trust for the issuance of the Trust  Securities shall constitute
a  contribution  to the capital of the Trust and shall not  constitute a loan to
the Trust.

          Except as otherwise provided herein, owners of beneficial interests in
Global  Certificates  shall not be  entitled  to receive  physical  delivery  of
certificated  Capital  Securities.  Purchasers of Initial Capital Securities who
are not QIBs shall receive  certificated  Initial Capital Securities bearing the
Restricted Securities Legend ("Restricted Certificated  Securities");  provided,
however, that upon transfer of such Restricted Certificated Securities to a QIB,
such  Restricted  Certificated  Securities  shall,  unless the  relevant  Global
Capital Security has previously been exchanged,  be exchanged for an interest in
a Global  Capital  Security  pursuant to the  provisions  of Section 5.5 hereof.
Restricted  Certificated  Securities  shall  include the  Restricted  Securities
Legend unless  removed in accordance  with this Section 5.2(a) or Section 5.5(e)
hereof.

          Capital Securities initially sold to qualified institutional buyers in
reliance on Rule 144A under the Securities Act ("Rule 144A Capital  Securities")
initially will be represented by one or more certificates in registered,  global
form with such applicable legends as are provided for in Section 5.5(c),  except
as  otherwise   permitted   herein   (collectively,   the   "Restricted   Global
Certificate").  Such Global  Security  shall be registered in the name of DTC or
its nominee and deposited  with the Property  Trustee,  at its  Corporate  Trust
Office,   as  custodian   for  DTC,  duly  executed  by  the  Issuer  Trust  and
authenticated  by the Property  Trustee as hereinafter  provided.  The aggregate
principal amount of the Restricted  Global  Certificate may from time to time be
increased  or  decreased  by  adjustments  made on the  records of the  Property
Trustee,  as custodian for DTC, in connection with a  corresponding  decrease or
increase  in  the  aggregate   principal  amount  of  the  Regulation  S  Global
Certificate or the Unrestricted Global Certificate, as hereinafter provided.

          Capital Securities initially sold in offshore transactions in reliance
on  Regulation  S  ("Regulation  S  Capital   Securities")   initially  will  be
represented by one or more certificates in 

                                       25

<PAGE>



registered,  global form with such  applicable  legends as are  provided  for in
Section 5.14, except as otherwise  permitted herein.  Such Capital Securities in
global form shall be  registered in the name of DTC or its nominee and deposited
with the Property Trustee,  at its Corporate Trust Office, as custodian for DTC,
duly executed by the Issuer Trust and  authenticated  by the Property Trustee as
hereinafter  provided,  for  credit  to the  respective  accounts  at DTC of the
depositories  for Euroclear or CEDEL.  Until such time as the Restricted  Period
(as defined  below)  shall have  terminated,  such Capital  Securities  shall be
referred to herein collectively as the "Regulation S Global  Certificate." After
such  time  as  the  Restricted  Period  shall  have  terminated,  such  Capital
Securities shall be referred to herein collectively as the "Unrestricted  Global
Certificate."  The  aggregate  principal  amount  of  the  Regulation  S  Global
Certificate  or the  Unrestricted  Global  Certificate  may from time to time be
increased  or  decreased  by  adjustments  made on the  records of the  Property
Trustee,  as custodian for DTC, in connection with a  corresponding  decrease or
increase in the aggregate principal amount of the Restricted Global Certificate,
as hereinafter  provided. As used herein, the term "Restricted Period" means the
period of 40 consecutive days beginning on and including the first day after the
later of (i) the day that the Lead  Manager  advises  the  Issuer  Trust and the
Property Trustee is the day on which the Capital Securities are first offered to
persons  other than  distributors  (as defined in  Regulation  S) in reliance on
Regulation S and (ii) the Closing Date.

          Capital   Securities   initially  sold  to  institutional   accredited
investors  in  a  manner  exempt  from  the  registration  requirements  of  the
Securities  Act and not in  reliance  on  Regulation  S will be  represented  by
Capital Securities in registered,  certificated form (the "Certificated  Capital
Securities")  with such applicable  legends as are provided for in Section 5.14,
except as otherwise permitted herein;  provided,  however, that upon transfer of
such Certificated  Capital Securities to a qualified  institutional  buyer, such
Certificated  Capital  Securities will,  unless the Rule 144A Global  Liquidated
Certificate  has previously  been  exchanged,  be exchanged for an interest in a
Rule 144A Global  Capital  Security  pursuant to the provisions of Section 5.14.
Certificated  Capital  Securities  initially  sold to  Institutional  Accredited
Investors  are  issuable  only in  minimum  blocks  of 100  Capital  Securities,
representing  $100,000 in aggregate Liquidation Amount and in integral multiples
of $1,000 in excess thereof.

          The Trust Securities  Certificates  shall be executed on behalf of the
Trust by manual or facsimile  signature of at least one  Administrative  Trustee
and authenticated by the Property Trustee. Trust Securities Certificates bearing
the manual or facsimile  signatures  of  individuals  who were, at the time when
such  signatures  shall have been  affixed,  authorized to sign on behalf of the
Issuer Trust,  shall be validly issued and entitled to the benefit of this Trust
Agreement,  notwithstanding  that such  individuals  or any of them  shall  have
ceased  to be so  authorized  prior to the  delivery  of such  Trust  Securities
Certificates  or did not hold such offices at the date of delivery of such Trust
Securities  Certificates.  A transferee of a Trust Securities  Certificate shall
become a Securityholder,  and shall be entitled to the rights and subject to the
obligations of a Securityholder  hereunder,  upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.5.

                                       26

<PAGE>



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

          SECTION 5.3. Execution and Delivery of Trust Securities Certificates.

          At the Time of Delivery, the Administrative Trustees shall cause Trust
Securities  Certificates,  in an  aggregate  Liquidation  Amount as  provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered
to or upon the written order of the Depositor, executed by an authorized officer
thereof,  without  further  corporate  action by the  Depositor,  in  authorized
denominations.

          SECTION  5.4.  Global  Securities;   Non-Global   Securities;   Common
Securities Certificate.

          (a) Each Global Certificate  authenticated  under this Trust Agreement
shall  be  registered  in the  name of the  Clearing  Agency  designated  by the
Depositor for such Global Certificate or a nominee thereof and delivered to such
Clearing Agency or a nominee thereof or custodian therefor, and each such Global
Certificate  shall  constitute a Capital Security for all purposes of this Trust
Agreement.

          (b)  If a  Global  Certificate  is to be  exchanged  for  Certificated
Capital Securities or canceled in whole, it shall be surrendered by or on behalf
of the Clearing  Agency,  its nominee or custodian to the Property  Trustee,  as
Securities  Registrar,  for exchange or cancellation as provided in this Article
5.  If any  Global  Certificate  is to be  exchanged  for  Certificated  Capital
Securities  or  cancelled  in part,  or if  another  Capital  Security  is to be
exchanged  in  whole  or in  part  for  a  beneficial  interest  in  any  Global
Certificate,  in each case,  as  provided in Section  5.4,  then either (i) such
Global  Certificate  shall be so  surrendered  for exchange or  cancellation  as
provided  in this  Article 5 or (ii) the  Liquidation  Amount  thereof  shall be
reduced  or  increased  by an  amount  equal  to the  portion  thereof  to be so
exchanged or cancelled,  or equal to the principal  amount of such  Certificated
Capital Security to be so exchanged for a beneficial  interest  therein,  as the
case may be, by means of an  appropriate  adjustment  made on the records of the
Property Trustee,  as Securities  Registrar,  whereupon the Property Trustee, in
accordance with the Applicable Procedures, shall instruct the Clearing Agency or
its authorized representative to make a corresponding adjustment to its records.
Upon any such  surrender or  adjustment  of a Global  Certificate,  the Property
Trustee shall,  subject to Section 5.5 and as otherwise provided in this Article
5, authenticate and deliver any Capital Securities issuable in exchange for such
Global  Certificate  (or any  portion  thereof)  to or upon the  order  of,  and
registered  in such  names as may be  directed  by, the  Clearing  Agency or its
authorized  representative.   Upon  the  request  of  the  Property  Trustee  in
connection  with the occurrence of any of the events  specified in the preceding
paragraph, the Depositor shall promptly make available to the Property Trustee a
reasonable  supply  of  Capital  Securities  that are not in the form of  Global
Certificates.  The  Property  Trustee  shall be entitled to rely upon any order,
direction or request of the  Clearing  Agency or its  authorized  representative
which is given or made  pursuant to this  Article 5 if such order,  direction or
request is given or made in accordance with the Applicable Procedures.

                                       27

<PAGE>



          (c)  Every  Capital   Security   authenticated   and  delivered   upon
registration  of  transfer  of,  or in  exchange  for or in lieu  of,  a  Global
Certificate  or any  portion  thereof,  whether  pursuant  to this  Article 5 or
otherwise,  shall be authenticated and delivered in the form of, and shall be, a
Global Certificate,  unless such Capital Security is registered in the name of a
Person other than the Clearing  Agency for such Global  Certificate or a nominee
thereof.

          (d) The  Clearing  Agency or its  nominee,  as  registered  owner of a
Global  Certificate,  shall be the  holder of such  Global  Certificate  for all
purposes  under the Trust  Agreement and the Capital  Securities,  and owners of
beneficial  interests in a Global Certificate shall hold such interests pursuant
to the Applicable Procedures.  Accordingly, any such Owner's beneficial interest
in a Global Certificate will be shown only on, and the transfer of such interest
shall be effected only through, records maintained by the Clearing Agency or its
nominee or its participants and such owners of beneficial  interests in a Global
Certificate  will  not be  considered  the  owners  or  holders  of such  Global
Certificate for any purpose of this Trust Agreement or the Capital Securities.

          The  rights  of  the  Owners  of a  beneficial  interest  in a  Global
Certificate  Capital  Securities  shall be  exercised  only through the Clearing
Agency  and  shall  be  limited  to those  established  by law,  the  Applicable
Procedures and agreements between such Owners and the Clearing Agency and/or the
Clearing Agency Participants. Solely for the purposes of determining whether the
Holders of the requisite  amount of Capital  Securities have voted on any matter
provided for in this Trust Agreement,  so long as Definitive  Capital Securities
Certificates  have not been issued in certificated  fully  registered  form, the
Property Trustee and the  Administrative  Trustees may conclusively rely on, and
shall be  protected  in relying on, any written  instrument  (including a proxy)
delivered  to such Issuer  Trustees by the  Clearing  Agency  setting  forth the
Holders' votes or assigning the right to vote on any matter to any other Persons
either in whole or in part.

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

          SECTION 5.5.  Registration,  Transfer and Exchange Generally;  Certain
Transfers and Exchanges; Securities Act Legends.

          (a) The Administrative Trustees shall keep or cause to be kept, at the
office or agency  maintained  pursuant to Section  5.9, a register or  registers
(the  "Securities  Register")  in which the  registrar  and transfer  agent with
respect to the Trust  Securities (the "Securities  Registrar"),  subject to such
reasonable  regulations as it may prescribe,  shall provide for the registration
of  Capital  Securities  Certificates  and  (subject  to  Section  5.11)  Common
Securities  Certificates  and of transfers and  exchanges of Capital  Securities
Certificates  as herein  provided.  The  Property  Trustee  is hereby  appointed
Securities   Registrar  for  the  purpose  of  registering   Capital  Securities
Certificates  and (subject to Section 5.11) Common  Securities and transfers and
exchanges thereof as provided herein.



                                       28

<PAGE>



          Upon surrender for registration of transfer of any Capital  Securities
Certificate  at the office or agency  maintained  pursuant to Section  5.9,  the
Administrative  Trustees  or any one of them shall  execute  and  deliver to the
Property  Trustee,  and the Property  Trustee shall deliver,  in the name of the
designated  transferee  or  transferees,  one or  more  new  Capital  Securities
Certificates in authorized  denominations of a like aggregate Liquidation Amount
and bearing such restrictive legends as may be required by this Trust Agreement,
dated the date of execution by such Administrative Trustee or Trustees.

          At the option of the Holder,  Capital  Securities  Certificates may be
exchanged for other Capital  Securities  Certificates  of the same series of any
authorized  denominations,  of like  tenor  and  aggregate  Liquidation  Amount,
bearing such restrictive  legends as may be required by this Trust Agreement and
bearing  a number  not  contemporaneously  Outstanding,  upon  surrender  of the
Capital  Securities  Certificates  to be  exchanged  at such  office or  agency.
Whenever any Capital  Securities  Certificates  are so surrendered for exchange,
the Administrative  Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, the Capital Securities
Certificates that the Holder making the exchange is entitled to receive.

          All Capital Securities issued upon any transfer or exchange of Capital
Securities  shall  evidence the same interest in the assets of the Issuer Trust,
and be entitled to the same benefits under this Trust Agreement,  as the Capital
Securities surrendered upon such transfer or exchange. 

          The Securities Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Capital  Security  during a period  beginning at
the opening of business 15 days before the day of selection  for  redemption  of
such  Capital  Securities  pursuant  to  Article  IV and  ending at the close of
business on the day of mailing of the notice of redemption,  or (ii) to register
the transfer of or exchange any Capital  Security so selected for  redemption in
whole  or in  part,  except,  in the case of any  such  Capital  Security  to be
redeemed in part, any portion thereof not to be redeemed.

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

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



                                       29

<PAGE>



          (b)  Certain  Transfers  and  Exchanges.   Notwithstanding  any  other
provision  of this Trust  Agreement  or the Capital  Securities,  transfers  and
exchanges of Capital Securities and beneficial interests in a Global Certificate
of the kinds  specified in this Section  5.5(b) shall be made only in accordance
with this Section 5.5(b).

               (i)  Restricted   Global   Certificate  to  Regulation  S  Global
          Certificate.  If the owner of a beneficial  interest in the Restricted
          Global  Certificate  wishes at any time to transfer such interest to a
          Person  who  wishes to  acquire  the same in the form of a  beneficial
          interest in the Regulation S Global Certificate,  such transfer may be
          effected in accordance  with the  provisions of this Clause (b)(i) and
          Clause (b)(vii) below and subject to the Applicable  Procedures.  Upon
          receipt by the Property Trustee,  as Securities  Registrar,  of (A) an
          order given by the Clearing  Agency or its  authorized  representative
          directing  that a  beneficial  interest  in the  Regulation  S  Global
          Certificate in a specified principal amount be credited to a specified
          participant's account and that a beneficial interest in the Restricted
          Global  Certificate  in an equal  principal  amount  be  debited  from
          another  specified  participant's  account  and  (B)  a  Regulation  S
          Certificate,   in  the  form  of  Annex  E  hereto  (a  "Regulation  S
          Certificate")  and  satisfactory  to the  Property  Trustee  and  duly
          executed by the owner of such  beneficial  interest in the  Restricted
          Global  Certificate or his attorney duly  authorized in writing,  then
          the Property  Trustee,  as Securities  Registrar but subject to Clause
          (b)(vii) below, shall reduce the share number of the Restricted Global
          Certificate  and increase the share number of the  Regulation S Global
          Certificate by such specified  principal amount as provided in Section
          5.4(b).

               (ii)  Regulation  S  Global   Certificate  to  Restricted  Global
          Certificate. If the owner of a beneficial interest in the Regulation S
          Global  Certificate  wishes at any time to transfer such interest to a
          Person  who  wishes to  acquire  the same in the form of a  beneficial
          interest in the Restricted  Global  Certificate,  such transfer may be
          effected  only in accordance  with this Clause  (b)(ii) and subject to
          the Applicable  Procedures.  Upon receipt by the Property Trustee,  as
          Securities Registrar,  of (A) an order given by the Clearing Agency or
          its authorized  representative directing that a beneficial interest in
          the Restricted Global  Certificate in a specified  principal amount be
          credited to a specified  participant's  account and that a  beneficial
          interest in the Regulation S Global  Certificate in an equal principal
          amount be debited from another specified participant's account and (B)
          if  such  transfer  is  to  occur  during  the  Restricted  Period,  a
          Restricted  Securities  Certificate,  in the form of Annex F hereto (a
          "Restricted Securities  Certificate") and satisfactory to the Property
          Trustee and duly executed by the owner of such beneficial  interest in
          the Regulation S Global Certificate or his attorney duly authorized in
          writing,  then the Property Trustee,  as Securities  Registrar,  shall
          reduce the principal amount of the Regulation S Global Certificate and
          increase the principal amount of the Restricted Global  Certificate by
          such specified principal amount as provided in Section 5.4(b).

               (iii)  Restricted  Non-Global  Certificate  to Restricted  Global
          Certificate  or  Regulation S Global  Certificate.  If the Holder of a
          Restricted Capital Security (other than a Global  Certificate)  wishes
          at any time to transfer all or any portion of such Re-

                                       30

<PAGE>



          stricted  Capital  Security  to a Person who  wishes to take  delivery
          thereof in the form of a beneficial  interest in the Restricted Global
          Certificate or the Regulation S Global Certificate,  such transfer may
          be effected  only in  accordance  with the  provisions  of this Clause
          (b)(iii)  and Clause  (b)(vii)  below and  subject  to the  Applicable
          Procedures.  Upon  receipt  by the  Property  Trustee,  as  Securities
          Registrar,  of (A) such  Restricted  Capital  Security  as provided in
          Section 5.5(a) and  instructions  satisfactory to the Property Trustee
          directing  that  a  beneficial   interest  in  the  Restricted  Global
          Certificate  or  Regulation  S  Global   Certificate  in  a  specified
          principal  amount not greater  than the share  amount of such  Capital
          Security be credited  to a specified  participant's  account and (B) a
          Restricted Securities  Certificate,  if the specified account is to be
          credited  with  a  beneficial   interest  in  the  Restricted   Global
          Certificate,  or a Regulation S Certificate,  if the specified account
          is to be  credited  with a  beneficial  interest in the  Regulation  S
          Global  Certificate,  in  either  case  satisfactory  to the  Property
          Trustee  and  duly  executed  by  such  Holder  or his  attorney  duly
          authorized  in  writing,  then the  Property  Trustee,  as  Securities
          Registrar  but subject to Clause  (b)(vii)  below,  shall  cancel such
          Restricted  Capital  Security  (and  issue  a new  Restricted  Capital
          Security in respect of any untransferred  portion thereof) as provided
          in Section 5.4(a) and increase the principal  amount of the Restricted
          Global Certificate or the Regulation S Global Certificate, as the case
          may be, by the  specified  principal  amount as  provided  in  Section
          5.4(b).

               (iv)  Regulation S Non-Global  Certificate  to Restricted  Global
          Certificate  or  Regulation S Global  Certificate.  If the Holder of a
          Regulation S Capital Security (other than a Global Certificate) wishes
          at any  time to  transfer  all or any  portion  of such  Regulation  S
          Capital  Security  to a Person who  wishes to acquire  the same in the
          form of a beneficial  interest in the Restricted Global Certificate or
          the  Regulation S Global  Certificate,  such  transfer may be effected
          only in accordance  with this Clause (b)(iv) and Clause (b)(vii) below
          and subject to the Applicable Procedures. Upon receipt by the Property
          Trustee,  as Securities  Registrar,  of (A) such  Regulation S Capital
          Security as provided in Section 5.5(a) and  instructions  satisfactory
          to the Property  Trustee  directing that a beneficial  interest in the
          Restricted Global  Certificate or Regulation S Global Certificate in a
          specified  share  amount  not  greater  than the share  amount of such
          Capital Security be credited to a specified  participant's account and
          (B) if the transfer is to occur during the  Restricted  Period and the
          specified account is to be credited with a beneficial  interest in the
          Restricted Global  Certificate,  a Restricted  Securities  Certificate
          satisfactory to the Property  Trustee and duly executed by such Holder
          or his attorney duly authorized in writing then the Property  Trustee,
          as Securities  Registrar but subject to Clause (b)(vii)  below,  shall
          cancel  such  Regulation  S  Security  (and issue a new  Regulation  S
          Security in respect of any untransferred  portion thereof) as provided
          in Section 5.5(a) and increase the principal  amount of the Restricted
          Global Certificate or the Regulation S Global Certificate, as the case
          may be, by the  specified  principal  amount as  provided  in  Section
          5.14(b).

               (v) Non-Global Certificate to Non-Global Certificate.  A Security
          that is not a Global  Certificate may be  transferred,  in whole or in
          part, to a Person who takes  delivery in the form of another  Security
          that is not a Global Certificate as provided in Section

                                       31

<PAGE>



          5.13,  provided that, if the Security to be transferred in whole or in
          part is a Restricted  Security,  or is a Regulation S Capital Security
          and the transfer is to occur during the  Restricted  Period,  then the
          Property  Trustee  shall have  received  (A) a  Restricted  Securities
          Certificate, satisfactory to the Property Trustee and duly executed by
          the transferor  Holder or his attorney duly authorized in writing,  in
          which case the transferee  Holder shall take delivery in the form of a
          Restricted Security,  or (B) a Regulation S Certificate,  satisfactory
          to the Property Trustee and duly executed by the transferor  Holder or
          his attorney duly authorized in writing,  in which case the transferee
          Holder  shall  take  delivery  in the form of a  Regulation  S Capital
          Security (subject in every case to Section 5.4(c)).

               (vi)  Exchanges   between  Global   Certificate   and  Non-Global
          Certificate.  A  beneficial  interest in a Global  Certificate  may be
          exchanged for a Capital  Security that is not a Global  Certificate as
          provided  in  Section  5.13 to an  institution  that is an  accredited
          investor  within the  meaning of Rule  501(a)(1),  (2),  (3) or (7) of
          Regulation D of the Securities Act of 1933, as amended, provided that,
          if such  interest is a beneficial  interest in the  Restricted  Global
          Certificate,  or if such  interest  is a  beneficial  interest  in the
          Regulation S Global  Certificate  and such exchange is to occur during
          the  Restricted  Period,  then such interest  shall be exchanged for a
          Restricted  Security  (subject  in each  case to  Section  5.5(c)).  A
          Capital Security that is not a Global Certificate may be exchanged for
          a  beneficial  interest  in a  Global  Certificate  only  if (A)  such
          exchange occurs in connection  with a transfer  effected in accordance
          with  Clause  (b)(iii)  or  (iv)  above  or  (B)  such  Security  is a
          Regulation  S Capital  Security  and such  exchange  occurs  after the
          Restricted Period.

               (vii)  Regulation  S  Global   Certificate  to  be  Held  Through
          Euroclear or Cedel during Restricted  Period.  The Depositor shall use
          its best  efforts to cause the Clearing  Agency to ensure that,  until
          the expiration of the Restricted Period,  beneficial  interests in the
          Regulation  S  Global  Certificate  may be  held  only  in or  through
          accounts  maintained at the Clearing  Agency by Euroclear or Cedel (or
          by participants  acting for the account thereof),  and no person shall
          be entitled to effect any  transfer or exchange  that would  result in
          any such  interest  being held  otherwise  than in or through  such an
          account;  provided  that this Clause  (b)(vii)  shall not prohibit any
          transfer or exchange  of such an  interest in  accordance  with Clause
          (b)(ii) or (vi) above.

          (c) Securities  Act Legends.  Rule 144A  Securities  and  Certificated
Capital  Securities  and their  respective  Successor  Securities  shall  bear a
Restricted  Securities  Legend  as set forth in  Section  5.14,  subject  to the
following:

               (i) subject to the following  Clauses of this Section  5.5(c),  a
          Capital  Security  or any portion  thereof  which is  exchanged,  upon
          transfer or otherwise, for a Global Certificate or any portion thereof
          shall bear the Securities Act Legend borne by such Global  Certificate
          while represented thereby;

                                       32

<PAGE>



               (ii) subject to the following  Clauses of this Section 5.5(c),  a
          new Capital  Security which is not a Global  Certificate and is issued
          in  exchange  for  another  Capital   Security   (including,a   Global
          Certificate) or any portion thereof, upon transfer or otherwise, shall
          bear the Securities  Act Legend borne by such other Capital  Security,
          provided  that, if such new Capital  Security is required  pursuant to
          Section  5.5(b)(v)  or (vi) to be issued  in the form of a  Restricted
          Security,  it shall bear a Restricted  Securities  Legend and, if such
          new  Capital  Security  is so  required  to be issued in the form of a
          Regulation S Capital Security, it shall bear a Regulation S Legend;

               (iii) Any Capital Securities which are sold or otherwise disposed
          of  pursuant  to  an  effective   registration   statement  under  the
          Securities Act (including the Shelf Registration Statement),  together
          with  their  Successor  Securities  shall  not bear a  Securities  Act
          Legend;  the Depositor shall inform the Property Trustee in writing of
          the effective date of any such registration  statement registering the
          Capital  Securities  under the  Securities  Act and shall  notify  the
          Property  Trustee at any time when  prospectuses  may not be delivered
          with  respect  to  Capital  Securities  to be  sold  pursuant  to such
          registration  statement.  The Property Trustee shall not be liable for
          any  action  taken  or  omitted  to be  taken  by it in good  faith in
          accordance with the aforementioned registration statement;

               (iv) at any time  after  the  Capital  Securities  may be  freely
          transferred  without  registration under the Securities Act or without
          being subject to transfer restrictions pursuant to the Securities Act,
          a new Capital Security which does not bear a Securities Act Legend may
          be issued in exchange for or in lieu of a Capital Security (other than
          a Global Certificate) or any portion thereof which bears such a legend
          if the  Property  Trustee  has  received  an  Unrestricted  Securities
          Certificate,  in the  form  of  Exhibit  G  hereto  (an  "Unrestricted
          Securities  Certificate") and satisfactory to the Property Trustee and
          duly executed by the Holder of such legended  Capital  Security or his
          attorney duly  authorized in writing,  and after such date and receipt
          of such  certificate,  the Property  Trustee  shall  authenticate  and
          deliver such a new Capital Security in exchange for or in lieu of such
          other Capital Security as provided in this Article 5;

               (v) a new Capital  Security  which does not bear a Securities Act
          Legend may be issued in exchange for or in lieu of a Capital  Security
          (other than a Global  Certificate)  or any portion thereof which bears
          such a legend if, in the Depositor's  judgment,  placing such a legend
          upon such new Capital  Security is not necessary to ensure  compliance
          with the  registration  requirements  of the  Securities  Act, and the
          Property   Trustee,   at  the  direction  of  the   Depositor,   shall
          authenticate  and deliver  such a new Capital  Security as provided in
          this Article 5; and

          Notwithstanding  the foregoing  provisions of this Section  5.5(c),  a
Successor  Security of a Capital Securities that does not bear a particular form
of Securities Act Legend shall not bear such form of legend unless the Depositor
has reasonable  cause to believe that such  Successor  Security is a "restricted
security" within the meaning of Rule 144, in which case the Property Trustee, at
the direction of the  Depositor,  shall  authenticate  and deliver a new Capital
Security

                                       33

<PAGE>



bearing a Restricted  Securities Legend in exchange for such Successor  Security
as provided in this Article 5.

          (d) Any purchaser or Holder of any Capital  Securities or any interest
therein will be deemed to have  represented by its purchase and holding  thereof
that it either  (i) is not a Plan or a Plan Asset  Entity and is not  purchasing
such Capital  Securities on behalf of or with "plan assets" of any Plan, or (ii)
is eligible for the exemptive  relief available under PTCE 96-23, 95- 60, 91-38,
90-1 or 84-14 or another  applicable  exemption with respect to such purchase or
holding.  The Securities  Registrar may, and if the Depositor  shall so request,
the Securities  Registrar shall, before registering for transfer or exchange any
Capital Securities  Certificates as provided in Sections 5.2, 5.4 or 5.5 of this
Trust Agreement,  (A) require the purchaser or Holder of such Capital Securities
Certificates to confirm that it either (x) is not a Plan, a Plan Asset Entity or
a  Person  investing  "plan  assets"  of any  Plan  or (y) is  eligible  for the
exemptive relief available under PTCE 96-23,  95-60,  91-38,  90-1 or 84-14, and
(B) if such purchaser or Holder does not provide such  confirmation,  require an
Opinion  of Counsel  or other  evidence  satisfactory  to the  Depositor  of the
availability  to such purchaser or Holder of another  applicable  exemption with
respect to such purchase or holding.

          (e) After a transfer  of any  Initial  Capital  Securities  during the
period of the effectiveness of, and pursuant to, a Shelf Registration  Statement
with respect to the Initial Capital Securities,  all requirements  pertaining to
legends  on  such  Initial  Capital   Securities   shall  cease  to  apply,  the
requirements  requiring  that any such  Initial  Capital  Securities  issued  to
certain  Holders  to be  issued  in  global  form  shall  cease  to  apply,  and
certificated  Initial Capital Securities without legends shall be made available
to the Holders of such Initial Capital  Securities.  Upon the  consummation of a
Registered  Exchange  Offer  with  respect  to the  Initial  Capital  Securities
pursuant to which Holders of Initial  Capital  Securities  are offered  Exchange
Capital  Securities  in  exchange  for their  Initial  Capital  Securities,  all
requirements  pertaining to such Initial Capital Securities that Initial Capital
Securities  issued to certain  Holders be issued in global  form shall  cease to
apply and certificated Initial Capital Securities with the Restricted Securities
Legend shall be available to Holders of such Initial Capital  Securities that do
not exchange their Initial Capital  Securities,  and Exchange Capital Securities
in  certificated  form shall be available to Holders that  exchange such Initial
Capital Securities in such Registered Exchange Offer.

          SECTION 5.6.  Mutilated,  Destroyed,  Lost or Stolen Trust  Securities
Certificates.

          If (a) any mutilated Trust Securities Certificate shall be surrendered
to the  Securities  Registrar,  or if the  Securities  Registrar  shall  receive
evidence  to its  satisfaction  of the  destruction,  loss or theft of any Trust
Securities  Certificate,  and (b) there  shall be  delivered  to the  Securities
Registrar and the  Administrative  Trustees such security or indemnity as may be
required  by them to save each of them  harmless,  then in the absence of notice
that such Trust Securities  Certificate  shall have been acquired by a bona fide
purchaser,  the  Administrative  Trustees,  or any one of them, on behalf of the
Issuer Trust shall execute and make  available for delivery,  in exchange for or
in lieu of any  such  mutilated,  destroyed,  lost or  stolen  Trust  Securities
Certificate,  a new  Trust  Securities  Certificate  of like  class,  tenor  and
denomination.

                                       34

<PAGE>



In connection with the issuance of any new Trust  Securities  Certificate  under
this Section 5.6, the  Administrative  Trustees or the Securities  Registrar may
require the payment of a sum  sufficient to cover any tax or other  governmental
charge  that  may be  imposed  in  connection  therewith.  Any  duplicate  Trust
Securities  Certificate  issued  pursuant to this  Section 5.6 shall  constitute
conclusive  evidence of an  undivided  beneficial  interest in the assets of the
Issuer Trust  corresponding  to that evidenced by the lost,  stolen or destroyed
Trust Securities Certificate,  as if originally issued, whether or not the lost,
stolen or destroyed Trust Securities Certificate shall be found at any time.

          SECTION 5.7. Persons Deemed Holders.

          The Issuer Trustees and the Securities  Registrar shall each treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities  Register as the owner of such Trust  Securities  Certificate for the
purpose of receiving  Distributions and for all other purposes  whatsoever,  and
none of the Issuer  Trustees and the Securities  Registrar shall be bound by any
notice to the contrary.

          SECTION 5.8. Access to List of Holders' Names and Addresses.

          Each  Holder and each Owner shall be deemed to have agreed not to hold
the Depositor or the Issuer Trustees  accountable by reason of the disclosure of
its name and address,  regardless of the source from which such  information was
derived.

          SECTION 5.9. Maintenance of Office or Agency.

          The  Administrative  Trustees  shall  maintain an office or offices or
agency or agencies where Capital Securities  Certificates may be surrendered for
registration  of transfer or exchange  and where  notices and demands to or upon
the  Issuer  Trustees  in respect of the Trust  Securities  Certificates  may be
served.  The Administrative  Trustees  initially  designate HSB Group, Inc., One
State  Street,  Hartford,  Connecticut  06102 as its  office and agency for such
purposes.  The  Administrative  Trustees shall give prompt written notice to the
Depositor, the Property Trustee and to the Holders of any change in the location
of the Securities Register or any such office or agency.

          SECTION 5.10. Appointment of Paying Agents.

          The Paying  Agent or Agents shall make  Distributions  to Holders from
the Payment  Account and shall report the amounts of such  Distributions  to the
Property Trustee and the  Administrative  Trustees.  Any Paying Agent shall have
the revocable  power to withdraw  funds from the Payment  Account solely for the
purpose  of making  the  Distributions  referred  to above.  The  Administrative
Trustees  may  revoke  such  power  and  remove  the  Paying  Agent  in its sole
discretion. The Paying Agent shall initially be the Bank and any co-paying agent
chosen by the Property Trustee and acceptable to the Administrative Trustees and
the Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice


                                       35

<PAGE>



to the  Administrative  Trustees and the Property Trustee.  If the Bank shall no
longer be the Paying  Agent or a  successor  Paying  Agent  shall  resign or its
authority  to act be  revoked,  the  Administrative  Trustees  shall  appoint  a
successor (which shall be a bank or trust company) that is reasonably acceptable
to the  Depositor to act as Paying  Agent.  Such  successor  Paying Agent or any
additional  Paying  Agent shall  execute  and deliver to the Issuer  Trustees an
instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Issuer Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Holders in trust for the benefit of the Holders  entitled thereto until such
sums shall be paid to such Holders.  The Paying Agent shall return all unclaimed
funds to the  Property  Trustee and upon  removal of a Paying  Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions  of Sections  8.1, 8.3 and 8.6 herein shall apply to the Bank also in
its role as Paying Agent, for so long as the Bank shall act as Paying Agent and,
to the extent  applicable,  to any other paying agent appointed  hereunder.  Any
reference  in this  Agreement to the Paying  Agent shall  include any  co-paying
agent unless the context requires otherwise.

          SECTION 5.11. Ownership of Common Securities by Depositor.

          At the Time of Delivery,  the Depositor shall acquire,  and thereafter
shall retain, beneficial and record ownership of the Common Securities.  Neither
the  Depositor nor any successor  Holder of the Common  Securities  may transfer
less than all the Common  Securities  (except in  connection  with a  redemption
thereof), and the Depositor or any such successor Holder may transfer the Common
Securities  only  (i)  in  connection  with a  consolidation  or  merger  of the
Depositor into another corporation, or any conveyance,  transfer or lease by the
Depositor  of its  properties  and assets  substantially  as an  entirety to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to the Depositor or an
Affiliate of the Depositor in compliance  with  applicable  law  (including  the
Securities  Act and  applicable  state  securities  and blue sky  laws).  To the
fullest extent permitted by law, any attempted transfer of the Common Securities
other  than as set  forth in the next  proceeding  sentence  shall be void.  The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS NOT
TRANSFERABLE  EXCEPT  TO THE  DEPOSITOR  OR AN  AFFILIATE  OF THE  DEPOSITOR  IN
COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."

          SECTION 5.12. Notices to Clearing Agency.

          To the extent that a notice or other  communication  to the Holders is
required  under this Trust  Agreement,  for so long as  Capital  Securities  are
represented by a Book-Entry Capital Securities Certificate,  the Issuer Trustees
shall give all such notices and  communications  specified herein to be given to
the Clearing Agency, and shall have no obligations to the Owners.



                                       36

<PAGE>



          SECTION 5.13. Definitive Capital Securities Certificates.

          Notwithstanding any other provision in this Trust Agreement other than
as provided for in Section 5.5, no Global  Certificate may be exchanged in whole
or in part  for  Capital  Securities  registered,  and no  transfer  of a Global
Certificate  in whole or in part may be  registered,  in the name of any  Person
other than the Clearing Agency for such Global  Certificate or a nominee thereof
unless  (i) such  Clearing  Agency (A) has  notified  the  Depositor  that it is
unwilling or unable to continue as Clearing  Agency for such Global  Certificate
or (B)  has  ceased  to be a  clearing  agency  registered  as  such  under  the
Securities  Exchange Act of 1934,  as amended,  and in either case the Trust and
the Depositor  thereupon fails to appoint a successor Clearing Agency,  (ii) the
Trust and the Depositor, at their option, notify the Property Trustee in writing
that it elects to cause the issuance of the Capital  Securities in  certificated
form or (iii) there shall have occurred and be continuing an Event of Default or
any  event  which  after  notice  or lapse of time or both  would be an Event of
Default. In all cases, Certificated Capital Securities delivered in exchange for
any Global Certificate or beneficial interests therein will be registered in the
names,  and issued in any approved  denominations,  requested by or on behalf of
the Clearing Agency (in accordance with its customary procedures).

          SECTION 5.14. Restrictive Legends.

          The  Restricted  Global  Certificate  and  the  Certificated   Capital
Securities shall bear the following legend (the "Restricted  Securities Legend")
unless the Depositor determines otherwise in accordance with applicable law:

               "THE  CAPITAL   SECURITIES   EVIDENCED   HEREBY  AND  ANY  JUNIOR
          SUBORDINATED  DEBENTURES  ISSUABLE  HEREWITH HAVE NOT BEEN  REGISTERED
          UNDER THE U.S.  SECURITIES ACT OF 1933 (THE "SECURITIES  ACT") AND MAY
          NOT BE OFFERED,  SOLD, PLEDGED OR OTHERWISE  TRANSFERRED EXCEPT (A) BY
          ANY  INITIAL  INVESTOR  THAT IS NOT A  QUALIFIED  INSTITUTIONAL  BUYER
          WITHIN THE  MEANING OF RULE 144A UNDER THE  SECURITIES  ACT,  (1) TO A
          PERSON  WHO  THE  TRANSFEROR   REASONABLY   BELIEVES  IS  A  QUALIFIED
          INSTITUTIONAL  BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
          QUALIFIED   INSTITUTIONAL   BUYER  IN  A   TRANSACTION   MEETING   THE
          REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE  TRANSACTION MEETING THE
          REQUIREMENTS  OF  RULE  903 OR RULE  904 OF  REGULATION  S  UNDER  THE
          SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM  REGISTRATION  UNDER
          THE  SECURITIES  ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
          (4)  PURSUANT TO AN  EFFECTIVE  REGISTRATION  STATEMENT  OR (B) BY ANY
          INITIAL  INVESTOR  THAT IS A QUALIFIED  INSTITUTIONAL  BUYER OR BY ANY
          SUBSEQUENT INVESTOR, (1) AS DESCRIBED IN CLAUSE (A) ABOVE OR (2) TO AN
          INSTITUTION THAT IS AN ACCREDITED  INVESTOR WITHIN THE MENAING OF RULE
          501(a)(1), (2), (3 ) OR (7) OF REGULATION D IN A


                                       37

<PAGE>



          TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENT OF THE SECURITIES
          ACT, AND, IN EACH CASE (A) AND (B), IN COMPLIANCE  WITH ALL APPLICABLE
          SECURITIES  LAWS  OF  THE  STATES  OF  THE  UNITED  STATES  AND  OTHER
          JURISDICTIONS.  SECURITIES  OWNED BY AN INITIAL INVESTOR THAT IS NOT A
          QUALIFIED  INSTITUTIONAL  BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM AND
          MAY  NOT  BE  TRANSFERRED  WITHOUT  CERTIFICATION  THAT  THE  TRANSFER
          COMPLIES  WITH THE  FOREGOING  RESTRICTIONS,  AS PROVIDED IN THE TRUST
          AGREEMENT REFERRED TO BELOW."

          SECTION 5.15.  Rights of Holders;  Waivers of Past  Defaults. 

          (a) The legal title to the Trust Property is vested exclusively in the
Property  Trustee (in its capacity as such) in accordance  with Section 2.9, and
the Holders  shall not have any right or title  therein other than the undivided
beneficial  interest in the assets of the Issuer Trust  conferred by their Trust
Securities and they shall have no right to call for any partition or division of
property,  profits or rights of the Issuer Trust except as described  below. The
Trust Securities shall be personal property giving only the rights  specifically
set forth therein and in this Trust  Agreement.  The Trust Securities shall have
no preemptive or similar rights and when issued and delivered to Holders against
payment of the purchase price therefor will be fully paid and  nonassessable  by
the Issuer Trust.  The Holders of the Trust  Securities,  in their capacities as
such, shall be entitled to the same limitation of personal liability extended to
stockholders  of private  corporations  for profit  organized  under the General
Corporation Law of the State of Delaware.

          (b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default,  the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding  Debentures fail to declare
the principal of all of the  Debentures to be immediately  due and payable,  the
Holders of at least 25% in  Liquidation  Amount of the Capital  Securities  then
Outstanding shall have the right to make such declaration by a notice in writing
to the Property Trustee, the Depositor and the Debenture Trustee.

          At any time after a declaration  of  acceleration  with respect to the
Debentures  has been made and  before a judgment  or decree  for  payment of the
money  due has  been  obtained  by the  Debenture  Trustee  as  provided  in the
Indenture, if the Property Trustee fails to annul any such declaration and waive
such default,  the Holders of at least a Majority in  Liquidation  Amount of the
Capital Securities, by written notice to the Property Trustee, the Depositor and
the  Debenture  Trustee,   may  rescind  and  annul  such  declaration  and  its
consequences if:

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

                    (A)  all  overdue  installments  of  interest  on all of the
               Debentures,


                                       38

<PAGE>



                    (B) any  accrued  Additional  Interest  (as  defined  in the
               Indenture) on all of the Debentures,

                    (C)  the  principal  of  (and  premium,   if  any,  on)  any
               Debentures   that  have  become  due   otherwise   than  by  such
               declaration of acceleration and interest and Additional  Interest
               thereon at the rate borne by the Debentures, and

                    (D) all sums paid or advanced by the Debenture Trustee under
               the  Indenture  and  the   reasonable   compensation,   expenses,
               disbursements  and  advances  of the  Debenture  Trustee  and the
               Property Trustee, their agents and counsel; and

               (ii) all Events of Default with respect to the Debentures,  other
          than the  non-payment  of the  principal  of the  Debentures  that has
          become due solely by such  acceleration,  have been cured or waived as
          provided in Section 5.13 of the Indenture.

          The  Holders  of at least a  Majority  in  Liquidation  Amount  of the
Capital  Securities  may, on behalf of the Holders of all the Trust  Securities,
waive any past default or Event of Default under the Indenture, except a default
or Event of Default in the payment of principal or interest (unless such default
or Event of  Default  has been  cured and a sum  sufficient  to pay all  matured
installments  of interest and principal due otherwise than by  acceleration  has
been deposited  with the Debenture  Trustee) or a default or Event of Default in
respect of a covenant or provision  that under the Indenture  cannot be modified
or amended without the consent of the holder of each outstanding  Debenture.  No
such  rescission  shall  affect  any  subsequent  default  or  impair  any right
consequent thereon.

          Upon receipt by the Property  Trustee of written notice declaring such
an acceleration,  or rescission and annulment thereof, by Holders of any part of
the Capital  Securities,  a record  date shall be  established  for  determining
Holders of Outstanding Capital Securities entitled to join in such notice, which
record date shall be at the close of business  on the day the  Property  Trustee
receives such notice.  The Holders on such record date, or their duly designated
proxies,  and only  such  Persons,  shall be  entitled  to join in such  notice,
whether or not such Holders  remain  Holders  after such record date;  provided,
that, unless such declaration of acceleration,  or rescission and annulment,  as
the  case may be,  shall  have  become  effective  by  virtue  of the  requisite
percentage  having  joined in such notice prior to the day that is 90 days after
such record date, such notice of declaration of acceleration,  or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving,  after expiration of such
90-day  period,  a  new  written  notice  of  declaration  of  acceleration,  or
rescission  and  annulment  thereof,  as the case may be, that is identical to a
written  notice that has been canceled  pursuant to the proviso to the preceding
sentence,  in which event a new record date shall be established pursuant to the
provisions of this Section 5.16(b).

          (c) For so long as any Capital Securities remain  Outstanding,  to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a

                                       39

<PAGE>



Debenture  Event of  Default  specified  in  Section  5.1(1)  or  5.1(2)  of the
Indenture,  any Holder of Capital Securities shall have the right to institute a
proceeding  directly  against  the  Depositor,  pursuant  to Section  5.9 of the
Indenture,  for  enforcement of payment to such Holder of any amounts payable in
respect  of  Debentures  having  an  aggregate  principal  amount  equal  to the
aggregate Liquidation Amount of the Capital Securities of such Holder (a "Direct
Action").  Except as set forth in Section 5.15(b) and this Section 5.15(c),  the
Holders of Capital Securities shall have no right to exercise directly any right
or remedy available to the holders of, or in respect of, the Debentures.

          (d) Except as  otherwise  provided in  paragraphs  (a), (b) and (c) of
this Section 5.15, the Holders of at least a Majority in  Liquidation  Amount of
the  Capital  Securities  may,  on  behalf  of  the  Holders  of all  the  Trust
Securities,  waive any past  default or Event of Default  and its  consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default  arising  therefrom shall be deemed to have been
cured,  for every  purpose of this Trust  Agreement,  but no such  waiver  shall
extend to any  subsequent  or other  default  or Event of  Default or impair any
right consequent thereon.


                                   ARTICLE VI

                        ACTS OF HOLDERS; MEETINGS; VOTING

          SECTION 6.1. Limitations on Voting Rights.

          (a) Except as expressly  provided in this Trust  Agreement  and in the
Indenture  and as  otherwise  required by law,  no Holder of Capital  Securities
shall  have  any  right  to  vote  or  in  any  manner  otherwise   control  the
administration,  operation and management of the Issuer Trust or the obligations
of the parties hereto,  nor shall anything herein set forth, or contained in the
terms of the Trust Securities Certificates, be construed so as to constitute the
Holders from time to time as partners or members of an association.

          (b) So long as any  Debentures  are held by the  Property  Trustee  on
behalf of the Issuer Trust,  the Property Trustee shall not (i) direct the time,
method and place of conducting any  proceeding  for any remedy  available to the
Debenture  Trustee,  or execute  any trust or power  conferred  on the  Property
Trustee with respect to the Debentures,  (ii) waive any past default that may be
waived under Section 5.13 of the Indenture,  (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due and
payable,  or (iv) consent to any amendment,  modification  or termination of the
Indenture or the Debentures,  where such consent shall be required,  without, in
each case, obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities,  provided,  however,  that where a
consent  under  the  Indenture  would  require  the  consent  of each  Holder of
Debentures  affected  thereby,  no such  consent  shall be given by the Property
Trustee without the prior written consent of each Holder of Capital  Securities.
The  Property  Trustee  shall not  revoke any action  previously  authorized  or
approved by a vote of the Holders of the Capital Securities,


                                       40

<PAGE>



except by a  subsequent  vote of the  Holders  of the  Capital  Securities.  The
Property  Trustee  shall  notify all  Holders of the Capital  Securities  of any
notice of default  received  with  respect to the  Debentures.  In  addition  to
obtaining  the  foregoing  approvals  of the Holders of the Capital  Securities,
prior to taking any of the foregoing actions,  the Issuer Trustees shall, at the
expense of the  Depositor,  obtain an Opinion  of  Counsel  experienced  in such
matters to the effect  that such action  shall not cause the Issuer  Trust to be
taxable as a corporation  or classified as other than a grantor trust for United
States Federal income tax purposes.

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

          SECTION 6.2. Notice of Meetings.

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

          SECTION 6.3. Meetings of Holders of the Capital Securities.

          No  annual   meeting  of  Holders  is   required   to  be  held.   The
Administrative  Trustees,  however,  shall call a meeting of the  Holders of the
Capital Securities to vote on any matter upon the written request of the Holders
of at least  25% in  aggregate  Liquidation  Amount of the  Outstanding  Capital
Securities and the  Administrative  Trustees or the Property Trustee may, at any
time  in  their  discretion,  call a  meeting  of  the  Holders  of the  Capital
Securities to vote on any matters as to which such Holders are entitled to vote.

          The  Holders  of at least a  Majority  in  Liquidation  Amount  of the
Capital Securities,  present in person or by proxy, shall constitute a quorum at
any meeting of the Holders of the Capital Securities.


                                       41

<PAGE>



          If a quorum  is  present  at a  meeting,  an  affirmative  vote by the
Holders present, in person or by proxy, holding Capital Securities  representing
at  least  a  majority  of the  aggregate  Liquidation  Amount  of  the  Capital
Securities  held by the Holders  present,  either in person or by proxy, at such
meeting shall  constitute  the action of the Holders of the Capital  Securities,
unless this Trust Agreement requires a greater number of affirmative votes.

          SECTION 6.4. Voting Rights.

          Holders  shall be entitled to one vote for each $1,000 of  Liquidation
Amount  represented  by their  Outstanding  Trust  Securities  in respect of any
matter as to which such Holders are entitled to vote.

          SECTION 6.5. Proxies, etc.

          At any meeting of  Holders,  any Holder  entitled to vote  thereat may
vote by proxy,  provided  that no proxy shall be voted at any meeting  unless it
shall have been placed on file with the  Administrative  Trustees,  or with such
other  officer or agent of the Issuer Trust as the  Administrative  Trustees may
direct,  for  verification  prior to the time at which such vote shall be taken.
Pursuant to a resolution  of the Property  Trustee,  proxies may be solicited in
the  name of the  Property  Trustee  or one or  more  officers  of the  Property
Trustee. Only Holders of record shall be entitled to vote. When Trust Securities
are held jointly by several persons,  any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities,  but if more than one of
them  shall be present  at such  meeting  in person or by proxy,  and such joint
owners or their proxies so present disagree as to any vote to be cast, such vote
shall not be received in respect of such Trust Securities. A proxy purporting to
be executed by or on behalf of a Holder shall be deemed valid unless  challenged
at or prior to its exercise,  and the burden of proving invalidity shall rest on
the challenger.  No proxy shall be valid more than three years after its date of
execution.

          SECTION 6.6. Holder Action by Written Consent.

          Any action  that may be taken by Holders  of Capital  Securities  at a
meeting may be taken without a meeting if Holders holding at least a Majority in
Liquidation Amount of the Capital Securities entitled to vote in respect of such
action (or such  larger  proportion  thereof as shall be  required  by any other
provision of this Trust Agreement)  shall consent to the action in writing.  Any
action that may be taken by the Holder of all the Common Securities may be taken
if such Holder shall consent to the action in writing.

          SECTION 6.7. Record Date for Voting and Other Purposes.

          For the purposes of determining the Holders who are entitled to notice
of and to vote at any meeting or by written  consent,  or to  participate in any
distribution  on the Trust  Securities  in respect of which a record date is not
otherwise provided for in this Trust Agreement,  or for the purpose of any other
action, the Administrative Trustees may from time to time fix a date,


                                       42

<PAGE>



not more than 90 days prior to the date of any meeting of Holders or the payment
of a distribution or other action,  as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.

          SECTION 6.8. Acts of Holders.

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

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

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

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

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



                                       43

<PAGE>



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

          SECTION 6.9. Inspection of Records.

          Upon reasonable notice to the Administrative Trustees and the Property
Trustee,  the records of the Issuer Trust shall be open to inspection by Holders
(and  other  Issuer  Trustees)  during  normal  business  hours for any  purpose
reasonably  related  to such  Holder's  interest  as a Holder  (or  such  Issuer
Trustee's service as a Trustee hereunder).


                                   ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

          SECTION 7.1.  Representations  and Warranties of the Property  Trustee
and the Delaware Trustee.

          The  Property  Trustee and the  Delaware  Trustee,  each  severally on
behalf of and as to itself,  hereby  represents  and warrants for the benefit of
the Depositor and the Holders that:

          (a) the Property Trustee is a national banking  association with trust
powers, duly organized,  validly existing and in good standing under the laws of
the United States;

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

          (c) the Delaware  Trustee is a Delaware  corporation,  duly organized,
validly  existing and in good  standing  under the laws of the State of Delaware
and satisfies for the Issuer Trust the  requirements  of Section  3807(a) of the
Delaware Business Trust Act;

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

          (e) this  Trust  Agreement  has been  duly  authorized,  executed  and
delivered by the Property  Trustee and the Delaware  Trustee and constitutes the
valid and legally  binding  agreement  of each of the  Property  Trustee and the
Delaware Trustee  enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,


                                       44

<PAGE>



reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;

          (f) the execution,  delivery and  performance of this Trust  Agreement
have been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and do not require any approval
of  stockholders  of the  Property  Trustee  and the  Delaware  Trustee and such
execution,  delivery and performance will not (i) violate the Charter or By-laws
of the Property Trustee or the Delaware Trustee,  (ii) violate any provision of,
or  constitute,  with or without  notice or lapse of time, a default  under,  or
result in the creation or imposition of, any Lien on any properties  included in
the Trust  Property  pursuant to the  provisions  of, any  indenture,  mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the  Delaware  Trustee  is a party or by which it is bound,  or (iii)
violate any law,  governmental  rule or  regulation  of the United States or the
State of Delaware,  as the case may be, governing the banking,  trust or general
powers of the  Property  Trustee or the  Delaware  Trustee  (as  appropriate  in
context) or any order,  judgment or decree applicable to the Property Trustee or
the Delaware Trustee;

          (g) none of the  authorization,  execution or delivery by the Property
Trustee or the Delaware  Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee,  as the
case may be, contemplated herein requires the consent or approval of, the giving
of notice  to, the  registration  with or the  taking of any other  action  with
respect to any  governmental  authority  or agency under any existing law of the
United States or the State of Delaware  governing the banking,  trust or general
powers of the Property Trustee or the Delaware Trustee,  appropriate in context;
and
         
          (h) there are no  proceedings  pending  or, to the best of each of the
Property Trustee's and the Delaware Trustee's  knowledge,  threatened against or
affecting  the Property  Trustee or the Delaware  Trustee in any court or before
any  governmental  authority,  agency or  arbitration  board or  tribunal  that,
individually  or in the aggregate,  would  materially  and adversely  affect the
Issuer Trust or would  question the right,  power and  authority of the Property
Trustee or the  Delaware  Trustee,  as the case may be, to enter into or perform
its obligations as one of the Issuer Trustees under this Trust Agreement.

          SECTION 7.2. Representations and Warranties of Depositor.

          The Depositor  hereby  represents  and warrants for the benefit of the
Holders that:

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



                                       45

<PAGE>



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


                                  ARTICLE VIII

                       THE ISSUER TRUSTEES; PAYING AGENTS

          SECTION 8.1. Certain Duties and Responsibilities.

          (a) The duties and responsibilities of the Issuer Trustees shall be as
provided  by this Trust  Agreement  and,  in the case of the  Property  Trustee,
subject to the Trust Indenture Act.  Notwithstanding the foregoing,  but subject
to Section 8.1(c) and 8.1(e), no provision of this Trust Agreement shall require
any of the Issuer Trustees to expend or risk its or their own funds or otherwise
incur any financial  liability in the  performance of any of its or their duties
hereunder,  or in the exercise of any of its or their rights or powers, if it or
they shall have reasonable grounds for believing that repayment of such funds or
adequate  indemnity against such risk or liability is not reasonably  assured to
it or them.  Whether or not therein  expressly so provided,  every  provision of
this Trust  Agreement  relating to the conduct or affecting  the liability of or
affording  protection to the Issuer  Trustees shall be subject to the provisions
of this  Section  8.1.  Nothing in this Trust  Agreement  shall be  construed to
release  an  Administrative  Trustee  from  liability  for his or her own  gross
negligent  action,  his or her own gross negligent failure to act, or his or her
own wilful  misconduct.  To the  extent  that,  at law or in  equity,  an Issuer
Trustee  has  duties and  liabilities  relating  to the  Issuer  Trust or to the
Holders,  such Issuer  Trustee shall not be liable to the Issuer Trust or to any
Holder for such Issuer  Trustee's  good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Issuer Trustees otherwise existing at
law or in equity,  are agreed by the  Depositor  and the Holders to replace such
other duties and liabilities of the Issuer Trustees.

          (b) All  payments  made by the  Property  Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust  Property  and only to the extent that there shall be  sufficient
revenue or proceeds from the Trust Property to enable the Property  Trustee or a
Paying Agent to make payments in accordance with the terms hereof.  Each Holder,
by its  acceptance of a Trust  Security,  agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution  to it as herein  provided  and that the  Issuer  Trustees  are not
personally  liable to it for any  amount  distributable  in respect of any Trust
Security  or for any other  liability  in  respect of any Trust  Security.  This
Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set
forth elsewhere in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.



                                       46

<PAGE>



          (c) If an  Event  of  Default  has  occurred  and is  continuing,  the
Property  Trustee  shall  enforce  this Trust  Agreement  for the benefit of the
Holders.

          (d) The  Property  Trustee,  before  the  occurrence  of any  Event of
Default  and after the curing of all Events of Default  that may have  occurred,
shall  undertake  to perform only such duties as are  specifically  set forth in
this Trust  Agreement  (including  pursuant  to Section  10.10),  and no implied
covenants shall be read into this Trust Agreement  against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived  pursuant
to Section  5.16),  the Property  Trustee shall  exercise such of the rights and
powers vested in it by this Trust Agreement, and use the same degree of care and
skill in its exercise  thereof,  as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.

          (e) No provision of this Trust Agreement shall be construed to relieve
the Property  Trustee  from  liability  for its own  negligent  action,  its own
negligent failure to act, or its own wilful misconduct, except that:

               (i) prior to the occurrence of any Event of Default and after the
          curing  or  waiving  of all  such  Events  of  Default  that  may have
          occurred:
                    (A) the duties and obligations of the Property Trustee shall
               be  determined  solely by the  express  provisions  of this Trust
               Agreement (including pursuant to Section 10.10), and the Property
               Trustee  shall not be liable except for the  performance  of such
               duties  and  obligations  as are  specifically  set forth in this
               Trust Agreement (including pursuant to Section 10.10); and

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

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

               (iii) the  Property  Trustee  shall not be liable with respect to
          any  action  taken  or  omitted  to be  taken  by it in good  faith in
          accordance with the direction of the Holders of at least a Majority in
          Liquidation  Amount of the  Capital  Securities  relating to the time,
          method and place of conducting any proceeding for any remedy available
          to the Property


                                       47

<PAGE>



          Trustee,  or exercising any trust or power conferred upon the Property
          Trustee under this Trust Agreement;

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

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

               (vi) the Property Trustee shall not be responsible for monitoring
          the  compliance by the  Administrative  Trustees or the Depositor with
          their  respective  duties  under this Trust  Agreement,  nor shall the
          Property  Trustee be liable for the default or misconduct of any other
          Issuer Trustee or the Depositor;

          (f)  The   Administrative   Trustees  shall  not  be  responsible  for
monitoring  the  compliance by the Issuer  Trustees or the Depositor  with their
respective  duties under this Trust Agreement,  nor shall either  Administrative
Trustee be liable for the default or misconduct  of any other Issuer  Trustee or
the  Depositor.  The Delaware  Trustee shall not be  responsible  for monitoring
compliance by the Property Trustee, the Administrative Trustees or the Depositor
with their respective duties under this Trust Agreement,  nor shall the Delaware
Trustee be liable for the default or misconduct  of any other Issuer  Trustee or
the Depositor.

          SECTION 8.2. Certain Notices.

          Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit,  in
the manner and to the extent  provided in Section 10.8,  notice of such Event of
Default to the  Holders  and the  Administrative  Trustee,  unless such Event of
Default shall have been cured or waived.

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

          The  Property  Trustee  shall not be deemed to have  knowledge  of any
Event of Default unless the Property Trustee shall have received written notice,
or a Responsible Officer charged


                                       48

<PAGE>



with the  administration  of this Trust  Agreement  shall have  obtained  actual
knowledge, of such Event of Default.

          SECTION 8.3. Certain Rights of Property Trustee.

          Subject to the provisions of Section 8.1:

          (a) the Property  Trustee may rely and shall be protected in acting or
refraining  from acting in good faith upon any  resolution,  Opinion of Counsel,
certificate,  written  representation of a Holder or transferee,  certificate of
auditors  or any other  certificate,  statement,  instrument,  opinion,  report,
notice,  request,  consent,  order,  appraisal,  bond,  debenture,  note,  other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;

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

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

          (d) any direction or act of an Administrative  Trustee contemplated by
this Trust Agreement shall be sufficiently  evidenced by a certificate  executed
by such Administrative Trustee and setting forth such direction or act;

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

          (f) the Property  Trustee may consult with counsel  (which counsel may
be counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such

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<PAGE>



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

          (g) the Property  Trustee shall be under no obligation to exercise any
of the rights or powers  vested in it by this Trust  Agreement at the request or
direction of any of the Holders  pursuant to this Trust  Agreement,  unless such
Holders  shall have  offered to the  Property  Trustee  reasonable  security  or
indemnity against the costs,  expenses and liabilities that might be incurred by
it in  compliance  with  such  request  or  direction;  provided  that,  nothing
contained in this Section 8.3(g) shall be taken to relieve the Property Trustee,
upon the  occurrence of an Event of Default,  of its  obligation to exercise the
rights and powers vested in it by this Trust Agreement;

          (h) the Property Trustee shall not be bound to make any  investigation
into the facts or  matters  stated in any  resolution,  certificate,  statement,
instrument,  opinion,  report, notice, request,  consent, order, approval, bond,
debenture,  note or other evidence of  indebtedness  or other paper or document,
unless  requested in writing to do so by one or more  Holders,  but the Property
Trustee  may make such  further  inquiry  or  investigation  into such  facts or
matters as it may see fit;

          (i) the  Property  Trustee  may  execute  any of the  trusts or powers
hereunder or perform any duties  hereunder  either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence,  bad faith or wilful misconduct with respect to selection of
any agent or attorney appointed by it hereunder;

          (j)  whenever  in the  administration  of  this  Trust  Agreement  the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request  instructions  from the Holders (which  instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust  Securities as would be entitled to direct the Property  Trustee under the
terms of the Trust Securities in respect of such remedy, right or action),  (ii)
may refrain  from  enforcing  such  remedy or right or taking such other  action
until such instructions are received,  and (iii) shall be protected in acting in
accordance with such instructions; and

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

          No  provision  of this Trust  Agreement  shall be deemed to impose any
duty or obligation on any Issuer  Trustee to perform any act or acts or exercise
any  right,  power,  duty or  obligation  conferred  or  imposed  on it,  in any
jurisdiction  in which it shall be illegal,  or in which it shall be unqualified
or incompetent in accordance with applicable law, to perform any such act or


                                       50

<PAGE>



acts, or to exercise any such right,  power,  duty or obligation.  No permissive
power or authority  available to any Issuer  Trustee  shall be construed to be a
duty.

          SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.

          The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor and the Issuer Trust,  and the
Issuer  Trustees do not assume any  responsibility  for their  correctness.  The
Issuer  Trustees  shall not be  accountable  for the use or  application  by the
Depositor of the proceeds of the Debentures.

          The Property Trustee may conclusively assume that any funds held by it
hereunder  are  legally  available  unless an  officer of the  Property  Trustee
assigned to its Corporate Trust division shall have received written notice from
the  Depositor,  any Holder or any other Issuer  Trustee that such funds are not
legally available.

          SECTION 8.5. May Hold Securities.

          Any Issuer  Trustee  or any agent of any Issuer  Trustee or the Issuer
Trust, in its individual or any other capacity,  may become the owner or pledgee
of Trust  Securities  and,  subject  to  Sections  8.8 and 8.13  and,  except as
provided in the definition of the term "Outstanding" in Article I, may otherwise
deal with the Issuer  Trust with the same rights it would have if it were not an
Issuer Trustee or such agent.

          SECTION 8.6. Compensation; Indemnity; Fees.

          The Depositor agrees:

          (a) to pay to each Issuer  Trustee and Paying  Agent from time to time
such reasonable  compensation for all services rendered by them hereunder as may
be agreed by the Depositor and such Issuer Trustee or Paying Agent,  as the case
may be,  from  time to time  (which  compensation  shall not be  limited  by any
provision  of law in  regard to the  compensation  of a  trustee  of an  express
trust);

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

          (c) to the fullest  extent  permitted by applicable  law, to indemnify
and hold harmless (i) each Issuer  Trustee,  (ii) each Paying  Agent,  (iii) any
Affiliate  of any  Issuer  Trustee,  (iv) any  officer,  director,  shareholder,
employee, representative or agent of any Issuer Trustee, and (v) any employee or
agent of the Issuer Trust (referred to herein as an "Indemnified Person")


                                       51

<PAGE>



from and against any loss, damage,  liability, tax, penalty, expense or claim of
any kind or nature whatsoever  incurred by such Indemnified  Person by reason of
the  creation,  operation  or  termination  of the  Issuer  Trust  or any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Issuer Trust and in a manner such Indemnified Person reasonably  believed
to be within the scope of authority conferred on such Indemnified Person by this
Trust  Agreement,  except  that no  Indemnified  Person  shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence,  bad faith or wilful  misconduct with respect to
such acts or omissions.

          (d) to the fullest  extent  permitted by  applicable  law, the parties
intend that Section 3561 of Title 12 of the Delaware Code shall not apply to the
Issuer Trust and that  compensation  payable to any Issuer  Trustee  pursuant to
this  Section  8.6 not be subject to review by any court under  Section  3560 of
Title 12 of the Delaware Code or otherwise.

          The  provisions of this Section 8.6 shall survive the  termination  of
this Trust Agreement and the resignation or removal of any Issuer Trustee.

          No  Issuer  Trustee  or  Paying  Agent may claim any Lien on any Trust
Property as a result of any amount due pursuant to this Section 8.6.

          The Depositor,  any Issuer Trustee (subject to Section 8.8(a)) and any
Paying Agent may engage in or possess an interest in other business  ventures of
any nature or description,  independently or with others,  similar or dissimilar
to the  business of the Issuer  Trust,  and the Issuer  Trust and the Holders of
Trust  Securities  shall have no rights by virtue of this Trust Agreement in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Issuer
Trust,  shall not be deemed  wrongful or improper.  Neither the  Depositor,  any
Paying Agent nor any Issuer Trustee shall be obligated to present any particular
investment or other  opportunity to the Issuer Trust even if such opportunity is
of a character  that,  if presented to the Issuer  Trust,  could be taken by the
Issuer Trust,  and the  Depositor,  any Issuer Trustee or any Paying Agent shall
have the right to take for its own  account  (individually  or as a  partner  or
fiduciary)  or to recommend to others any such  particular  investment  or other
opportunity.  Any Issuer  Trustee or Paying Agent may engage or be interested in
any  financial or other  transaction  with the Depositor or any Affiliate of the
Depositor,  or may act as  depository  for,  trustee or agent for, or act on any
committee  or body  of  holders  of,  securities  or  other  obligations  of the
Depositor or its Affiliates.

          SECTION 8.7.  Corporate  Property  Trustee  Required;  Eligibility  of
Issuer Trustees.

          (a) There  shall at all times be a  Property  Trustee  hereunder  with
respect to the Trust Securities.  The Property Trustee shall be a Person that is
a national or state chartered bank and eligible  pursuant to the Trust Indenture
Act to act as such,  and that  has at the  time of such  appointment  securities
rated in one of the three highest rating  categories by a nationally  recognized
statistical  rating  organization and a combined capital and surplus of at least
$50,000,000.  If any  such  Person  publishes  reports  of  condition  at  least
annually, pursuant to law


                                       52

<PAGE>



or to the requirements of its supervising or examining  authority,  then for the
purposes of this Section 8.7 and to the extent  permitted by the Trust Indenture
Act, the  combined  capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so  published.  If at any time the  Property  Trustee  with respect to the Trust
Securities  shall cease to be eligible in accordance with the provisions of this
Section  8.7,  it shall  resign  immediately  in the  manner and with the effect
hereinafter specified in this Article. At the time of appointment,  the Property
Trustee must have securities rated in one of the three highest rating categories
by a nationally recognized statistical rating organization.

          (b) There  shall at all times be one or more  Administrative  Trustees
hereunder.  Each Administrative  Trustee shall be either a natural person who is
at least 21 years of age or a legal  entity  that shall act  through one or more
persons authorized to bind that entity.

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

          SECTION 8.8. Conflicting Interests.

          (a)  If the  Property  Trustee  has or  shall  acquire  a  conflicting
interest  within the meaning of the Trust  Indenture  Act, the Property  Trustee
shall either eliminate such interest or resign,  to the extent and in the manner
provided by, and subject to the provisions of, the Trust  Indenture Act and this
Trust Agreement.

          (b) The Guarantee  Agreement  and the Indenture  shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.

          SECTION 8.9. Co-Trustees and Separate Trustee.

          Unless an Event of Default shall have occurred and be  continuing,  at
any time or times,  for the  purpose of meeting  the legal  requirements  of the
Trust  Indenture  Act or of any  jurisdiction  in which  any  part of the  Trust
Property may at the time be located,  Depositor and the Administrative Trustees,
by agreed  action of the majority of them shall have power to appoint,  and upon
the written  request of the  Administrative  Trustee and the Depositor shall for
such purpose join with the Administrative  Trustees in the execution,  delivery,
and  performance  of all  instruments  and  agreements  necessary  or  proper to
appoint,  one or more Persons  approved by the Property Trustee either to act as
co-trustee,  jointly with the Property Trustee, of all or any part of such Trust
Property,  or to the extent  required by law to act as  separate  trustee of any
such  property,  in  either  case with such  powers  as may be  provided  in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid,  any property,  title,  right or power deemed necessary or desirable,
subject to the other provisions of this Section 8.9.


                                       53

<PAGE>



Any co-trustee or separate trustee appointed  pursuant to this Section 8.9 shall
either be (i) a natural person who is at least 21 years of age and a resident of
the United States,  or (ii) a legal entity with its principal  place of business
in the United  States that shall act through one or more persons  authorized  to
bind such entity. If an Event of Default under the Indenture shall have occurred
and be continuing,  the Property Trustee alone shall have the power to make such
appointment.

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

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

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

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

          (c) The  Property  Trustee at any time,  by an  instrument  in writing
executed by it, with the written  concurrence of the  Depositor,  may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section  8.9,  and, in case a Debenture  Event of Default  has  occurred  and is
continuing,  the Property Trustee shall have power to accept the resignation of,
or remove,  any such  co-trustee or separate  trustee without the concurrence of
the Depositor.  Upon the written request of the Property Trustee,  the Depositor
shall join with the Property Trustee in the execution,  delivery and performance
of all  instruments  and  agreements  necessary  or  proper to  effectuate  such
resignation  or removal.  A successor to any  co-trustee or separate  trustee so
resigning  or removed may be  appointed  in the manner  provided in this Section
8.9.

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



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

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

          SECTION 8.10. Resignation and Removal; Appointment of Successor.

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

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

          Unless a  Debenture  Event  of  Default  shall  have  occurred  and be
continuing,  any Issuer  Trustee may be removed at any time by Act of the Holder
of the Common  Securities.  If a Debenture  Event of Default shall have occurred
and be  continuing,  the Property  Trustee or the Delaware  Trustee,  or both of
them,  may be  removed  at such  time by Act of the  Holders  of a  Majority  in
Liquidation Amount of the Capital Securities,  delivered to the Relevant Trustee
(in its individual  capacity and, in the case of the Property Trustee, on behalf
of the  Issuer  Trust).  An  Administrative  Trustee  may only be removed by the
Holder of the Common Securities and may be so removed at any time.

          If any Issuer Trustee shall resign,  be removed or become incapable of
acting  as Issuer  Trustee,  or if a vacancy  shall  occur in the  office of any
Issuer Trustee for any cause, at a time when no Debenture Event of Default shall
have occurred and be  continuing,  the Holder of the Common  Securities,  by Act
delivered to the retiring  Issuer  Trustee,  shall promptly  appoint a successor
Issuer  Trustee or Issuer  Trustees,  and such  successor  Issuer  Trustee shall
comply with the applicable requirements of Section 8.11. If the Property Trustee
or the  Delaware  Trustee  shall  resign,  be  removed  or become  incapable  of
continuing to act as the Property Trustee or the Delaware  Trustee,  as the case
may be, at a time when a Debenture  Event of Default  shall have occurred and be
continuing,  the  Holders  of  Capital  Securities,  by Act of the  Holders of a
Majority  in  Liquidation  Amount of the  Capital  Securities  delivered  to the
retiring Relevant Trustee,  shall promptly appoint a successor  Relevant Trustee
or Trustees,  and such successor Issuer Trustee shall comply with the applicable
requirements  of Section 8.11.  If an  Administrative  Trustee shall resign,  be
removed or become incapable of acting as Administrative  Trustee, at a time when
a Debenture  Event of Default shall have occurred and be continuing,  the Holder
of the Common Securities by Act delivered to the Administrative Trustee shall


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<PAGE>



promptly appoint a successor  Administrative Trustee or Administrative  Trustees
and such  successor  Administrative  Trustee or Trustees  shall  comply with the
applicable  requirements of Section 8.11. If no successor Relevant Trustee shall
have been so appointed by the Holder of the Common  Securities or the Holders of
a Majority in Liquidation Amount of the Capital Securities,  as the case may be,
and accepted  appointment in the manner required by Section 8.11, any Holder who
has been a Holder of Trust  Securities for at least six months may, on behalf of
such Holder and all others similarly situated,  or any other Issuer Trustee, may
petition any court of competent  jurisdiction for the appointment of a successor
Relevant Trustee.

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

          Notwithstanding  the  foregoing  or any other  provision of this Trust
Agreement,  if any Delaware Trustee who is a natural person dies or becomes,  in
the opinion of the Depositor,  incompetent or incapacitated, the vacancy created
by such death, incompetence or incapacity may be filled by (a) the unanimous act
of the  remaining  Administrative  Trustees if there are at least two of them or
(b) otherwise by the Depositor (with the successor in either case being a Person
who satisfies the eligibility  requirement for the Delaware Trustee set forth in
Section 8.7).

          SECTION 8.11. Acceptance of Appointment by Successor.

          In case of the appointment  hereunder of a successor Relevant Trustee,
the retiring  Relevant Trustee and each successor  Relevant Trustee with respect
to the Trust  Securities  shall execute and deliver an amendment  hereto wherein
each  successor  Relevant  Trustee shall accept such  appointment  and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm  to, and to vest in,  each  successor  Relevant  Trustee all the rights,
powers,  trusts and duties of the retiring  Relevant Trustee with respect to the
Trust Securities and the Issuer Trust, and (b) shall add to or change any of the
provisions  of this Trust  Agreement  as shall be  necessary  to provide  for or
facilitate  the  administration  of the Issuer  Trust by more than one  Relevant
Trustee,  it being  understood  that nothing herein or in such  amendment  shall
constitute  such  Relevant  Trustees  co-trustees  and  upon the  execution  and
delivery of such amendment the  resignation or removal of the retiring  Relevant
Trustee  shall  become  effective to the extent  provided  therein and each such
successor Relevant Trustee,  without any further act, deed or conveyance,  shall
become  vested with all the rights,  powers,  trusts and duties of the  retiring
Relevant Trustee;  but, on request of the Issuer Trust or any successor Relevant
Trustee such retiring  Relevant Trustee shall duly assign,  transfer and deliver
to such successor Relevant Trustee all Trust Property,  all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Issuer Trust.


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<PAGE>



          Upon  request of any Issuer  Trustee  or any such  successor  Relevant
Trustee,  the retiring Relevant Trustee or the Issuer Trust, as the case may be,
shall execute any and all  instruments  for more fully and certainly  vesting in
and confirming to such successor  Relevant  Trustee all such rights,  powers and
trusts referred to in the first or second preceding  paragraph,  as the case may
be.

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

          SECTION  8.12.  Merger,  Conversion,  Consolidation  or  Succession to
Business.

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

          SECTION 8.13.  Preferential  Collection of Claims Against Depositor or
Issuer Trust.

          If and when the Property  Trustee shall be or become a creditor of the
Depositor  or  the  Issuer  Trust  (or  any  other   obligor  upon  the  Capital
Securities),  the Property  Trustee  shall be subject to the  provisions  of the
Trust  Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).

          SECTION 8.14. Property Trustee May File Proofs of Claim.

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

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


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<PAGE>



          (b) to collect  and receive  any moneys or other  property  payable or
deliverable on any such claims and to distribute the same;

and any custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator or
other similar official in any such judicial  proceeding is hereby  authorized by
each Holder to make such payments to the Property  Trustee and, in the event the
Property  Trustee shall  consent to the making of such payments  directly to the
Holders,  to pay to the  Property  Trustee any amount due it for the  reasonable
compensation,  expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.

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

          SECTION 8.15. Reports by Property Trustee.

          (a) Not later than 60 days  following  May 15 of each year  commencing
with May 15,  1998,  the  Property  Trustee  shall  transmit  to all  Holders in
accordance  with Section 10.8, and to the Depositor,  a brief report dated as of
the immediately preceding December 31 with respect to:

               (i) its eligibility under Section 8.7 or, in lieu thereof,  if to
          the best of its knowledge it has  continued to be eligible  under said
          Section, a written statement to such effect;

               (ii) a statement that the Property  Trustee has complied with all
          of its obligations  under this Trust Agreement during the twelve-month
          period (or, in the case of the initial  report,  the period  since the
          Closing Date) ending with such December 31 or, if the Property Trustee
          has not complied in any  material  respect  with such  obligations,  a
          description of such noncompliance; and

               (iii) any change in the property and funds in its  possession  as
          Property  Trustee  since the date of its last  report  and any  action
          taken  by the  Property  Trustee  in  the  performance  of its  duties
          hereunder  which  it has not  previously  reported  and  which  in its
          opinion materially affects the Trust Securities.

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

          (c) A copy of each such report shall, at the time of such transmission
to Holders,  be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market

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<PAGE>



or such other interdealer quotation system or self-regulatory  organization upon
which the Trust  Securities  are listed or traded,  with the Commission and with
the Depositor.

          SECTION 8.16. Reports to the Property Trustee.

          Each of the Depositor and the Administrative Trustees on behalf of the
Issuer Trust shall provide to the Property  Trustee such documents,  reports and
information  as required by Section 314 of the Trust  Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture  Act. The Depositor and the  Administrative  Trustees on behalf of the
Issuer  Trust  shall  annually  file with the  Property  Trustee  a  certificate
specifying  whether  such  Person  is in  compliance  with all of the  terms and
covenants applicable to such Person hereunder.

          SECTION 8.17. Evidence of Compliance with Conditions Precedent.

          Each of the Depositor and the Administrative Trustees on behalf of the
Issuer Trust shall  provide to the Property  Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust  Indenture
Act. Any certificate or opinion  required to be given by an officer  pursuant to
Section  314(c)(1) of the Trust  Indenture  Act shall be given in the form of an
Officers' Certificate.

          SECTION 8.18. Number of Issuer Trustees.

          (a) The initial number of Issuer Trustees shall be five, provided that
the  Property  Trustee  and the  Delaware  Trustee may be the same Person if the
Property Trustee satisfies the applicable requirements.

          (b) If an Issuer  Trustee  ceases to hold  office  for any  reason,  a
vacancy  shall  occur.  The  vacancy  shall be  filled  with an  Issuer  Trustee
appointed in accordance with Section 8.10.

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

          SECTION 8.19. Delegation of Power.

          (a) Any Administrative  Trustee,  by power of attorney consistent with
applicable  law,  delegate to any other  natural  person over the age of 21 such
Administrative  Trustee's  power for the  purpose  of  executing  any  documents
contemplated  in  Section  2.7(a),   including  any  registration  statement  or
amendment  thereto filed with the Commission,  or making any other  governmental
filing; and



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<PAGE>



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

          SECTION 8.20. Appointment of Administrative Trustees.

          (a) The  Administrative  Trustee shall  initially be Saul L. Basch, R.
Kevin Price and Robert C. Walker, and their successors shall be appointed by the
Holder of all the Common Securities.  The Administrative  Trustees may resign or
be  removed by the Holder of all the  Common  Securities  at any time.  Upon any
resignation or removal of an Administrative Trustee, the Depositor shall appoint
a successor  Administrative  Trustee.  If at any time there is no Administrative
Trustee,  the  Property  Trustee  or any  Holder  who has been a Holder of Trust
Securities  for at  least  six  months  may  petition  any  court  of  competent
jurisdiction for the appointment of one or more Administrative Trustees.

          (b) Whenever a vacancy in the number of Administrative  Trustees shall
occur,  until such  vacancy is filled by the  appointment  of an  Administrative
Trustee in accordance  with this Section 8.20,  the  Administrative  Trustees in
office,  regardless of their number (and  notwithstanding any other provision of
this  Agreement),  shall  have  all the  powers  granted  to the  Administrative
Trustees and shall  discharge  all the duties  imposed  upon the  Administrative
Trustees by this Trust Agreement.

          (c) Notwithstanding the foregoing or any other provision of this Trust
Agreement,  if any  Administrative  Trustee  who is a  natural  person  dies  or
becomes, in the opinion of the Holder of all the Common Securities,  incompetent
or incapacitated,  the vacancy created by such death, incompetence or incapacity
may be filled by the unanimous act of the remaining  Administrative Trustees, if
there were at least two of them prior to such vacancy, and by the Depositor,  if
there  were  not two  such  Administrative  Trustees  immediately  prior to such
vacancy  (with  the  successor  being a Person  who  satisfies  the  eligibility
requirement for Administrative Trustees set forth in Section 8.7).


                                   ARTICLE IX

                       DISSOLUTION, LIQUIDATION AND MERGER

          SECTION 9.1. Dissolution Upon Expiration Date.

          Unless  earlier  dissolved,   the  Issuer  Trust  shall  automatically
dissolve on July 15,  2047 (the  "Expiration  Date"),  and shall  thereafter  be
terminated by filing a Certificate of  Cancellation  with the Secretary of State
of the State of Delaware,  following the  distribution  of the Trust Property in
accordance with Section 9.4.


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<PAGE>




          SECTION 9.2. Early Dissolution.

          The  first  to  occur  of any of the  following  events  is an  "Early
Termination Event" upon the occurrence of which the Trust shall be dissolved:

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

          (b) the written  direction to the Property  Trustee from the Holder of
all the  Common  Securities  at any time to  dissolve  the  Issuer  Trust and to
distribute  the  Debentures  to Holders in exchange  for the Capital  Securities
(which  direction is optional and wholly within the  discretion of the Holder of
all the Common Securities);

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

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

          SECTION 9.3. Termination.

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

          SECTION 9.4. Liquidation.

          (a) If an Early  Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the  Expiration  Date,  the Issuer  Trust shall be
liquidated  by the Issuer  Trustees  as  expeditiously  as the  Issuer  Trustees
determine to be possible by distributing,  after  satisfaction of liabilities to
creditors  of the Issuer  Trust as provided by Section  3808(e) of the  Delaware
Business Trust Act and any other applicable law, to each Holder a Like Amount of
Debentures,  subject to Section 9.4(d).  Notice of liquidation shall be given by
the Property Trustee by first-class  mail,  postage prepaid mailed not less than
30 nor more than 60 days prior to the  Liquidation  Date to each Holder of Trust
Securities at such Holder's address  appearing in the Securities  Register.  All
such notices of liquidation shall:

               (i) state the Liquidation Date;

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<PAGE>



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

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

          (b) Except where Section 9.2(c) or 9.4(d) applies,  in order to effect
the  liquidation  of the Issuer  Trust and  distribution  of the  Debentures  to
Holders, the Property Trustee, either itself acting as exchange agent or through
the appointment of a separate exchange agent,  shall establish a record date for
such distribution (which shall be not more than 45 days prior to the Liquidation
Date) and establish such  procedures as it shall deem  appropriate to effect the
distribution  of Debentures  in exchange for the  Outstanding  Trust  Securities
Certificates.

          (c)  Except  where  Section  9.2(c)  or  9.4(d)  applies,   after  the
Liquidation  Date,  (i) the  Trust  Securities  will no  longer  be deemed to be
Outstanding,  (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such Trust
Securities  Certificates  to the exchange  agent for  exchange,  (iii) any Trust
Securities  Certificates  not so  surrendered  for  exchange  will be  deemed to
represent a Like Amount of Debentures  bearing accrued and unpaid interest in an
amount  equal  to  the  accumulated  and  unpaid  Distributions  on  such  Trust
Securities  Certificates  until such  certificates are so surrendered (and until
such certificates are so surrendered,  no payments of interest or principal will
be made to  Holders  of  Trust  Securities  Certificates  with  respect  to such
Debentures), and (iv) all rights of Holders holding Trust Securities will cease,
except the right of such Holders to receive  Debentures  upon surrender of Trust
Securities Certificates.

          (d) If,  upon  dissolution  of the  Trust,  notwithstanding  the other
provisions  of this Section  9.4,  whether  because of an order for  dissolution
entered by a court of competent  jurisdiction or otherwise,  distribution of the
Debentures in the manner provided  herein is determined by the Property  Trustee
not to be practical, or if an Early Termination Event specified in clause (c) of
Section 9.2 occurs,  the Trust  Property  shall be  liquidated  by the  Property
Trustee in such manner as the Property  Trustee  determines.  In such event,  in
connection with the winding-up of the Issuer Trust,  Holders will be entitled to
receive out of the assets of the Issuer  Trust  available  for  distribution  to
Holders,  after  satisfaction of liabilities to creditors of the Issuer Trust as
provided  by  Section  3808(e)  of the  Delaware  Business  Trust  Act and other
applicable  law, an amount equal to the  Liquidation  Amount per Trust  Security
plus accumulated and unpaid  Distributions  thereon to the date of payment (such
amount being the "Liquidation Distribution").  If, upon any such winding up, the
Liquidation  Distribution  can be paid only in part because the Issuer Trust has
insufficient  assets  available  to  pay  in  full  the  aggregate   Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Issuer  Trust on the Trust  Securities  shall be paid on a pro rata basis
(based upon Liquidation  Amounts).  The Holder of all the Common Securities will
be entitled to receive


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<PAGE>



Liquidation  Distributions  upon any such  winding-up  pro rata  (determined  as
aforesaid) with Holders of Capital Securities, except that, if a Debenture Event
of Default  specified in Section  5.1(1) or 5.1(2) of the Indenture has occurred
and is continuing,  the Capital Securities shall have a priority over the Common
Securities as provided in Section 4.3.

          SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
Issuer Trust.

          The Issuer Trust may not merge with or into, consolidate,  amalgamate,
or be  replaced  by, or  convey,  transfer  or lease its  properties  and assets
substantially  as an entirety to any corporation or other body,  except pursuant
to this  Section  9.5. The Issuer Trust may, at the request of the Holder of all
the Common Securities and, with the consent of the Administrative  Trustees, but
without the  consent of the Holders of the  Outstanding  Trust  Securities,  the
Property  Trustee,  or the Delaware  Trustee,  merge with or into,  consolidate,
amalgamate,  or be replaced by or convey,  transfer or lease its  properties and
assets  substantially as an entirety to a trust organized as such under the laws
of any State;  provided,  that (i) such  successor  entity  either (a) expressly
assumes all of the  obligations  of the Issuer Trust with respect to the Capital
Securities,  or (b)  substitutes  for the Capital  Securities  other  securities
having  substantially  the same terms as the Capital  Securities (the "Successor
Securities")  so long as the Successor  Securities have the same priority as the
Capital  Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity possessing the
same  powers  and  duties  as the  Property  Trustee  is  appointed  to hold the
Debentures,  (iii)  such  merger,  consolidation,   amalgamation,   replacement,
conveyance,  transfer or lease does not cause the Capital Securities  (including
any  Successor  Securities)  to  be  downgraded  by  any  nationally  recognized
statistical  rating  organization  that then  assigns  a rating  to the  Capital
Securities,  (iv)  such  merger,   consolidation,   amalgamation,   replacement,
conveyance,  transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material  respect,  (v) such  successor  entity has a purpose
substantially  identical to that of the Issuer Trust, (vi) prior to such merger,
consolidation,  amalgamation,  replacement,  conveyance,  transfer or lease, the
Issuer Trust has received an opinion from  independent  counsel  experienced  in
such  matters to the effect that (a) such merger,  consolidation,  amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital  Securities  (including
any  Successor  Securities)  in any material  respect,  and (b)  following  such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Issuer Trust nor such successor  entity will be required to register
as an  "investment  company"  under the  Investment  Company  Act, and (vii) the
Depositor  or its  permitted  successor  or  transferee  owns all of the  common
securities of such  successor  entity and  guarantees  the  obligations  of such
successor entity under the Successor  Securities at least to the extent provided
by the Guarantee  Agreement.  Notwithstanding  the  foregoing,  the Issuer Trust
shall not, except with the consent of holders of all of the Capital  Securities,
consolidate,  amalgamate,  merge  with or into,  or be  replaced  by or  convey,
transfer or lease its properties and assets  substantially as an entirety to any
other entity or permit any other entity to consolidate,  amalgamate,  merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor


                                       63

<PAGE>



entity to be  taxable as a  corporation  or  classified  as other than a grantor
trust for United States Federal income tax purposes.


                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

          SECTION 10.1. Limitation of Rights of Holders.

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

          SECTION 10.2. Amendment.

          (a) This  Trust  Agreement  may be  amended  from  time to time by the
Property  Trustee,  the  Administrative  Trustees  and the  Holder of the Common
Securities,  without  the consent of the  Delaware  Trustee or any Holder of the
Capital  Securities,  (i) to cure  any  ambiguity,  correct  or  supplement  any
provision herein that may be inconsistent with any other provision herein, or to
make any other  provisions  with respect to matters or questions  arising  under
this Trust Agreement,  which shall not be inconsistent with the other provisions
of this Trust Agreement,  or (ii) to modify,  eliminate or add to any provisions
of this Trust  Agreement to such extent as shall be necessary to ensure that the
Issuer Trust will not be taxable as a  corporation  or will be  classified  as a
grantor  trust for United States  Federal  income tax purposes at all times that
any Trust Securities are Outstanding or to ensure that the Issuer Trust will not
be required to register as an "investment  company" under the Investment Company
Act;  provided,  however,  that in either case (i) or (ii) such action shall not
adversely  affect in any material  respect the interests of the Delaware Trustee
or any Holder.

          (b) Except as provided in Section  10.2(c)  hereof,  any  provision of
this Trust Agreement may be amended by the Property Trustee,  the Administrative
Trustees  and the Holder of the Common  Securities,  without  the consent of the
Delaware Trustee,  and with (i) the consent of Holders of at least a Majority in
Liquidation  Amount of the Capital  Securities,  and (ii)  receipt by the Issuer
Trustees  of an Opinion of Counsel  to the  effect  that such  amendment  or the
exercise of any power  granted to the Issuer  Trustees in  accordance  with such
amendment  will not cause the Issuer Trust to be taxable as a corporation  or as
other than a grantor  trust for United  States  Federal  income tax  purposes or
affect the Issuer Trust's exemption from status as an "investment company" under
the Investment Company Act.



                                       64

<PAGE>



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

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

          (e) Notwithstanding  anything in this Trust Agreement to the contrary,
(i) without the consent of the Depositor and the Administrative  Trustees,  this
Trust  Agreement  may not be amended in a manner  that  imposes  any  additional
obligation on the Depositor or the Administrative Trustees, and (ii) without the
consent of the Delaware  Trustee,  this Trust  Agreement may not be amended in a
manner that imposes any additional obligation on the Delaware Trustee.

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

          (g) Neither the  Property  Trustee nor the Delaware  Trustee  shall be
required to enter into any  amendment to this Trust  Agreement  that affects its
own  rights,  duties or  immunities  under this Trust  Agreement.  The  Property
Trustee  shall be  entitled  to receive an Opinion of Counsel  and an  Officers'
Certificate  stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.

          SECTION 10.3. Separability.

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

          SECTION 10.4. Governing Law.

          THIS TRUST  AGREEMENT  AND THE RIGHTS AND  OBLIGATIONS  OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR AND THE ISSUER TRUSTEES WITH RESPECT TO
THIS TRUST AGREEMENT AND THE TRUST  SECURITIES  SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED

                                       65

 <PAGE>



BY THE LAWS OF THE STATE OF DELAWARE  WITHOUT  REFERENCE  TO ITS CONFLICT OF LAW
PROVISIONS.  THE  PROVISIONS  OF SECTION 3540 OF TITLE 12 OF THE  DELAWARE  CODE
SHALL NOT APPLY TO THIS TRUST.

          To the fullest  extent  permitted by Delaware law,  there shall not be
applicable to the Issuer Trust,  the Issuer Trustees or this Trust Agreement any
provisions  of law  (whether  statutory  or  common)  of the  State of  Delaware
pertaining to trusts (other than the Delaware Business Trust Act) that relate to
or regulate in a manner  inconsistent  with the terms hereof (a) the filing with
any court or  governmental  body or agent of trustee  accounts or  schedules  of
trustee  fees and  charges,  (b)  affirmative  requirements  to post  bonds  for
trustees, officers, agents or employees of a trust, (c) the acquisition, holding
or disposition of any property,  (d) the allocation of receipts and expenditures
between income and principal,  (e) restrictions or limitation on the permissible
nature,  amount or concentration of trust investment or requirements relating to
the titling,  storage or other manner of holding or investing  trust assets,  or
(f) the  establishment  of fiduciary or other  standards  of  responsibility  or
limitations  on the acts or powers of trustees  that are  inconsistent  (whether
more or less restrictive) with this provision.

          SECTION 10.5. Payments Due on Non-Business Day.

          If the date fixed for any payment on any Trust Security shall be a day
that is not a Business  Day, then such payment need not be made on such date but
may be made on the  next  succeeding  day  that is a  Business  Day  (except  as
otherwise  provided  in  Sections  4.1(a) and  4.2(d)),  with the same force and
effect as though made on the date fixed for such payment,  and no  Distributions
shall accumulate on such unpaid amount for the period after such date.

          SECTION 10.6. Successors.

          This  Trust  Agreement  shall be binding  upon and shall  inure to the
benefit of any  successor  to the  Depositor,  the  Issuer  Trust and any Issuer
Trustee,  including any successor by operation of law. Except in connection with
a consolidation,  merger or sale involving the Depositor that is permitted under
Article  VIII of the  Indenture  and  pursuant to which the  assignee  agrees in
writing to perform the Depositor's  obligations  hereunder,  the Depositor shall
not assign its obligations hereunder.

          SECTION 10.7. Headings.

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

          SECTION 10.8. Reports, Notices and Demands.

          (a) Any  report,  notice,  demand or other  communication  that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any  Holder or the  Depositor  may be given or served in  writing  by
deposit thereof, first-class postage prepaid, in

                                       66

<PAGE>



the United States mail, hand delivery or facsimile  transmission,  in each case,
addressed, (a) in the case of a Holder of Capital Securities,  to such Holder as
such Holder's name and address may appear on the Securities Register; and (b) in
the case of the Holder of the Common Securities or the Depositor,  to HSB Group,
Inc.,  One State  Street,  Hartford,  Connecticut  06102,  Attention:  Corporate
Secretary,  facsimile  no.: (860)  493-1038,  or to such other address as may be
specified  in a written  notice by the  Holder of the Common  Securities  or the
Depositor,  as the case may be, to the Property Trustee.  Such notice, demand or
other  communication  to  or  upon  a  Holder  shall  be  deemed  to  have  been
sufficiently  given or made, for all purposes,  upon hand  delivery,  mailing or
transmission.  Such  notice,  demand  or  other  communication  to or  upon  the
Depositor  shall be  deemed to have  been  sufficiently  given or made only upon
actual receipt of the writing by the Depositor.

          (b) Any notice, demand or other communication that by any provision of
this Trust  Agreement  is required or permitted to be given or served to or upon
the  Issuer  Trust or any  Issuer  Trustee  may be given or served in writing by
deposit thereof,  first-class  postage prepaid,  in the United States mail, hand
delivery or facsimile transmission,  in each case, addressed, (a) in the case of
the Property  Trustee to The First National Bank of Chicago,  One First National
Plaza, Suite 0126,  Chicago,  Illinois  60670-0126,  Attention:  Corporate Trust
Services Division;  (b) with respect to the Delaware Trustee,  Attention:  First
Chicago Delaware Inc., 300 King Street,  Wilmington,  Delaware 19801, Attention:
Michael J. Majchrzak; (c) in the case of the Administrative Trustees, to them at
the  address   above  for   notices  to  the   Depositor,   marked   "Attention:
Administrative  Trustees  of HSB  Capital  I"; and (d) in the case of the Issuer
Trust, to its principal  executive  office specified in Section 2.2, with a copy
to each of the Property  Trustee,  the Delaware  Trustee and the  Administrative
Trustees,  or, in each such case, to such other address as may be specified in a
written notice by the applicable Person to the Property  Trustee,  the Depositor
and the  Holders.  Such  notice,  demand or other  communication  to or upon the
Property  Trustee,  the Delaware  Trustee,  the  Administrative  Trustees or the
Issuer Trust shall be deemed to have been  sufficiently  given or made only upon
actual  receipt of the writing by the Property  Trustee,  the Delaware  Trustee,
such Administrative Trustees or the Issuer Trust, as the case may be.

          SECTION 10.9. Agreement Not to Petition.

          Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust has
been  terminated in accordance  with Article IX, they shall not file, or join in
the  filing of, a  petition  against  the  Issuer  Trust  under any  bankruptcy,
insolvency,  reorganization  or other similar law  (including  the United States
Bankruptcy  Code)  (collectively,  "Bankruptcy  Laws") or otherwise  join in the
commencement  of any  proceeding  against the Issuer Trust under any  Bankruptcy
Law. The Property  Trustee and the Depositor  agree, for the benefit of Holders,
that if the  Depositor or any Issuer  Trustee  takes action in violation of this
Section  10.9,  then at the expense of the  Depositor,  the Property  Trustee or
Depositor, as the case may be, shall file an answer with the bankruptcy court or
otherwise  properly contest the filing of such petition by the Depositor against
the Issuer Trust or the  commencement  of such action and raise the defense that
the Depositor has agreed in


                                       67

<PAGE>



writing not to take such action and should be estopped and  precluded  therefrom
and such other  defenses,  if any,  as counsel  for the Issuer  Trustees  or the
Issuer Trust may assert.

          SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.

          (a) Prior to the time a  Registration  Statement,  with respect to the
Capital  Securities,   shall  be  declared  effective  as  contemplated  by  the
Registration  Rights  Agreement,  the Trust  Indenture  Act that are required or
deemed to be part of this  Trust  Agreement  pursuant  to the terms  herein  and
shall,  to the extent  applicable,  be  governed by such  provisions.  The Trust
Agreement  shall be subject to and governed by the Trust  Indenture Act upon (i)
the  consummation  of the exchange  offer  pursuant to the  Registration  Rights
Agreement or (ii) the effectiveness of a Registration  Statement with respect to
the Capital Securities. Until such time, the Trust Indenture Act shall not apply
to this Trust Agreement.

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

          (c) If any  provision  hereof  limits,  qualifies  or  conflicts  with
another  provision  hereof  which is  required  or deemed to be included in this
Trust  Agreement  by any of the  provisions  of the Trust  Indenture  Act,  such
required or deemed  provision  shall  control.  If any  provision  of this Trust
Agreement  modifies or excludes any  provision of the Trust  Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to
this Trust Agreement as so modified or excluded, as the case may be.

          SECTION  10.11.  Acceptance  of Terms of  Trust  Agreement,  Guarantee
Agreement and Indenture.

          THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY  BENEFICIAL  OWNER,  WITHOUT ANY SIGNATURE OR
FURTHER  MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL  ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT
AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS
OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE ISSUER TRUST,  SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND  PROVISIONS
OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE
ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.

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



                                       68

<PAGE>



          SECTION  10.12.  Registration  Rights.  The  Holders  of  the  Capital
Securities,  are entitled to the benefits of the Registration  Rights Agreement,
including the right to receive  Liquidated Damages  Distributions  determined by
reference to  Liquidated  Damages (as defined in the  Indenture)  under  certain
circumstances.


                                       69

<PAGE>



          IN WITNESS WHEREOF,  the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.


                                        HSB GROUP, INC.
                                        as Depositor


                                        By:______________________
                                           Name:
                                           Title:



                                        First National Bank of Chicago
                                        as Property Trustee


                                        By:_________________________
                                           Name:
                                           Title:



                                        First Chicago Delaware Inc.
                                        as Delaware Trustee
                      
                                        HSB Capital I


                                        By:_________________________
                                           Name:  Saul L. Basch
                                           as Administrative Trustee



                                        By:_________________________
                                           Name:  R. Kevin Price
                                           as Administrative Trustee



                                        By:_________________________
                                           Name:  Robert C. Walker
                                           as Administrative Trustee



<PAGE>



                                                         Exhibit A








                             [CERTIFICATE OF TRUST]



                                       A-1

<PAGE>



                                                           Exhibit B









                       [CERTIFICATE DEPOSITORY AGREEMENT]



                                       B-1

<PAGE>



                                                         Exhibit C









                     [Form of Common Securities Certificate]

       THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN
        AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND
                      SECTION 5.11 OF THE TRUST AGREEMENT.

Certificate Number                     Aggregate Liquidation Amount

       C-__                                            $________

                    Certificate Evidencing Common Securities

                                       of

                                  HSB Capital I

                     Global Floating Rate Common Securities
                 (liquidation amount $1,000 per Common Security)

         HSB Capital I, a statutory business trust created under the laws of the
State of Delaware (the "Issuer  Trust"),  hereby certifies that [NAME OF HOLDER]
(the "Holder") is the registered  owner of __________  (____) common  securities
(aggregate Liquidation Amount ______________________ ($__________) of the Issuer
Trust representing  common undivided  beneficial  interests in the assets of the
Issuer  Trust  and  designated  the  Global  Floating  Rate  Common   Securities
(liquidation  amount  $1,000 per Common  Security)  (the  "Common  Securities").
Except in accordance with Section 5.11 of the Trust Agreement (as defined below)
the Common  Securities are not  transferable  and any attempted  transfer hereof
other than in accordance  therewith  shall be void.  The  designations,  rights,
privileges,  restrictions,  preferences  and other terms and  provisions  of the
Common  Securities  are set  forth  in,  and  this  certificate  and the  Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and  provisions  of, the Amended and Restated  Trust  Agreement of the
Issuer Trust, dated as of July 15, 1997, as the same may be amended from time to
time (the "Trust Agreement"),  among HSB Group, Inc., a Delaware corporation, as
Depositor,  The First  National  Bank of  Chicago,  as Property  Trustee,  First
Chicago Delaware,  Inc., as Delaware Trustee,  and the  Administrative  Trustees
named therein,  including the designation of the terms of the Common  Securities
as set  forth  therein.  The  Issuer  Trust  will  furnish  a copy of the  Trust
Agreement to the Holder without charge upon written  request to the Issuer Trust
at its principal place of business or registered office.

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

         Terms used but not defined  herein have the  meanings  set forth in the
Trust Agreement.



                                       C-1

<PAGE>



         IN WITNESS WHEREOF,  one of the  Administrative  Trustees of the Issuer
Trust has executed this certificate this 15th day of July, 1997.


                                        HSB CAPITAL I



                                        By:___________________
                                           Name:
                                           Administrative Trustee






         TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

         This is one of the Securities referred to in the
         within-mentioned Trust Agreement


         THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee


         By:______________________________________
            Name:
            Title:



<PAGE>



                                                         Exhibit D









                    [Form of Capital Securities Certificate]

         [IF  THE  CAPITAL  SECURITIES  CERTIFICATE  IS TO BE A  GLOBAL  CAPITAL
SECURITIES CERTIFICATE,  INSERT--THIS CAPITAL SECURITIES CERTIFICATE IS A GLOBAL
CAPITAL  SECURITIES  CERTIFICATE  WITHIN  THE  MEANING  OF THE  TRUST  AGREEMENT
HEREINAFTER  REFERRED TO AND IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A
NOMINEE  OF  A  CLEARING  AGENCY.   THIS  CAPITAL   SECURITIES   CERTIFICATE  IS
EXCHANGEABLE  FOR CAPITAL  SECURITIES  CERTIFICATES  REGISTERED IN THE NAME OF A
PERSON  OTHER  THAN THE  CLEARING  AGENCY  OR ITS  NOMINEE  ONLY IN THE  LIMITED
CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE CLEARING  AGENCY TO A NOMINEE OF THE  CLEARING  AGENCY OR BY A
NOMINEE OF THE CLEARING  AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE
CLEARING  AGENCY,  EXCEPT IN THE LIMITED  CIRCUMSTANCES  DESCRIBED  IN THE TRUST
AGREEMENT.

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

         [IF THE CAPITAL  SECURITIES  CERTIFICATE  IS TO  EVIDENCE A  RESTRICTED
CAPITAL  SECURITY,  INSERT -- THE CAPITAL  SECURITIES  EVIDENCED  HEREBY AND ANY
JUNIOR SUBORDINATED  DEBENTURES ISSUABLE HEREWITH HAVE NOT BEEN REGISTERED UNDER
THE U.S.  SECURITIES ACT OF 1933 (THE "SECURITIES  ACT") AND MAY NOT BE OFFERED,
SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED EXCEPT (A) BY ANY INITIAL INVESTOR THAT
IS NOT A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES  ACT,  (1) TO A PERSON WHO THE  TRANSFEROR  REASONABLY  BELIEVES IS A
QUALIFIED  INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED  INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE  TRANSACTION  MEETING THE  REQUIREMENTS  OF RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES  ACT, (3) PURSUANT TO AN EXEMPTION
FROM  REGISTRATION  UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRA-


                                       D-1

<PAGE>



TION STATEMENT OR (B) BY ANY INITIAL INVESTOR THAT IS A QUALIFIED  INSTITUTIONAL
BUYER OR BY ANY SUBSEQUENT INVESTOR, (1) AS DESCRIBED IN CLAUSE (A) ABOVE OR (2)
TO AN  INSTITUTION  THAT IS AN  ACCREDITED  INVESTOR  WITHIN THE MENAING OF RULE
501(a)(1),  (2),  (3) OR (7) OF  REGULATION D IN A  TRANSACTION  EXEMPT FROM THE
REGISTRATION  REQUIREMENT OF THE SECURITIES  ACT, AND, IN EACH CASE (A) AND (B),
IN COMPLIANCE  WITH ALL APPLICABLE  SECURITIES  LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.  SECURITIES OWNED BY AN INITIAL INVESTOR THAT IS
NOT A QUALIFIED  INSTITUTIONAL  BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM AND MAY
NOT BE TRANSFERRED  WITHOUT  CERTIFICATION  THAT THE TRANSFER  COMPLIES WITH THE
FOREGOING RESTRICTIONS, AS PROVIDED IN THE TRUST AGREEMENT REFERRED TO BELOW.]

         NO EMPLOYEE  BENEFIT OR OTHER PLAN  SUBJECT TO TITLE I OF THE  EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"),  NO
ENTITY WHOSE  UNDERLYING  ASSETS  INCLUDE  "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"),  AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES  CERTIFICATE OR
ANY  INTEREST  HEREIN,  UNLESS  SUCH  PURCHASER  OR HOLDER IS  ELIGIBLE  FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS  EXEMPTION  ("PTCE")  96-23,  95-60,  91-38,  90-1  OR  84-14  OR  ANOTHER
APPLICABLE  EXEMPTION  WITH RESPECT TO SUCH PURCHASE OR HOLDING AND, IN THE CASE
OF ANY  PURCHASER  OR HOLDER  RELYING ON ANY  EXEMPTION  OTHER THAN PTCE  96-23,
95-60,  91-38,  90-1 OR 84-14, HAS COMPLIED WITH ANY REQUEST BY THE DEPOSITOR OR
THE ISSUER TRUST FOR AN OPINION OF COUNSEL OR OTHER EVIDENCE WITH RESPECT TO THE
AVAILABILITY  OF SUCH  EXEMPTION.  ANY  PURCHASER  OR  HOLDER  OF  THIS  CAPITAL
SECURITIES CERTIFICATE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED
BY ITS  PURCHASE  AND HOLDING  HEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN
ASSET ENTITY AND IS NOT  PURCHASING  SUCH  SECURITIES ON BEHALF OF OR WITH "PLAN
ASSETS" OF ANY PLAN, OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
PTCE 96-23,  95-60,  91-38, 90-1 OR 84-14 OR ANOTHER  APPLICABLE  EXEMPTION WITH
RESPECT TO SUCH PURCHASE OR HOLDING.

Certificate Number                              Aggregate Liquidation Amount

     P-__                                                  $_______

                               CUSIP NO. 40428QAAO

                    Certificate Evidencing Capital Securities

                                       of

                                  HSB Capital I


                                       D-2

<PAGE>




                Global Floating Rate Capital Securities, Series A
                (liquidation amount $1,000 per Capital Security)


     HSB Capital I, a statutory  business  trust  created  under the laws of the
State   of   Delaware   (the   "Issuer    Trust"),    hereby    certifies   that
_____________________________   (the  "Holder")  is  the  registered   owner  of
_________________   (____)  capital  securities  (aggregate  Liquidation  Amount
____________________  ($________)) of the Issuer Trust  representing a preferred
undivided  beneficial  interest in the assets of the Issuer Trust and designated
the Global Floating Rate Capital Securities, Series A (liquidation amount $1,000
per Capital  Security) (the "Capital  Securities").  The Capital  Securities are
transferable  on the books and  records of the Issuer  Trust,  in person or by a
duly authorized  attorney,  upon surrender of this certificate duly endorsed and
in proper form for  transfer  as provided in Section 5.5 of the Trust  Agreement
(as  defined  below).  The  designations,   rights,  privileges,   restrictions,
preferences  and other terms and  provisions of the Capital  Securities  are set
forth in, and this certificate and the Capital Securities represented hereby are
issued and shall in all respects be subject to the terms and  provisions of, the
Amended and Restated Trust  Agreement of the Issuer Trust,  dated as of July 15,
1997,  as the same may be  amended  from time to time (the  "Trust  Agreement"),
among HSB Group, Inc., a Delaware corporation,  as Depositor, The First National
Bank of Chicago, as Property Trustee, First Chicago Delaware,  Inc., as Delaware
Trustee,   and  the  Administrative   Trustees  named  therein,   including  the
designation  of the terms of the Capital  Securities as set forth  therein.  The
Holder is entitled to the benefits of the Guarantee Agreement,  dated as of July
15, 1997 (the "Guarantee  Agreement"),  entered into by HSB Group,  Inc. and The
First National Bank of Chicago,  as guarantee  trustee,  to the extent  provided
therein.  The Issuer  Trust will furnish a copy of the Trust  Agreement  and the
Guarantee  Agreement to the Holder  without  charge upon written  request to the
Issuer Trust at its principal place of business or registered office.

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




                                       D-3

<PAGE>



     IN WITNESS WHEREOF, one of the Administrative  Trustees of the Issuer Trust
has executed this certificate this 15th day of July, 1997.

                                        HSB CAPITAL I


                                        By:_______________________
                                           Name:
                                           Administrative Trustee






         TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

         This is one of the Securities referred to in the
         within-mentioned Trust Agreement


         THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee


         By:________________________________
            Name:
            Title:



                                       D-4

<PAGE>



                                   ASSIGNMENT

         FOR VALUE RECEIVED,  the undersigned assigns and transfers this Capital
Security to:


          _____________________________________________________________
        (Insert assignee's social security or tax identification number)



       _______________________________________________________________  
                    (Insert address and zip code of assignee)

and irrevocably appoints _______________________________________________________

________________________________________________________________________________

agent to transfer this Capital Securities Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.

Date: ________________

Signature: ___________________________________________________________________
           (Sign exactly as your name appears on the other side of this Capital
            Security Certificate)

The  signature(s)  should be  guaranteed  by an eligible  guarantor  institution
(banks,  stockbrokers,  savings  and loan  associations  and credit  unions with
membership in an approved signature guarantee  medallion  program),  pursuant to
S.E.C. Rule 17Ad-15.



                                       D-5

<PAGE>



                                                      Exhibit E


                       [Form of Regulation S Certificate]

                            REGULATION S CERTIFICATE

          (For transfers pursuant to Sections 5.5(b)(i), (iii) and (v)
                             of the Trust Agreement)


The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL  60670-0126

Attention:  Corporate Trust Services Division

                  Re:      Global Floating Rate Capital Securities
                           of HSB Capital I (the "Securities")
                           -----------------------------------

                  Reference is made to the Amended and Restated Trust Agreement,
dated as of July 15, 1997 (the "Trust  Agreement"),  among HSB Group,  Inc. (the
"Company"),  First  National  Bank  of  Chicago  as  Property  Trustee  and  the
Administrative  Trustees  named  therein.  Terms used  herein and defined in the
Trust Agreement or in Regulation S or Rule 144 under the U.S.  Securities Act of
1933 (the "Securities Act") are used herein as so defined.

                  This  certificate  relates to _________  shares of Securities,
which  are   evidenced  by  the   following   certificate(s)   (the   "Specified
Securities"):

                  CUSIP No(s). ________________________

                  CERTIFICATE No(s). __________________

                  The Person in whose name this  certificate  is executed  below
(the  "Undersigned")  hereby certifies that either (i) it is the sole beneficial
owner of the  Specified  Securities  or (ii) it is  acting  on behalf of all the
beneficial owners of the Specified  Securities and is duly authorized by them to
do so. Such  beneficial  owner or owners are referred to herein  collectively as
the  "Owner."  If  the  Specified   Securities  are   represented  by  a  Global
Certificate,  they are held through the Clearing  Agency or  participant  in the
name  of the  Undersigned,  as or on  behalf  of  the  Owner.  If the  Specified
Securities are not represented by a Global  Certificate,  they are registered in
the name of the Undersigned, as or on behalf of the Owner.

                  The Owner  has  requested  that the  Specified  Securities  be
transferred to a person (the "Transferee") who will take delivery in the form of
a Regulation S Security.  In  connection  with such  transfer,  the Owner hereby
certifies that,  unless such transfer is being effected pursuant to an effective
registration  statement  under  the  Securities  Act,  it is being  effected  in
accordance  with  Rule 904 or Rule 144  under  the  Securities  Act and with all
applicable securities


                                       E-1

<PAGE>



laws of the states of the United  States and other  jurisdictions.  Accordingly,
the Owner hereby further certifies as follows:

          (1)  Rule  904  Transfers.  If  the  transfer  is  being  effected  in
accordance with Rule 904:

               (A)  the  Owner  is  not a  distributor  of  the  Securities,  an
          affiliate of the Company or any such distributor or a person acting on
          behalf of any of the foregoing;

               (B) the  offer  of the  Specified  Securities  was not  made to a
          person in the United States;

               (C) either:

                    (i) at the time the buy order was originated, the Transferee
               was outside the United  States or the Owner and any person acting
               on its behalf reasonably believed that the Transferee was outside
               the United States,  or 

                    (ii) the transaction is being executed in, on or through the
               facilities   of  the  Eurobond   market,   as  regulated  by  the
               Association of International Bond Dealers,  or another designated
               offshore  securities  market and neither the Owner nor any person
               acting  on  its  behalf  knows  that  the  transaction  has  been
               prearranged with a buyer in the United States;

               (D) no  directed  selling  efforts  have been made in the  United
          States by or on behalf of the Owner or any affiliate  thereof; 

               (E) if the  Owner is a dealer in  securities  or has  received  a
          selling  concession,  fee or  other  remuneration  in  respect  of the
          Specified  Securities,  and  the  transfer  is  to  occur  during  the
          Restricted  Period,  then the requirements of Rule 904(c)(1) have been
          satisfied; and

               (F) the  transaction is not part of a plan or scheme to evade the
          registration requirements of the Securities Act.

          (2) Rule 144 Transfers.  If the transfer is being effected pursuant to
     Rule 144:

               (A) the transfer is occurring  after a holding period of at least
          one year  (computed in accordance  with paragraph (d) of Rule 144) has
          lapsed since the  Specified  Securities  were last  acquired  from the
          Trust or from an  affiliate of the Trust,  whichever is later,  and is
          being  effected in accordance  with the applicable  amount,  manner of
          sale and notice requirements of Rule 144; or

               (B) the transfer is occurring  after a holding period of at least
          two  years  has  elapsed  since  the  Specified  Securities  were last
          acquired  from the Trust or from an affiliate of the Trust,  whichever
          is later,  and the Owner is not, and during the preceding three months
          has not been, an affiliate of the Trust.



                                       E-2

<PAGE>



          This certificate and the statements contained herein are made for your
     benefit and the benefit of the Trust and the Purchasers.

     Dated: ___________

          (Print  the name of the  Undersigned,  as such term is  defined in the
          second paragraph of this certificate)


          By:
             Name:
             Title:

          (If the  Undersigned is a corporation,  partnership or fiduciary,  the
          title of the  person  signing  on  behalf of the  Undersigned  must be
          stated.)


                                       E-3

<PAGE>



                                                              Exhibit F









                   [Form of Restricted Securities Certificate]


                        RESTRICTED SECURITIES CERTIFICATE

           (For transfers pursuant to Sections 5.5(b)(ii), (iii), (iv)
                         and (v) of the Trust Agreement)


The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL  60670-0126

Attention:  Corporate Trust Services Division

                  Re:      Global Floating Rate Capital Securities
                           of HSB Capital I (the "Securities")

                  Reference is made to the Amended and Restated Trust Agreement,
dated as of July 15, 1997 (the "Trust  Agreement"),  among HSB Group,  Inc. (the
"Company"),  The First  National  Bank of Chicago as  Property  Trustee  and the
Administrative  Trustees  named  therein.  Terms used  herein and defined in the
Trust Agreement or in Regulation S or Rule 144 under the U.S.  Securities Act of
1933 (the "Securities Act") are used herein as so defined.

                  This  certificate  relates to _________  shares of Securities,
which  are   evidenced  by  the   following   certificate(s)   (the   "Specified
Securities"):

                  CUSIP No(s). ________________________

                  CERTIFICATE No(s). __________________

                  The Person in whose name this  certificate  is executed  below
(the  "Undersigned")  hereby certifies that either (i) it is the sole beneficial
owner of the  Specified  Securities  or (ii) it is  acting  on behalf of all the
beneficial owners of the Specified  Securities and is duly authorized by them to
do so. Such  beneficial  owner or owners are referred to herein  collectively as
the  "Owner."  If  the  Specified   Securities  are   represented  by  a  Global
Certificate,  they are held through the Clearing  Agency or  participant  in the
name  of the  Undersigned,  as or on  behalf  of  the  Owner.  If the  Specified
Securities are not represented by a Global  Certificate,  they are registered in
the name of the Undersigned, as or on behalf of the Owner.

                  The Owner  has  requested  that the  Specified  Securities  be
transferred to a person (the "Transferee") who will take delivery in the form of
a Restricted Security. In connection


                                       F-1

<PAGE>



with such transfer,  the Owner hereby  certifies  that,  unless such transfer is
being  effected  pursuant  to an  effective  registration  statement  under  the
Securities  Act, it is being  effected in accordance  with Rule 144A or Rule 144
under the Securities Act and all applicable securities laws of the states of the
United States and other  jurisdictions.  Accordingly,  the Owner hereby  further
certifies as follows:

          (1)  Rule  144A  Transfers.  If the  transfer  is  being  effected  in
     accordance with Rule 144A:

               (A) the Specified  Securities  are being  transferred to a person
          that the Owner and any person acting on its behalf reasonably  believe
          is a "qualified  institutional buyer" within the meaning of Rule 144A,
          acquiring  for  its own  account  or for the  account  of a  qualified
          institutional buyer; and

               (B) the Owner and any  person  acting on its  behalf  have  taken
          reasonable steps to ensure that the Transferee is aware that the Owner
          may be relying on Rule 144A in connection with the transfer; and

          (2) Rule 144 Transfers.  If the transfer is being effected pursuant to
     Rule 144:

               (A) the transfer is occurring  after a holding period of at least
          one year  (computed in accordance  with paragraph (d) of Rule 144) has
          elapsed  since the  Specified  Securities  were last acquired from the
          Trust or from an  affiliate of the Trust,  whichever is later,  and is
          being  effected in accordance  with the applicable  amount,  manner of
          sale, and notice requirements of rule 144; or

               (B) the transfer is occurring  after a holding period of at least
          two  years  has  elapsed  since  the  Specified  Securities  were last
          acquired  from the Trust or from an affiliate of the Trust,  whichever
          is later,  and the Owner is not, and during the preceding three months
          has not been, an affiliate of the Trust.

          (3)  Regulation  S  Transfers.  If the  transfer is being  effected in
     accordance with Regulation S:

               (A) the  transfer  is being  made to a  person  who is not a U.S.
          person; or

               (B) the transferee is not acquiring such Specified Securities for
          the account or benefit of any U.S. person.



                                       F-2

<PAGE>



         This certificate and the statements  contained herein are made for your
benefit and benefit of the Trust and the Purchasers.

Dated:___________________________

         (Print  the name of the  Undersigned,  as such term is  defined  in the
         second paragraph of this certificate.)

         By:__________________________
            Name:
            Title:

         (If the  Undersigned  is a corporation,  partnership or fiduciary,  the
         title of the  person  signing  on  behalf  of the  Undersigned  must be
         stated.)


                                       F-3

<PAGE>


                                               EXHIBIT G -- Form of Unrestricted
                                                          Securities Certificate


                       UNRESTRICTED SECURITIES CERTIFICATE

(For removal of Securities Act Legends pursuant to Section 5.5(c))


The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL  60670-0126

Attention:  Corporate Trust Services Division

Re:  Global   Floating  Rate  Capital   Securities  of  HSB  Group,   Inc.  (the
     "Securities")

         Reference is made to the Amended and Restated Trust Agreement, dated as
of July 15, 1997 (the "Trust Agreement"), among HSB Group, Inc. (the "Company"),
The First  National Bank of Chicago as Property  Trustee and the  Administrative
Trustees named therein.  Terms used herein and defined in the Trust Agreement or
in  Regulation  S or Rule  144  under  the  U.S.  Securities  Act of  1933  (the
"Securities Act") are used herein as so defined.

         This certificate relates to ___________ shares of Securities, which are
evidenced by the following certificate(s) (the "Specified Securities"):

         CUSIP No(s).  _____________________

         CERTIFICATE No(s). _______________

         The  person in whose  name this  certificate  is  executed  below  (the
"Undersigned")  hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial  owner or owners are referred to herein  collectively as the "Owner."
If the Specified  Securities are represented by a Global  Certificate,  they are
held through the Clearing Agency or participant in the name of the  Undersigned,
as or on behalf of the Owner. If the Specified Securities are not represented by
a Global  Certificate,  they are registered in the name of the Undersigned as or
on behalf of the Owner.



0128995.06-01S7a
                                       G-1

<PAGE>




                                 HSB GROUP, INC.



                                       to



                       THE FIRST NATIONAL BANK OF CHICAGO,
                                   as Trustee



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



                          JUNIOR SUBORDINATED INDENTURE


                            Dated as of July 15, 1997


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








<PAGE>



                                 HSB GROUP, INC.


         Reconciliation  and  tie  between  the  Trust  Indenture  Act  of  1939
(including  cross-references  to  provisions of Section 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture  whether
or not  physically  contained  therein) and the Junior  Subordinated  Indenture,
dated as of July 15, 1997.

TRUST INDENTURE ACT SECTION                                   INDENTURE SECTION

(ss.) 310 (a)(1),(2) and (5)...............................    6.9
          (a)(3)...........................................    Not Applicable
          (a)(4)...........................................    Not Applicable
          (b)..............................................    6.8
          .................................................    6.10
          (c)..............................................    Not Applicable
(ss.) 311 (a)..............................................    6.13(a)
          (b)..............................................    6.13(b)
          (b) (2)..........................................    7.3(a)(2)
          .................................................    7.3(a)(2)
(ss.) 312 (a)..............................................    7.1
          .................................................    7.2(a)
          (b)..............................................    7.2(b)
          (c)..............................................    7.2(c)
(ss.) 313 (a)..............................................    7.3(a)
          (b)..............................................    7.3(b)
          (c)..............................................    7.3(a), 7.3(b)
          (d)..............................................    7.3(c)
(ss.) 314 (a) (1), (2) and (3)...........................      7.4
          (a) (4)..........................................   10.5
          (b)..............................................    Not Applicable
          (c)(1)...........................................    1.2
          (c)(2)...........................................    1.2
          (c)(3)...........................................    Not Applicable
          (d)..............................................    Not Applicable
          (e)..............................................    1.2
          (f)..............................................    Not Applicable
(ss.) 315 (a)............................................      6.1(a)
          (b)..............................................    6.2
          .................................................    7.3(a)(6)
          (c)..............................................    6.1(b)
          (d)..............................................    6.1(c)
          (d)(1)...........................................    6.1(a)(1)



<PAGE>



          (d)(2)............................................    6.1(c)(2)
          (d)(3)............................................    6.1(c)(3)
          (e)...............................................    5.14
(ss.) 316 (a)...............................................    1.1
          (a)(1)(A).........................................    5.12
          (a)(1)(B).........................................    5.13
          (a)(2)............................................    Not Applicable
          (b)...............................................    5.8
          (c)...............................................    1.4(f)
(ss.) 317 (a)(1)............................................    5.3
          (a)(2)............................................    5.4
          (b)...............................................    10.3
(ss.) 318 (a)...............................................     1.7

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

Note:This  reconciliation and tie shall not, for any purpose,  be deemed to be a
     part of the Junior Subordinated Indenture. 

<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1.        Definitions..............................................  1
SECTION 1.2.        Compliance Certificate and Opinions...................... 12
SECTION 1.3.        Forms of Documents Delivered to Trustee.................. 12
SECTION 1.4.        Acts of Holders.......................................... 13
SECTION 1.5.        Notices, Etc to Trustee and Corporation.................. 15
SECTION 1.6.        Notice to Holders; Waiver................................ 15
SECTION 1.7.        Conflict with Trust Indenture Act........................ 16
SECTION 1.8.        Effect of Headings and Table of Contents................. 16
SECTION 1.9.        Successors and Assigns................................... 16
SECTION 1.10.       Separability Clause...................................... 16
SECTION 1.11.       Benefits of Indenture.................................... 17
SECTION 1.12.       Governing Law............................................ 17
SECTION 1.13.       Non-Business Days........................................ 17


                                   ARTICLE II

                                 SECURITY FORMS

SECTION 2.1.        Forms Generally.......................................... 17
SECTION 2.2.        Form of Face of Security................................. 18
SECTION 2.3.        Form of Reverse of Security.............................. 21
SECTION 2.4.        Additional Provisions Required in Global Security........ 24
SECTION 2.5.        Form of Trustee's Certificate of Authentication.......... 25
SECTION 2.6.        Form of Trustee's Certificate of Authentication ..........25


                                   ARTICLE III

                                 THE SECURITIES

SECTION 3.1.        Title and Terms.......................................... 26
SECTION 3.2.        Denominations............................................ 29
SECTION 3.3.        Execution, Authentication, Delivery and Dating........... 29
SECTION 3.4.        Temporary Securities..................................... 32
SECTION 3.5.        Global Securities........................................ 32

                                      - i -


<PAGE>



SECTION 3.6.        Registration, Transfer and Exchange Generally; Certain
                    Transfers and Exchanges; Securities Act Legends.......... 34
SECTION 3.7.        Mutilated, Destroyed, Lost and Stolen Securities......... 42
SECTION 3.8.        Payment of Interest and Additional Interest; Interest
                        Rights Preserved..................................... 43
SECTION 3.9.        Persons Deemed Owners.................................... 45
SECTION 3.10.       Cancellation............................................. 45
SECTION 3.11.       Computation of Interest.................................. 45
SECTION 3.12.       Deferrals of Interest Payment Dates...................... 46
SECTION 3.13.       Right of Set-Off......................................... 47
SECTION 3.14.       Agreed Tax Treatment..................................... 47
SECTION 3.15.       Shortening of Stated Maturity............................ 47
SECTION 3.16.       CUSIP Numbers............................................ 47


                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

SECTION 4.1.        Satisfaction and Discharge of Indenture.................. 48
SECTION 4.2.        Application of Trust Money............................... 49


                                    ARTICLE V

                                    REMEDIES

SECTION 5.1.        Events of Default........................................ 49
SECTION 5.2.        Acceleration of Maturity; Rescission and Annulment....... 50
SECTION 5.3.        Collection of Indebtedness and Suits for Enforcement
                         by Trustee.......................................... 52
SECTION 5.4.        Trustee May File Proofs of Claim......................... 53
SECTION 5.5.        Trustee May Enforce Claim Without Possession 
                    of Securities............................................ 54
SECTION 5.6.        Application of Money Collected........................... 54
SECTION 5.7.        Limitation on Suits...................................... 54
SECTION 5.8.        Unconditional Right of Holders to Receive Principal,
                        Premium and Interest; Direct Action by Holders
                        of Capital Securities................................ 55
SECTION 5.9.        Restoration of Rights and Remedies....................... 55
SECTION 5.10.       Rights and Remedies Cumulative........................... 56
SECTION 5.11.       Delay or Omission Not Waiver............................. 56
SECTION 5.12.       Control by Holders....................................... 56
SECTION 5.13.       Waiver of Past Defaults.................................. 57

                                     - ii -


<PAGE>



SECTION 5.14.       Undertaking for Costs.................................... 57
SECTION 5.15.       Waiver of Usury, Stay or Extension Laws.................. 58


                                   ARTICLE VI

                                   THE TRUSTEE

SECTION 6.1.        Certain Duties and Responsibilities...................... 58
SECTION 6.2.        Notice of Defaults....................................... 59
SECTION 6.3.        Certain Rights of Trustee................................ 59
SECTION 6.4.        Not Responsible for Recitals or Issuance 
                    of Securities............................................ 60
SECTION 6.5.        May Hold Securities...................................... 61
SECTION 6.6.        Money Held in Trust...................................... 61
SECTION 6.7.        Compensation and Reimbursement........................... 61
SECTION 6.8.        Disqualification; Conflicting Interests.................. 62
SECTION 6.9.        Corporate Trustee Required; Eligibility.................. 62
SECTION 6.10.       Resignation and Removal; Appointment of Successor........ 63
SECTION 6.11.       Acceptance of Appointment by Successor................... 64
SECTION 6.12.       Merger, Conversion, Consolidation or Succession 
                    to Business.............................................. 65
SECTION 6.13.       Preferential Collection of Claims Against Corporation.... 65
SECTION 6.14.       Appointment of Authenticating Agent...................... 66


                                   ARTICLE VII

              HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION

 SECTION 7.1.        Corporation to Furnish Trustee Names and
                         Addresses of Holders................................ 67
 SECTION 7.2.        Preservation of Information, Communications 
                     to Holders.............................................. 68
 SECTION 7.3.        Reports by Trustee...................................... 68
 SECTION 7.4.        Reports by Corporation.................................. 68


                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1.        Corporation May Consolidate, Etc., Only 
                    on Certain Terms......................................... 69
SECTION 8.2.        Successor Corporation Substituted........................ 70



                                     - iii -


<PAGE>



                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

SECTION 9.1.        Supplemental Indentures Without Consent of Holders....... 70
SECTION 9.2.        Supplemental Indentures with Consent of Holders.......... 72
SECTION 9.3.        Execution of Supplemental Indentures..................... 73
SECTION 9.4.        Effect of Supplemental Indentures........................ 73
SECTION 9.5.        Conformity with Trust Indenture Act...................... 73
SECTION 9.6.        Reference in Securities to Supplemental Indentures....... 74


                                    ARTICLE X

                                    COVENANTS

SECTION 10.1.       Payment of Principal, Premium and Interest............... 74
SECTION 10.2.       Maintenance of Office or Agency.......................... 74
SECTION 10.3.       Money for Security Payments to be Held in Trust.......... 75
SECTION 10.4.       Statement as to Compliance............................... 76
SECTION 10.5.       Waiver of Certain Covenants.............................. 76
SECTION 10.6.       Additional Sums.......................................... 77
SECTION 10.7.       Additional Covenants..................................... 77
SECTION 10.8.       Original Issue Discount. ................................ 78


                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

SECTION 11.1.       Applicability of This Article............................ 79
SECTION 11.2.       Election to Redeem; Notice to Trustee.................... 79
SECTION 11.3.       Selection of Securities to be Redeemed................... 79
SECTION 11.4.       Notice of Redemption..................................... 80
SECTION 11.5.       Deposit of Redemption Price.............................. 81
SECTION 11.6.       Payment of Securities Called for Redemption.............. 81
SECTION 11.7.       Right of Redemption of Securities Initially Issued
                    to an Issuer Trust....................................... 82



                                     - iv -


<PAGE>



                                   ARTICLE XII

                                  SINKING FUNDS

SECTION 12.1.       Applicability of Article................................. 82
SECTION 12.2.       Satisfaction of Sinking Fund Payments 
                    with Securities.......................................... 82
SECTION 12.3.       Redemption of Securities for Sinking Fund................ 83


                                  ARTICLE XIII

                           SUBORDINATION OF SECURITIES

SECTION 13.1.       Securities Subordinate to Senior Indebtedness............ 84
SECTION 13.2.       No Payment When Senior Indebtedness in Default; 
                    Payment Over of Proceeds Upon Dissolution, Etc........... 85
SECTION 13.3.       Payment Permitted If No Default.......................... 86
SECTION 13.4.       Subrogation to Rights of Holders of 
                    Senior Indebtedness...................................... 87
SECTION 13.5.       Provisions Solely to Define Relative Rights.............. 87
SECTION 13.6.       Trustee to Effectuate Subordination...................... 88
SECTION 13.7.       No Waiver of Subordination Provisions.................... 88
SECTION 13.8.       Notice to Trustee........................................ 88
SECTION 13.9.       Reliance on Judicial Order or Certificate 
                    of Liquidating Agent..................................... 89
SECTION 13.10.      Trustee Not Fiduciary for Holders of 
                    Senior Indebtedness...................................... 89
SECTION 13.11.      Rights of Trustee as Holder of Senior
                    Indebtedness; Preservation of Trustee's Rights........... 89
SECTION 13.12.      Article Applicable to Paying Agents...................... 90

                                   ARTICLE XIV

                                    EXPENSES

SECTION 14.1.       Payment of Expenses by the Corporation................... 90
SECTION 14.2.       Term of Agreement........................................ 90
SECTION 14.3.       Waiver of Notice......................................... 91
SECTION 14.4.       No Impairment............................................ 91
SECTION 14.5.       Enforcement.............................................. 91
SECTION 14.6.       Subrogation.............................................. 91
SECTION 14.7.       Amendment................................................ 92


                                      - v -


<PAGE>




         JUNIOR SUBORDINATED  INDENTURE,  dated as of July 15, 1997, between HSB
GROUP, INC., a Connecticut corporation (the "Corporation"), having its principal
office at One State Street, Hartford,  Connecticut,  and The First National Bank
of Chicago, a national banking association, as Trustee (the "Trustee").


                           RECITALS OF THE CORPORATION

         WHEREAS, the Corporation has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its unsecured
junior   subordinated   debt   securities  in  series  (the   "Securities")   of
substantially the tenor  hereinafter  provided,  including  Securities issued to
evidence loans made to the Corporation  with the proceeds from the issuance from
time  to time by one or  more  business  trusts  (each  an  "Issuer  Trust")  of
preferred  undivided  beneficial  interests in the assets of such Issuer  Trusts
(the "Capital  Securities") and common undivided interests in the assets of such
Issuer Trusts (the "Common Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered; and

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

         NOW THEREFORE, THIS INDENTURE WITNESSETH:

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


                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         SECTION 1.1. Definitions.

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

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

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


                                      - 1 -


<PAGE>



                  (c) The words  "include",  "includes"  and  "including"  shall
         be deemed to be followed by the phrase "without limitation";

                  (d) All accounting terms not otherwise defined herein have the
         meanings  assigned  to  them  in  accordance  with  generally  accepted
         accounting principles;

                  (e) Whenever  the context may  require,  any gender shall be
         deemed to include the others;

                  (f) Unless the context otherwise requires,  any reference to
          an "Article" or a "Section" refers to an Article or a Section,  as the
          case may be, of this Indenture; and

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

          "Act" when used with  respect to any Holder has the meaning  specified
in Section 1.4.

         "Additional  Interest" means the interest, if any, that shall accrue on
any interest on the  Securities  of any series the payment of which has not been
made on the applicable Interest Payment Date or that has been deferred during an
Extension  Period,  and that  shall  accrue at the rate per annum  specified  or
determined as specified in such Security.

         "Additional Sums" has the meaning specified in Section 10.6.

         "Additional  Taxes"  means  any  additional  taxes,  duties  and  other
governmental  charges to which an Issuer  Trust has become  subject from time to
time as a result of a Tax Event.

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

         "Agent Member" means any member of, or participant in, the Depositary.

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

         "Authenticating  Agent"  means any  Person  authorized  by the  Trustee
pursuant  to  Section  6.14 to act on  behalf  of the  Trustee  to  authenticate
Securities of one or more series.

                                      - 2 -


<PAGE>




         "Bankruptcy  Code"  means  Title 11 of the  United  States  Code or any
successor statute thereto, in each case as amended from time to time.

         "Board of Directors" means the board of directors of the Corporation or
the  Executive  Committee of the board of directors of the  Corporation  (or any
other committee of the board of directors of the Corporation  performing similar
functions)  or  a  committee  designated  by  the  board  of  directors  of  the
Corporation (or such  committee),  comprised of two or more members of the board
of directors of the Corporation or officers of the Corporation, or both.

         "Board  Resolution"  means  a copy  of a  resolution  certified  by the
Corporate  Secretary or an Assistant  Secretary of the  Corporation to have been
duly adopted by the Board of Directors,  or officers of the Corporation to which
authority to act on behalf of the Board of Directors has been delegated,  and to
be in full force and effect on the date of such certification,  and delivered to
the Trustee.

         "Business Day" means any day other than (i) a Saturday or Sunday,  (ii)
a day on which banking  institutions  in The City of New York are  authorized or
required by law or executive order to remain closed, or (iii) a day on which the
Corporate  Trust Office of the  Trustee,  or, with  respect to  Securities  of a
series  initially  issued to an Issuer Trust for so long as such  Securities are
held by such Issuer Trust, the Corporate Trust Office (as defined in the related
Trust  Agreement)  of the  Property  Trustee or the Delaware  Trustee  under the
related Trust Agreement, is closed for business.

          "Capital Securities" has the meaning specified in the first recital of
this Indenture.

          "CEDEL" means  Centrale de Livraison de Valeurs  Mobilieres,  S.A., or
its successor.

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

          "Common  Securities" has the meaning specified in the first recital of
this Indenture.

         "Corporate  Trust Office" means the principal  office of the Trustee at
which at any particular time its corporate trust business shall be administered.

         "Corporation"  includes a corporation,  association,  company,  limited
liability company, joint-stock company or business trust.

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

                                      - 3 -


<PAGE>




         "Corporation  Request" and "Corporation  Order" mean,  respectively,  a
written  request  or order  signed in the name of the  Corporation  by its Chief
Executive  Officer,  its  President,  one of its Senior  Vice  Presidents,  Vice
Presidents  and by its  Chief  Financial  Officer,  Treasurer,  Controller,  its
Corporate Secretary or an Assistant Secretary, and delivered to the Trustee.

         "Debt" means,  with respect to any Corporation,  whether recourse is to
all or a portion of the assets of such Corporation and whether or not contingent
and without  duplication,  (i) every  obligation of such  Corporation  for money
borrowed;  (ii)  every  obligation  of  such  Corporation  evidenced  by  bonds,
debentures,  notes or other similar instruments,  including obligations incurred
in connection  with the  acquisition of property,  assets or  businesses;  (iii)
every  reimbursement  obligation of such  Corporation with respect to letters of
credit,  bankers'  acceptances or similar  facilities  issued for the account of
such Corporation; (iv) every obligation of such Corporation issued or assumed as
the  deferred  purchase  price of  property  or services  (but  excluding  trade
accounts  payable  or accrued  liabilities  arising  in the  ordinary  course of
business);  (v) every capital lease  obligation  of such  Corporation;  (vi) all
indebtedness  of the  Corporation,  whether  incurred on or prior to the date of
this  Indenture  or  thereafter  incurred,  for claims in respect of  derivative
products,  including  interest rate, foreign exchange rate and commodity forward
contracts,  options  and  swaps  and  similar  arrangements;   and  (vii)  every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which,  in either case,  such
Corporation  has  guaranteed  or is  responsible  or  liable  for,  directly  or
indirectly, as obligor or otherwise.

         "Defaulted Interest" has the meaning specified in Section 3.8.

         "Definitive Security" means a Security that does not contain the legend
set forth in Section 2.4.

         "Delaware  Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware  Trustee" in the related Trust Agreement,  solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and  not in its  individual  capacity,  or its  successor  in  interest  in such
capacity, or any successor Delaware trustee appointed as therein provided.

         "Depositary"  means,  with  respect  to the  Securities  of any  series
issuable  or  issued  in  whole  or in  part in the  form of one or more  Global
Securities,  the Person designated as Depositary by the Corporation  pursuant to
Section 3.1 with respect to such series (or any successor thereto).

         "Discount Security" means any security that provides for an amount less
than the principal  amount  thereof to be due and payable upon a declaration  of
acceleration of the Maturity thereof pursuant to Section 5.2.


                                      - 4 -


<PAGE>



         "Distributions",  with  respect  to the Trust  Securities  issued by an
Issuer  Trust,  means  amounts  payable in respect of such Trust  Securities  as
provided  in  the  related   Trust   Agreement   and   referred  to  therein  as
"Distributions".

         "Dollar"  or "$" means the  currency  of the  United  States of America
that,  as at the time of payment,  is legal tender for the payment of public and
private debts.

         "Euroclear"  means Morgan Guaranty Trust Company of New York,  Brussels
Office, or its successor as operator of the Euroclear System.

         "Event of Default", unless otherwise specified with respect to a series
of  Securities  as  contemplated  by Section 3.1,  has the meaning  specified in
Article V.

         "Exchange  Act"  means  the  Securities  Exchange  Act of  1934  or any
successor statute thereto, in each case as amended from time to time.

          "Exchange Offer" has the meaning specified in the Registration  Rights
Agreement.

         "Exchange  Security" means a Security issued pursuant to and having the
rights  provided  therefor  in this  Indenture,  including  the right to receive
Interest  Payments as provided herein,  and to be issued hereunder in connection
with the offer to exchange the Initial Securities for a new series of debentures
of the Corporation as contemplated by the Registration Rights Agreement.

         "Expiration Date" has the meaning specified in Section 1.4.

         "Extension Period" has the meaning specified in Section 3.12.

         "Global  Security"  means a Security in the form  prescribed in Section
2.4 evidencing  all or part of a series of Securities,  issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
its nominee.

         "Guarantee  Agreement"  means,  with respect to any Issuer  Trust,  the
Guarantee  Agreement  executed by the Corporation for the benefit of the Holders
of the Capital  Securities issued by such Issuer Trust, as modified,  amended or
supplemented from time to time.

          "Holder"  means a Person in whose name a Security is registered in the
Securities Register.

         "Indenture"  means this instrument as originally  executed or as it may
from  time  to  time  be  supplemented  or  amended  by one or  more  indentures
supplemental  hereto entered into pursuant to the applicable  provisions  hereof
and shall include the terms of each particular series of Securities  established
as contemplated by Section 3.1.


                                      - 5 -


<PAGE>



         "Initial  Security"  means a Security issued pursuant to and having the
rights  provided  therefor  in this  Indenture,  including  the right to receive
Interest  Payments  to the extent  provided  herein,  and  designated  as Junior
Subordinated Securities.

         "Institutional Accredited Investor" means an accredited investor within
the  meaning  of Rule  501(a)(1),  (2),  (3) or (7) of  Regulation  D under  the
Securities Act.

         "Interest  Payment Date" means,  as to each series of  Securities,  the
Stated Maturity of an installment of interest on such Securities.

          "Issuer Trust" has the meaning  specified in the first recital of this
Indenture.

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

          "Notice of Default"  means a written  notice of the kind  specified in
Section 5.1(3).

         "Officers'  Certificate"  means  a  certificate  signed  by  its  Chief
Executive  Officer,  the President or a Senior Vice President,  and by the Chief
Financial Officer,  Treasurer or the Corporate Secretary or Assistant Secretary,
of the Corporation and delivered to the Trustee.

         "Opinion of  Counsel"  means a written  opinion of counsel,  who may be
counsel  for  or an  employee  of  the  Corporation  or  any  Affiliate  of  the
Corporation.

         "Original  Issue Date" means the date of issuance  specified as such in
each Security.

         "Outstanding"  means,  when used in reference to any Securities,  as of
the  date  of  determination,   all  Securities  theretofore  authenticated  and
delivered under this Indenture, except:

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

                  (ii)  Securities  for  whose  payment  money in the  necessary
         amount has been  theretofore  deposited  with the Trustee or any Paying
         Agent in trust for the Holders of such Securities; and

                  (iii) Securities in substitution for or in lieu of which other
         Securities have been authenticated and delivered or that have been paid
         pursuant to Section 3.7,  unless proof  satisfactory  to the Trustee is
         presented  that any such  Securities are held by Holders in whose hands
         such  Securities  are  valid,  binding  and  legal  obligations  of the
         Corporation;


                                      - 6 -


<PAGE>



provided,  however,  that in  determining  whether the Holders of the  requisite
principal  amount of  Outstanding  Securities  have given any  request,  demand,
authorization,  direction, notice, consent or waiver hereunder, Securities owned
by the  Corporation or any other obligor upon the Securities or any Affiliate of
the  Corporation or such other obligor shall be disregarded and deemed not to be
Outstanding,  except that, in determining whether the Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only  Securities that the Trustee knows to be so owned shall
be so disregarded.  Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's  right so to act with respect to such  Securities and that
the pledgee is not the  Corporation  or any other obligor upon the Securities or
any Affiliate of the Corporation or such other obligor. Upon the written request
of the  Trustee,  the  Corporation  shall  furnish to the  Trustee  promptly  an
Officers'  Certificate listing and identifying all Securities,  if any, known by
the  Corporation to be owned or held by or for the account of the Corporation or
any other obligor on the Securities, or any Affiliate of the Corporation or such
obligor,  and subject to the  provisions  of Section 6.1,  the Trustee  shall be
entitled to accept such  Officers'  Certificate  as  conclusive  evidence of the
facts therein set forth and of the fact that all  Securities  not listed therein
are  Outstanding  for the  purpose  of any such  determination.  Notwithstanding
anything herein to the contrary, Securities of any series initially issued to an
Issuer  Trust  that are  owned  by such  Issuer  Trust  shall  be  deemed  to be
Outstanding  notwithstanding the ownership by the Corporation or an Affiliate of
any beneficial interest in such Issuer Trust.

         "Paying  Agent"  means the  Trustee  or any  Person  authorized  by the
Corporation  to pay the  principal  of (or  premium,  if any) or interest on, or
other amounts in respect of, any Securities on behalf of the Corporation.

         "Person" means a legal person,  including any individual,  corporation,
estate,  partnership,  joint  venture,  trust,  unincorporated  association,  or
government or any agency or political  subdivision  thereof, or any other entity
of whatever nature.

         "Place of Payment" means, with respect to the Securities of any series,
the place or places where the  principal of (and  premium,  if any) and interest
(including any Additional Interest) on the Securities of such series are payable
pursuant to Section 3.1.

         "Predecessor  Security" of any particular Security means every previous
Security  evidencing all or a portion of the same debt as that evidenced by such
particular  Security.  For  the  purposes  of  this  definition,   any  security
authenticated  and  delivered  under Section 3.7 in exchange for or in lieu of a
mutilated,  destroyed,  lost or stolen  Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

         "Proceeding" has the meaning specified in Section 13.2.

         "Property  Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property  Trustee" in the related Trust Agreement,  solely in
its capacity as Property Trustee of

                                      - 7 -


<PAGE>



such Issuer Trust under such Trust Agreement and not in its individual capacity,
or its successor in interest in such capacity, or any successor property trustee
appointed as therein provided.

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

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

          "Registered   Exchange  Offer"  has  the  meaning   specified  in  the
Registration Rights Agreement.

         "Registration  Rights Agreement" means a Registration  Rights Agreement
among the Corporation,  an Issuer Trust, and one or more initial purchasers,  as
such  agreement may be amended,  modified or  supplemented  from time to time in
accordance  with the terms  thereof  relating to the exchange  and  registration
rights for capital securities of a Trust and a series of Securities.

         "Regular Record Date" for the interest  payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series,  the day that
is fifteen days next  preceding  such  Interest  Payment Date  (whether or not a
Business Day).

         "Regulation  D" means  Regulation  D under the  Securities  Act (or any
successor provision), as it may be amended from time to time.

          "Regulation S  Certificate"  has the meaning  specified in Section 3.6
hereof.

          "Regulation S Global Certificate" has the meaning specified in Section
3.6.

         "Regulation  S  Security"  means all  Securities  required  pursuant to
Section 3.7 to bear a Regulation S Legend.  Such term includes the  Regulation S
Global Certificate.

         "Responsible Officer", when used with respect to the Trustee, means the
chairman or any  vice-chairman  of the board of  directors,  the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee,  the president,  any vice president,  the secretary, any
assistant secretary,  the treasurer,  any assistant treasurer,  the cashier, any
assistant cashier,  any trust officer or assistant trust officer, the controller
or any  assistant  controller  or any other  officer of the Trustee  customarily
performing  functions  similar to those performed by any of the above designated
officers and also means, with respect to a particular  matter, any other officer
to whom such  matter is  referred  because of such  officer's  knowledge  of and
familiarity with the particular subject.

          "Restricted  Definitive  Securities"  has  the  meaning  specified  in
Section 3.3.

                                      - 8 -


<PAGE>




         "Restricted Global Security" has the meaning specified in Section 3.3.

         "Restricted Period" means the 40-day period following the last original
issue date of the Securities.

         "Restricted   Securities"   means  all  Securities,   including  Global
Securities,  for  which  is  required  pursuant  to  Section  2.8(c)  to  bear a
Restricted Securities Legend.

        "Restricted Securities Legend" has the meaning specified in Section 2.4.

         "Restricted   Security"  means  each  Security  required  to  bear  the
Restricted Securities Legend.

         "Rights  Plan"  means  a plan  of the  Corporation  providing  for  the
issuance  by the  Corporation  to all  holders  of its  common  stock of  rights
entitling the holders  thereof to subscribe for or purchase  shares of any class
or series of capital stock of the Corporation, which rights are (i) deemed to be
transferred  with such  shares  of such  common  stock  and (ii) also  issued in
respect  of future  issuances  of such  common  stock,  in each  case  until the
occurrence of a specified event or events.

         "Rule 144A" means Rule 144A under the  Securities Act (or any successor
provision), as it may be amended from time to time.

         "Rule 144A  Information"  shall be such information with respect to the
Corporation as is specified pursuant to Rule 144A(d)(4) under the Securities Act
or any successor provision thereto, in each case as amended from time to time.

         "Rule 144A Securities" has the meaning specified in Section 2.6.

         "Securities  Act"  means the  Securities  Act of 1933 or any  successor
statute thereto, in each case as amended from time to time.

          "Securities  Act Legend"  means a  Restricted  Securities  Legend or a
Regulation S Legend.

          "Securities  Register" and "Securities  Registrar" have the respective
meanings specified in Section 3.6.

          "Security" means any debt security  authenticated  and delivered under
this Indenture.

         "Senior  Indebtedness" means the principal of (and premium, if any) and
interest,  if any  (including  interest  accruing  on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceeding),  on
Debt of the Corporation, whether incurred on or prior to the date

                                      - 9 -


<PAGE>



of this Indenture or hereafter  incurred,  unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such  obligations are not superior in right of payment to the Securities or
to other Debt that is pari  passu  with,  or  subordinated  to, the  Securities,
provided,  however,  that Senior Indebtedness shall not be deemed to include (a)
any Debt of the  Corporation  that,  when  incurred  and without  respect to any
election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without
recourse  to the  Corporation,  (b) any  Debt of the  Corporation  to any of its
Subsidiaries,  (c) any Debt of the  Corporation to any Person who is an employee
of the Corporation and (d) any Securities.

          "Shelf Registration Statement" has the meaning assigned thereto in the
Registration Rights Agreement.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8.

         "Stated  Maturity",  when  used with  respect  to any  Security  or any
installment of principal thereof (or premium, if any) or interest (including any
Additional Interest) thereon,  means the date specified pursuant to the terms of
such  Security as the fixed date on which the principal of such Security or such
installment  of  principal  (or  premium,  if any) or  interest  (including  any
Additional  Interest)  is due and  payable,  as such  date may be  shortened  as
provided pursuant to the terms of such Security and this Indenture,  in the case
of the Stated Maturity of any Security,  and subject to the deferral of any such
date during any Extension Period, in the case of any instalment of interest.

         "Subsidiary"  means a  corporation  more  than  50% of the  outstanding
voting stock of which is owned, directly or indirectly, by the Corporation or by
one or more  other  Subsidiaries,  or by the  Corporation  and one or more other
Subsidiaries.  For purposes of this definition,  "voting stock" means stock that
ordinarily has voting power for the election of directors,  whether at all times
or only so long as no senior  class of stock has such voting  power by reason of
any contingency.

         "Successor  Security" of any  particular  Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security. For the purposes of this definition,  any Security
authenticated  and  delivered  under Section 3.7 in exchange for or in lieu of a
mutilated,  destroyed,  lost or stolen  Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

         "Tax  Event"  means the  receipt  by an Issuer  Trust of an  Opinion of
Counsel  experienced  in such  matters  to the effect  that,  as a result of any
amendment to, or change  (including any announced  proposed change) in, the laws
(or  any  regulations   thereunder)  of  the  United  States  or  any  political
subdivision  or  taxing  authority  thereof  or  therein,  or as a result of any
official  administrative  pronouncement  or judicial  decision  interpreting  or
applying  such laws or  regulations,  which  amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Capital Securities of such Issuer Trust, there

                                     - 10 -


<PAGE>



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

         "Trust  Agreement"  means,  with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that if
the Trust  Indenture  Act of 1939 is amended after such date,  "Trust  Indenture
Act" means the Trust Indenture Act of 1939 as so amended.

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

         "Trustee"  means  the  Person  named  as the  "Trustee"  in  the  first
paragraph of this instrument,  solely in its capacity as such Trustee and not in
its  individual  capacity,  until a  successor  Trustee  shall have  become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and,
if at any time  there  is more  than one such  Person,  "Trustee"  as used  with
respect to the  Securities  of any series shall mean the Trustee with respect to
Securities of that series.

         SECTION 1.2. Compliance Certificate and Opinions.

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

         Every  certificate  or  opinion  with  respect  to  compliance  with  a
condition  or  covenant   provided  for  in  this  Indenture   (other  than  the
certificates provided pursuant to Section 10.4) shall include:


                                     - 11 -


<PAGE>



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

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

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

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

         SECTION 1.3. Forms of Documents Delivered to Trustee.

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

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

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

         SECTION 1.4. Acts of Holders.

         (a) Any request,  demand,  authorization,  direction,  notice, consent,
waiver or other  action  provided by this  Indenture  to be given to or taken by
Holders  may  be  embodied  in and  evidenced  by one  or  more  instruments  of
substantially similar tenor signed by such Holders in person or by

                                     - 12 -


<PAGE>



an agent duly appointed in writing;  and, except as herein  otherwise  expressly
provided, such action shall become effective when such instrument or instruments
is or are delivered to the Trustee,  and, where it is hereby expressly required,
to the  Corporation.  Such  instrument or instruments  (and the action  embodied
therein and evidenced  thereby) are herein sometimes referred to as the "Act" of
the Holders signing such  instrument or  instruments.  Proof of execution of any
such  instrument or of a writing  appointing  any such agent shall be sufficient
for any purpose of this  Indenture  and (subject to Section 6.1)  conclusive  in
favor of the Trustee and the Corporation, if made in the manner provided in this
Section 1.4.

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

         (c) The  fact  and  date of the  execution  by any  Person  of any such
instrument or writing,  or the authority of the Person  executing the same,  may
also be proved in any other  manner that the  Trustee  deems  sufficient  and in
accordance with such reasonable rules as the Trustee may determine.

         (d) The  ownership  of  Securities  shall be proved by the  Securities
Register.

         (e) Any request,  demand,  authorization,  direction,  notice, consent,
waiver or other  action by the Holder of any  Security  shall bind every  future
Holder of the same  Security  and the Holder of every  Security  issued upon the
transfer  thereof  or in  exchange  therefor  or in lieu  thereof  in respect of
anything  done or  suffered  to be done by the  Trustee  or the  Corporation  in
reliance  thereon,  whether  or not  notation  of such  action is made upon such
Security.

         (f) The Corporation may set any day as a record date for the purpose of
determining  the Holders of  Outstanding  Securities  of any series  entitled to
give,  make or take  any  request,  demand,  authorization,  direction,  notice,
consent,  waiver or other action  provided or permitted by this  Indenture to be
given, made or taken by Holders of Securities of such series,  provided that the
Corporation  may not set a record date for, and the provisions of this paragraph
shall  not  apply  with  respect  to,  the  giving  or  making  of  any  notice,
declaration,  request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities  of the relevant  series on such record date,  and no other  Holders,
shall be  entitled  to take the  relevant  action,  whether or not such  Holders
remain  Holders  after such record date,  provided  that no such action shall be
effective  hereunder unless taken on or prior to the applicable  Expiration Date
by Holders of the requisite  principal amount of Outstanding  Securities of such
series on such record  date.  Nothing in this  paragraph  shall be  construed to
prevent the Corporation  from setting a new record date for any action for which
a record date has previously been set pursuant to this paragraph  (whereupon the
record date previously set shall  automatically and with no action by any Person
be canceled and of no effect), and nothing in this

                                     - 13 -


<PAGE>



paragraph  shall be construed to render  ineffective any action taken by Holders
of the  requisite  principal  amount of  Outstanding  Securities of the relevant
series on the date such action is taken.  Promptly  after any record date is set
pursuant to this paragraph,  the  Corporation,  at its own expense,  shall cause
notice of such record date,  the proposed  action by Holders and the  applicable
Expiration  Date to be given to the  Trustee  in writing  and to each  Holder of
Securities of the relevant series in the manner set forth in Section 1.6.

         The  Trustee  may set any  day as a  record  date  for the  purpose  of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default,  (ii) any  declaration  of
acceleration  referred  to in  Section  5.2,  (iii)  any  request  to  institute
proceedings  referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12,  in each case with respect to  Securities  of such series.  If any
record  date is set  pursuant  to this  paragraph,  the  Holders of  Outstanding
Securities of such series on such record date,  and no other  Holders,  shall be
entitled to join in such notice, declaration,  request or direction,  whether or
not such Holders  remain  Holders after such record date,  provided that no such
action shall be effective  hereunder  unless taken on or prior to the applicable
Expiration  Date by Holders of the  requisite  principal  amount of  Outstanding
Securities of such series on such record date.  Nothing in this paragraph  shall
be  construed  to prevent  the  Trustee  from  setting a new record date for any
action  for  which a  record  date has  previously  been  set  pursuant  to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any  Person be  canceled  and of no  effect),  and  nothing in this
paragraph  shall be construed to render  ineffective any action taken by Holders
of the  requisite  principal  amount of  Outstanding  Securities of the relevant
series on the date such action is taken.  Promptly  after any record date is set
pursuant to this paragraph,  the Trustee,  at the Corporation's  expense,  shall
cause  notice of such  record  date,  the  proposed  action by  Holders  and the
applicable Expiration Date to be given to the Corporation in writing and to each
Holder of Securities  of the relevant  series in the manner set forth in Section
1.6.

         With  respect to any record date set  pursuant to this Section 1.4, the
party hereto that sets such record date may designate any day as the "Expiration
Date" and from time to time may change  the  Expiration  Date to any  earlier or
later day,  provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing,  and
to each Holder of Securities  of the relevant  series in the manner set forth in
Section 1.6, on or prior to the existing  Expiration Date. If an Expiration Date
is not  designated  with respect to any record date set pursuant to this Section
1.4,  the  party  hereto  that set such  record  date  shall be  deemed  to have
initially designated the 180th day after such record date as the Expiration Date
with  respect  thereto,  subject to its right to change the  Expiration  Date as
provided in this paragraph.  Notwithstanding  the foregoing,  no Expiration Date
shall be later than the 180th day after the applicable record date.

         (g) Without limiting the foregoing, a Holder entitled hereunder to take
any action  hereunder  with  regard to any  particular  Security  may do so with
regard to all or any part of the principal  amount of such Security or by one or
more duly appointed  agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.

                                     - 14 -


<PAGE>




         SECTION 1.5.  Notices, Etc. to Trustee and Corporation.

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

                  (1)  the  Trustee  by  any  Holder,   any  holder  of  Capital
         Securities or the  Corporation  shall be  sufficient  for every purpose
         hereunder if made, given,  furnished or filed in writing to or with the
         Trustee at its Corporate Trust office, or

                  (2) the  Corporation by the Trustee,  any Holder or any holder
         of Capital  Securities shall be sufficient for every purpose (except as
         otherwise  provided in Section 5.1) hereunder if in writing and mailed,
         first-class postage prepaid, to the Corporation  addressed to it at the
         address of its  principal  office  specified in the first  paragraph of
         this Indenture or at any other address previously  furnished in writing
         to the Trustee by the Corporation.

         SECTION 1.6.  Notice to Holders; Waiver.

         Where this Indenture  provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly  provided)
if in writing and mailed,  first-class  postage prepaid, to each Holder affected
by such event,  at the  address of such  Holder as it appears in the  Securities
Register,  not later than the latest  date,  and not earlier  than the  earliest
date,  prescribed for the giving of such notice. If, by reason of the suspension
of or  irregularities  in regular mail service or for any other reason, it shall
be impossible or  impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the  relevant  Securities,  then any  manner of giving  such  notice as shall be
satisfactory  to the Trustee  shall be deemed to be a sufficient  giving of such
notice.  In any case  where  notice to  Holders  is given by mail,  neither  the
failure to mail such  notice,  nor any  defect in any  notice so mailed,  to any
particular  Holder shall affect the  sufficiency  of such notice with respect to
other  Holders.  Where this  Indenture  provides for notice in any manner,  such
notice may be waived in writing by the Person  entitled to receive  such notice,
either  before or after the event,  and such waiver shall be the  equivalent  of
such notice.  Waivers of notice by Holders shall be filed with the Trustee,  but
such filing  shall not be a condition  precedent  to the  validity of any action
taken in reliance upon such waiver.

         SECTION 1.7.  Conflict with Trust Indenture Act.

         Prior to the time a  Registration  Statement  with respect to the first
relevant series of Securities  shall be declared  effective as contemplated by a
Registration  Rights Agreement,  the Trust Indenture Act shall apply as a matter
of contract to this Indenture for purposes of  interpretation,  construction and
defining  the  rights  and  obligations  hereunder,   and  this  Indenture,  the
Corporation  and the  Trustee  shall be  deemed  for all  purposes  hereof to be
subject to and governed by the Trust  Indenture  Act to the same extent as would
be the case if this Indenture

                                     - 15 -


<PAGE>



were  qualified  under  that Act on the date  hereof.  Upon such a  Registration
Statement  being declared  effective,  this  Agreement  should be subject to the
Trust Indenture Act. Except as otherwise  expressly  provided herein,  if and to
the extent that any provision of this Indenture  limits,  qualifies or conflicts
with the duties imposed by any of Sections 310 to 317,  inclusive,  of the Trust
Indenture Act through  operation of Section 318(c) thereof,  such imposed duties
shall control.

         SECTION 1.8. Effect of Headings and Table of Contents.

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

         SECTION 1.9. Successors and Assigns.

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

         SECTION 1.10. Separability Clause.

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

         SECTION 1.11. Benefits of Indenture.

         Nothing in this  Indenture  or in the  Securities,  express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness,  the Holders of the Securities and,
to the extent expressly  provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2 the holders of Capital  Securities,  any  benefit or any legal or  equitable
right, remedy or claim under this Indenture.

         SECTION 1.12. Governing Law.

         THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         SECTION 1.13.  Non-Business Days.

         If any Interest Payment Date,  Redemption Date or Stated Maturity shall
not be a  Business  Day,  then  (notwithstanding  any  other  provision  of this
Indenture or the  Securities)  payment of principal of (and premium,  if any) or
interest (including any Additional Interest) or other amounts in respect of such
Security need not be made on such date,  but may be made on the next  succeeding
Business  Day (and no  interest  shall  accrue in respect of the  amounts  whose
payment is so delayed for the period from and after such Interest  Payment Date,
Redemption Date or

                                     - 16 -


<PAGE>



Stated  Maturity,  as the case may be, until such next succeeding  Business Day)
except that, if such Business Day falls in the next  succeeding  calendar  year,
such payment shall be made on the  immediately  preceding  Business Day (in each
case with the same force and effect as if made on the  Interest  Payment Date or
Redemption Date or at the Stated Maturity).


                                   ARTICLE II

                                 SECURITY FORMS

         SECTION 2.1. Forms Generally.

         The  Securities  of  each  series  and  the  Trustee's  certificate  of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be  established  by or  pursuant to a Board
Resolution or in one or more indentures  supplemental  hereto, in each case with
such appropriate  insertions,  omissions,  substitutions and other variations as
are required or permitted by this  Indenture and may have such letters,  numbers
or other marks of identification and such legends or endorsements placed thereon
as may be  required  to  comply  with  applicable  tax laws or the  rules of any
securities  exchange or as may,  consistently  herewith,  be  determined  by the
officers  executing  such  securities,  as evidenced  by their  execution of the
Securities.  If the form of  Securities of any series is  established  by action
taken pursuant to a Board  Resolution,  a copy of an appropriate  record of such
action shall be certified by the Corporate  Secretary or an Assistant  Secretary
of the  Corporation  and delivered to the Trustee at or prior to the delivery of
the  Corporation  Order   contemplated  by  Section  3.3  with  respect  to  the
authentication and delivery of such Securities.

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

         SECTION 2.2. Form of Face of Security.

                                 HSB GROUP, INC.
                         Junior Subordinated Debentures

No. _____________                                                    $__________

         HSB GROUP,  INC., a  Connecticut  corporation  (hereinafter  called the
"Corporation",  which term  includes any  successor  Person under the  Indenture
hereinafter  referred  to),  for  value  received,  hereby  promises  to  pay to
_______________,  or registered assigns, the principal sum of __________ Dollars
on _________, ____ [if the Security is a Global Security, then insert, if

                                     - 17 -


<PAGE>



applicable--,  or such other principal amount  represented  hereby as may be set
forth in the  records of the  Securities  Registrar  hereinafter  referred to in
accordance  with the Indenture] [; provided that the Corporation may shorten the
Stated  Maturity of the  principal  of this  Security to a date not earlier than
__________,   in  the  circumstances  described  on  the  reverse  hereof].  The
Corporation  further  promises  to pay  interest  on  said  principal  sum  from
___________,  ____ or from  the  most  recent  Interest  Payment  Date to  which
interest has been paid or duly provided for, [monthly][quarterly][semi-annually]
[if applicable,  insert-(subject to deferral as set forth herein)] in arrears on
[insert applicable  Interest Payment Dates] of each year,  commencing  ________,
____,  at the rate of ___%  per  annum,  [if  applicable  insert--together  with
Additional Sums, if any, as provided in Section 10.6 of the Indenture] until the
principal  hereof is paid or duly provided for or made available for payment [if
applicable,   insert--  ;  provided  that  any  overdue  principal,  premium  or
Additional  Sums and any overdue  installment of interest shall bear  Additional
Interest  at the rate of ___% per annum (to the extent  that the payment of such
interest       shall       be       legally       enforceable),       compounded
[monthly][quarterly][semi-annually],  from the dates such  amounts are due until
they are paid or made available for payment,  and such interest shall be payable
on  demand].  The amount of  interest  payable  for any period  less than a full
interest  period  shall be  computed  on the basis of a  360-day  year of twelve
30-day months and the actual days elapsed in a partial month in such period. The
amount of interest  payable for any full  interest  period  shall be computed by
dividing the  applicable  rate per annum by  [twelve/four/two].  The interest so
payable,  and punctually paid or duly provided for, on any Interest Payment Date
will,  as  provided in the  Indenture,  be paid to the Person in whose name this
Security (or one or more  Predecessor  Securities) is registered at the close of
business on the Regular Record Date for such interest installment [if applicable
insert--,  which shall be the  [____________ or ____________]  (whether or not a
Business Day), as the case may be, next  preceding such Interest  Payment Date].
Any such  interest not so punctually  paid or duly provided for shall  forthwith
cease to be payable to the Holder on such Regular  Record Date and may either be
paid to the  Person in whose  name  this  Security  (or one or more  Predecessor
Securities)  is registered at the close of business on a Special Record Date for
the  payment  of such  Defaulted  Interest  to be fixed by the  Trustee,  notice
whereof  shall be given to Holders of Securities of this series not less than 10
days  prior to such  Special  Record  Date,  or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities  exchange
on which the  Securities  of this series may be listed,  and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.

         [If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Corporation shall have the right, at any time during the term
of this  Security,  from time to time to defer the  payment of  interest on this
Security for up to ____ consecutive  [monthly][quarterly][semi-annual]  interest
payment  periods  with  respect  to each  deferral  period  (each an  "Extension
Period")  [if  applicable,   insert--,   during  which  Extension   Periods  the
Corporation  shall have the right to make  partial  payments  of interest on any
Interest  Payment Date, and] at the end of which the  Corporation  shall pay all
interest then accrued and unpaid (including any Additional Interest, as provided
below);  provided,  however,  that no Extension  Period shall extend  beyond the
Stated  Maturity of the  principal of this  Security [if Stated  Maturity can be
shortened  or  extended,  insert--,  as then in effect,]  and no such  Extension
Period may end

                                     - 18 -


<PAGE>



on a date other than an Interest  Payment Date; and provided  further,  however,
that during any such Extension Period,  the Corporation shall not (i) declare or
pay any dividends or distributions  on, or redeem,  purchase,  acquire or make a
liquidation payment with respect to, any of the Corporation's  capital stock, or
(ii) make any payment of  principal  of or  interest  or premium,  if any, on or
repay,  repurchase or redeem any debt  securities of the  Corporation  that rank
pari passu in all respects  with or junior in interest to this Security or (iii)
make any guarantee  payments with respect to any guarantee by the Corporation of
the debt securities of any subsidiary of the Corporation if such guarantee ranks
pari  passu  with or  junior  in  interest  to the  Securities  (other  than (a)
dividends  or  distributions  in  common  stock  of  the  Corporation,  (b)  any
declaration  of  a  dividend  in  connection  with  the   implementation   of  a
stockholders'  rights plan,  or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments  under the  Guarantee  and (d) purchases of common stock related to the
issuance  of  common  stock or  rights  under  any of the  Corporation's  or its
subsidiaries' benefit plans for their directors,  officers or employees).  Prior
to the  termination of any such Extension  Period,  the  Corporation may further
defer the payment of interest,  provided  that no Extension  Period shall exceed
____  consecutive  [monthly][quarterly][semi-annual]  interest  payment periods,
extend beyond the Stated  Maturity of the principal of this Security or end on a
date other than an  Interest  Payment  Date.  Upon the  termination  of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional  Interest then due on any Interest  Payment Date, the Corporation may
elect to begin a new  Extension  Period,  subject  to the above  conditions.  No
interest shall be due and payable during an Extension Period,  except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension shall bear Additional Interest (to the extent that
the payment of such interest shall be legally  enforceable) at the rate of ____%
per annum, compounded  [monthly][quarterly][semi-annually] and calculated as set
forth in the first  paragraph of this Security,  from the dates on which amounts
would  otherwise  have been due and  payable  until paid or made  available  for
payment.  The Corporation shall give the Holder of this Security and the Trustee
notice of its election to begin any  Extension  Period at least one Business Day
prior to the next  succeeding  Interest  Payment Date on which  interest on this
Security  would be payable but for such deferral [if  applicable,  insert--or so
long as such Securities are held by [insert name of applicable Issuer Trust], at
least one Business Day prior to the earlier of (i) the next  succeeding  date on
which  Distributions  on the Capital  Securities  of such Issuer  Trust would be
payable but for such deferral,  and (ii) the date on which the Property  Trustee
of such  Issuer  Trust is  required  to give  notice to holders of such  Capital
Securities of the record date or the date such Distributions are payable].

         Payment of the principal of (and premium,  if any) and interest on this
Security will be made at the office or agency of the Corporation  maintained for
that  purpose in [insert  Place of  Payment],  in such coin or  currency  of the
United  States of America as at the time of payment is legal  tender for payment
of public and private debts [if applicable, insert--; provided, however, that at
the  option of the  Corporation  payment  of  interest  may be made (i) by check
mailed to the  address of the Person  entitled  thereto  as such  address  shall
appear in the  Securities  Register,  or (ii) by wire  transfer  in  immediately
available  funds at such place and to such account as may be  designated  by the
Person entitled thereto as specified in the Securities Register].

                                     - 19 -


<PAGE>




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

         Reference is hereby made to the further provisions of this Security set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as if set forth at this place.

         Unless the  certificate of  authentication  hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall  not be  entitled  to any  benefit  under  the  Indenture  or be  valid or
obligatory for any purpose.

         IN WITNESS  WHEREOF,  the  Corporation has caused this instrument to be
duly executed under its corporate seal.

                                          HSB GROUP, INC.


                                          By:______________________
                                             Name:
                                             Title:

Attest:

_____________________________________________
[Corporate Secretary or Assistant Secretary]

         SECTION 2.3. Form of Reverse of Security.

         This  Security is one of a duly  authorized  issue of securities of the
Corporation (herein called the "Securities"),  issued and to be issued in one or
more series under the Junior Subordinated  Indenture,  dated as of July 15, 1997
(herein called the "Indenture"),  between the Corporation and The First National
Bank of Chicago,  as Trustee  (herein called the "Trustee",  which term includes
any  successor  trustee  under  the  Indenture),  to  which  Indenture  and  all
indentures  supplemental thereto reference is hereby made for a statement of the
respective rights,  limitations of rights,  duties and immunities  thereunder of
the Corporation, the Trustee, the holders of Senior Indebtedness and the Holders
of the Securities, and of the terms upon which the

                                     - 20 -


<PAGE>



Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof [if applicable, insert--, limited in
aggregate principal amount to
$ -----------].

         All terms used in this  Security  that are defined in the Indenture [if
applicable,  insert--or in the Amended and Restated Trust Agreement, dated as of
July 15,  1997 (as  modified,  amended or  supplemented  from time to time,  the
"Trust  Agreement"),  relating to [insert  name of Issuer  Trust]  (the  "Issuer
Trust") among the Corporation,  as Depositor, the Trustees named therein and the
Holders  from time to time of the Trust  Securities  issued  pursuant  thereto,]
shall  have the  meanings  assigned  to them in the  Indenture  [if  applicable,
insert--or the Trust Agreement, as the case may be].

         [If applicable, insert--The Corporation may at any time, at its option,
on or after _______, __ and subject to the terms and conditions of Article XI of
the Indenture, redeem this Security in whole at any time or in part from time to
time,  at a  Redemption  Price  equal to 100% of the  principal  amount  hereof,
together,  in the  case  of any  such  redemption,  with  accrued  interest  [if
applicable,  insert-- (including any Additional  Interest)] to but excluding the
date fixed for redemption.]

         [If applicable, insert--In addition, upon the occurrence and during the
continuation of a Tax Event in respect of the Issuer Trust, the Corporation may,
at its  option,  at any time  within 90 days of the  occurrence  and  during the
continuation  of such Tax Event redeem this Security,  in whole but not in part,
subject  to the  terms and  conditions  of  Article  XI of the  Indenture,  at a
Redemption Price equal to [insert formula].

         [If the Security is subject to redemption of any kind,  insert--In  the
event of  redemption of this Security in part only, a new Security or Securities
of this series for the  unredeemed  portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]

         The Indenture contains provisions for satisfaction and discharge of the
entire  indebtedness of this Security upon  compliance by the  Corporation  with
certain conditions set forth in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
Corporation  and the Trustee at any time to enter into a supplemental  indenture
or  indentures  for the  purpose  of  modifying  in any  manner  the  rights and
obligations of the Corporation  and of the Holders of the  Securities,  with the
consent of the  Holders of not less than a majority in  principal  amount of the
Outstanding  Securities  of each  series  to be  affected  by such  supplemental
indenture.   The  Indenture  also  contains  provisions  permitting  Holders  of
specified  percentages  in principal  amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Corporation with certain  provisions of the Indenture
and certain past defaults under the Indenture and their  consequences.  Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon  such  Holder  and upon all  future  Holders  of this  Security  and of any
Security issued upon the registration of transfer hereof

                                     - 21 -


<PAGE>



or in  exchange  herefor  or in lieu  hereof,  whether or not  notation  of such
consent or waiver is made upon this Security.

         [If the Security is not a Discount Security, insert--As provided in and
subject to the provisions of the Indenture,  if an Event of Default with respect
to  the  Securities  of  this  series  at the  time  Outstanding  occurs  and is
continuing,  then and in every such case the  Trustee or the Holders of not less
than 25% in aggregate  principal  amount of the  Outstanding  Securities of this
series may declare the  principal  amount of all the  Outstanding  Securities of
this  series to be due and  payable  immediately,  by a notice in writing to the
Corporation  (and to the Trustee if given by Holders) [if applicable,  insert--,
provided that, if upon an Event of Default,  the Trustee or such Holders fail to
declare the  principal of all the  Outstanding  Securities  of this series to be
immediately  due  and  payable,  the  holders  of  at  least  25%  in  aggregate
Liquidation  Amount of the Capital  Securities then  Outstanding  shall have the
right to make such declaration by a notice in writing to the Corporation and the
Trustee];  and  upon any  such  declaration  the  principal  of and the  accrued
interest  (including  any  Additional  Interest) on all the  Securities  of this
series shall become  immediately  due and payable,  provided that the payment of
such  principal  and  interest  (including  any  Additional  Interest)  on  such
Securities  shall remain  subordinated to the extent provided in Article XIII of
the Indenture.]

         [If the  Security is a Discount  Security,  insert--As  provided in and
subject to the provisions of the Indenture,  if an Event of Default with respect
to  the  Securities  of  this  series  at the  time  Outstanding  occurs  and is
continuing,  then and in every such case the  Trustee or the Holders of not less
than 25% in aggregate  principal  amount of the  Outstanding  Securities of this
series may declare an amount of principal of the Outstanding  Securities of this
series  to be due  and  payable  immediately,  by a  notice  in  writing  to the
Corporation  (and to the Trustee if given by Holders) [if applicable,  insert--,
provided that, if upon an Event of Default,  the Trustee or such Holders fail to
declare such principal amount of the Outstanding Securities of this series to be
immediately  due  and  payable,  the  holders  of  at  least  25%  in  aggregate
Liquidation  Amount of the Capital  Securities then  Outstanding  shall have the
right to make such declaration by a notice in writing to the Corporation and the
Trustee].  The principal amount payable upon such acceleration shall be equal to
[insert  formula for determining the amount].  Upon any such  declaration,  such
amount of the principal of and the accrued  interest  (including  any Additional
Interest) on such Securities shall become immediately due and payable,  provided
that the  payment of such  principal  and  interest  (including  any  Additional
Interest) on such Securities shall remain subordinated to the extent provided in
Article  XIII of the  Indenture.  Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal,  premium
and interest (in each case to the extent that the payment of such interest shall
be legally enforceable),  all of the Corporation's obligations in respect of the
payment of the principal of and premium and  interest,  if any, on this Security
shall terminate.]

         No reference  herein to the Indenture and no provision of this Security
or of the Indenture  shall alter or impair the  obligation  of the  Corporation,
which is absolute and  unconditional,  to pay the principal of (and premium,  if
any) and interest [if applicable, insert--(including any

                                     - 22 -


<PAGE>



Additional  Interest)] on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth,  the  transfer of this  Security  is  registrable  in the  Securities
Register,  upon surrender of this Security for  registration  of transfer at the
office  or  agency  of the  Corporation  maintained  under  Section  10.2 of the
Indenture  for such  purpose,  duly  endorsed  by, or  accompanied  by a written
instrument  of  transfer  in  form  satisfactory  to  the  Corporation  and  the
Securities  Registrar  duly  executed  by,  the Holder  hereof or such  Holder's
attorney duly authorized in writing, and thereupon one or more new Securities of
this  series,  of like  tenor,  of  authorized  denominations  and for the  same
aggregate  principal  amount,  will be issued to the  designated  transferee  or
transferees.

         The  Securities  of this series are issuable  only in  registered  form
without coupons in denominations  of $1,000 and any integral  multiple of $1,000
in  excess  thereof.  As  provided  in the  Indenture  and  subject  to  certain
limitations therein set forth,  Securities of this series are exchangeable for a
like aggregate  principal  amount of Securities of this series and of like tenor
of a different authorized denomination,  as requested by the Holder surrendering
the same.

         No service charge shall be made for any such  registration  of transfer
or exchange,  but the  Corporation  may require  payment of a sum  sufficient to
cover any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Security for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this  Security is  registered as the owner hereof
for all  purposes,  whether or not this  Security  be  overdue,  and neither the
Corporation,  the  Trustee nor any such agent shall be affected by notice to the
contrary.

         The Corporation and, by its acceptance of this Security or a beneficial
interest  therein,  the Holder of, and any  Person  that  acquires a  beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.

         THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.


         SECTION 2.4.  Restrictive Legends.

                  (a) Restricted  Global  Securities  and Restricted  Definitive
Securities shall bear the following legend (the "Restricted  Securities Legend")
unless the Corporation determines otherwise in accordance with applicable law:


                                     - 23 -


<PAGE>



                  "THE JUNIOR SUBORDINATED  DEBENTURES EVIDENCED HEREBY HAVE NOT
         BEEN REGISTERED UNDER THE U.S.  SECURITIES ACT OF 1933 (THE "SECURITIES
         ACT") AND MAY NOT BE OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED
         EXCEPT  (A)  BY  ANY   INITIAL   INVESTOR   THAT  IS  NOT  A  QUALIFIED
         INSTITUTIONAL   BUYER  WITHIN  THE  MEANING  OF  RULE  144A  UNDER  THE
         SECURITIES ACT, (1) TO A PERSON WHO THE TRANSFEROR  REASONABLY BELIEVES
         IS A QUALIFIED INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE
         ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
         REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE  TRANSACTION  MEETING THE
         REQUIREMENTS  OF  RULE  903 OR  RULE  904 OF  REGULATION  S  UNDER  THE
         SECURITIES  ACT, (3) PURSUANT TO AN EXEMPTION FROM  REGISTRATION  UNDER
         THE  SECURITIES  ACT PROVIDED BY RULE 144  THEREUNDER (IF AVAILABLE) OR
         (4)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  OR (B) BY ANY
         INITIAL  INVESTOR  THAT IS A  QUALIFIED  INSTITUTIONAL  BUYER OR BY ANY
         SUBSEQUENT INVESTOR,  (1) AS DESCRIBED IN CLAUSE (A) ABOVE OR (2) TO AN
         INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
         (2),  (3) OR (7) OF  REGULATION  D IN A  TRANSACTION  EXEMPT  FROM  THE
         REGISTRATION  REQUIREMENT  OF THE  SECURITIES ACT AND, IN EACH CASE (A)
         AND (B),  IN  COMPLIANCE  WITH ALL  APPLICABLE  SECURITIES  LAWS OF THE
         STATES OF THE UNITED  STATES AND OTHER  JURISDICTIONS.  AS DESCRIBED IN
         CLAUSE (A) ABOVE OR (2) TO AN  INSTITUTIONAL  ACCREDITED  INVESTOR WITH
         THE MEANING OF RULE  501(A)(1),  (2),  (3) OR (7) OF  REGULATION D IN A
         TRANSACTION EXEMPT FROM REGISTRATION REQUIREMENT OF SECURITIES OWNED BY
         AN INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT
         BE  HELD IN  BOOK-  ENTRY  FORM  AND  MAY  NOT BE  TRANSFERRED  WITHOUT
         CERTIFICATION   THAT  THE   TRANSFER   COMPLIES   WITH  THE   FOREGOING
         RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW."

         SECTION 2.5.  Additional Provisions Required in Global Security.

         Unless  otherwise  specified as contemplated by Section 3.1, any Global
Security  issued  hereunder  shall,  in addition to the provisions  contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:

         THIS SECURITY IS A GLOBAL  SECURITY WITHIN THE MEANING OF THE INDENTURE
         HEREINAFTER  REFERRED TO AND IS  REGISTERED IN THE NAME OF A DEPOSITARY
         OR A  NOMINEE  OF A  DEPOSITARY.  THIS  SECURITY  IS  EXCHANGEABLE  FOR
         SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
         OR ITS  NOMINEE  ONLY IN THE  LIMITED  CIRCUMSTANCES  DESCRIBED  IN THE
         INDENTURE  AND  MAY  NOT  BE  TRANSFERRED  EXCEPT  AS A  WHOLE  BY  THE
         DEPOSITARY  TO A  NOMINEE  OF THE  DEPOSITARY  OR BY A  NOMINEE  OF THE
         DEPOSITARY  TO THE  DEPOSITARY  OR ANOTHER  NOMINEE OF THE  DEPOSITARY,
         EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


                                     - 24 -


<PAGE>



         SECTION 2.6. Form of Trustee's Certificate of Authentication.

         The Trustee's  certificates of authentication shall be in substantially
the following form:

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

Dated:

                                                  ------------
                                                  as Trustee

                                                  By:______________________
                                                  Authorized Officer


                                   ARTICLE III

                                 THE SECURITIES

         SECTION 3.1. Title and Terms.

         The aggregate  principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.

         The  Securities  may be issued in one or more  series.  There  shall be
established in or pursuant to a Board  Resolution  and,  subject to Section 3.3,
set forth or determined in the manner provided in an Officers'  Certificate,  or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of a series:

                  (a) the title of the securities of such series,  which shall
         distinguish   the   Securities  of  the  series  from  all  other
         Securities;

                  (b) the limit, if any, upon the aggregate  principal amount of
         the Securities of such series that may be  authenticated  and delivered
         under this Indenture (except for Securities authenticated and delivered
         upon  registration  of transfer of, or in exchange  for, or in lieu of,
         other  Securities of the series pursuant to Section 3.4, 3.5, 3.6, 3.7,
         9.6 or 11.6 and except for any  Securities  that,  pursuant  to Section
         3.3,  are  deemed  never  to  have  been  authenticated  and  delivered
         hereunder);  provided, however, that the authorized aggregate principal
         amount of such  series may be  increased  above such  amount by a Board
         Resolution to such effect;

                  (c) the Person to whom any interest  (including any Additional
         Interest) on a Security of the series  shall be payable,  if other than
         the Person in whose name that

                                     - 25 -


<PAGE>



          security (or one or more Predecessor  Securities) is registered at the
          close of business on the Regular Record Date for such interest;

                  (d) the Stated  Maturity or  Maturities on which the principal
         of  the  Securities  of  such  series  is  payable  or  the  method  of
         determination  thereof,  and any dates on which or circumstances  under
         which,  the  Corporation  shall have the right to shorten  such  Stated
         Maturity or Maturities;

                  (e) the rate or rates, if any, at which the Securities of such
         series  shall  bear  interest,  if any,  the rate or rates at which and
         extent  to which  Additional  Interest,  if any,  shall be  payable  in
         respect of any Securities of such series,  the date or dates from which
         any such interest or  Additional  Interest  shall accrue,  the Interest
         Payment  Dates on which  such  interest  shall be  payable,  the right,
         pursuant to Section  3.12 or as  otherwise  set forth  therein,  of the
         Corporation  to defer or  extend  an  Interest  Payment  Date,  and the
         Regular  Record Date for the interest  payable on any Interest  Payment
         Date or the method by which any of the foregoing shall be determined;

                  (f) the place or places where the  principal of (and  premium,
         if  any)  and  interest  (including  any  Additional  Interest)  on the
         Securities  of such series shall be payable,  the place or places where
         the  Securities  of such series may be presented  for  registration  of
         transfer or exchange,  any  restrictions  that may be applicable to any
         such  transfer or exchange in addition to or in lieu of those set forth
         herein,  and the place or places  where  notices and demands to or upon
         the  Corporation  in respect of the  Securities  of such  series may be
         made;

                  (g) the  period  or  periods  within  or the  date or dates on
         which,  the price or prices at which and the terms and conditions  upon
         which, if any, the Securities of such series may be redeemed,  in whole
         or in part,  at the option of the  Corporation,  and if other than by a
         Board  Resolution,  the manner in which any election by the Corporation
         to redeem such Securities shall be evidenced;

                  (h) the obligation or the right, if any, of the Corporation to
         redeem, repay or purchase the Securities of such series pursuant to any
         sinking fund, amortization or analogous provisions, or at the option of
         a Holder thereof,  and the period or periods within which, the price or
         prices at which, the currency or currencies (including currency unit or
         units)  in  which  and  the  other  terms  and  conditions  upon  which
         Securities  of the series shall be redeemed,  repaid or  purchased,  in
         whole or in part, pursuant to such obligation;

                  (i) the  denominations  in which any Securities of such series
         shall be  issuable,  if other  than  denominations  of  $1,000  and any
         integral multiple thereof;

                  (j)  if  other  than  Dollars,   the  currency  or  currencies
         (including  any currency  unit or units) in which the principal of (and
         premium, if any) and interest (including any

                                     - 26 -


<PAGE>



         Additional  Interest) on the Securities of the series shall be payable,
         or in which the Securities of the series shall be  denominated  and the
         manner of determining the equivalent thereof in Dollars for purposes of
         the definition of Outstanding;

                  (k) the additions,  modifications  or deletions,  if any, in
         the covenants of the Corporation set forth herein with respect to
         the Securities of such series;

                  (l) if other than the principal amount thereof, the portion of
         the principal amount of Securities of such series that shall be payable
         upon declaration of acceleration of the Maturity thereof;

                  (m) if the principal  amount payable at the Stated Maturity of
         any Securities of the series will not be  determinable as of any one or
         more dates  prior to the  Stated  Maturity,  the  amount  that shall be
         deemed to be the  principal  amount of such  Securities  as of any such
         date for any purpose  thereunder or hereunder,  including the principal
         amount  thereof that shall be due and payable  upon any Maturity  other
         than the Stated  Maturity or that shall be deemed to be  Outstanding as
         of any date prior to the Stated  Maturity  (or,  in any such case,  the
         manner in which such amount deemed to be the principal  amount shall be
         determined);

                  (n) the additions or changes,  if any, to this  Indenture with
         respect  to the  Securities  of such  series as shall be  necessary  to
         permit or facilitate  the issuance of the  Securities of such series in
         bearer form,  registrable or not registrable as to principal,  and with
         or without interest coupons;

                  (o) any  index or  indices  used to  determine  the  amount of
         payments of principal of and premium, if any, on the Securities of such
         series or the manner in which such amounts will be determined;

                  (p) if applicable,  that any Securities of the series shall be
         issuable  in  whole  or in  part  in the  form  of one or  more  Global
         Securities  and, in such case,  the  respective  Depositories  for such
         Global  Securities,  the form of any  legend or  legends  that shall be
         borne by any such Global Security in addition to or in lieu of that set
         forth in Section 2.4 and any circumstances in addition to or in lieu of
         those set forth in Section 3.5 in which any such Global Security may be
         exchanged  in  whole  or in part  for  Securities  registered,  and any
         transfer of such Global Security in whole or in part may be registered,
         in the name or names of  Persons  other  than the  Depositary  for such
         Global Security or a nominee thereof;

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

                  (r) the terms of any right to convert or  exchange  Securities
         of  such  series  into  any  other   securities   or  property  of  the
         Corporation, and the additions or changes, if any, to this

                                     - 27 -


<PAGE>



          Indenture  with respect to the  Securities of such series to permit or
          facilitate such conversion or exchange;

                  (s) if such  Securities are to be issued to an Issuer Trust,
          the form or forms  of the  Trust  Agreement  and  Guarantee  Agreement
          relating thereto;

                  (t) if other than as set forth herein, the relative degree, if
         any,  to which the  Securities  of the series  shall be senior to or be
         subordinated to other series of Securities in right of payment, whether
         such other series of Securities are Outstanding or not;

                  (u) the additions,  modifications or deletions, if any, in the
         Events of Default  that apply to any  Securities  of the series and any
         change in the right of the  Trustee  or the  requisite  Holders of such
         Securities  to declare  the  principal  amount  thereof due and payable
         pursuant to Section 5.2 and

                  (v) any other terms of the  Securities  of such series  (which
         terms shall not be inconsistent  with the provisions of this Indenture,
         except as permitted by Section 9.1(6)).

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

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

         The  Securities  shall be  subordinated  in right of  payment to Senior
Indebtedness as provided in Article XIII.

         SECTION 3.2. Denominations.

         The  Securities  of each series  shall be in  registered  form  without
coupons  and shall be  issuable  in  denominations  of $1,000  and any  integral
multiple thereof, unless otherwise specified as contemplated by Section 3.1.

         SECTION 3.3.  Execution, Authentication and Dating.

         (a)  Execution,  Authentication  and Dating  generally.  The Securities
shall be executed on behalf of the Corporation by its Chief  Executive  Officer,
its President or one of its Senior Vice Presidents and attested by its Corporate
Secretary or one of its  Assistant  Secretaries.  The  signature of any of these
officers on the Securities may be manual or facsimile.


                                     - 28 -


<PAGE>



         Securities  bearing the manual or facsimile  signatures of  individuals
who were at any time the  proper  officers  of the  Corporation  shall  bind the
Corporation, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such  Securities.  At any time and from
time to time after the execution and delivery of this Indenture, the Corporation
may deliver  Securities of any series executed by the Corporation to the Trustee
for authentication, together with a Corporation Order for the authentication and
delivery of such Securities,  and the Trustee in accordance with the Corporation
Order shall  authenticate and deliver such  Securities.  If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in  authenticating  such
Securities,  and accepting the additional  responsibilities under this Indenture
in relation to such  Securities,  the Trustee shall be entitled to receive,  and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,

                  (1) if the form of such Securities has been  established by or
         pursuant to Board  Resolution  as permitted  by Section 2.1,  that such
         form has been  established  in conformity  with the  provisions of this
         Indenture;

                  (2) if the terms of such Securities  have been  established by
         or pursuant to Board  Resolution as permitted by Section 3.1, that such
         terms have been  established in conformity  with the provisions of this
         Indenture; and

                  (3) that such Securities,  when authenticated and delivered by
         the Trustee and issued by the  Corporation in the manner and subject to
         any conditions  specified in such Opinion of Counsel,  will  constitute
         valid and legally binding  obligations of the  Corporation,  subject to
         bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
         and similar  laws of general  applicability  relating  to or  affecting
         creditors' rights and to general equity principles.

If such  form or terms  have  been so  established,  the  Trustee  shall  not be
required to  authenticate  such  Securities  if the issuance of such  Securities
pursuant to this  Indenture  will  affect the  Trustee's  own rights,  duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.

         Notwithstanding  the  provisions  of Section  3.1 and of the  preceding
paragraphs, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers'  Certificate  otherwise
required pursuant to Section 3.1 or the Corporation Order and Opinion of Counsel
otherwise  required  pursuant to such  preceding  paragraphs  at or prior to the
authentication  of each Security of such series if such  documents are delivered
at or prior to the  authentication  upon original issuance of the first Security
of such series to be issued.

         Each Security shall be dated the date of its authentication.


                                     - 29 -


<PAGE>



         No Security shall be entitled to any benefit under this Indenture or be
valid or  obligatory  for any purpose,  unless there  appears on such Security a
certificate  of  authentication  substantially  in the form  provided for herein
executed  by  the  Trustee  by the  manual  signature  of one of its  authorized
officers,  and such certificate upon any Security shall be conclusive  evidence,
and the only  evidence,  that  such  Security  has been duly  authenticated  and
delivered hereunder.  Notwithstanding the foregoing,  if any Security shall have
been  authenticated  and  delivered  hereunder  but never issued and sold by the
Corporation,  and the Corporation shall deliver such Security to the Trustee for
cancellation  as provided in Section  3.10,  for all purposes of this  Indenture
such  Security  shall be deemed never to have been  authenticated  and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

         (b) Form of Securities at Initial Issuance. Unless otherwise determined
by the  Corporation,  the  provisions  in this  Section  3.3(b)  shall  apply to
Securities of a Series sold in transaction  exempt from  registration  under the
Securities Act. Securities  initially sold to qualified  institutional buyers in
reliance  on Rule  144A  under  the  Securities  Act  ("Rule  144A  Securities")
initially will be represented by one or more certificates in registered,  global
form with such  applicable  legends as are provided for in Sections 2.4 and 2.5,
except as otherwise  permitted  herein  (collectively,  the  "Restricted  Global
Certificate").  Such  Global  Security  shall be  registered  in the name of the
Depositary or its nominee and deposited with the Trustee, at its Corporate Trust
Office,  as custodian for the  Depositary,  duly executed by the Corporation and
authenticated by the Trustee.  The aggregate  principal amount of the Restricted
Global  Certificate  may  from  time  to  time  be  increased  or  decreased  by
adjustments  made on the records of the Depositary or the Trustee,  as custodian
for the Depositary,  in connection with (i) a corresponding decrease or increase
in the aggregate  principal amount of, if so provided with respect to Securities
of a  series,  the  Regulation  S Global  Security  or the  Unrestricted  Global
Security, as hereinafter provided or (ii) transfer to persons taking delivery of
a transfer in the form of a Definitive Security, as provided for herein.

         Securities  initially  sold in  offshore  transactions  in  reliance on
Regulation S ("Regulation S Securities") initially will be represented by one or
more certificates in registered, global form with such applicable legends as the
Corporation may determine in accordance with applicable law, except as otherwise
permitted herein. Such Securities in global form shall be registered in the name
of the  Depositary  or its  nominee  and  deposited  with  the  Trustee,  at its
Corporate Trust Office,  as custodian for the  Depositary,  duly executed by the
Corporation and authenticated by the Trustee as hereinafter provided, for credit
to the respective  accounts at the Depositary of the  depositories for Euroclear
or CEDEL. Until such time as the Restricted Period (as defined below) shall have
terminated,  such  Securities  shall be referred to herein  collectively  as the
"Regulation S Global  Security." After such time as the Restricted  Period shall
have terminated, such Securities shall be referred to herein collectively as the
"Unrestricted Global Security." The aggregate principal amount of the Regulation
S Global Security or the  Unrestricted  Global Security may from time to time be
increased  or decreased by  adjustments  made on the records of the Trustee,  as
custodian for the Depositary, in connection with (i) a corresponding decrease or
increase in the aggregate principal amount of the Restricted Global Security, as
hereinafter provided or (ii) transfers to persons taking delivery of transfer in
the form of a Definitive

                                     - 30 -


<PAGE>



Security,  as provided for herein. As used herein, the term "Restricted  Period"
means the period of 40 consecutive days beginning on and including the first day
after the later of (i) the day that the Lead Manager advises the Corporation and
the Trustee is the day on which the  Securities of a Series are first offered to
persons  other than  distributors  (as defined in  Regulation  S) in reliance on
Regulation S and (ii) the closing date in respect of Securities of such series.

         Securities  initially sold to institutional  accredited  investors in a
manner exempt from the  registration  requirements of the Securities Act and not
in reliance on Regulation S will be  represented  by  Securities in  registered,
certificated form (the "Restricted Definitive  Securities") with such applicable
legends  as are  provided  for in Section  2.4,  except as  otherwise  permitted
herein; provided,  however, that (i) upon transfer of such Definitive Securities
to a qualified  institutional buyer, such Definitive Securities will, unless the
Restricted Global Certificate has previously been exchanged, be exchanged for an
interest in a Restricted Global Certificate pursuant to the provisions herein or
(ii) upon  transfer of such  Definitive  Security to a purchaser  in reliance on
Regulation  S, such  Definitive  Security  will be exchanged  for an interest in
Regulatory S Global Security or an Unrestricted Global Security, as the case may
be, pursuant to the provisions herein.  Definitive  Securities initially sold to
Institutional  Accredited  Investors are issuable only in minimum  blocks of 100
Securities,  representing $100,000 in aggregate principal amount and in integral
multiples of $1,000 in excess thereof.

         SECTION 3.4.  Temporary Securities.

         Pending the  preparation  of definitive  Securities of any series,  the
Corporation  may  execute,   and  upon  Corporation   Order  the  Trustee  shall
authenticate and deliver,  temporary Securities that are printed,  lithographed,
typewritten,   mimeographed  or  otherwise   produced,   in  any   denomination,
substantially  of the tenor of the definitive  Securities of such series in lieu
of which  they are  issued  and with  such  appropriate  insertions,  omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.

         If temporary  Securities of any series are issued, the Corporation will
cause definitive  Securities of such series to be prepared without  unreasonable
delay. After the preparation of definitive Securities,  the temporary Securities
shall be exchangeable for definitive  Securities upon surrender of the temporary
Securities  at the  office  or  agency of the  Corporation  designated  for that
purpose without charge to the Holder. Upon surrender for cancellation of any one
or more  temporary  Securities,  the  Corporation  shall execute and the Trustee
shall  authenticate  and deliver in  exchange  therefor  one or more  definitive
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount,  bearing such restrictive legends as may be required
by this Indenture and bearing a number not contemporaneously  outstanding. Until
so exchanged,  the  temporary  Securities of any series shall in all respects be
entitled to the same benefits under this  Indenture as definitive  Securities of
such series.


                                     - 31 -


<PAGE>



         SECTION 3.5. Global Securities.

         (a)  Each  Global   Security  issued  under  this  Indenture  shall  be
registered in the name of the Depositary  designated by the Corporation for such
Global  Security or a nominee  thereof and  delivered  to such  Depositary  or a
nominee  thereof or  custodian  therefor,  and each such Global  Security  shall
constitute a single Security for all purposes of this Indenture.

         (b) Other than as provided for in Section  3.6, no Global  Security may
be exchanged in whole or in part for Definitive Securities, and no transfer of a
Global Security in whole or in part may be registered, in the name of any Person
other than the Depositary for such Global  Security or a nominee  thereof unless
(i) such  Depositary  advises the Trustee in writing that such  Depositary is no
longer willing or able to properly discharge its  responsibilities as Depositary
with respect to such Global Security,  and the Corporation is unable to locate a
qualified successor, (ii) the Corporation executes and delivers to the Trustee a
Corporation  Order  stating  that  the  Corporation   elects  to  terminate  the
book-entry  system  through such  Depositary or (iii) an Event of Default occurs
and is  continuing.  Upon the  occurrence of any event  specified in clause (i),
(ii) or (iii)  above,  the  Securities  Registrar  shall  notify the  applicable
Depositary  and instruct  such  Depositary  to notify all  beneficial  owners of
Global Securities of the occurrence of such event and of the availability of the
definitive  Securities to beneficial  owners of such  Securities  requesting the
same; provided,  however, that no Securities shall be issued in any denomination
less than the minimum authorized denomination therefor.

         (c) If any  Global  Security  is to be  exchanged  in whole  for  other
Securities or canceled in whole,  it shall be surrendered by or on behalf of the
applicable Depositary or its nominee to the Securities Registrar for exchange or
cancellation  as provided in this Article  III. If any Global  Security is to be
exchanged for other Securities or canceled in part, or if another Security is to
be  exchanged  in whole  or in part  for a  beneficial  interest  in any  Global
Security,  then  either (i) such Global  Security  shall be so  surrendered  for
exchange or  cancellation  as provided in this Article III or (ii) the principal
amount  thereof  shall be reduced,  subject to Section  3.6, or  increased by an
amount equal to the portion thereof to be so exchanged or canceled,  or equal to
the principal  amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Securities Registrar with notice to the Trustee, whereupon
the Trustee, in accordance with the Applicable  Procedures,  shall instruct such
Depositary or its authorized  representative to make a corresponding  adjustment
to its records.  Upon any such  surrender or adjustment of a Global  Security by
the  Depositary,  accompanied by registration  instructions,  the Trustee shall,
subject to  Section  3.5(b)  and as  otherwise  provided  in this  Article  III,
authenticate  and deliver any  Securities  issuable in exchange  for such Global
Security (or any portion  thereof) in accordance  with the  instructions  of the
Depositary;  provided,  however,  that no  Securities  shall  be  issued  in any
denomination less than the minimum authorized denomination therefor. Neither the
Securities  Registrar  nor the Trustee shall be liable for any delay in delivery
of such  instructions and may conclusively rely on, and shall be fully protected
in relying on, such instructions.


                                     - 32 -


<PAGE>



         (d) Every Security  authenticated  and delivered upon  registration  of
transfer of, or in exchange for or in lieu of, a Global  Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be  authenticated  and  delivered  in the form of,  and shall be, a Global
Security,  unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.

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

         (f) As provided in Section 3.9, the Depositary for a Global Security or
its nominee,  as the registered owner of a Global Security,  shall be the Holder
of  such  Global  Security  for  all  purposes  under  this  Indenture  and  the
Securities,  and owners of beneficial  interests in a Global Security shall hold
such interests pursuant to the Applicable  Procedures.  The Securities Registrar
and the Trustee  shall be entitled to deal with the  Depositary  for such Global
Security  for all  purposes of this  Indenture  relating to the Global  Security
(including  the payment of the  principal  amount of (and  premium,  if any) and
interest (including  Additional Interest) on such Global Security and the giving
of  instructions  or  directions by or to  beneficial  owners of the  Securities
represented  thereby) as the sole Holder of the Securities  represented  thereby
and shall have no obligation to such beneficial owners. Neither the Corporation,
the Trustee nor the Securities  Registrar shall have any liability in respect of
any transfers effected by the Depositary.

         (g) The rights of owners of beneficial  interests in a Global  Security
shall be exercised  only  through the  Depositary  for such Global  Security and
shall be limited to those  established  by law, the  Applicable  Procedures  and
agreements  between such beneficial  owners and the Depositary  and/or its Agent
Members.

         SECTION 3.6. Registration, Transfer and Exchanges.

         (a)  Registration,  Transfer and Exchange  Generally.  The  Corporation
shall cause to be kept at the  Corporate  Trust Office of the Trustee a register
or registers  (the  "Securities  Register")  in which the registrar and transfer
agent with respect to the Securities (the  "Securities  Registrar"),  subject to
such  reasonable  regulations  as  it  may  prescribe,  shall  provide  for  the
registration  of  Securities  and of transfers  and  exchanges of  Securities as
herein provided.  The Trustee is hereby appointed  Securities  Registrar for the
purpose of  registering  Securities and transfers and exchanges of Securities as
herein provided.


                                     - 33 -


<PAGE>



         Upon  surrender  for  registration  of transfer of any  Security at the
office or agency of the Corporation designated for that purpose, the Corporation
shall execute,  and the Trustee shall  authenticate and deliver,  in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized  denominations,  of like tenor and aggregate  principal
amount,  bearing such  restrictive  legends as may be required by this Indenture
and bearing a number not contemporaneously outstanding.

         At the option of the  Holder,  Securities  may be  exchanged  for other
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount,  bearing such restrictive legends as may be required
by this Indenture and bearing a number not contemporaneously  outstanding,  upon
surrender of the  Securities to be exchanged at such office or agency.  Whenever
any Securities are so surrendered for exchange,  the Corporation  shall execute,
and the Trustee shall  authenticate and deliver,  the Securities that the Holder
making the exchange is entitled to receive.

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

         Neither the Corporation, the Trustee nor the Securities Registrar shall
be  required,  pursuant to the  provisions  of this  Section  3.6, (i) to issue,
register the transfer of or exchange any Security of any series  during a period
beginning  at the opening of business  15 days before the day of  selection  for
redemption of Securities of that series pursuant to Article XI and ending at the
close of business on the day of mailing of the notice of redemption,  or (ii) to
register the transfer of or exchange any Security so selected for  redemption in
whole or in part,  except,  in the case of any such  Security  to be redeemed in
part, any portion thereof not to be redeemed.

         Every Security presented or surrendered for registration of transfer or
exchange  shall (if so  required  by the  Corporation  or the  Trustee)  be duly
endorsed,  or be  accompanied  by a  written  instrument  of  transfer  in  form
satisfactory to the Corporation and the Securities  Registrar,  duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing.

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

         (b)  Registration,   Transfer,  and  Exchange;  Global  Securities  and
Definitive Securities.  This Section 3.6(b) shall govern transfers and exchanges
of  Securities of a series in which (1) no Securities of such series are sold in
reliance  on  Regulation  S or  (2),  if  Securities  are  sold in  reliance  on
Regulation S, such Securities are not represented by a Global Security.

               (i)  Transfer  and  Exchange  of  Definitive   Securities.   When
          Definitive Securities are presented to the Securities Registrar with a
          request:

                                     - 34 -


<PAGE>




                    (1) to register the transfer of such Definitive  Securities;
               or

                    (2) to exchange such  Definitive  Securities  for Definitive
               Securities in an equal aggregate  principal  amount of Definitive
               Securities of other authorized denominations

               the Securities  Registrar shall register the transfer or make the
               exchange as requested  if its  reasonable  requirements  for such
               transaction  are met;  provided,  however,  that  the  Definitive
               Securities surrendered for transfer or exchange:

                    (A)  shall be duly  endorsed  or  accompanied  by a  written
               instrument  of transfer in form  reasonably  satisfactory  to the
               Trustee and the Securities Registrar, duly executed by the Holder
               thereof or his attorney duly authorized in writing; and

                    (B) in the case of Restricted Securities that are Definitive
               Securities, are being transferred or exchanged either pursuant to
               an effective  registration statement under the Securities Act, or
               pursuant to clause (1), (2) or (3) below and are  accompanied  by
               the  following   additional   information   and   documents,   as
               applicable:

                    (1) if such Restricted Securities are being delivered to the
               Securities  Registrar by a Holder for registration in the name of
               such Holder,  without transfer, a Restricted Security Certificate
               in the form attached hereto as Exhibit A (a "Restricted  Security
               Transfer Certificate"); or

                    (2) if such Restricted  Securities are being  transferred to
               the  Company or to a QIB in  accordance  with Rule 144A under the
               Securities  Act,  a  Restricted  Security  Transfer   Certificate
               certification to that effect; or

                    (3) if such Restricted  Securities are being transferred (w)
               pursuant to an exemption  from  registration  in accordance  with
               Rule 144  under  the  Securities  Act or (x) to an  institutional
               "accredited investor" within the meaning of Rule 501(a)(1),  (2),
               (3) or (7)  under  the  Securities  Act  that  is  acquiring  the
               security  for its own  account,  or for  the  account  of such an
               institutional  accredited  investor,  in each  case in a  minimum
               principal  amount of the  Securities  of $100,000 for  investment
               purposes  and  not  with a view  to,  or for  offer  or  sale  in
               connection  with, any distribution in violation of the Securities
               Act and, in the case of (x), together with (I) a certification to
               that  effect  and  (II)  if the  Corporation  or  the  Securities
               Registrar   so  requests,   an  Opinion  of  Counsel   reasonably
               acceptable to the Corporation and to the Securities  Registrar to
               the  effect  that  such  transfer  is  in  compliance   with  the
               Securities Act.

               (ii)  Restrictions  of Transfer of a  Definitive  Security  For a
          Beneficial  Interest in a Global Security.  A Definitive  Security may
          not be exchanged for a beneficial interest

                                     - 35 -


<PAGE>



          in a Global Security except upon  satisfaction of the requirements set
          forth below.  Upon  receipt by the Trustee of a  Definitive  Security,
          duly endorsed or accompanied  by appropriate  instruments of transfer,
          in form satisfactory to the Trustee, together with:

                    (i) if such  Definitive  Security is a  Restricted  Security
               being transferred to a QIB; and

                    (ii) whether or not such Definitive Security is a Restricted
               Security,  written instructions directing the Trustee to make, or
               to direct the  custodian to make,  an adjustment on its books and
               records  with  respect  to such  Global  Security  to  reflect an
               increase  in the  aggregate  principal  amount of the  Securities
               represented by the Global Security,

               then the Trustee shall cancel such Definitive Security and cause,
               or direct the Security Custodian to cause, in accordance with the
               standing   instructions  and  procedures   existing  between  the
               Depositary and the Securities Custodian,  the aggregate principal
               amount of  Securities  represented  by the Global  Security to be
               increased   accordingly.   If  no  Global   Securities  are  then
               outstanding,  the  Corporation  shall issue and the Trustee shall
               authenticate,  upon written order of the Corporation, in the form
               of  an  Officers'  Certificate,  a new  Global  Security  in  the
               appropriate principal amount.

               Neither the Trustee nor the  Securities  Registrar  has duties to
               obtain  certificates or other  documentation  with respect to the
               transfer   or   exchange   between   or  among   any   Depositary
               participants, members or beneficial owners in any global security
               and shall have no liability or responsibility with respect to the
               legality thereof.

                    (iii)  Transfer  and  Exchange  of  Global  Securities.  The
               transfer  and  exchange  of  Global   Securities   or  beneficial
               interests  therein shall be effected  through the Depositary,  in
               accordance with this Indenture (including applicable restrictions
               on transfer set forth herein,  if any) and the  procedures of the
               Depositary therefor.

                    (iv) Transfer of a Beneficial  Interest in a Global Security
               For a Definitive Security.

                             (i) Any person  having a  beneficial  interest in a
                  Global Security that is being  transferred or exchanged either
                  pursuant  to an  effective  registration  statement  under the
                  Securities  Act or pursuant  to clause (ii) may upon  request,
                  and  it  accompanied  by  the  information   specified  below,
                  exchange such beneficial interest for a Definitive Security of
                  the same aggregate principal amount.

                             (ii) In the  case  of a  beneficial  interest  in a
                  Global Security which is a Restricted Security and during such
                  time  as  a  registration   statement  with  respect  to  such
                  Securities is not effective,  if such  beneficial  interest is
                  being transferred

                                     - 36 -


<PAGE>



                  (w) pursuant to an exemption from  registration  in accordance
                  with  Rule  144  under  the  Securities  Act,  or  (x)  to  an
                  institutional "accredited investor" within the meaning of Rule
                  501(a)(1),  (2), (3) or (7) under the  Securities  Act that is
                  acquiring the security for its own account, or for the account
                  of such an institutional  accredited investor, in each case in
                  a minimum principal amount of the Securities of $100,000,  for
                  investment  purposes  and not with a view to,  or for offer or
                  sale in connection  with, any distribution in violation of the
                  Securities  Act,  and,  in the  case  of  (x),  together  with
                  certification   to  that   effect  then  the  Trustee  or  the
                  Securities Custodian,  at the direction of the Trustee,  shall
                  cause,  in  accordance  with  the  standing  instructions  and
                  procedures  existing between the Depositary and the Securities
                  Custodian,  the  aggregate  principal  amount  of  the  Global
                  Security to be reduced on its books and records and, following
                  such reduction,  the Corporation shall execute and the Trustee
                  shall  authenticate and deliver to the transferee a Definitive
                  Security.

                             (iii) Definitive  Securities issued in exchange for
                  a beneficial  interest in a Global  Security  pursuant to this
                  Section  3.6(b)(iv)  shall be  registered in such names and in
                  such authorized  denominations as the Depositary,  pursuant to
                  instructions  from its  direct  or  indirect  participants  or
                  otherwise,  shall  instruct  the  Trustee.  The Trustee  shall
                  deliver  such  Definitive  Securities  to the Persons in whose
                  names such Securities are so registered in accordance with the
                  written instructions of the Depositary.

                  (v)   Restrictions   on  Transfer   and   Exchange  of  Global
         Securities.  Notwithstanding any other provisions of this Indenture,  a
         Global  Security  may  not be  transferred  as a  whole  except  by the
         Depositary  to a  nominee  of the  Depositary  or by a  nominee  of the
         Depositary to the  Depositary or an other nominee of the  Depositary or
         by the  Depositary  or any such nominee to a successor  Depositary or a
         nominee of such successor Depositary.

                  (c) Certain Transfers and Exchanges;  Rule 144A and Regulation
S  Issuances.  This  Section  3.6(c)  shall  govern  transfer  and  exchanges of
Securities  of a series  in which  any  Securities  of such  series  are sold to
non-U.S. persons in offshore transactions in reliance upon Regulation S and such
Securities sold are represented by a Global Security.

                             (i)  Restricted  Global  Security to  Regulation  S
         Global  Security.  If  the  owner  of  a  beneficial  interest  in  the
         Restricted Global Security wishes at any time to transfer such interest
         to a Person who wishes to acquire the same in the form of a  beneficial
         interest in the  Regulation  S Global  Security,  such  transfer may be
         effected in  accordance  with the  provisions of this Clause (c)(i) and
         Clause  (b)(vii) below and subject to the Applicable  Procedures.  Upon
         receipt by the Trustee, as Securities Registrar,  of (A) an order given
         by the Clearing Agency or its authorized  representative directing that
         a  beneficial  interest  in  the  Regulation  S  Global  Security  in a
         specified  principal  amount be credited  to a specified  participant's
         account and that a beneficial interest in the Restricted

                                     - 37 -


<PAGE>



         Global  Security in an equal  principal  amount be debited from another
         specified  participant's  account  and  (B)  a  Regulation  S  Transfer
         Certificate in the Form of Exhibit B.1 hereto (a "Regulation S Transfer
         Certificate"),  satisfactory  to the Trustee  and duly  executed by the
         owner of such beneficial  interest in the Restricted Global Security or
         his  attorney  duly  authorized  in  writing,   then  the  Trustee,  as
         Securities Registrar but subject to Clause (c)(vii) below, shall reduce
         the share  number of the  Restricted  Global  Security and increase the
         share  number of the  Regulation  S Global  Security by such  specified
         principal amount.

                  (ii)  Regulation  S  Global  Security  to  Restricted   Global
         Security.  If the owner of a  beneficial  interest in the  Regulation S
         Global  Security  wishes at any time to  transfer  such  interest  to a
         Person  who  wishes  to  acquire  the same in the form of a  beneficial
         interest  in the  Restricted  Global  Security,  such  transfer  may be
         effected only in accordance with this Clause (c)(ii) and subject to the
         Applicable  Procedures.  Upon  receipt by the  Trustee,  as  Securities
         Registrar,  of  (A)  an  order  given  by the  Clearing  Agency  or its
         authorized  representative  directing that a beneficial interest in the
         Restricted Global Security in a specified  principal amount be credited
         to a specified  participant's account and that a beneficial interest in
         the  Regulation  S Global  Security  in an equal  principal  amount  be
         debited from another  specified  participant's  account and (B) if such
         transfer  is to  occur  during  the  Restricted  Period,  a  Restricted
         Securities  Transfer  Certificate  in the Form of Exhibit B.2 hereto (a
         "Restricted  Securities  Transfer  Certificate"),  satisfactory  to the
         Trustee and duly executed by the owner of such  beneficial  interest in
         the  Regulation S Global  Security or his attorney  duly  authorized in
         writing,  then the Trustee, as Securities  Registrar,  shall reduce the
         principal  amount of the Regulation S Global  Security and increase the
         principal  amount of the Restricted  Global  Security by such specified
         principal amount.

                             (iii) Restricted  Definitive Security to Restricted
         Global  Security or  Regulation S Global  Security.  If the Holder of a
         Restricted  Definitive Securities wishes at any time to transfer all or
         any portion of such  Restricted  Definitive  Securities to a Person who
         wishes to take delivery thereof in the form of a beneficial interest in
         the Restricted  Global  Security or the  Regulation S Global  Security,
         such transfer may be effected only in accordance with the provisions of
         this  Clause  (c)(iii)  and Clause  (c)(vii)  below and  subject to the
         Applicable  Procedures.  Upon  receipt by the  Trustee,  as  Securities
         Registrar, of (A) certificates  representing such Restricted Definitive
         Securities as provided in Section and instructions  satisfactory to the
         Trustee  directing that a beneficial  interest in the Restricted Global
         Security or  Regulation  S Global  Security  in a  specified  principal
         amount not greater than the share  amount of such  Security be credited
         to a specified  participant's  account and (B) a Restricted  Securities
         Security,  if the specified account is to be credited with a beneficial
         interest in the Restricted Global Security, or a Regulation S Security,
         if the specified  account is to be credited with a beneficial  interest
         in the Regulation S Global Security, in either case satisfactory to the
         Trustee  and  duly  executed  by  such  Holder  or  his  attorney  duly
         authorized in writing,  then the Trustee,  as Securities  Registrar but
         subject  to  Clause  (c)(vii)  below,   shall  cancel  such  Restricted
         Definitive

                                     - 38 -


<PAGE>



         Security (and issue a new Restricted  Definitive Security in respect of
         any  untransferred  portion  thereof) as provided in Section 3.6(a) and
         increase the principal amount of the Restricted  Global Security or the
         Regulation  S Global  Security,  as the case may be,  by the  specified
         principal amount.

                             (iv)   Regulation  S  Non-Global   Certificate   to
         Restricted Global  Certificate or Regulation S Global  Certificate.  If
         the Holder of a Regulation S Security (other than a Global Certificate)
         wishes at any time to transfer all or any portion of such  Regulation S
         Security  to a Person who  wishes to acquire  the same in the form of a
         beneficial interest in the Restricted Global Security or the Regulation
         S Global  Security,  such  transfer may be effected  only in accordance
         with this Clause  (c)(iv) and Clause  (c)(vii) below and subject to the
         Applicable  Procedures.  Upon  receipt by the  Trustee,  as  Securities
         Registrar,  of (A) such  Regulation  S Security  as provided in Section
         2.8(a) and  instructions  satisfactory to the Trustee  directing that a
         beneficial  interest in the Restricted  Global Security or Regulation S
         Global  Security in a specified share amount not greater than the share
         amount  of such  Security  be  credited  to a  specified  participant's
         account  and (B) if the  transfer  is to occur  during  the  Restricted
         Period and the  specified  account is to be credited  with a beneficial
         interest in the Restricted  Global  Security,  a Restricted  Securities
         Security  satisfactory  to the Trustee and duly executed by such Holder
         or his  attorney  duly  authorized  in  writing  then the  Trustee,  as
         Securities Registrar but subject to Clause (c)(vii) below, shall cancel
         such  Regulation S Security (and issue a new Regulation S Securities in
         respect of any  untransferred  portion  thereof) as provided in Section
         3.6(a) and  increase  the  principal  amount of the  Restricted  Global
         Security or the  Regulation S Global  Security,  as the case may be, by
         the specified principal amount.

                             (v) Non-Global Security to Non-Global  Security.  A
         Security that is not a Global Security may be transferred,  in whole or
         in part, to a Person who takes delivery in the form of another Security
         that is not a Global  Security  as provided  in Section  2.9,  provided
         that,  if the  Security  to be  transferred  in  whole  or in part is a
         Restricted Security,  or is a Regulation S Security and the transfer is
         to occur  during the  Restricted  Period,  then the Trustee  shall have
         received (A) a Restricted Securities Transfer Certificate, satisfactory
         to the  Trustee  and duly  executed  by the  transferor  Holder  or his
         attorney  duly  authorized  in  writing,  in which case the  transferee
         Holder shall take delivery in the form of a Restricted Security, or (B)
         a Regulation S Transfer  Certificate,  satisfactory  to the Trustee and
         duly executed by the transferor  Holder or his attorney duly authorized
         in writing,  in which case the transferee Holder shall take delivery in
         the form of a Regulation  S Security  (subject in every case to Section
         3.6(d)).

                             (vi)   Exchanges   between   Global   Security  and
         Non-Global  Security. A beneficial interest in a Global Security may be
         exchanged for a Security  that is not a Global  Security as provided in
         Section 2.9 to an institution that is an accredited investor within the
         meaning  of Rule  501(a)(1),  (2),  (3) or (7) of  Regulation  D of the
         Securities Act of 1933, as amended,  provided that, if such interest is
         a beneficial  interest in the Restricted  Global  Security,  or if such
         interest is a beneficial interest in the Regulation S Global

                                     - 39 -


<PAGE>



         Security and such  exchange is to occur during the  Restricted  Period,
         then such  interest  shall be  exchanged  for a  Restricted  Definitive
         Security  (subject in each case to Section 3.6(d)).  A Security that is
         not a Global  Security may be exchanged for a beneficial  interest in a
         Global  Certificate only if (A) such exchange occurs in connection with
         a transfer effected in accordance with Clause (c)(iii) or (iv) above or
         (B) such Security is a Regulation S Security and such  exchange  occurs
         after the Restricted Period.

                             (vii)  Regulation  S  Global  Security  to be  Held
         Through  Euroclear or Cedel during  Restricted  Period.  The  Depositor
         shall use its best efforts to cause the Clearing Agency to ensure that,
         until the expiration of the Restricted Period,  beneficial interests in
         the  Regulation  S  Global  Security  may be held  only  in or  through
         accounts maintained at the Clearing Agency by Euroclear or Cedel (or by
         participants  acting for the account  thereof),  and no person shall be
         entitled to effect any  transfer or exchange  that would  result in any
         such interest  being held otherwise than in or through such an account;
         provided that this Clause  (b)(vii)  shall not prohibit any transfer or
         exchange of such an interest in accordance  with Clause (b)(ii) or (vi)
         above.

          (d) Securities Act Legends.  Except as set forth below, all Securities
     shall bear a Restricted Securities Legend:

                  (i) subject to the following Clauses of this Section 3.6(d), a
         Security or any portion  thereof that is  exchanged,  upon  transfer or
         otherwise,  for a Global Security or any portion thereof shall bear the
         Restricted Securities Legend;

                  (ii) subject to the following  Clauses of this Section 3.6(d),
         a new Security that is not a Global  Security and is issued in exchange
         for  another  Security  (including  a Global  Security)  or any portion
         thereof, upon transfer or otherwise, shall bear a Restricted Securities
         Legend by such other  Security,  provided that, if such new Security is
         required  pursuant  to  Section  3.6  to be  issued  in the  form  of a
         Restricted Security,  it shall bear a Restricted Securities Legend and,
         if such new  Security  is so  required  to be  issued  in the form of a
         Regulation S Capital Security, it shall bear a Regulation S Legend;

                  (iii) Any Securities  which are sold or otherwise  disposed of
         pursuant to an effective  registration  statement  under the Securities
         Act,  including  the Shelf  Registration  Statement  or a  Registration
         Statement  providing  for  an  Exchange  Offer,   together  with  their
         Successor  Securities  shall  not bear a  Securities  Act  Legend;  the
         Depositor  shall inform the Trustee in writing of the effective date of
         any such  registration  statement  registering the Securities under the
         Securities   Act  and  shall  notify  the  Trustee  at  any  time  when
         prospectuses may not be delivered with respect to Securities to be sold
         pursuant  to such  registration  statement.  The  Trustee  shall not be
         liable for any action  taken or omitted to be taken by it in good faith
         in accordance with the aforementioned registration statement;

                  (iv)  at  any  time  after  the   Securities   may  be  freely
         transferred  without  registration  under the Securities Act or without
         being subject to transfer restrictions pursuant to the

                                     - 40 -


<PAGE>



         Securities  Act, a new Security  which does not bear a  Securities  Act
         Legend may be issued in  exchange  for or in lieu of a Security  (other
         than a Global  Certificate)  or any portion  thereof which bears such a
         legend if the Trustee has received an Unrestricted  Securities Transfer
         Certificate  in the  form  of  Exhibit  B.3  hereto  (an  "Unrestricted
         Securities Transfer Certificate"), satisfactory to the Trustee and duly
         executed by the Holder of such  legended  Security or his attorney duly
         authorized  in  writing,  and  after  such  date  and  receipt  of such
         certificate,  the Trustee  shall  authenticate  and deliver  such a new
         Security in exchange for or in lieu of such other  Security as provided
         in this Article 2;

                  (v) a new Security that does not bear a Restricted  Securities
         Legend  may be  issued  in  exchange  for or in  lieu  of a  Restricted
         Security  or any  portion  thereof  that bears such a legend if, in the
         Corporation's  sole  judgment,  placing  such a  legend  upon  such new
         Security is not and will not be necessary to ensure compliance with the
         registration  requirements of the Securities  Act, and the Trustee,  at
         the written  direction of the  Corporation  in the form of an Officers'
         Certificate,  shall  authenticate  and deliver  such a new  Security as
         provided in this Article III;

                  (vi)  notwithstanding the foregoing provisions of this Section
         3.6(d),  a  Successor  Security  of a  Security  that  does  not bear a
         Restricted Securities Legend shall not bear such form of legend unless,
         in the  Corporation's  sole  judgement  such  Successor  Security  is a
         "restricted  security"  within  the  meaning  of  Rule  144  under  the
         Securities Act, in which case the Trustee,  at the written direction of
         the  Corporation  in  the  form  of  an  Officers'  Certificate,  shall
         authenticate and deliver a new Security bearing a Restricted Securities
         Legend in  exchange  for such  Successor  Security  as provided in this
         Article III; and

                  (vii) Securities distributed to a holder of Capital Securities
         upon dissolution of an Issuer Trust shall bear a Restricted  Securities
         Legend if the Capital Securities so held bear a similar legend.

         The  Corporation  shall inform the Trustee in writing of the  effective
date  of  any  registration  statement  registering  any  Securities  under  the
Securities  Act. The Trustee shall not be liable for any action taken or omitted
to be  taken  by  it  in  good  faith  in  accordance  with  the  aforementioned
registration statement.

         SECTION 3.7.  Mutilated, Destroyed, Lost and Stolen Securities.

         If any mutilated  Security is surrendered to the Trustee  together with
such security or indemnity as may be required by the  Corporation or the Trustee
to save each of them  harmless,  the  Corporation  shall execute and the Trustee
shall  authenticate and deliver in exchange  therefor a new Security of the same
series, of like tenor and aggregate principal amount,  bearing the same legends,
and bearing a number not contemporaneously outstanding.


                                     - 41 -


<PAGE>



         If there shall be delivered to the  Corporation  and to the Trustee (i)
evidence  to  their  satisfaction  of the  destruction,  loss  or  theft  of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless,  then, in the absence of notice to the Corporation or the
Trustee  that such  Security  has been  acquired by a bona fide  purchaser,  the
Corporation  shall execute and upon its request the Trustee  shall  authenticate
and  deliver,  in lieu of any such  destroyed,  lost or stolen  Security,  a new
Security  of the same  series,  of like tenor and  aggregate  principal  amount,
bearing the same legends as such destroyed, lost or stolen Security, and bearing
a number not contemporaneously outstanding.

         If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and  payable,  the  Corporation  in its  discretion  may,
instead of issuing a new Security, pay such Security.

         Upon the  issuance of any new  Security  under this  Section  3.7,  the
Corporation  may  require the  payment of a sum  sufficient  to cover any tax or
other governmental  charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

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

         The provisions of this Section 3.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

          SECTION 3.8.  Payment of Interest and  Additional  Interest;  Interest
     Rights Preserved.

         Interest  (including  any  Additional  Interest) on any Security of any
series that 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 Security
(or one or more  Predecessor  Securities) is registered at the close of business
on the Regular  Record Date for such  interest in respect of  Securities of such
series, except that, unless otherwise provided in the Securities of such series,
interest  (including any Additional  Interest) payable on the Stated Maturity of
the  principal  of a Security  shall be paid to the Person to whom  principal is
paid.  The initial  payment of  interest  on any  Security of any series that is
issued between a Regular Record Date and the related Interest Payment Date shall
be payable as provided in such Security or in the Board  Resolution  pursuant to
Section 3.1 with respect to the related series of Securities.

         Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest  Payment Date for  Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular

                                     - 42 -


<PAGE>



Record Date by virtue of having been such Holder,  and such  Defaulted  Interest
may be paid by the  Corporation,  at its  election in each case,  as provided in
Clause (1) or (2) below:

                  (1) The Corporation may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities of such series in
         respect  of  which   interest  is  in  default  (or  their   respective
         Predecessor  Securities)  are  registered at the close of business on a
         Special Record Date for the payment of such Defaulted  Interest,  which
         shall be fixed in the following  manner.  The Corporation  shall notify
         the Trustee in writing of the amount of Defaulted  Interest proposed to
         be paid on each Security and the date of the proposed  payment,  and at
         the same time the Corporation  shall deposit with the Trustee an amount
         of money equal to the aggregate  amount  proposed to be paid in respect
         of such Defaulted  Interest or shall make arrangements  satisfactory to
         the Trustee for such deposit prior to the date of the proposed payment,
         such money when  deposited  to be held in trust for the  benefit of the
         Persons entitled to such Defaulted  Interest as provided in this Clause
         (1).  Thereupon  the  Trustee  shall fix a Special  Record Date for the
         payment of such  Defaulted  Interest,  which  shall be not more than 15
         days  and not  less  than 10 days  prior  to the  date of the  proposed
         payment  and not less than 10 days after the  receipt by the Trustee of
         the notice of the proposed  payment.  The Trustee shall promptly notify
         the Corporation of such Special Record Date and, in the name and at the
         expense of the Corporation,  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 Holder of a Security of
         such  series  at the  address  of  such  Holder  as it  appears  in the
         Securities  Register not less than 10 days prior to such Special Record
         Date.  The  Trustee  may,  in its  discretion,  in the  name and at the
         expense of the  Corporation,  cause a similar notice to be published at
         least  once  in a  newspaper,  customarily  published  in  the  English
         language on each Business Day and of general circulation in the Borough
         of Manhattan, The City of New York, but such publication shall not be a
         condition  precedent to the  establishment of such Special Record Date.
         Notice of the  proposed  payment  of such  Defaulted  Interest  and the
         Special  Record Date  therefor  having been mailed as  aforesaid,  such
         Defaulted  Interest  shall be paid to the  Persons  in whose  names the
         Securities of such series (or their respective Predecessor  Securities)
         are  registered  on such  Special  Record  Date and  shall no longer be
         payable pursuant to the following Clause (2).

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

         Subject to the foregoing  provisions of this Section 3.8, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security.

                                     - 43 -


<PAGE>




         SECTION 3.9. Persons Deemed Owners.

         The  Corporation,  the Trustee and any agent of the  Corporation or the
Trustee  shall treat the Person in whose name any Security is  registered as the
owner of such Security for the purpose of receiving  payment of principal of and
(subject  to  Section  3.8) any  interest  on such  Security  and for all  other
purposes  whatsoever,  whether or not such Security be overdue,  and neither the
Corporation,  the Trustee nor any agent of the  Corporation or the Trustee shall
be affected by notice to the contrary.

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

         SECTION 3.10.  Cancellation.

         All  Securities  surrendered  for  payment,  redemption,   transfer  or
exchange  shall,  if  surrendered  to any  Person  other  than the  Trustee,  be
delivered to the Trustee,  and any such  Securities and  Securities  surrendered
directly to the Trustee for any such purpose  shall be promptly  canceled by it.
The  Corporation  may at any time  deliver to the Trustee for  cancellation  any
Securities previously authenticated and delivered hereunder that the Corporation
may have  acquired in any manner  whatsoever,  and all  Securities  so delivered
shall be promptly canceled by the Trustee.  No Securities shall be authenticated
in lieu of or in  exchange  for any  Securities  canceled  as  provided  in this
Section  3.10,  except as expressly  permitted by this  Indenture.  All canceled
Securities  shall be destroyed by the Trustee and the Trustee  shall  deliver to
the Corporation a certificate of such destruction.

         SECTION 3.11. Computation of Interest.

         Except as  otherwise  specified  as  contemplated  by  Section  3.1 for
Securities  of any  series,  interest on the  Securities  of each series for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months  and the  actual  number of days  elapsed  in any  partial  month in such
period, and interest on the Securities of each series for a full period shall be
computed by dividing  the rate per annum by the number of interest  periods that
together constitute a full twelve months.


                                     - 44 -


<PAGE>



         SECTION 3.12. Deferrals of Interest Payment Dates.

         If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the  Securities  of a particular  series,  so long as no Event of Default has
occurred and is continuing,  the  Corporation  shall have the right, at any time
during  the term of such  series,  from  time to time to defer  the  payment  of
interest on such  Securities  for such period or periods as may be  specified as
contemplated  by  Section  3.1  (each,  an  "Extension  Period"),  during  which
Extension  Periods the  Corporation  shall,  if so specified as  contemplated by
Section 3.1, have the right to make partial payments of interest  (including any
Additional Interest) on any Interest Payment Date. No Extension Period shall end
on a date other than an Interest  Payment Date. At the end of any such Extension
Period the  Corporation  shall pay all  interest  then accrued and unpaid on the
Securities  (together  with  Additional  Interest  thereon,  if any, at the rate
specified  for the  Securities  of  such  series,  to the  extent  permitted  by
applicable law); provided, however, that no Extension Period shall extend beyond
the Stated  Maturity of the  principal of the  Securities  of such  series;  and
provided further, however that during any such Extension Period, the Corporation
shall not (i)  declare  or pay any  dividends  or  distributions  on, or redeem,
purchase,  acquire or make a  liquidation  payment  with  respect to, any of the
Corporation's  capital  stock,  or (ii)  make any  payment  of  principal  of or
interest  or  premium,  if any,  on or  repay,  repurchase  or  redeem  any debt
securities  of the  Corporation  that rank pari  passu in all  respects  with or
junior in  interest  to the  Securities  of such  series  or make any  guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any Subsidiary of the  Corporation if such guarantee ranks pari passu with or
junior in interest to the Securities of such series (other than (a) dividends or
distributions  in common  stock of the  Corporation,  (b) any  declaration  of a
dividend in connection with the  implementation of a stockholders'  rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Guarantee
Agreement  and (d)  purchases of common stock  related to the issuance of common
stock  or  rights  under  any of the  Corporation's  or  any  Subsidiary  of the
Corporation's benefit plans for their directors, officers or employees. Prior to
the termination of any such Extension Period,  the Corporation may further defer
the payment of interest,  provided  that no Event of Default has occurred and is
continuing,  and  provided  further  that no  Extension  Period shall exceed the
period or  periods  specified  in such  Securities,  extend  beyond  the  Stated
Maturity  of the  principal  of such  Securities  or end on a date other than an
Interest  Payment Date.  Upon the  termination of any such Extension  Period and
upon the payment of all accrued and unpaid  interest  (including  any Additional
Interest) then due on any Interest  Payment Date, the  Corporation  may elect to
begin a new  Extension  Period,  subject to the above  conditions.  No  interest
(including any Additional Interest) shall be due and payable during an Extension
Period,  except at the end thereof,  but each installment of interest that would
otherwise  have been due and payable  during such  Extension  Period  shall bear
Additional  Interest as and to the extent as may be specified as contemplated by
Section 3.1. The  Corporation  shall give the Holders of the  Securities of such
series and the Trustee notice of its election to begin any such Extension Period
at least one Business Day prior to the next succeeding  Interest Payment Date on
which  interest  on  Securities  of such  series  would be payable  but for such
deferral  or, with  respect to any  Securities  of a series  issued to an Issuer
Trust,  so long as any such  Securities are held by such Issuer Trust,  at least
one Business Day prior to the earlier of (i) the next succeeding date on

                                     - 45 -


<PAGE>



which  Distributions  on the Capital  Securities  of such Issuer  Trust would be
payable but for such deferral,  and (ii) the date on which the Property  Trustee
of such  Issuer  Trust is  required  to give  notice to holders of such  Capital
Securities of the record date or the date such Distributions are payable.

         The Trustee shall promptly give notice of the Corporation's election to
begin any such Extension Period to the Holders of the Outstanding  Securities of
such series.

         SECTION 3.13. Right of Set-Off.

         With  respect  to the  Securities  of a series  initially  issued to an
Issuer Trust,  notwithstanding  anything to the contrary herein, the Corporation
shall have the right to set off any payment it is otherwise  required to make in
respect of any such Security to the extent the Corporation has theretofore made,
or is  concurrently  on the date of such  payment  making,  a payment  under the
Guarantee  Agreement  relating  to  such  Security  or to a  holder  of  Capital
Securities pursuant to an action undertaken under Section 5.8 of this Indenture.

         SECTION 3.14. Agreed Tax Treatment.

         Each Security issued  hereunder shall provide that the Corporation and,
by its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial  interest in, such Security agree that
for United States federal, state and local tax purposes it is intended that such
Security constitutes indebtedness.

         SECTION 3.15. Shortening of Stated Maturity.

         If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular  series,  the Corporation shall have the right
to shorten the Stated Maturity of the principal of the Securities of such series
at any time to any date.

         SECTION 3.16. CUSIP Numbers.

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



                                     - 46 -


<PAGE>



                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

         SECTION 4.1. Satisfaction and Discharge of Indenture.

         This Indenture shall, upon Corporation Request,  cease to be of further
effect  (except  as to any  surviving  rights of  registration  of  transfer  or
exchange of Securities herein expressly  provided for and as otherwise  provided
in this  Section  4.1) and the  Trustee,  on demand of and at the expense of the
Corporation,  shall execute proper  instruments  acknowledging  satisfaction and
discharge of this Indenture, when

                  (1) either

                         (A)(1) all  Securities  theretofore  authenticated  and
                    delivered   (other  than  (i)  Securities   that  have  been
                    destroyed,  lost or stolen  and that have been  replaced  or
                    paid as  provided  in Section  3.7 and (ii)  Securities  for
                    whose payment money has theretofore  been deposited in trust
                    or  segregated  and  held in trust  by the  Corporation  and
                    thereafter repaid to the Corporation or discharged from such
                    trust,  as provided in Section 10.3) have been  delivered to
                    the Trustee for cancellation; or

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

                                 (i) have become due and payable, or

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

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

         and the  Corporation,  in the case of subclause  (B)(i),  (ii) or (iii)
         above,  has  deposited  or caused to be  deposited  with the Trustee as
         trust  funds in trust for such  purpose  an amount in the  currency  or
         currencies  in  which  the   Securities  of  such  series  are  payable
         sufficient  to pay  and  discharge  the  entire  indebtedness  on  such
         Securities not theretofore  delivered to the Trustee for  cancellation,
         for  principal  (and  premium,  if any)  and  interest  (including  any
         Additional  Interest)  to the  date of  such  deposit  (in the  case of
         Securities  that have become due and payable) or to the Stated Maturity
         or Redemption Date, as the case may be;


                                     - 47 -


<PAGE>



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

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

Notwithstanding   the  satisfaction   and  discharge  of  this  Indenture,   the
obligations of the Corporation to the Trustee under Section 6.7, the obligations
of the  Trustee to any  Authenticating  Agent under  Section  6.14 and, if money
shall have been deposited  with the Trustee  pursuant to subclause (B) of Clause
(1) of this Section 4.1, the  obligations  of the Trustee  under Section 4.2 and
the last paragraph of Section 10.3 shall survive.

         SECTION 4.2. Application of Trust Money.

         Subject to the  provisions of the last  paragraph of Section 10.3,  all
money deposited with the Trustee  pursuant to Section 4.1 shall be held in trust
and applied by the Trustee,  in accordance with the provisions of the Securities
and this Indenture,  to the payment, either directly or through any Paying Agent
(including  the  Corporation  acting as its own Paying Agent) as the Trustee may
determine,  to the Persons entitled thereto,  of the principal (and premium,  if
any) and interest  (including any Additional  Interest) for the payment of which
such money or obligations have been deposited with or received by the Trustee.


                                    ARTICLE V

                                    REMEDIES

         SECTION 5.1. Events of Default.

         "Event of Default", wherever used herein with respect to the Securities
of any series,  means any one of the following  events  (whatever the reason for
such Event of Default and whether it shall be  voluntary  or  involuntary  or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order,  rule or regulation of any  administrative  or  governmental
body), except as may be specified pursuant to Section 3.1:

                  (1)  default in the  payment of any  interest  (including  any
         Additional  Interest)  upon any Security of that series when it becomes
         due and  payable,  and  continuance  of such default for a period of 30
         days  (subject  to the  deferral  of any  due  date in  respect  of any
         interest  (including  Additional  Interest) in the case of an Extension
         Period); or

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


                                     - 48 -


<PAGE>



                  (3) failure on the part of the Corporation  duly to observe or
         perform any other of the  covenants  or  agreements  on the part of the
         Corporation in the Securities of that series or in this Indenture for a
         period  of 90 days  after  the date on  which  written  notice  of such
         failure,  requiring the Corporation to remedy the same and stating that
         such  notice  is a  "Notice  of  Default"  shall  have  been  given  by
         registered or certified  mail to the  Corporation  by the Trustee or to
         the  Corporation  and the  Trustee  by the  Holders  of at least 25% in
         aggregate  principal  amount  of the  Outstanding  Securities  of  that
         series; or

                  (4)  the  entry  of  a  decree  or  order  by a  court  having
         jurisdiction  in the premises  adjudging the  Corporation a bankrupt or
         insolvent,   or  approving  as  properly   filed  a  petition   seeking
         reorganization  of the  Corporation  under the  Bankruptcy  Code or any
         other similar  applicable  Federal or State law,  which decree or order
         shall have continued undischarged and unstayed for a period of 60 days;
         or the entry of a decree or order of a court having jurisdiction in the
         premises for the  appointment of a receiver or liquidator or trustee or
         assignee in  bankruptcy  or  insolvency  of the  Corporation  or of its
         property,  or for the winding up or liquidation  of its affairs,  which
         decree or order shall have  continued  undischarged  and unstayed for a
         period of 60 days; or

                  (5)  the   commencement   by  the   Corporation  of  voluntary
         proceedings  to be  adjudicated  a  bankrupt,  or  the  consent  by the
         Corporation to the filing of a bankruptcy proceeding against it, or the
         filing by the  Corporation  of a petition or answer or consent  seeking
         reorganization  under the Bankruptcy  Code or any other similar Federal
         or State law,  or the consent by the  Corporation  to the filing of any
         such petition,  or the consent by the Corporation to the appointment of
         a receiver  or  liquidator  or trustee or  assignee  in  bankruptcy  or
         insolvency of it or of its property,  or the making by the  Corporation
         of an assignment for the benefit of creditors,  or the admission by the
         Corporation  in writing of its inability to pay its debts  generally as
         they become due; or

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

         SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default  (other  than an Event of Default  specified  in
Section  5.1(4) or 5.1(5)) with respect to  Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the  Holders  of  not  less  than  25%  in  aggregate  principal  amount  of the
Outstanding  Securities of that series may declare the principal  amount (or, if
the  Securities  of that series are  Discount  Securities,  such  portion of the
principal  amount as may be  specified  in the terms of that  series) of all the
Securities  of that  series to be due and  payable  immediately,  by a notice in
writing to the  Corporation  (and to the Trustee if given by Holders),  provided
that, in the case of the  Securities of a series issued to an Issuer Trust,  if,
upon an Event of  Default,  the  Trustee or the  Holders of not less than 25% in
principal  amount of the  Outstanding  Securities of such series fail to declare
the  principal of all the  Outstanding  Securities  of such series (or specified
portion thereof) to be immediately due and payable,  the holders of at least 25%
in aggregate  Liquidation  Amount (as defined in the related Trust Agreement) of
the

                                     - 49 -


<PAGE>



related  series  of  Capital   Securities  issued  by  such  Issuer  Trust  then
outstanding shall have the right to make such declaration by a notice in writing
to the Corporation and the Trustee; and upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including any
Additional  Interest)  on  all  the  Securities  of  such  series  shall  become
immediately due and payable.  If an Event of Default specified in Section 5.1(4)
or 5.1(5)  with  respect to  Securities  of any  series at the time  Outstanding
occurs,  the principal  amount of all the  Securities of such series (or, if the
Securities of such series are Discount Securities, such portion of the principal
amount of such  Securities  as may be specified by the terms of that series) and
the accrued interest  (including any Additional  Interest) on all the Securities
of such series shall automatically,  and without any declaration or other action
on the part of the Trustee or any Holder,  become  immediately  due and payable.
Payment  of  principal  (and  premium,  if  any)  and  interest  (including  any
Additional  Interest) on such Securities shall remain subordinated to the extent
provided  in  Article  XIII   notwithstanding  that  such  amount  shall  become
immediately due and payable as herein provided.

         At any time after such a declaration  of  acceleration  with respect to
Securities  of any  series  has been made and  before a  judgment  or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article V provided,  the Holders of a majority in aggregate  principal amount of
the Outstanding  Securities of that series, by written notice to the Corporation
and the Trustee, may rescind and annul such declaration and its consequences if:

          (1) the  Corporation  has paid or  deposited  with the  Trustee  a sum
     sufficient to pay:

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

               (B) any accrued  Additional  Interest on all  Securities  of such
          series,

               (C) the principal of (and premium,  if any, on) any Securities of
          such series that have become due otherwise than by such declaration of
          acceleration, and

               (D) all sums paid or advanced by the  Trustee  hereunder  and the
          reasonable compensation,  expenses,  disbursements and advances of the
          Trustee, its agents and counsel; and

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

         In the case of  Securities  of a series  initially  issued to an Issuer
Trust,  if the Holders of such  Securities  fail to annul such  declaration  and
waive such  default,  the  holders of a Majority  in  Liquidation  Amount of the
Capital  Securities (as defined in the related Trust  Agreement)  issued by such
Issuer Trust shall also have the right to rescind and annul such declaration and
its

                                     - 50 -


<PAGE>



consequences by written notice to the  Corporation  and the Trustee,  subject to
the  satisfaction  of the  conditions  set forth in Clauses (1) and (2) above of
this Section 5.2.

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

          SECTION 5.3.  Collection of Indebtedness  and Suits for Enforcement by
     Trustee.

         The Corporation covenants that if:

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

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

the Corporation  will, upon demand of the Trustee,  pay to the Trustee,  for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such  Securities for principal (and premium,  if any),  including any sinking
fund payment or analogous  obligations,  and interest  (including any Additional
Interest),  and, in addition  thereto,  all amounts  owing to the Trustee  under
Section 6.7.

         If the  Corporation  fails  to pay such  amounts  forthwith  upon  such
demand,  the Trustee,  in its own name and as trustee of an express  trust,  may
institute  a  judicial  proceeding  for the  collection  of the  sums so due and
unpaid,  and may prosecute such proceeding to judgment or final decree,  and may
enforce  the same  against  the  Corporation  or any  other  obligor  upon  such
Securities  and  collect  the  moneys  adjudged  or decreed to be payable in the
manner  provided  by law out of the  property  of the  Corporation  or any other
obligor upon the Securities, wherever situated.

         If an Event of Default with respect to  Securities of any series occurs
and is  continuing,  the  Trustee may in its  discretion  proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate  judicial  proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights,  whether for the specific enforcement of
any  covenant or  agreement  in this  Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

         SECTION 5.4. Trustee May File Proofs of Claim.

         In  case  of any  receivership,  insolvency,  liquidation,  bankruptcy,
reorganization,   arrangement,   adjustment,   composition   or  other  judicial
proceeding  relative to the Corporation or any other obligor upon the Securities
or the property of the Corporation or of such other obligor or their creditors,

                                     - 51 -


<PAGE>




                  (a) the Trustee  (irrespective of whether the principal of the
         Securities  of any  series  shall  then be due and  payable  as therein
         expressed or by  declaration or otherwise and  irrespective  of whether
         the  Trustee  shall  have made any  demand on the  Corporation  for the
         payment  of  overdue  principal  (or  premium,   if  any)  or  interest
         (including any Additional  Interest))  shall be entitled and empowered,
         by intervention in such proceeding or otherwise,

                             (1) to file and prove a claim for the whole  amount
                  of principal (and premium, if any) and interest (including any
                  Additional  Interest)  owing  and  unpaid  in  respect  of the
                  Securities  and to file such other  papers or documents as may
                  be necessary  or advisable  and to take any and all actions as
                  are authorized  under the Trust Indenture Act in order to have
                  the claims of the Holders and any  predecessor  to the Trustee
                  under  Section 6.7 allowed in any such  judicial  proceedings;
                  and

                             (2) in particular,  the Trustee shall be authorized
                  to collect and receive any moneys or other property payable or
                  deliverable  on any such claims and to distribute  the same in
                  accordance with Section 5.6; and

                  (b) any custodian,  receiver,  assignee, trustee,  liquidator,
         sequestrator   (or  other  similar   official)  in  any  such  judicial
         proceeding is hereby authorized by each Holder to make such payments to
         the Trustee for distribution in accordance with Section 5.6, and in the
         event that the  Trustee  shall  consent to the making of such  payments
         directly to the Holders, to pay to the Trustee any amount due to it and
         any predecessor Trustee under Section 6.7.

         Nothing  herein  contained  shall be deemed to authorize the Trustee to
authorize  or  consent to or accept or adopt on behalf of any Holder any plan of
reorganization,  arrangement, adjustment or composition affecting the Securities
or the rights of any Holder  thereof,  or to  authorize  the  Trustee to vote in
respect of the claim of any Holder in any such  proceeding;  provided,  however,
that the  Trustee  may,  on behalf of the  Holders,  vote for the  election of a
trustee in  bankruptcy  or similar  official and be a member of a creditors'  or
other similar committee.

        SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.

         All rights of action and claims under this  Indenture or the Securities
may be prosecuted  and enforced by the Trustee  without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such  proceeding  instituted by the Trustee shall be brought in its own name
as trustee of an express trust,  and any recovery of judgment shall,  subject to
Article XIII and after  provision  for the payment of all the amounts  owing the
Trustee and any  predecessor  Trustee under Section 6.7, its agents and counsel,
be for the ratable  benefit of the Holders of the Securities in respect of which
such judgment has been recovered.


                                     - 52 -


<PAGE>



         SECTION 5.6. Application of Money Collected.

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

               FIRST:  To the  payment of all  amounts  due the  Trustee and any
          predecessor Trustee under Section 6.7;

               SECOND:  Subject to Article  XIII,  to the payment of the amounts
          then due and unpaid upon  Securities of such series for principal (and
          premium, if any) and interest  (including any Additional  Interest) in
          respect  of which or for the  benefit  of which  such  money  has been
          collected,  ratably,  without  preference  or  priority  of any  kind,
          according to the amounts due and payable on such series of  Securities
          for  principal  (and  premium,  if any) and  interest  (including  any
          Additional Interest), respectively; and

               THIRD:  The  balance,  if any, to the Person or Persons  entitled
          thereto.

          SECTION 5.7. Limitation on Suits.

         Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding,  judicial or otherwise, with respect
to this  Indenture  or for the  appointment  of a receiver,  assignee,  trustee,
liquidator or sequestrator  (or other similar  official) or for any other remedy
hereunder, unless:

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

                  (2) the  Holders of not less than 25% in  aggregate  principal
         amount of the  Outstanding  Securities  of that series  shall have made
         written  request to the Trustee to institute  proceedings in respect of
         such Event of Default in its own name as Trustee hereunder;

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

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


                                     - 53 -


<PAGE>



                  (5) no direction  inconsistent  with such written  request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority in aggregate principal amount of the Outstanding Securities of
         that series;

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

          SECTION  5.8.  Unconditional  Right of Holders  to Receive  Principal,
Premium and Interest; Direct Action by Holders of Capital Securities.

         Notwithstanding  any other provision in this  Indenture,  the Holder of
any  Security  of any  series  shall  have  the  right,  which is  absolute  and
unconditional,  to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional  Interest)
on such Security on the respective Stated Maturities  expressed in such Security
(or, in the case of redemption,  on the  Redemption  Date) and to institute suit
for the  enforcement  of any such payment,  and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series issued
to an Issuer Trust,  any registered  holder of the series of Capital  Securities
issued by such Issuer  Trust  shall have the right,  upon the  occurrence  of an
Event of Default  described  in Section  5.1(1) or 5.1(2),  to  institute a suit
directly  against the  Corporation  for enforcement of payment to such holder of
principal of (premium,  if any) and (subject to Sections 3.8 and 3.12)  interest
(including any Additional  Interest) on the Securities having a principal amount
equal to the  aggregate  Liquidation  Amount (as  defined in the  related  Trust
Agreement) of such Capital Securities held by such holder.

         SECTION 5.9. Restoration of Rights and Remedies.

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

         SECTION 5.10. Rights and Remedies Cumulative.

         Except as otherwise  provided in the last  paragraph of Section 3.7, no
right or remedy herein  conferred upon or reserved to the Trustee or the Holders
is intended to be  exclusive  of any other right or remedy,  and every right and
remedy shall,  to the extent  permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter

                                     - 54 -


<PAGE>



existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

         SECTION 5.11. Delay or Omission Not Waiver.

         No delay or omission of the Trustee,  any Holder of any Security or any
holder of any Capital Security to exercise any right or remedy accruing upon any
Event of Default  with  respect to the  Securities  of the related  series shall
impair  any such  right or remedy or  constitute  a waiver of any such  Event of
Default or an acquiescence therein.

         Every right and remedy given by this Article V or by law to the Trustee
or to the  Holders  and the right and  remedy  given to the  holders  of Capital
Securities  by Section 5.8 may be exercised  from time to time,  and as often as
may be deemed expedient,  by the Trustee,  the Holders or the holders of Capital
Securities, as the case may be.

         SECTION 5.12. Control by Holders.

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

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

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

          (3) subject to the  provisions  of Section 6.1, the Trustee shall have
     the right to decline to follow such  direction if a Responsible  Officer or
     Officers of the Trustee shall, in good faith, determine that the proceeding
     so directed would be unjustly prejudicial to the Holders not joining in any
     such direction or would involve the Trustee in personal liability.

         SECTION 5.13.  Waiver of Past Defaults.

         The Holders of not less than a majority in aggregate  principal  amount
of the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
Majority  in  Liquidation  Amount of the Capital  Securities  (as defined in the
related Trust Agreement)  issued by such Issuer Trust may waive any past default
or Event of Default  hereunder and its consequences  with respect to such series
except a default:


                                     - 55 -


<PAGE>



                  (1) in the payment of the principal of (or premium, if any) or
         interest  (including any  Additional  Interest) on any Security of such
         series (unless such default has been cured and the Corporation has paid
         to or deposited  with the Trustee a sum  sufficient  to pay all matured
         installments  of interest  (including any Additional  Interest) and all
         principal of (and  premium,  if any, on) all  Securities of that series
         due otherwise than by acceleration), or

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

         Any such  waiver  shall be deemed to be on behalf of the Holders of all
the  Securities of such series or, in the case of a waiver by holders of Capital
Securities  issued by such  Issuer  Trust,  by the  holders  of all the  Capital
Securities issued by such Issuer Trust.

         Upon any such waiver,  such default or Event of Default  shall cease to
exist, and any default or Event of Default arising  therefrom shall be deemed to
have been cured,  for every purpose of this Indenture;  but no such waiver shall
extend to any  subsequent  or other  default  or Event of  Default or impair any
right consequent thereon.

         SECTION 5.14. Undertaking for Costs.

         All parties to this Indenture  agree,  and each Holder of any Security,
by its acceptance thereof, shall be deemed to have agreed, that any court may in
its discretion  require,  in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as  Trustee,  the filing by any party  litigant in such suit of an
undertaking  to pay the  costs of such  suit,  and that  such  court  may in its
discretion  assess  reasonable  costs,  including  reasonable  attorneys'  fees,
against  any party  litigant  in such suit,  having due regard to the merits and
good  faith of the  claims or  defenses  made by such  party  litigant;  but the
provisions  of this Section 5.14 shall not apply to any suit  instituted  by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate  more  than  10% in  aggregate  principal  amount  of the  Outstanding
Securities  of any  series,  or to any suit  instituted  by any  Holder  for the
enforcement of the payment of the principal of (or premium,  if any) or interest
(including any  Additional  Interest) on any Security on or after the respective
Stated Maturities expressed in such Security.

         SECTION 5.15. Waiver of Usury, Stay or Extension Laws.

         The  Corporation  covenants  (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner  whatsoever
claim or take the benefit or  advantage  of, any usury,  stay or  extension  law
wherever  enacted,  now or at any time hereafter in force,  which may affect the
covenants or the  performance of this  Indenture;  and the  Corporation  (to the
extent  that it may  lawfully  do so) hereby  expressly  waives  all  benefit or
advantage  of any such law,  and  covenants  that it will not  hinder,  delay or
impede the execution of any power herein

                                     - 56 -


<PAGE>



granted to the Trustee,  but will suffer and permit the  execution of every such
power as though no such law had been enacted.


                                   ARTICLE VI

                                   THE TRUSTEE

         SECTION 6.1. Certain Duties and Responsibilities.

         (a) Except during the continuance of an Event of Default,

                  (1) 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; and

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

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

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

               (1) this Subsection shall not be construed to limit the effect of
          Subsection (a) of this Section 6.1;

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

               (3) the Trustee  shall not be liable  with  respect to any action
          taken or omitted to be taken by it in good  faith in  accordance  with
          the  direction  of Holders  pursuant to Section  5.12  relating to the
          time, method and place of conducting any proceeding for any

                                     - 57 -


<PAGE>



          remedy  available to the  Trustee,  or  exercising  any trust or power
          conferred  upon the Trustee,  under this Indenture with respect to the
          Securities of a series.

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

         (e) Whether or not therein  expressly so provided,  every  provision of
this  Indenture  relating  to the  conduct  or  affecting  the  liability  of or
affording  protection to the Trustee shall be subject to the  provisions of this
Section 6.1.

         SECTION 6.2. Notice of Defaults.

         Within 90 days after actual  knowledge by a Responsible  Officer of the
Trustee  of  the  occurrence  of  any  default  hereunder  with  respect  to the
Securities of any series,  the Trustee shall  transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register,  notice of such default,  unless such default shall have been cured or
waived; provided,  however, that, except in the case of a default in the payment
of the principal of (or premium,  if any) or interest  (including any Additional
Interest)  on any  Security of such  series,  the Trustee  shall be protected in
withholding such notice if and so long as the board of directors,  the executive
committee or a trust committee of directors and/or  Responsible  Officers of the
Trustee in good faith  determines  that the withholding of such notice is in the
interests of the Holders of  Securities  of such series;  and provided  further,
however,  that, in the case of any default of the character specified in Section
5.1(3),  no such notice to Holders of  Securities  of such series shall be given
until at least 30 days after the  occurrence  thereof.  For the  purpose of this
Section  6.2,  the term  "default"  means any event that is, or after  notice or
lapse of time or both  would  become,  an  Event  of  Default  with  respect  to
Securities of such series.

         SECTION 6.3. Certain Rights of Trustee.

         Subject to the provisions of Section 6.1:

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

         (b) any request or direction of the Corporation  mentioned herein shall
be sufficiently  evidenced by a Corporation Request or Corporation Order and any
resolution  of the Board of Directors may be  sufficiently  evidenced by a Board
Resolution;


                                     - 58 -


<PAGE>



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

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

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

         (f) the Trustee shall not be bound to make any  investigation  into the
facts or matters stated in any resolution,  certificate,  statement, instrument,
opinion,  report, notice, request,  direction,  consent, order, bond, debenture,
Security or other paper or document,  but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit; and

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

         SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.

         The  recitals  contained  herein  and in  the  Securities,  except  the
Trustee's  certificates of  authentication,  shall be taken as the statements of
the Corporation,  and neither the Trustee nor any  Authenticating  Agent assumes
any responsibility  for their correctness.  The Trustee makes no representations
as to the  validity  or  sufficiency  of this  Indenture  or of the  Securities.
Neither the Trustee nor any  Authenticating  Agent shall be accountable  for the
use or application by the Corporation of the Securities or the proceeds thereof.

         SECTION 6.5. May Hold Securities.

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


                                     - 59 -


<PAGE>



         SECTION 6.6. Money Held in Trust.

         Money held by the  Trustee in trust  hereunder  need not be  segregated
from other  funds  except to the extent  required  by law  (including  the Trust
Indenture  Act).  The Trustee  shall be under no  liability  for interest on any
money received by it hereunder except as otherwise agreed with the Corporation.

         SECTION 6.7. Compensation and Reimbursement.

         The Corporation agrees

                  (1) to pay to the  Trustee  from time to time such  reasonable
         compensation for all services  rendered by it hereunder in such amounts
         as the Corporation and the Trustee shall agree from time to time (which
         compensation  shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

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

                  (3) to  indemnify  the  Trustee  for,  and to hold it harmless
         against,  any loss,  liability  or expense  (including  the  reasonable
         compensation  and the  expenses  and  disbursements  of its  agents and
         counsel) incurred without  negligence,  wilful misconduct or bad faith,
         arising out of or in connection  with the acceptance or  administration
         of this trust or the performance of its duties hereunder, including the
         costs and expenses of defending  itself  against any claim or liability
         in connection  with the exercise or performance of any of its powers or
         duties hereunder. This indemnification shall survive the termination of
         this Indenture.

         When the Trustee incurs expenses or renders  services after an Event of
Default  specified  in Section  5.1(4) or 5.1(5)  occurs,  the  expenses and the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under the Bankruptcy Code.

         SECTION 6.8. Disqualification; Conflicting Interests.

         (a) The Trustee for the Securities of any series issued hereunder shall
be  subject to the  provisions  of Section  310(b) of the Trust  Indenture  Act.
Nothing  herein shall  prevent the Trustee from filing with the  Commission  the
application referred to in the second to last paragraph of said Section 310(b).


                                     - 60 -


<PAGE>



         (b) The Trust  Agreement  and the Guarantee  Agreement  with respect to
each Issuer Trust shall be deemed to be specifically described in this Indenture
for the purposes of clause (i) of the first proviso  contained in Section 310(b)
of the Trust Indenture Act.

         SECTION 6.9. Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be:

                  (a) a corporation  organized and doing business under the laws
         of the United States of America or of any State or Territory thereof or
         the  District  of  Columbia,  authorized  under  such laws to  exercise
         corporate  trust powers and subject to  supervision  or  examination by
         Federal, State, Territorial or District of Columbia authority, or

                  (b) a corporation or other Person organized and doing business
         under  the laws of a foreign  government  that is  permitted  to act as
         Trustee  pursuant  to a rule,  regulation  or order of the  Commission,
         authorized  under such laws to exercise  corporate  trust  powers,  and
         subject to  supervision  or  examination  by  authority of such foreign
         government or a political subdivision thereof substantially  equivalent
         to supervision or examination applicable to United States institutional
         trustees,

in either case having at the time of appointment  securities rated in one of the
three highest rating categories by a nationally  recognized  statistical  rating
organization and a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid  supervising or examining authority,  then,
for the  purposes of this  Section 6.9 and to the extent  permitted by the Trust
Indenture  Act, the combined  capital and surplus of such  corporation  shall be
deemed to be its  combined  capital  and surplus as set forth in its most recent
report of condition so  published.  If at any time the Trustee shall cease to be
eligible in accordance  with the provisions of this Section 6.9, it shall resign
immediately  in the  manner and with the effect  hereinafter  specified  in this
Article  VI.  Neither the  Corporation  nor any Person  directly  or  indirectly
controlling,  controlled by or under common control with the  Corporation  shall
serve as Trustee for the Securities of any series issued hereunder.

         SECTION 6.10. Resignation and Removal; Appointment of Successor.

         (a) No  resignation  or removal of the Trustee and no  appointment of a
successor  Trustee  pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.

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

                                     - 61 -


<PAGE>




         (c)  The  Trustee  may be  removed  at any  time  with  respect  to the
Securities  of any  series by Act of the  Holders  of a  majority  in  aggregate
principal amount of the Outstanding Securities of such series,  delivered to the
Trustee and to the Corporation.

         (d) If at any time:

         (1) the  Trustee  shall fail to comply with  Section 6.8 after  written
request  therefor by the  Corporation  or by any Holder who has been a bona fide
Holder of a Security for at least six months, or

         (2) the Trustee shall cease to be eligible  under Section 6.9 and shall
fail to resign after written request  therefor by the Corporation or by any such
Holder, or

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

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

         (e) If the Trustee  shall  resign,  be removed or become  incapable  of
acting,  or if a vacancy shall occur in the office of Trustee for any cause with
respect to the  Securities of one or more series,  the  Corporation,  by a Board
Resolution,  shall  promptly  appoint a successor  Trustee  with  respect to the
Securities of that or those series.  If, within one year after such resignation,
removal or incapability,  or the occurrence of such vacancy, a successor Trustee
with  respect to the  Securities  of any series shall be appointed by Act of the
Holders  of  a  majority  in  aggregate  principal  amount  of  the  Outstanding
Securities of such series delivered to the Corporation and the retiring Trustee,
the successor Trustee so appointed shall,  forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities of such
series and supersede the successor Trustee  appointed by the Corporation.  If no
successor  Trustee with respect to the  Securities of any series shall have been
so appointed by the  Corporation or the Holders and accepted  appointment in the
manner  hereinafter  provided,  any Holder who has been a bona fide  Holder of a
Security of such series for at least six months may, subject to Section 5.14, on
behalf of such Holder and all others similarly  situated,  petition any court of
competent  jurisdiction for the appointment of a successor  Trustee with respect
to the Securities of such series.

         (f) The  Corporation  shall give  notice of each  resignation  and each
removal of the Trustee  with  respect to the  Securities  of any series and each
appointment of a successor Trustee with

                                     - 62 -


<PAGE>



respect to the Securities of any series by mailing  written notice of such event
by  first-class  mail,  postage  prepaid,  to the Holders of  Securities of such
series as their names and  addresses  appear in the  Securities  Register.  Each
notice  shall  include the name of the  successor  Trustee  with  respect to the
Securities of such series and the address of its Corporate Trust Office.

         SECTION 6.11. Acceptance of Appointment by Successor.

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

         (b) In case of the  appointment  hereunder of a successor  Trustee with
respect to the Securities of one or more (but not all) series,  the Corporation,
the retiring  Trustee and each successor  Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain  such  provisions  as shall be  necessary  or  desirable to transfer and
confirm to, and to vest in,  each  successor  Trustee  all the  rights,  powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,  (2)
if the retiring  Trustee is not retiring with respect to all  Securities,  shall
contain  such  provisions  as shall be deemed  necessary or desirable to confirm
that all the rights,  powers,  trusts and duties of the  retiring  Trustee  with
respect  to the  Securities  of that or those  series as to which  the  retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the  provisions of this  Indenture as shall be
necessary  to  provide  for or  facilitate  the  administration  of  the  trusts
hereunder by more than one Trustee,  it being  understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same  trust and that each such  Trustee  shall be  trustee  of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder  administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture  the  resignation  or removal of the  retiring  Trustee  shall  become
effective  to the  extent  provided  therein  and each such  successor  Trustee,
without any further act,  deed or  conveyance,  shall become vested with all the
rights,  powers,  trusts and duties of the retiring  Trustee with respect to the
Securities of that or those series to which the  appointment  of such  successor
Trustee  relates;  but, on request of the Corporation or any successor  Trustee,
such retiring Trustee shall duly assign,  transfer and deliver to such successor
Trustee all  property and money held by such  retiring  Trustee  hereunder  with
respect to the  Securities of that or those series to which the  appointment  of
such successor Trustee relates.


                                     - 63 -


<PAGE>



         (c) Upon request of any such successor  Trustee,  the Corporation shall
execute  any and all  instruments  for more fully and  certainly  vesting in and
confirming to such successor  Trustee all rights,  powers and trusts referred to
in paragraph (a) or (b) of this Section 6.11, as the case may be.

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

          SECTION  6.12.  Merger,  Conversion,  Consolidation  or  Succession to
Business.

         Any  corporation  into which the Trustee may be merged or  converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust
business of the Trustee, shall be the successor Trustee hereunder, provided such
corporation  shall be otherwise  qualified  and eligible  under this Article VI,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto. If any Securities shall have been authenticated,  but
not  delivered,  by the  Trustee  then  in  office,  any  successor  by  merger,
conversion  or  consolidation  to such  authenticating  Trustee  may adopt  such
authentication  and  deliver  the  Securities  so  authenticated,   and  if  any
Securities shall not have been  authenticated,  any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the  name of  such  successor  Trustee,  and in all  cases  the  certificate  of
authentication  shall have the full force which it is  provided  anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.

         SECTION 6.13. Preferential Collection of Claims Against Corporation.

         If  and  when  the  Trustee  shall  be or  become  a  creditor  of  the
Corporation  (or any other  obligor upon the  Securities),  the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Corporation (or any such other obligor).

         SECTION 6.14. Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating  Agent or Agents with respect
to one or more series of Securities,  which shall be authorized to act on behalf
of the Trustee to  authenticate  Securities  of such series issued upon original
issue and upon exchange,  registration of transfer or partial redemption thereof
or pursuant to Section 3.7, and Securities so authenticated shall be entitled to
the  benefits  of this  Indenture  and  shall be valid  and  obligatory  for all
purposes as if authenticated  by the Trustee  hereunder.  Wherever  reference is
made in this Indenture to the  authentication  and delivery of Securities by the
Trustee or to the Trustee's certificate of authentication,  such reference shall
be deemed to include  authentication and delivery on behalf of the Trustee by an
Authenticating Agent or the Authenticating Agent's certificate of authentication
set forth for this Section 6.14. Each  Authenticating  Agent shall be acceptable
to the Corporation  and shall at all times be a corporation  organized and doing
business  under  the laws of the  United  States of  America  or of any State or
Territory thereof or the District of

                                     - 64 -


<PAGE>



Columbia,  authorized under such laws to act as Authenticating  Agent,  having a
combined  capital  and  surplus  of not less than  $50,000,000  and  subject  to
supervision  or  examination  by  Federal,  State,  Territorial  or  District of
Columbia authority.  If such Authenticating Agent publishes reports of condition
at least  annually,  pursuant  to law or to the  requirements  of the  aforesaid
supervising or examining  authority,  then for the purposes of this Section 6.14
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Authenticating  Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an  Authenticating  Agent shall  cease to be eligible in  accordance
with the provisions of this Section 6.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.14.

         Any  corporation  into which an  Authenticating  Agent may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation  succeeding to all or substantially  all of
the corporate trust business of an Authenticating  Agent, shall be the successor
Authenticating  Agent hereunder,  provided such  corporation  shall be otherwise
qualified and eligible under this Section 6.14,  without the execution or filing
of any paper or any further act on the part of the Trustee or the Authenticating
Agent.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the  Trustee  and to the  Corporation.  The  Trustee  may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such  Authenticating  Agent and to the  Corporation.  Upon  receiving  such a
notice of resignation  or upon such a  termination,  or in case at any time such
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions  of  this  Section   6.14,   the  Trustee  may  appoint  a  successor
Authenticating  Agent,  which shall be acceptable to the  Corporation  and shall
give  notice of such  appointment  in the manner  provided in Section 1.6 to all
Holders of  Securities  of the series with respect to which such  Authenticating
Agent will serve.  Any  successor  Authenticating  Agent upon  acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its  predecessor  hereunder,  with like effect as if  originally  named as an
Authenticating  Agent.  No  successor  Authenticating  Agent shall be  appointed
unless eligible under the provision of this Section 6.14.

         The  Trustee  agrees to pay to each  Authenticating  Agent from time to
time reasonable  compensation  for its services under this Section 6.14, and the
Trustee shall be entitled to be  reimbursed  for such  payments,  subject to the
provisions of Section 6.7.

         If an  appointment  with respect to one or more series is made pursuant
to this Section 6.14, the  Securities of such series may have endorsed  thereon,
in addition to the  Trustee's  certificate  of  authentication,  an  alternative
certificate of authentication in the following form:


                                     - 65 -


<PAGE>



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


Dated:  ___________________
                                               ------------,
                                               as Trustee


                                               By:_______________________,
                                               As Authenticating Agent


                                               By:________________________
                                               Authorized Officer


                                   ARTICLE VII

              HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION

          SECTION 7.1.  Corporation  to Furnish  Trustee  Names and Addresses of
Holders.

         The Corporation will furnish or cause to be furnished to the Trustee:

                  (a)  quarterly,  on or before  January  1,  April 1, July 1 or
         October  1 of each  year,  a  list,  in such  form as the  Trustee  may
         reasonably  require,  of the names and addresses of the Holders as of a
         date not more than 15 days prior to the delivery thereof, and

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

in each case to the extent such  information  is in the possession or control of
the  Corporation  and has not  otherwise  been  received  by the  Trustee in its
capacity as Securities Registrar.

         SECTION 7.2. Preservation of Information, Communications to Holders.

         (a) The Trustee shall  preserve,  in as current a form as is reasonably
practicable,  the names and  addresses  of Holders  contained in the most recent
list  furnished  to the  Trustee as  provided  in Section  7.1 and the names and
addresses  of Holders  received  by the Trustee in its  capacity  as  Securities
Registrar.  The  Trustee may  destroy  any list  furnished  to it as provided in
Section 7.1 upon receipt of a new list so furnished.


                                     - 66 -


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         (b) The rights of  Holders  to  communicate  with  other  Holders  with
respect to their rights under this  Indenture or under the  Securities,  and the
corresponding rights and privileges of the Trustee,  shall be as provided in the
Trust Indenture Act.

         (c) Every Holder of Securities,  by its acceptance thereof, agrees with
the Corporation and the Trustee that neither the Corporation nor the Trustee nor
any  agent  of  either  of them  shall  be held  accountable  by  reason  of the
disclosure  of  information  as to the names and  addresses  of the Holders made
pursuant to the Trust Indenture Act.

         SECTION 7.3. Reports by Trustee.

         (a) The Trustee shall  transmit to Holders such reports  concerning the
Trustee and its actions under this Indenture as may be required  pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.

         (b) Reports so required to be  transmitted  at stated  intervals of not
more than 12 months shall be  transmitted no later than July 15 in each calendar
year,  commencing  with the first July 15 after the first issuance of Securities
under this Indenture.

         (c) If this  Indenture  shall  have  been  qualified  under  the  Trust
Indenture  Act,  a copy  of  each  such  report  shall,  at  the  time  of  such
transmission to Holders,  be filed by the Trustee with each securities  exchange
upon  which  any  Securities  are  listed  and  also  with the  Commission.  The
Corporation  will  notify  the  Trustee  when any  Securities  are listed on any
securities exchange.

         SECTION 7.4. Reports by Corporation.

         The  Corporation  shall file with the Trustee and with the  Commission,
and transmit to the Holders, such information,  documents and other reports, and
such summaries  thereof,  as may be required pursuant to the Trust Indenture Act
at the times and in the manner  provided in the Trust  Indenture  Act;  provided
that any such  information,  documents or reports  required to be filed with the
Commission  pursuant to Section 13 or Section 15(d) of the Exchange Act shall be
filed with the  Trustee  within 15 days after the same is  required  to be filed
with the Commission.  At any time when the Corporation is not subject to Section
13 or 15(d) of the  Exchange  Act,  upon the  request of a Holder or  beneficial
owner  of  a  Security,   the  Corporation  shall  promptly  furnish  Rule  144A
Information,  or cause  such  information  to be  furnished,  to such  Holder or
beneficial  owner or to a prospective  purchaser of such Security  designated by
such Holder or beneficial owner in order to permit  compliance by such Holder or
beneficial  owner with Rule 144A under the Securities Act in connection with the
resale of such Security by such Holder or beneficial owner;  provided,  however,
that the  Corporation  shall not be required to furnish such  information at any
time to a prospective  purchaser  located outside the United States who is not a
"U.S.  person" within the meaning of Regulation S under the Securities  Act. The
Corporation  also shall comply with the other  provisions of Trust Indenture Act
Section  314(a),  provided,  however,  that the  Corporation  shall be required,
pursuant to this Section 7.4, to provide any document, report or

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other  information  to the  Commission  only if this  Indenture  shall have been
qualified under the Trust Indenture Act.


                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         SECTION 8.1. Corporation May Consolidate, Etc., Only on Certain Terms.

         The  Corporation  shall not  consolidate  with or merge  into any other
Person or convey,  transfer or lease its properties and assets  substantially as
an entirety to any Person,  and no Person shall  consolidate  with or merge into
the  Corporation  or  convey,  transfer  or  lease  its  properties  and  assets
substantially as an entirety to the Corporation, unless:

                  (1) if the Corporation  shall  consolidate  with or merge into
         another  Person or convey,  transfer or lease its properties and assets
         substantially as an entirety to any Person,  the corporation  formed by
         such  consolidation  or into  which  the  Corporation  is merged or the
         Person that  acquires by conveyance  or transfer,  or that leases,  the
         properties and assets of the Corporation  substantially  as an entirety
         shall be a  corporation,  partnership  or trust  organized and existing
         under the laws of the United  States of America or any State thereof or
         the District of Columbia and shall  expressly  assume,  by an indenture
         supplemental  hereto,  executed and  delivered to the Trustee,  in form
         satisfactory  to the  Trustee,  the due  and  punctual  payment  of the
         principal  of  (and  premium,  if  any)  and  interest  (including  any
         Additional  Interest)  on all the  Securities  of every  series and the
         performance  of every  covenant  of this  Indenture  on the part of the
         Corporation to be performed or observed;

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

                  (3) the  Corporation has delivered to the Trustee an Officers'
         Certificate  and  an  Opinion  of  Counsel,   each  stating  that  such
         consolidation,  merger,  conveyance,  transfer  or  lease  and any such
         supplemental  indenture  comply  with  this  Article  VIII and that all
         conditions  precedent  herein provided for relating to such transaction
         have been complied with;  and the Trustee,  subject to Section 6.1, may
         rely  upon  such  Officers'  Certificate  and  Opinion  of  Counsel  as
         conclusive  evidence that such  transaction  complies with this Section
         8.1.

         SECTION 8.2. Successor Corporation Substituted.

         Upon any  consolidation  or merger by the Corporation  with or into any
other Person,  or any  conveyance,  transfer or lease by the  Corporation of its
properties and assets substantially as

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<PAGE>



an  entirety  to any  Person in  accordance  with  Section  8.1,  the  successor
corporation formed by such consolidation or into which the Corporation is merged
or to which such conveyance,  transfer or lease is made shall succeed to, and be
substituted  for,  and may  exercise  every right and power of, the  Corporation
under this Indenture  with the same effect as if such successor  Person had been
named as the  Corporation  herein;  and in the  event  of any  such  conveyance,
transfer or lease, the Corporation  shall be discharged from all obligations and
covenants under this Indenture and the Securities.

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

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


                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

         SECTION 9.1. Supplemental Indentures Without Consent of Holders.

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

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

                  (2) to  convey,  transfer,  assign,  mortgage  or  pledge  any
         property  to or with the  Trustee  or to  surrender  any right or power
         herein conferred upon the Corporation; or


                                     - 69 -


<PAGE>



                  (3) to  establish  the form or terms  of  Securities  of any
          series as permitted by Sections 2.1 or 3.1; or

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

                  (5) to add any additional Events of Default for the benefit of
         the Holders of all or any series of Securities  (and if such additional
         Events of Default  are to be for the benefit of less than all series of
         Securities,   stating  that  such  additional  Events  of  Default  are
         expressly   being  included  solely  for  the  benefit  of  the  series
         specified); or

                  (6) to  change  or  eliminate  any of the  provisions  of this
         Indenture,  provided  that any such  change  or  elimination  shall (a)
         become  effective  only when there is no  Security  Outstanding  of any
         series  created prior to the execution of such  supplemental  indenture
         that is entitled to the benefit of such  provision  or (b) not apply to
         any Outstanding Securities; or

                  (7) to cure  any  ambiguity,  to  correct  or  supplement  any
         provision  herein that may be defective or inconsistent  with any other
         provision  herein,  or to make any other  provisions  with  respect  to
         matters or questions  arising under this Indenture,  provided that such
         action  pursuant  to this  clause  (7) shall not  adversely  affect the
         interest of the  Holders of  Securities  of any series in any  material
         respect  or,  in the case of the  Securities  of a series  issued to an
         Issuer  Trust  and for so long as any of the  corresponding  series  of
         Capital   Securities   issued  by  such  Issuer   Trust  shall   remain
         outstanding, the holders of such Capital Securities; or

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

                  (9) to comply with the requirements of the Commission in order
         to effect or maintain the  qualification  of this  Indenture  under the
         Trust Indenture Act.

         SECTION 9.2. Supplemental Indentures with Consent of Holders.

         With  the  consent  of the  Holders  of not  less  than a  majority  in
aggregate principal amount of the Outstanding Securities of each series affected
by  such  supplemental  indenture,  by  Act of  said  Holders  delivered  to the
Corporation  and  the  Trustee,  the  Corporation,  when  authorized  by a Board
Resolution,   and  the  Trustee  may  enter  into  an  indenture  or  indentures
supplemental

                                     - 70 -


<PAGE>



hereto for the purpose of adding any  provisions to or changing in any manner or
eliminating  any of the  provisions  of this  Indenture  or of  modifying in any
manner  the  rights of the  Holders  of  Securities  of such  series  under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each  Outstanding  Security of each series affected
thereby,

                  (1) change the Stated  Maturity  of the  principal  of, or any
         installment of interest  (including  any  Additional  Interest) on, any
         Security,  or  reduce  the  principal  amount  thereof  or the  rate of
         interest thereon or any premium payable upon the redemption thereof, or
         reduce the amount of principal of a Discount Security that would be due
         and payable upon a declaration of acceleration of the Maturity  thereof
         pursuant to Section 5.2, or change the place of payment  where,  or the
         coin or currency in which,  any  Security  or interest  (including  any
         Additional  Interest)  thereon  is  payable,  or  impair  the  right to
         institute suit for the  enforcement of any such payment on or after the
         Stated Maturity thereof (or, in the case of redemption, on or after the
         Redemption Date), or

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

                  (3) modify any of the provisions of this Section 9.2,  Section
         5.13 or Section  10.5,  except to increase  any such  percentage  or to
         provide that  certain  other  provisions  of this  Indenture  cannot be
         modified or waived  without the consent of the Holder of each  Security
         affected thereby;

provided further, however, that, in the case of Securities of a series issued to
an  Issuer  Trust,  so  long  as any  of the  corresponding  series  of  Capital
Securities  issued  by  such  Issuer  Trust  remains  outstanding,  (i) no  such
amendment  shall be made that  adversely  affects  the  holders of such  Capital
Securities in any material  respect,  and no termination of this Indenture shall
occur,  and no waiver of any Event of Default or  compliance  with any  covenant
under  this  Indenture  shall be  effective,  without  the prior  consent of the
holders of at least a Majority in Liquidation  Amount of such Capital Securities
(as defined in the related  Trust  Agreement)  unless and until the principal of
(and  premium,  if any,  on) the  Securities  of such series and all accrued and
(subject to Section 3.12) unpaid interest  (including,  subject to Section 3.12,
any Additional  Interest)  thereon have been paid in full, and (ii) no amendment
shall be made to Section 5.8 of this  Indenture  that would impair the rights of
the holders of Capital  Securities  issued by any Issuer Trust provided  therein
without the prior  consent of the  holders of each such  Capital  Security  then
outstanding  unless and until the  principal  of (and  premium,  if any, on) the
Securities  of such series and all accrued and (subject to Section  3.12) unpaid
interest  (including,  subject to Section 3.12, any Additional Interest) thereon
have been paid in full.


                                     - 71 -


<PAGE>



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

         It shall not be necessary for any Act of Holders under this Section 9.2
to approve the particular form of any proposed  supplemental  indenture,  but it
shall be sufficient if such Act shall approve the substance thereof.

         SECTION 9.3. Execution of Supplemental Indentures.

         In  executing  or  accepting  the  additional  trusts  created  by  any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts  created by this  Indenture,  the  Trustee  shall be  entitled  to
receive,  and (subject to Section 6.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such  supplemental  indenture is authorized or permitted by this Indenture,  and
that all conditions  precedent  herein provided for relating to such action have
been complied  with.  The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

         SECTION 9.4. Effect of Supplemental Indentures.

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

         SECTION 9.5. Conformity with Trust Indenture Act.

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

         SECTION 9.6. Reference in Securities to Supplemental Indentures.

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

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<PAGE>





                                    ARTICLE X

                                    COVENANTS

         SECTION 10.1. Payment of Principal, Premium and Interest.

         The Corporation  covenants and agrees for the benefit of each series of
Securities  that it will duly and  punctually pay the principal of (and premium,
if any) and interest  (including any  Additional  Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.

         SECTION 10.2. Maintenance of Office or Agency.

         The  Corporation  will maintain in each Place of Payment for any series
of  Securities  an office or  agency  where  Securities  of that  series  may be
presented or  surrendered  for payment,  where  Securities of that series may be
surrendered  for  registration  of transfer or  exchange  and where  notices and
demands to or upon the  Corporation  in respect of the Securities of that series
and this  Indenture  may be  served.  The  Corporation  initially  appoints  the
Trustee,  acting  through  its  Corporate  Trust  Office,  as its agent for said
purposes.  The Corporation will give prompt written notice to the Trustee of any
change  in the  location  of any  such  office  or  agency.  If at any  time the
Corporation  shall  fail to  maintain  such  office or  agency or shall  fail to
furnish the Trustee with the address thereof,  such  presentations,  surrenders,
notices and demands may be made or served at the  Corporate  Trust Office of the
Trustee, and the Corporation hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.

         The  Corporation may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such  purposes,  and may from time to time rescind such  designations;
provided,  however,  that no such  designation or rescission shall in any manner
relieve the  Corporation  of its  obligation  to maintain an office or agency in
each Place of Payment  for  Securities  of any  series  for such  purposes.  The
Corporation  will  give  prompt  written  notice  to the  Trustee  of  any  such
designation and any change in the location of any such office or agency.

         SECTION 10.3. Money for Security Payments to be Held in Trust.

         If the  Corporation  shall at any time act as its own Paying Agent with
respect to any series of Securities,  it will, on or before each due date of the
principal  of (or  premium,  if  any)  or  interest  (including  any  Additional
Interest) on any of the  Securities of such series,  segregate and hold in trust
for the  benefit of the Persons  entitled  thereto a sum  sufficient  to pay the
principal (or premium, if any) or interest  (including any Additional  Interest)
so  becoming  due until  such sums shall be paid to such  Persons  or  otherwise
disposed  of as herein  provided,  and will  promptly  notify the Trustee of its
failure so to act.

                                     - 73 -


<PAGE>




         Whenever the Corporation shall have one or more Paying Agents, it will,
prior to 10:00 a.m.,  New York City time,  on each due date of the  principal of
(or premium,  if any) or interest  (including  any  Additional  Interest) on any
Securities,  deposit with a Paying Agent a sum  sufficient  to pay the amount so
becoming  due,  such  sum to be held in trust  for the  benefit  of the  Persons
entitled to such  amount,  and (unless  such Paying  Agent is the  Trustee)  the
Corporation will promptly notify the Trustee of its failure so to act.

         The Corporation  will cause each Paying Agent other than the Trustee to
execute  and  deliver to the Trustee an  instrument  in which such Paying  Agent
shall agree with the Trustee,  subject to the  provisions  of this Section 10.3,
that such Paying Agent will:

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

                  (2) give the Trustee notice of any default by the  Corporation
         (or any  other  obligor  upon  such  Securities)  in the  making of any
         payment of principal (or premium,  if any) or interest  (including  any
         Additional Interest) in respect of any Security of any series;

                  (3) at any time during the  continuance  of any  default  with
         respect  to a series of  Securities,  upon the  written  request of the
         Trustee, forthwith pay to the Trustee all sums so held in trust by such
         Paying Agent with respect to such series; and

                  (4) comply with the  provisions  of the Trust  Indenture Act
         applicable to it as a Paying Agent.

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

         Any money  deposited with the Trustee or any Paying Agent, or then held
by the Corporation in trust for the payment of the principal of (or premium,  if
any) or  interest  (including  any  Additional  Interest)  on any  Security  and
remaining  unclaimed for two years after such principal (or premium,  if any) or
interest  (including any  Additional  Interest) has become due and payable shall
(unless  otherwise  required by  mandatory  provision of  applicable  escheat or
abandoned  or  unclaimed  property  law) be paid on  Corporation  Request to the
Corporation,  or (if  then  held by the  Corporation)  shall  (unless  otherwise
required by mandatory  provision of applicable escheat or abandoned or unclaimed
property  law) be  discharged  from such trust;  and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the

                                     - 74 -


<PAGE>



Corporation for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money,  and all liability of the Corporation as
trustee thereof, shall thereupon cease;  provided,  however, that the Trustee or
such Paying Agent, before being required to make any such repayment,  may at the
expense of the Corporation cause to be published once, in a newspaper  published
in the English  language,  customarily  published  on each  Business  Day and of
general  circulation in the Borough of Manhattan,  The City of New York,  notice
that such money remains  unclaimed  and that,  after a date  specified  therein,
which  shall  not be less than 30 days  from the date of such  publication,  any
unclaimed   balance  of  such  money  then  remaining  will  be  repaid  to  the
Corporation.

         SECTION 10.4. Statement as to Compliance.

         The Corporation shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the  Corporation  ending  after the date  hereof,  an
Officers'  Certificate  covering the preceding calendar year, stating whether or
not to the best knowledge of the signers  thereof the  Corporation is in default
in the  performance,  observance or fulfillment of or compliance with any of the
terms,  provisions,  covenants  and  conditions  of this  Indenture,  and if the
Corporation shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. For the purpose of this Section
10.4,  compliance  shall be  determined  without  regard to any grace  period or
requirement of notice provided pursuant to the terms of this Indenture.

         SECTION 10.5. Waiver of Certain Covenants.

         Subject to the rights of holders  of Capital  Securities  specified  in
Section  9.2, if any, the  Corporation  may omit in any  particular  instance to
comply with any covenant or condition  provided  pursuant to Section 3.1, 9.1(3)
or 9.1(4) with respect to the  Securities of any series,  if before or after the
time  for such  compliance  the  Holders  of at least a  majority  in  aggregate
principal  amount of the Outstanding  Securities of such series shall, by Act of
such Holders,  either waive such  compliance in such instance or generally waive
compliance  with such covenant or condition,  but no such waiver shall extend to
or affect such covenant or condition  except to the extent so expressly  waived,
and,  until  such  waiver  shall  become  effective,   the  obligations  of  the
Corporation  in respect of any such  covenant or condition  shall remain in full
force and effect.

         SECTION 10.6. Additional Sums.

         In the case of the Securities of a series initially issued to an Issuer
Trust,  so long as no Event of Default has occurred and is continuing and except
as otherwise  specified as contemplated by Section 2.1 or Section 3.1, if (i) an
Issuer Trust is the Holder of all of the Outstanding  Securities of such series,
and (ii) a Tax Event has  occurred and is  continuing  in respect of such Issuer
Trust,  the  Corporation  shall  pay to such  Issuer  Trust  (or  its  permitted
successor  under the related Trust  Agreement)  for so long as such Issuer Trust
(or  its  permitted  successor)  is the  registered  holder  of the  Outstanding
Securities  of such  series,  together  with any  payment  of  principal  of (or
premium, if any) or interest (including any Additional Interest) on

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such  Securities,  such  additional  sums as may be  necessary in order that the
amount of  Distributions  (including any Additional  Amounts (as defined in such
Trust  Agreement))  then  payable by such Issuer Trust in respect of the related
Capital  Securities and Common  Securities in accordance  with the terms thereof
shall not be reduced as a result of any  Additional  Taxes arising from such Tax
Event (the  "Additional  Sums").  Whenever in this  Indenture or the  Securities
there is a reference  in any context to the payment of principal of (or premium,
if any) or interest (including any Additional Interest) on the Securities,  such
mention  shall be deemed to include  mention of the  payments of the  Additional
Sums  provided  for in this  paragraph  to the  extent  that,  in such  context,
Additional Sums are, were or would be payable in respect thereof pursuant to the
provisions  of this  paragraph,  and  any  express  mention  of the  payment  of
Additional Sums (if  applicable) in any provision  hereof shall not be construed
as  excluding  Additional  Sums in those  provisions  hereof  where such express
mention is not made;  provided,  however,  that the  deferral  of the payment of
interest pursuant to Section 3.12 or the terms of the Securities shall not defer
the payment of any Additional Sums that may be due and payable.

         SECTION 10.7. Additional Covenants.

         The Corporation  covenants and agrees with each Holder of Securities of
each series  that it shall not,  and it shall not permit any  Subsidiary  of the
Corporation to, (x) declare or pay any dividends or distributions  on, or redeem
purchase,  acquire or make a liquidation  payment with respect to, any shares of
the  Corporation's  capital  stock,  or (y) make any payment of  principal of or
interest  or  premium,  if any,  on or  repay,  repurchase  or  redeem  any debt
securities  of the  Corporation  that rank pari  passu in all  respects  with or
junior in  interest  to the  Securities  of such  series  or make any  guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any Subsidiary of the  Corporation if such guarantee ranks pari passu with or
junior in interest to the Securities of such series (other than (a) dividends or
distributions  in common  stock of the  Corporation,  (b) any  declaration  of a
dividend in connection with the  implementation of a stockholders'  rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Guarantee
Agreement  and (d)  purchases of common stock  related to the issuance of common
stock  or  rights  under  any of the  Corporation's  or  any  Subsidiary  of the
Corporation's  benefit  plans for their  directors,  officers or employees if at
such time (i) there shall have occurred any event of which the  Corporation  has
actual  knowledge  that (A) with the  giving of notice or the lapse of time,  or
both,  would  constitute  an Event of  Default  and (B) in  respect of which the
Corporation  shall  not  have  taken  reasonable  steps  to  cure,  (ii)  if the
Securities of such series are held by an Issuer Trust, the Corporation  shall be
in default with respect to its payment of any  obligations  under the  Guarantee
Agreement  relating to the Capital  Securities  issued by such Issuer Trust,  or
(iii) the  Corporation  shall have given notice of its selection of an Extension
Period with  respect to the  Securities  of such  series as provided  herein and
shall not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing.

         The  Corporation  also  covenants  with each Holder of  Securities of a
series issued to an Issuer Trust (i) to hold,  directly or  indirectly,  100% of
the  Common  Securities  of such  Issuer  Trust,  provided  that  any  permitted
successor of the Corporation hereunder may succeed to the

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Corporation's ownership of such Common Securities, (ii) as holder of such Common
Securities,  not to  voluntarily  terminate,  wind-up or  liquidate  such Issuer
Trust,  other than (a) in connection  with a  distribution  of the Securities of
such series to the holders of the related  Capital  Securities in liquidation of
such Issuer Trust, or (b) in connection with certain mergers,  consolidations or
amalgamations  permitted by the related  Trust  Agreement,  and (iii) to use its
reasonable  efforts,  consistent  with the terms and  provisions  of such  Trust
Agreement,  to cause such Issuer Trust to continue to be classified as a grantor
trust and not to be taxable as a corporation  for United States  federal  income
tax purposes.

         SECTION 10.8. Original Issue Discount.

         For each  year  during  which any  Securities  that  were  issued  with
original issue discount are Outstanding,  the Corporation  shall furnish to each
Paying Agent in a timely fashion such information as may be reasonably requested
by each Paying Agent in order that such Paying Agent may prepare the information
that it is required to report for such year on Internal  Revenue  Service  Forms
1096 and 1099 pursuant to Section 6049 of the Internal  Revenue Code of 1986, as
amended.  Such  information  shall include the amount of original issue discount
includable in income for each $1,000 of principal  amount at Stated  Maturity of
Securities Outstanding during such year.


                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

         SECTION 11.1. Applicability of This Article.

         Redemption  of  Securities  of any series  (whether by  operation  of a
sinking  fund or  otherwise)  as  permitted  or required by any form of Security
issued  pursuant to this Indenture shall be made in accordance with such form of
Security and this Article XI;  provided,  however,  that if any provision of any
such form of Security  shall conflict with any provision of this Article XI, the
provision of such form of Security  shall govern.  Except as otherwise set forth
in the form of Security  for such  series,  each  Security of a series  shall be
subject to partial redemption only in integral multiples of $1,000.

         SECTION 11.2. Election to Redeem; Notice to Trustee.

         The  election  of the  Corporation  to redeem any  Securities  shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the  Corporation,  the Corporation  shall, not less than 45 nor more
than 60 days prior to the  Redemption  Date  (unless a shorter  notice  shall be
satisfactory to the Trustee),  notify the Trustee and, in the case of Securities
of a series held by an Issuer  Trust,  the  Property  Trustee  under the related
Trust  Agreement,  of such date and of the principal amount of Securities of the
applicable series to be redeemed and provide the additional information required
to be included in the notice or notices

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contemplated  by  Section  11.4;  provided  that in the  case of any  series  of
Securities  initially  issued to an Issuer Trust, for so long as such Securities
are held by such Issuer  Trust,  such notice shall be given not less than 45 nor
more than 75 days prior to such  Redemption  Date (unless a shorter notice shall
be satisfactory to the Property Trustee under the related Trust  Agreement).  In
the  case  of any  redemption  of  Securities  prior  to the  expiration  of any
restriction on such  redemption  provided in the terms of such  Securities,  the
Corporation  shall  furnish the Trustee  with an  Officers'  Certificate  and an
Opinion of Counsel evidencing compliance with such restriction.

         SECTION 11.3. Selection of Securities to be Redeemed.

         If less than all the  Securities of any series are to be redeemed,  the
particular  Securities  to be redeemed  shall be selected  not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding  Securities of
such series not previously called for redemption,  by such method as the Trustee
shall deem fair and  appropriate  and which may  provide for the  selection  for
redemption of a portion of the principal  amount of any Security of such series,
provided that the  unredeemed  portion of the  principal  amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.

         The Trustee shall  promptly  notify the  Corporation  in writing of the
Securities  selected for partial  redemption and the principal amount thereof to
be redeemed.  For all purposes of this Indenture,  unless the context  otherwise
requires,  all provisions relating to the redemption of Securities shall relate,
in the case of any  Security  redeemed  or to be redeemed  only in part,  to the
portion  of the  principal  amount  of such  Security  that has been or is to be
redeemed.

         SECTION 11.4. Notice of Redemption.

         Notice  of  redemption  shall  be given by  first-class  mail,  postage
prepaid,  mailed not less than 30 nor more than 60 days prior to the  Redemption
Date, to each Holder of Securities to be redeemed, at the address of such Holder
as it  appears  in the  Securities  Register,  provided  that in the case of any
series of Securities  initially  issued to an Issuer Trust,  for so long as such
Securities  are held by such Issuer  Trust,  such notice shall be given not less
than 45 nor more than 75 days prior to such  Redemption  Date  (unless a shorter
notice shall be  satisfactory  to the Property  Trustee  under the related Trust
Agreement).

         With respect to Securities  of each series to be redeemed,  each notice
of redemption shall state:

                  (a) the Redemption Date;

                  (b) the Redemption Price or, if the Redemption Price cannot be
         calculated  prior to the time the  notice is  required  to be sent,  an
         estimate of the  Redemption  Price together with a statement that it is
         an estimate and that the actual  Redemption Price will be calculated on
         the third Business Day prior to the Redemption Date (and, if such an

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<PAGE>



         estimate of the Redemption Price is given, a subsequent notice shall be
         given as set  forth  above on the date that  such  Redemption  Price is
         calculated setting forth the actual Redemption Price);

                  (c) if less than all Outstanding Securities of such particular
         series are to be  redeemed,  the  identification  (and,  in the case of
         partial redemption, the respective principal amounts) of the particular
         Securities to be redeemed;

                  (d) that on the Redemption  Date,  the  Redemption  Price will
         become due and payable upon each such Security or portion thereof,  and
         that interest  (including any  Additional  Interest)  thereon,  if any,
         shall cease to accrue on and after said date;

                  (e) the  place or places  where  such  Securities  are to be
         surrendered for payment of the Redemption Price;

                  (f) that the  redemption  is for a sinking  fund, if such is
         the case;

                  (g) such other  provisions  as may be required in respect of
         the terms of a particular series of Securities.

         Notice of  redemption  of  Securities to be redeemed at the election of
the  Corporation  shall be given by the  Corporation  or,  at the  Corporation's
request,  by the Trustee in the name and at the expense of the  Corporation  and
shall be irrevocable. The notice if mailed in the manner provided above shall be
conclusively  presumed  to have  been  duly  given,  whether  or not the  Holder
receives such notice.  In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security  designated for redemption as
a whole or in part shall not  affect the  validity  of the  proceedings  for the
redemption of any other Security.

         SECTION 11.5. Deposit of Redemption Price.

         Prior to 10:00  a.m.,  New  York  City  time,  on the  Redemption  Date
specified in the notice of  redemption  given as provided in Section  11.4,  the
Corporation will deposit with the Trustee or with one or more Paying Agents (or,
if the  Corporation  is acting as its own Paying  Agent,  the  Corporation  will
segregate  and hold in trust as  provided  in  Section  10.3) an amount of money
sufficient to pay the Redemption Price of, and any accrued  interest  (including
any Additional  Interest) on, all the Securities (or portions  thereof) that are
to be redeemed on that date.

         SECTION 11.6. Payment of Securities Called for Redemption.

         If any notice of redemption has been given as provided in Section 11.4,
the  Securities or portion of  Securities  with respect to which such notice has
been given  shall  become due and payable on the date and at the place or places
stated in such notice at the applicable  Redemption Price, together with accrued
interest  (including  any  Additional  Interest)  to  the  Redemption  Date.  On
presentation  and  surrender  of such  Securities  at a Place of Payment in said
notice specified,

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<PAGE>



the said Securities or the specified portions thereof shall be paid and redeemed
by the  Corporation at the applicable  Redemption  Price,  together with accrued
interest (including any Additional  Interest) to the Redemption Date;  provided,
however,  that,  unless  otherwise  specified  as  contemplated  by Section 3.1,
installments  of interest  (including  any  Additional  Interest)  whose  Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Securities,  or one or more Predecessor  Securities,  registered as such at
the close of business on the relevant  record dates according to their terms and
the provisions of Section 3.8.

         Upon   presentation  of  any  Security   redeemed  in  part  only,  the
Corporation shall execute and the Trustee shall  authenticate and deliver to the
Holder thereof, at the expense of the Corporation,  a new Security or Securities
of the same series, of authorized  denominations,  in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms.

         If any  Security  called  for  redemption  shall  not be so  paid  upon
surrender  thereof for  redemption,  the principal of (and premium,  if any, on)
such Security  shall,  until paid, bear interest from the Redemption Date at the
rate prescribed therefor in such Security.

          SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust.

         In the case of  Securities  of a series  initially  issued to an Issuer
Trust,  except as  otherwise  specified  as  contemplated  by Section  3.1,  the
Corporation,  at its option, may redeem such Securities (i) on or after the date
specified in such  Security,  in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the  continuation of a Tax Event in whole
(but not in part) at any time within 90 days following the occurrence and during
the  continuation  of such Tax Event at a  Redemption  Price  specified  in such
Security,  together with accrued interest (including any Additional Interest) to
but excluding the Redemption Date.

         If less than all the  Securities of any such series are to be redeemed,
the aggregate  principal amount of such Securities  remaining  Outstanding after
giving effect to such  redemption  shall be sufficient to satisfy any provisions
of the Trust Agreement related to the Issuer Trust to which such Securities were
issued,  including  any  requirement  in such Trust  Agreement as to the minimum
Liquidation  Amount (as defined in such Trust  Agreement) of Capital  Securities
that may be held by a holder of Capital Securities thereunder.



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                                   ARTICLE XII

                                  SINKING FUNDS

         SECTION 12.1. Applicability of Article.

         The  provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise  specified as
contemplated by Section 3.1 for such Securities.

         The minimum  amount of any sinking  fund  payment  provided  for by the
terms of any  Securities  of any series is herein  referred  to as a  "mandatory
sinking  fund  payment",  and any sinking fund payment in excess of such minimum
amount  that is  permitted  to be made by the  terms of such  Securities  of any
series is herein referred to as an "optional sinking fund payment".  If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund  payment may be subject to  reduction  as provided  in Section  12.2.  Each
sinking fund payment  shall be applied to the  redemption  of  Securities of any
series as provided for by the terms of such Securities.

         SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.

         In lieu of making all or any part of a mandatory  sinking  fund payment
with respect to any Securities of a series in cash, the  Corporation  may at its
option, at any time no more than 16 months and no less than 45 days prior to the
date on  which  such  sinking  fund  payment  is  due,  deliver  to the  Trustee
Securities  of  such  series  (together  with  the  unmatured  coupons,  if any,
appertaining  thereto)  theretofore  purchased  or  otherwise  acquired  by  the
Corporation,  except  Securities of such series that have been redeemed  through
the application of mandatory or optional  sinking fund payments  pursuant to the
terms of the  Securities  of such series,  accompanied  by a  Corporation  Order
instructing  the  Trustee  to  credit  such  obligations  and  stating  that the
Securities of such series were  originally  issued by the  Corporation by way of
bona fide sale or other  negotiation for value;  provided that the Securities to
be so credited  have not been  previously so credited.  The  Securities to be so
credited  shall be received  and credited for such purpose by the Trustee at the
Redemption  Price for such  Securities,  as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.

         SECTION 12.3. Redemption of Securities for Sinking Fund.

         Not less than 45 days prior to each  sinking  fund payment date for any
series of Securities,  the Corporation  will deliver to the Trustee an Officers'
Certificate  specifying the amount of the next ensuing  sinking fund payment for
such Securities  pursuant to the terms of such Securities,  the portion thereof,
if any,  that is to be satisfied by payment of cash in the currency in which the
Securities  of such series are payable  (except as provided  pursuant to Section
3.1) and the portion thereof,  if any, that is to be satisfied by delivering and
crediting Securities pursuant to

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<PAGE>



Section  12.2,  and will also  deliver to the  Trustee any  Securities  to be so
delivered. Such Officers' Certificate shall be irrevocable and upon its delivery
the Corporation shall be obligated to make any cash payment or payments referred
to therein,  on or before the  succeeding  sinking  fund  payment  date.  If the
Corporation fails to deliver such Officers' Certificate (or, as required by this
Indenture,  the  Securities  and coupons,  if any,  specified in such  Officers'
Certificate)  by the due date  therefor,  the  sinking  fund  payment due on the
succeeding  sinking fund payment date for such series shall be paid  entirely in
cash and shall be sufficient to redeem the principal amount of the Securities of
such series  subject to a mandatory  sinking fund  payment  without the right to
deliver or credit  securities  as provided in Section 12.2 and without the right
to make the  optional  sinking  fund payment with respect to such series at such
time.

         Any sinking fund payment or payments  (mandatory  or optional)  made in
cash plus any unused  balance of any  preceding  sinking fund payments made with
respect  to the  Securities  of any  particular  series  shall be applied by the
Trustee (or by the  Corporation,  if the Corporation is acting as its own Paying
Agent) on the sinking  fund  payment  date on which such payment is made (or, if
such  payment is made before a sinking fund  payment  date,  on the sinking fund
payment date  immediately  following the date of such payment) to the redemption
of  Securities  of  such  series  at the  Redemption  Price  specified  in  such
Securities  with  respect to the sinking  fund.  Any and all sinking fund moneys
with respect to the Securities of any particular series held by the Trustee (or,
if the  Corporation  is acting as its own Paying Agent,  segregated  and held in
trust as provided in Section  10.3) on the last  sinking  fund payment date with
respect to  Securities of such series and not held for the payment or redemption
of particular  Securities of such series shall be applied by the Trustee (or, by
the Corporation, if the Corporation is acting as its own Paying Agent), together
with other moneys, if necessary,  to be deposited (or segregated) sufficient for
the purpose, to the payment of the principal of the Securities of such series at
Maturity.  The Trustee  shall  select the  Securities  to be redeemed  upon such
sinking  fund  payment  date in the manner  specified  in Section 11.3 and cause
notice of the  redemption  thereof to be given in the name of and at the expense
of the  Corporation in the manner  provided in Section 11.4.  Such notice having
been duly given,  the redemption of such Securities shall be made upon the terms
and in the manner stated in Section 11.6. On or before each sinking fund payment
date, the Corporation shall pay to the Trustee (or, if the Corporation is acting
as its own Paying Agent,  the  Corporation  shall segregate and hold in trust as
provided in Section  10.3) in cash a sum in the currency in which  Securities of
such series are payable  (except as provided  pursuant to Section  3.1) equal to
the principal (and premium,  if any) and any interest  (including any Additional
Interest)  accrued to the Redemption Date for the Securities or portions thereof
to be redeemed on such sinking fund payment date pursuant to this Section 12.3.

         Neither the Trustee nor the Corporation  shall redeem any Securities of
a series with sinking fund monies or mail any notice of redemption of Securities
of such  series by  operation  of the sinking  fund for such  series  during the
continuance  of a default in  payment  of  interest  (including  any  Additional
Interest),  if any, on any  Securities of such series or of any Event of Default
(other than an Event of Default  occurring as a consequence  of this  paragraph)
with  respect to the  Securities  of such  series,  except that if the notice of
redemption  shall have been provided in accordance  with the provisions  hereof,
the Trustee (or the Corporation, if the

                                     - 82 -


<PAGE>



Corporation  is acting as its own Paying Agent) shall redeem such  Securities if
cash  sufficient  for that  purpose  shall be  deposited  with the  Trustee  (or
segregated by the  Corporation) for that purpose in accordance with the terms of
this Article XII.  Except as aforesaid,  any monies in the sinking fund for such
series at the time when any such default or Event of Default shall occur and any
monies  thereafter paid into such sinking fund shall,  during the continuance of
such  default or Event of Default,  be held as  security  for the payment of the
principal  of (and  premium,  if any) and  interest  (including  any  Additional
Interest) on the  Securities  of such series;  provided,  however,  that if such
default or Event of Default shall have been cured or waived as provided  herein,
such monies  shall  thereafter  be applied on the next sinking fund payment date
for the  Securities of such series on which such monies may be applied  pursuant
to the provisions of this Section 12.3.


                                  ARTICLE XIII

                           SUBORDINATION OF SECURITIES

         SECTION 13.1. Securities Subordinate to Senior Indebtedness.

         The Corporation covenants and agrees, and each Holder of a Security, by
its acceptance thereof,  likewise covenants and agrees,  that, to the extent and
in the manner  hereinafter  set forth in this Article  XIII,  the payment of the
principal  of (and  premium,  if any) and  interest  (including  any  Additional
Interest) on each and all of the  Securities of each and every series are hereby
expressly made  subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness.

        SECTION 13.2. No Payment When Senior Indebtedness in Default;  Payment
Over of Proceeds Upon Dissolution, Etc.

         If the Corporation shall default in the payment of any principal of (or
premium,  if any) or interest on any Senior  Indebtedness  when the same becomes
due and  payable,  whether at maturity or at a date fixed for  prepayment  or by
declaration  of  acceleration  or otherwise,  then,  upon written notice of such
default to the Corporation by the holders of Senior  Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have  ceased to exist,  no direct or  indirect  payment  (in cash,  property  or
securities,  by  set-off  or  otherwise)  shall be made or  agreed to be made on
account of the  principal of (or  premium,  if any) or interest  (including  any
Additional Interest) on any of the Securities,  or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Securities.

         In  the  event  of  (a)  any  insolvency,   bankruptcy,   receivership,
liquidation,   reorganization,   readjustment,   composition  or  other  similar
proceedings relating to the Corporation,  its creditors or its property, (b) any
proceeding  for  the  liquidation,  dissolution  or  other  winding  up  of  the
Corporation,  voluntary or involuntary,  whether or not involving  insolvency or
bankruptcy proceedings, (c) any assignment by the Corporation for the benefit of
creditors or (d) any other

                                     - 83 -


<PAGE>



marshaling of the assets of the  Corporation  (each such event,  if any,  herein
sometimes referred to as a "Proceeding"), all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings)  shall
first be paid in full  before  any  payment  or  distribution,  whether in cash,
securities  or  other  property,  shall  be  made  to any  Holder  of any of the
Securities on account  thereof.  Any payment or  distribution,  whether in cash,
securities or other property  (other than  securities of the  Corporation or any
other  corporation  provided for by a plan of reorganization or readjustment the
payment  of which is  subordinate,  at least  to the  extent  provided  in these
subordination  provisions  with  respect to the  indebtedness  evidenced  by the
Securities,  to the payment of all Senior  Indebtedness at the time  outstanding
and to any  securities  issued  in  respect  thereof  under  any  such  plan  of
reorganization   or   readjustment),   that  would   otherwise  (but  for  these
subordination provisions) be payable or deliverable in respect of the Securities
of any  series  shall be paid or  delivered  directly  to the  holders of Senior
Indebtedness  in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.

         In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior  Indebtedness,  the Holders of the  Securities,  together
with the holders of any obligations of the Corporation  ranking on a parity with
the  Securities,  shall be entitled to be paid from the remaining  assets of the
Corporation the amounts at the time due and owing on account of unpaid principal
of (and premium, if any) and interest (including any Additional Interest) on the
Securities and such other obligations before any payment or other  distribution,
whether in cash, property or otherwise,  shall be made on account of any capital
stock or any obligations of the Corporation ranking junior to the Securities and
such other obligations.

         If,  notwithstanding the foregoing,  any payment or distribution of any
character or any security,  whether in cash, securities or other property (other
than  securities of the Corporation or any other  corporation  provided for by a
plan of reorganization  or readjustment the payment of which is subordinate,  at
least to the extent provided in these  subordination  provisions with respect to
the  indebtedness  evidenced  by the  Securities,  to the  payment of all Senior
Indebtedness  at the time  outstanding  and to any securities  issued in respect
thereof  under  any  such  plan of  reorganization  or  readjustment),  shall be
received  by the  Trustee  or any  Holder in  contravention  of any of the terms
hereof and  before  all Senior  Indebtedness  (including  any  interest  thereon
accruing after the commencement of any Proceeding) shall have been paid in full,
such  payment or  distribution  or  security  shall be received in trust for the
benefit of, and shall be paid over or delivered and  transferred to, the holders
of the  Senior  Indebtedness  at the time  outstanding  in  accordance  with the
priorities  then existing  among such holders for  application to the payment of
all Senior  Indebtedness  remaining  unpaid,  to the extent necessary to pay all
such Senior  Indebtedness  (including  any interest  thereon  accruing after the
commencement  of any  Proceeding) in full. If the Trustee or any Holder fails to
endorse or assign any such  payment,  distribution  or security,  each holder of
Senior  Indebtedness is hereby  irrevocably  authorized to endorse or assign the
same.


                                     - 84 -


<PAGE>



         The  Trustee  and the Holders  shall take such  action  (including  the
delivery of this Indenture to an agent for the holders of Senior Indebtedness or
consent to the filing of a financing  statement with respect  hereto) as may, in
the opinion of counsel  designated  by the  holders of a majority  in  principal
amount of the Senior  Indebtedness  at the time  outstanding,  be  necessary  or
appropriate to assure the effectiveness of the  subordination  effected by these
provisions.

         The  provisions  of this  Section  13.2 shall not  impair  any  rights,
interests,  remedies or powers of any secured  creditor  of the  Corporation  in
respect of any security  interest the creation of which is not prohibited by the
provisions of this Indenture.

         The securing of any obligations of the Corporation,  otherwise  ranking
on a parity with the Securities or ranking junior to the  Securities,  shall not
be  deemed  to  prevent  such  obligations  from   constituting,   respectively,
obligations  ranking on a parity with the  Securities  or ranking  junior to the
Securities.

         SECTION 13.3. Payment Permitted If No Default.

         Nothing  contained in this Article XIII or elsewhere in this  Indenture
or in any of the  Securities  shall  prevent (a) the  Corporation,  at any time,
except during the pendency of the conditions described in the first paragraph of
Section  13.2 or of any  Proceeding  referred  to in Section  13.2,  from making
payments  at any  time of  principal  of  (and  premium,  if  any)  or  interest
(including any Additional Interest) on the Securities, or (b) the application by
the Trustee of any moneys  deposited  with it  hereunder to the payment of or on
account of the principal of (and  premium,  if any) or interest  (including  any
Additional  Interest) on the  Securities or the retention of such payment by the
Holders,  if, at the time of such  application  by the Trustee,  it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article XIII.

         SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness.

         Subject to the  payment in full of all  amounts due or to become due on
all  Senior  Indebtedness,  or the  provision  for such  payment in cash or cash
equivalents  or  otherwise  in a manner  satisfactory  to the  holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or  distributions  made to the holders of such Senior  Indebtedness
pursuant to the  provisions  of this Article XIII  (equally and ratably with the
holders of all  indebtedness  of the  Corporation  that by its express  terms is
subordinated to Senior Indebtedness of the Corporation to substantially the same
extent as the  Securities are  subordinated  to the Senior  Indebtedness  and is
entitled  to  like  rights  of   subrogation   by  reason  of  any  payments  or
distributions made to holders of such Senior  Indebtedness) to the rights of the
holders of such Senior  Indebtedness to receive  payments and  distributions  of
cash,  property and securities  applicable to the Senior  Indebtedness until the
principal  of (and  premium,  if any) and  interest  (including  any  Additional
Interest)  on the  Securities  shall  be  paid in  full.  For  purposes  of such
subrogation,  no  payments  or  distributions  to  the  holders  of  the  Senior
Indebtedness  of any cash,  property or  securities  to which the Holders of the
Securities or the Trustee would be entitled

                                     - 85 -


<PAGE>



except for the provisions of this Article XIII, and no payments over pursuant to
the  provisions  of this Article XIII to the holders of Senior  Indebtedness  by
Holders of the Securities or the Trustee,  shall, as among the Corporation,  its
creditors  other than  holders of Senior  Indebtedness,  and the  Holders of the
Securities,  be deemed to be a payment or  distribution by the Corporation to or
on account of such Senior Indebtedness.

         SECTION 13.5. Provisions Solely to Define Relative Rights.

         The provisions of this Article XIII are and are intended solely for the
purpose of defining the relative  rights of the Holders of the Securities on the
one hand and the  holders  of Senior  Indebtedness  on the other  hand.  Nothing
contained  in  this  Article  XIII or  elsewhere  in  this  Indenture  or in the
Securities is intended to or shall (a) impair,  as between the  Corporation  and
the Holders of the  Securities,  the obligations of the  Corporation,  which are
absolute  and  unconditional,  to pay  to the  Holders  of  the  Securities  the
principal  of (and  premium,  if any) and  interest  (including  any  Additional
Interest) on the Securities as and when the same shall become due and payable in
accordance  with their  terms;  (b)  affect  the  relative  rights  against  the
Corporation of the Holders of the  Securities  and creditors of the  Corporation
other than their  rights in relation to the holders of Senior  Indebtedness;  or
(c)  prevent  the  Trustee  or the  Holder  of any  Security  (or to the  extent
expressly  provided herein,  the holder of any Capital Security) from exercising
all remedies  otherwise  permitted  by  applicable  law upon default  under this
Indenture,  including filing and voting claims in any Proceeding, subject to the
rights, if any, under this Article XIII of the holders of Senior Indebtedness to
receive cash,  property and securities  otherwise  payable or deliverable to the
Trustee or such Holder.

         SECTION 13.6. Trustee to Effectuate Subordination.

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

         SECTION 13.7. No Waiver of Subordination Provisions.

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

         Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the Securities
of any series,  without  incurring  responsibility  to such  Holders and without
impairing or releasing the subordination as provided

                                     - 86 -


<PAGE>



in this Article XIII or the obligations hereunder of such Holders to the holders
of Senior  Indebtedness,  do any one or more of the  following:  (i)  change the
manner,  place or terms of payment or extend the time of payment of, or renew or
alter,  Senior  Indebtedness,  or otherwise  amend or  supplement  in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which  Senior  Indebtedness  is  outstanding;  (ii) sell,  exchange,  release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness;  (iii) release any Person liable in any manner for the  collection
of Senior Indebtedness;  and (iv) exercise or refrain from exercising any rights
against the Corporation and any other Person.

         SECTION 13.8. Notice to Trustee.

         The Corporation  shall give prompt written notice to the Trustee of any
fact known to the  Corporation  that would prohibit the making of any payment to
or by the Trustee in respect of the Securities.  Notwithstanding  the provisions
of this Article or any other provision of this Indenture,  the Trustee shall not
be charged with  knowledge of the existence of any facts that would prohibit the
making of any payment to or by the Trustee in respect of the Securities,  unless
and until the  Trustee  shall have  received  written  notice  thereof  from the
Corporation  or a holder of Senior  Indebtedness  or from any trustee,  agent or
representative therefor;  provided,  however, that if the Trustee shall not have
received the notice provided for in this Section 13.8 at least two Business Days
prior to the date upon which by the terms  hereof any monies may become  payable
for any purpose (including the payment of the principal of (and premium, if any,
on) or interest  (including  any Additional  Interest) on any  Security),  then,
anything  herein  contained to the contrary  notwithstanding,  the Trustee shall
have full power and  authority  to receive  such monies and to apply the same to
the purpose for which they were received and shall not be affected by any notice
to the  contrary  that may be received by it within two  Business  Days prior to
such date.

         Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the  delivery  to it of a  written  notice  by a Person  representing
himself  or  herself  to be a holder of  Senior  Indebtedness  (or a trustee  or
attorney-in-fact  therefor)  to  establish  that such notice has been given by a
holder of Senior  Indebtedness (or a trustee or attorney-in-fact  therefor).  If
the Trustee  determines  in good faith that  further  evidence is required  with
respect  to the  right of any  Person  as a holder  of  Senior  Indebtedness  to
participate  in any payment or  distribution  pursuant to this Article XIII, the
Trustee  may  request  such  Person  to  furnish   evidence  to  the  reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person,  the extent to which such  Person is  entitled  to  participate  in such
payment or  distribution  and any other  facts  pertinent  to the rights of such
Person under this  Article  XIII,  and if such  evidence is not  furnished,  the
Trustee may defer any payment to such Person pending  judicial  determination as
to the right of such Person to receive such payment.

          SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.

         Upon any payment or distribution of assets of the Corporation  referred
to in this Article XIII, the Trustee,  subject to the provisions of Section 6.1,
and the  Holders of the  Securities  shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in

                                     - 87 -


<PAGE>



which any Proceeding is pending,  or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other  Person  making such  payment or  distribution,  delivered to the
Trustee or to the Holders of  Securities,  for the purpose of  ascertaining  the
Persons entitled to participate in such payment or distribution,  the holders of
the Senior  Indebtedness and other  indebtedness of the Corporation,  the amount
thereof or payable  thereon,  the amount or amounts paid or distributed  thereon
and all other facts pertinent thereto or to this Article XIII.

        SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.

         The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary  duty to the holders of Senior  Indebtedness  and
shall not be liable to any such holders if it shall in good faith mistakenly pay
over or  distribute to Holders of  Securities  or to the  Corporation  or to any
other  Person  cash,  property  or  securities  to which any  holders  of Senior
Indebtedness shall be entitled by virtue of this Article XIII or otherwise.

          SECTION  13.11.  Rights of Trustee  as Holder of Senior  Indebtedness;
Preservation of Trustee's Rights.

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

         SECTION 13.12. Article Applicable to Paying Agents.

         If at any time any Paying Agent other than the Trustee  shall have been
appointed by the Corporation and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise  requires)
be construed as extending to and including  such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee.


                                   ARTICLE XIV

                                    EXPENSES

SECTION 14.1.  Payment of Expenses by the Corporation.

                  The  Corporation   hereby   irrevocably  and   unconditionally
guarantees to each person or entity to whom any Issuer Trust is now or hereafter
becomes indebted or liable (the "Expense  Beneficiaries") the full payment, when
and as due, of any and all Expense Obligations (as hereinafter  defined) to such
Expense  Beneficiaries.  As used herein,  "Expense Obligations" means any costs,
expenses or liabilities of any Issuer Trust, other than obligations of an Issuer
Trust to pay

                                     - 88 -


<PAGE>



to holders of any Capital  Securities or other similar  interests in such Issuer
Trust  the  amounts  due such  holders  pursuant  to the  terms  of the  Capital
Securities or such other similar interests, as the case may be. This Article XIV
is intended to be for the benefit of, and to be enforceable by, all such Expense
Beneficiaries,  whether or not such Expense  Beneficiaries  have received notice
hereof.

SECTION 14.2.  Term of Agreement.

                  This Article XIV shall  terminate  and be of no further  force
and effect with  respect to holders of  securities  of an Issuer  Trust upon the
later of (a) the date on which full payment has been made of all amounts payable
to  all  holders  of  all  the  Capital  Securities  (whether  upon  redemption,
liquidation,  exchange or  otherwise)  of such Issuer  Trust and (b) the date on
which there are no Expense Beneficiaries remaining; provided, however, that this
Article XIV shall continue to be effective or shall be  reinstated,  as the case
may be, with respect to such Issuer Trust,  if at any time any holder of Capital
Securities of such Issuer Trust or any Expense  Beneficiary must restore payment
of any sums paid under the Capital  Securities of such Issuer  Trust,  under any
Expense Obligation, under the guarantee agreement by the Corporation in favor of
holders of Capital Securities of such Issuer Trust or under this Article XIV for
any reason whatsoever. Subject to the terms of this Article XIV, the obligations
of  the  Corporation  under  this  Article  XIV  are  continuing,   irrevocable,
unconditional and absolute.

SECTION 14.3.  Waiver of Notice.

         The  Corporation  hereby waives notice of acceptance of the  agreements
contained in this Article XIV and of any Expense  Obligation to which it applies
or may apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment,  notice of dishonor, notice of redemption and all
other notices and demands.

SECTION 14.4.  No Impairment.

         The  obligations,  covenants,  agreements and duties of the Corporation
under this  Article XIV shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

               (a) the  extension of time for the payment by the Trust of all or
          any portion of the Expense  Obligations or for the  performance of any
          other  obligation  under,  arising out of, or in connection  with, the
          Expense Obligations;

               (b) any failure, omission, delay or lack of diligence on the part
          of the Expense Beneficiaries to enforce, assert or exercise any right,
          privilege, power or remedy conferred on the Expense Beneficiaries with
          respect to the  Expense  Obligations  or any action on the part of the
          Issuer Trust granting indulgence or extension of any kind; or


                                     - 89 -


<PAGE>



               (c) the voluntary or involuntary liquidation,  dissolution,  sale
          of any collateral,  receivership,  insolvency,  bankruptcy, assignment
          for the benefit of creditors, reorganization, arrangement, composition
          or  readjustment of debt of, or other similar  proceedings  affecting,
          the Trust or any of the assets of the Issuer Trust.

There shall be no obligation of the Expense  Beneficiaries to give notice to, or
obtain the consent of, the  Corporation  with respect to the happening of any of
the foregoing.

SECTION 14.5.  Enforcement.

                  An Expense  Beneficiary  may  enforce  this  Article  directly
against  the  Corporation  and the  Corporation  waives  any  right or remedy to
require  that any action be  brought  against  the Trust or any other  person or
entity before proceeding against the Corporation.

SECTION 14.6.  Subrogation.

         The Corporation shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to the Expense  Beneficiaries  by the Corporation
under this Article XIV with respect to the  applicable  Issuer Trust;  provided,
however,  that the  Corporation  shall not  (except  to the extent  required  by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any  indemnity,  reimbursement  or other
agreement,  in all cases as a result of payment  under this  Article XIV, if, at
the time of any such payment,  any amounts are due and unpaid under this Article
XIV.

SECTION 14.7.  Amendment.

                  So  long as  there  remains  any  Expense  Beneficiary  or any
Capital  Securities of an Issuer Trust are  outstanding,  this Article XIV shall
not be modified or amended in any manner adverse to such Expense  Beneficiary of
such Issuer  Trust or to the holders of the  Capital  Securities  of such Issuer
Trust without the written  consent of such Expense  Beneficiary or such holders,
as applicable.

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


                                     - 90 -


<PAGE>





         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and attested, all as of the day and year first above written.


                                             HSB GROUP, INC.


                                             By:_________________________
                                                 Name:  Saul L. Basch
                                                 Title: Senior Vice President,
                                                        Chief Financial 
                                                        Officer, Treasurer


Attest:

By:  _______________________
        Corporate Secretary



                                             THE FIRST NATIONAL BANK OF
                                             CHICAGO, as Trustee


                                             By:________________________
                                                Name:
                                                Title:


Attest:

By:  _______________________










<PAGE>



                                                Exhibit A -- Form of Restricted
                                                Securities Transfer Certificate








                        RESTRICTED SECURITIES CERTIFICATE

                  (For transfers pursuant to Section 3.6(b) of
                        the Indenture referred to below)


[-------------------------],
  as Securities Registrar
[address]

          Re:   Junior   Subordinated   Debenture  of  HSB  Group,   Inc.   (the
"Securities")

         Reference  is made to the Junior  Subordinated  Indenture,  dated as of
July __,  1997  (the  "Indenture"),  between  HSB  Group,  Inc.,  a  Connecticut
corporation, and ____________,  as Trustee. Terms used herein and defined in the
Indenture or in  Regulation  S, Rule 144A or Rule 144 under the U.S.  Securities
Act of 1933 (the "Securities Act") are used herein as so defined.

                  This certificate  relates to $__________  aggregate  principal
amount of Securities,  which are evidenced by the following  certificate(s) (the
"Specified Securities"):

                  CUSIP No(s). ___________________________

                  CERTIFICATE No(s). _____________________

                  CURRENTLY IN BOOK-ENTRY FORM:   Yes ___    No ___ (check one)

The person in whose name this certificate is executed below (the  "Undersigned")
hereby  certifies  that  either  (i)  it is the  sole  beneficial  owner  of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the  Specified  Securities  and is duly  authorized  by  them to do so.  Such
beneficial  owner or owners are referred to herein  collectively as the "Owner".
If the Specified Securities are represented by a Global Security,  they are held
through a Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Securities are not represented by a Global
Security, they are registered in the name of the Undersigned, as or on behalf of
the Owner.

         The Owner has requested that the Specified Securities be transferred to
another  person  (the  "Transferee")  who will  take  delivery  in the form of a
Restricted  Security.  In  connection  with  such  transfer,  the  Owner  hereby
certifies that,  unless such transfer is being effected pursuant to an effective
registration  statement  under  the  Securities  Act,  it is being  effected  in
accordance  with  Rule  144A,  Rule 904 of  Regulation  S or Rule 144  under the
Securities  Act and all applicable  securities  laws of the states of the United
States and other jurisdictions.  Accordingly, the Owner hereby further certifies
as follows:



                                       A-1

<PAGE>



               (1) Rule 144A  Transfers.  If the  transfer is being  effected in
          accordance with Rule 144A:

                    (A) the  Specified  Securities  are being  transferred  to a
               person  that  the  Owner  and any  person  acting  on its  behalf
               reasonably  believe is a "qualified  institutional  buyer" within
               the  meaning of Rule 144A,  acquiring  for its own account or for
               the account of a qualified institutional buyer; and

                    (B) the Owner and any person acting on its behalf have taken
               reasonable  steps to ensure that the Transferee is aware that the
               Owner  may be  relying  on  Rule  144A  in  connection  with  the
               transfer; and

               (2) Rule 904  Transfers.  If the  transfer  is being  effected in
          accordance with Rule 904:

                    (A) the Owner is not a  distributor  of the  Securities,  an
               affiliate of the Corporation or any such  distributor or a person
               acting in behalf of any of the foregoing;

                    (B) the offer of the Specified  Securities was not made to a
               person in the United States;

                    (C) either;

                         (i) at the  time  the buy  order  was  originated,  the
                    Transferee  was outside  the United  States or the Owner and
                    any person acting on its behalf reasonably believed that the
                    Transferee was outside the United States, or

                         (ii)  the  transaction  is  being  executed  in,  on or
                    through the facilities of the Eurobond market,  as regulated
                    by the Association of International Bond Dealers, or another
                    designated  offshore securities market and neither the Owner
                    nor  any  person   acting  on  its  behalf  knows  that  the
                    transaction has been  prearranged with a buyer in the United
                    States;

                    (D) no directed selling efforts have been made in the United
               States by or on behalf of the Owner or any affiliate thereof; and

                    (E) the transaction is not part of a plan or scheme to evade
               the registration requirements of the Securities Act.

               (3)  Rule  144  Transfers.  If the  transfer  is  being  effected
          pursuant to Rule 144:



                                       A-2

<PAGE>



                    (A) the transfer is occurring  after a holding  period of at
               least one year (computed in accordance with paragraph (d) of Rule
               144) has elapsed  since the date the  Specified  Securities  were
               acquired from the  Corporation or from an affiliate (as such term
               is defined in Rule 144) of the  Corporation,  whichever is later,
               and is being effected in accordance  with the applicable  amount,
               manner of sale and notice requirements of paragraphs (e), (f) and
               (h) of Rule 144; or

                    (B) the transfer is occurring  after a holding period by the
               Owner of at least  three  years  has  elapsed  since the date the
               Specified  Securities  were acquired from the Corporation or from
               an  affiliate  (as  such  term is  defined  in  Rule  144) of the
               Corporation, whichever is later, and the Owner is not, and during
               the  preceding  three  months has not been,  an  affiliate of the
               Corporation.


         This certificate and the statements  contained herein are made for your
benefit and the benefit of the Corporation and the Purchasers (as defined in the
Trust  Agreement  relating  to the  Issuer  Trust to which the  Securities  were
initially issued).

Dated:                                __________________________________________
                                      (Print  the  name of the  Undersigned,  as
                                      such  term  is   defined   in  the  second
                                      paragraph of this certificate.)


                                      By:_______________________________________
                                         Name:
                                         Title:

                                      (If  the  Undersigned  is  a  corporation,
                                      partnership or fiduciary, the title of the
                                      person    signing   on   behalf   of   the
                                      Undersigned must be stated.)


                                       A-3

<PAGE>



                                         EXHIBIT B.1 -- Form of Regulation S
                                                        Transfer Certificate


                            REGULATION S CERTIFICATE

 (For transfers pursuant to Sections 3.6(c)(i), (iii) and (v) of the Indenture)


First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670

Attention:  Corporate Trust Department

                    Re: Global Floating Rate Junior Subordinated Debentures (the
                        --------------------------------------------------------
                        "Securities")
                         -------------

                  Reference is made to the Indenture, dated as of July 15, 1997,
between HSB Group.  Inc. (the  "Company") and The First National Bank of Chicago
as Trustee (the "Trustee"). Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S.  Securities Act of 1933 (the "Securities
Act") are used herein as so defined.

                  This  certificate  relates to  _________  principal  amount of
Securities,  which are evidenced by the following certificate(s) (the "Specified
Securities"):

                  CUSIP No(s). ________________________

                  CERTIFICATE No(s). __________________

                  The Person in whose name this  certificate  is executed  below
(the  "Undersigned")  hereby certifies that either (i) it is the sole beneficial
owner of the  Specified  Securities  or (ii) it is  acting  on behalf of all the
beneficial owners of the Specified  Securities and is duly authorized by them to
do so. Such  beneficial  owner or owners are referred to herein  collectively as
the  "Owner".   If  the  Specified   Securities  are  represented  by  a  Global
Certificate,  they are held through the Clearing  Agency or  participant  in the
name  of the  Undersigned,  as or on  behalf  of  the  Owner.  If the  Specified
Securities are not represented by a Global  Certificate,  they are registered in
the name of the Undersigned, as or on behalf of the Owner.

                  The Owner  has  requested  that the  Specified  Securities  be
transferred to a person (the "Transferee") who will take delivery in the form of
a Regulation S Security.  In  connection  with such  transfer,  the Owner hereby
certifies that,  unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being


                                      B.1-1

<PAGE>



effected in accordance  with Rule 904 or Rule 144 under the  Securities  Act and
with all applicable  securities  laws of the states of the United  States and
other jurisdictions. Accordingly, the Owner hereby further certifies as follows:

          (1)  Rule  904  Transfers.  If  the  transfer  is  being  effected  in
     accordance with Rule 904:

               (A)  the  Owner  is  not a  distributor  of  the  Securities,  an
          affiliate of the Company or any such distributor or a person acting on
          behalf of any of the foregoing;

               (B) the  offer  of the  Specified  Securities  was not  made to a
          person in the United States;

               (C) either:

                    (i) at the time the buy order was originated, the Transferee
               was outside the United  States or the Owner and any person acting
               on its behalf reasonably believed that the Transferee was outside
               the United States, or

                    (ii) the transaction is being executed in, on or through the
               facilities   of  the  Eurobond   market,   as  regulated  by  the
               Association of International Bond Dealers,  or another designated
               offshore  securities  market and neither the Owner nor any person
               acting  on  its  behalf  knows  that  the  transaction  has  been
               prearranged with a buyer in the United States;

               (D) no  directed  selling  efforts  have been made in the  United
          States by or on behalf of the Owner or any affiliate thereof;

               (E) if the  Owner is a dealer in  securities  or has  received  a
          selling  concession,  fee or  other  remuneration  in  respect  of the
          Specified  Securities,  and  the  transfer  is  to  occur  during  the
          Restricted  Period,  then the requirements of Rule 904(c)(1) have been
          satisfied; and

               (F) the  transaction is not part of a plan or scheme to evade the
          registration requirements of the Securities Act.

          (2) Rule 144 Transfers.  If the transfer is being effected pursuant to
     Rule 144:

               (A) the transfer is occurring  after a holding period of at least
          one year  (computed in accordance  with paragraph (d) of Rule 144) has
          lapsed since the  Specified  Securities  were last  acquired  from the
          Company or from an affiliate of the Company,  whichever is later,  and
          is being effected in accordance with the applicable amount,  manner of
          sale and notice requirements of Rule 144; or


                                      B.1-2

<PAGE>




               (B) the transfer is occurring  after a holding period of at least
          two  years  has  elapsed  since  the  Specified  Securities  were last
          acquired from the Trust or from an affiliate of the Company, whichever
          is later,  and the Owner is not, and during the preceding three months
          has not been, an affiliate of the Company.



                                      B.1-3

<PAGE>




                  This certificate and the statements  contained herein are made
for your benefit and the benefit of the Company and the Purchasers.

Dated:  ___________

    (Print the name of the Undersigned, as such term is defined in the second
                         paragraph of this certificate)


                  By:
                             Name:
                             Title:

                  (If  the   Undersigned  is  a   corporation,   partnership  or
                  fiduciary,  the title of the  person  signing on behalf of the
                  Undersigned must be stated.)


                                      B.1-4

<PAGE>



                                 EXHIBIT B.2 -- Form of Restricted
                                                Securities Transfer Certificate


                        RESTRICTED SECURITIES CERTIFICATE

         (For transfers pursuant to Sections 3.6(c)(ii), (iii), (iv) and
                          (v) of the Trust Agreement)

First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670

Attention:  Corporate Trust Department

               Re: Global  Floating  Rate Junior  Subordinated  Debentures  (the
                   -------------------------------------------------------      
          "Securities")
           ----------    

                  Reference is made to the Indenture, dated as of July 15, 1997,
between HSB Group.  Inc. (the  "Company") and The First National Bank of Chicago
as Trustee (the "Trustee"). Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S.  Securities Act of 1933 (the "Securities
Act") are used herein as so defined.

                  This  certificate  relates to  _________  principal  amount of
Securities,  which are evidenced by the following certificate(s) (the "Specified
Securities"):

                  CUSIP No(s). ________________________

                  CERTIFICATE No(s). __________________

                  The Person in whose name this  certificate  is executed  below
(the  "Undersigned")  hereby certifies that either (i) it is the sole beneficial
owner of the  Specified  Securities  or (ii) it is  acting  on behalf of all the
beneficial owners of the Specified  Securities and is duly authorized by them to
do so. Such  beneficial  owner or owners are referred to herein  collectively as
the  "Owner".   If  the  Specified   Securities  are  represented  by  a  Global
Certificate,  they are held through the Clearing  Agency or  participant  in the
name  of the  Undersigned,  as or on  behalf  of  the  Owner.  If the  Specified
Securities are not represented by a Global  Certificate,  they are registered in
the name of the Undersigned, as or on behalf of the Owner.

                  The Owner  has  requested  that the  Specified  Securities  be
transferred to a person (the "Transferee") who will take delivery in the form of
a  Restricted  Security.  In  connection  with such  transfer,  the Owner hereby
certifies that,  unless such transfer is being effected pursuant to an effective
registration  statement  under  the  Securities  Act,  it is being  effected  in
accordance with Rule 144A or Rule 144 under the Securities Act and all


                                      B.2-1

<PAGE>



applicable  securities  laws  of the  states  of the  United  States  and  other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:

               (1) Rule 144A  Transfers.  If the  transfer is being  effected in
          accordance with Rule 144A:

                  (A) the Specified Securities are being transferred to a person
         that the Owner and any person acting on its behalf  reasonably  believe
         is a "qualified  institutional  buyer" within the meaning of Rule 144A,
         acquiring  for  its  own  account  or for the  account  of a  qualified
         institutional buyer; and

                  (B) the Owner and any person  acting on its behalf  have taken
         reasonable  steps to ensure that the Transferee is aware that the Owner
         may be relying on Rule 144A in connection with the transfer; and

               (2)  Rule  144  Transfers.  If the  transfer  is  being  effected
          pursuant to Rule 144:

                    (A) the transfer is occurring  after a holding  period of at
               least one year (computed in accordance with paragraph (d) of Rule
               144)  has  elapsed  since  the  Specified  Securities  were  last
               acquired  from the Company or from an  affiliate  of the Company,
               whichever is later,  and is being effected in accordance with the
               applicable  amount,  manner of sale, and notice  requirements  of
               rule 144; or

                    (B) the transfer is occurring  after a holding  period of at
               least two years has elapsed since the Specified  Securities  were
               last  acquired  from  the  Company  or from an  affiliate  of the
               Company, whichever is later, and the Owner is not, and during the
               preceding three months has not been, an affiliate of the Company.

               (3) Regulation S Transfers.  If the transfer is being effected in
          accordance with Regulation S:

                    (A) the transfer is being made to a person who is not a U.S.
               person; or

                    (B)  the   transferee  is  not  acquiring   such   Specified
               Securities for the account or benefit of any U.S. person.

         This certificate and the statements  contained herein are made for your
benefit and benefit of the Trust and the Purchasers.

Dated:___________________________

         (Print  the name of the  Undersigned,  as such term is  defined  in the
         second paragraph of this certificate.)


                                      B.2-2

<PAGE>




         By:__________________________
                  Name:
                  Title:

         (If the  Undersigned  is a corporation,  partnership or fiduciary,  the
         title of the  person  signing  on  behalf  of the  Undersigned  must be
         stated.)


                                      B.2-3

<PAGE>



                                          EXHIBIT B.3 -- Form of Unrestricted
                                               Securities Transfer Certificate


                       UNRESTRICTED SECURITIES CERTIFICATE

                   (For removal of  Securities  Act Legends  pursuant to Section
2.7(c) of the Indenture )


First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670

Attention:  Corporate Trust Department

                    Re: Global Floating Rate Junior Subordinated Debentures (the
               "Securities")

                  Reference is made to the Indenture, dated as of July 15, 1997,
between HSB Group.  Inc. (the  "Company") and The First National Bank of Chicago
as Trustee (the "Trustee"). Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S.  Securities Act of 1933 (the "Securities
Act") are used herein as so defined.

         This  certificate  relates to  ________________  shares of  Securities,
which  are   evidenced  by  the   following   certificate(s)   (the   "Specified
Securities"):

         CUSIP No(s). ____________________________

         CERTIFICATE No(s). ______________________

         The  person in whose  name this  certificate  is  executed  below  (the
"Undersigned")  hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial  owner or owners are referred to herein  collectively as the "Owner".
If the Specified  Securities are represented by a Global  Certificate,  they are
held through the Clearing Agency or participant in the name of the  Undersigned,
as or on behalf of the Owner. If the Specified Securities are not represented by
a Global  Certificate,  they are registered in the name of the Undersigned as or
on behalf of the Owner.

         The Owner has requested that the Specified  Securities be exchanged for
Securities  bearing no Securities  Act Legend  pursuant to Section 5.4(c) of the
Trust  Agreement.  In connection with such exchange,  the Owner hereby certifies
that the  exchange  is  occurring  after a holding  period of at least two years
(computed in  accordance  with  paragraph (d) of Rule 144) has elapsed since the
Specified Securities were last acquired from the Trust or


                                      B.3-1

<PAGE>


from an  affiliate of the Trust,  whichever is later,  and the Owner is not, and
during the preceding  three months has not been, an affiliate of the Trust.  The
Owner also  acknowledges  that any future transfers of the Specified  Securities
must  comply  with all  applicable  securities  laws of the states of the United
States and other jurisdictions.

         This certificate and the statements  contained herein are made for your
benefit and the benefit of the Trust and the Purchasers.

Dated:___________________________________
       (Print the name of the Undersigned, as such term is defined in
        the second paragraph of this certificate.)



                  By:____________________________
                      Name:
                      Title:


                  (If  the   Undersigned  is  a   corporation,   partnership  or
                  fiduciary,  the title of the  person  signing on behalf of the
                  Undersigned must be stated.)


0129012.07-01S7a
                                      B.3-2

<PAGE>




                               GUARANTEE AGREEMENT

                                     between


                                HSB GROUP, INC.,
                                  as Guarantor


                                       and


                       THE FIRST NATIONAL BANK OF CHICAGO,
                              as Guarantee Trustee


                                   Relating to

                                  HSB Capital I


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



                            Dated as of July 15, 1997


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







<PAGE>



                                TABLE OF CONTENTS
                                                                            Page


                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1. Definitions....................................................  2

                                   ARTICLE II

                               TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application...............................  5
SECTION 2.2. List of Holders................................................  5
SECTION 2.3. Reports by the Guarantee Trustee...............................  6
SECTION 2.4. Periodic Reports to the Guarantee Trustee......................  6
SECTION 2.5. Evidence of Compliance with Conditions Precedent...............  6
SECTION 2.6. Events of Default; Waiver......................................  6
SECTION 2.7. Event of Default; Notice.......................................  7
SECTION 2.8. Conflicting Interests..........................................  7


                                   ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.1. Powers and Duties of the Guarantee Trustee.....................  7
SECTION 3.2. Certain Rights of Guarantee Trustee............................  9
SECTION 3.3. Compensation; Fees............................................. 10


                                   ARTICLE IV

                                GUARANTEE TRUSTEE

SECTION 4.1. Guarantee Trustee; Eligibility................................. 11
SECTION 4.2. Appointment, Removal and Resignation of 
the Guarantee Trustee....................................................... 12


                                       -i-


<PAGE>



                                    ARTICLE V

                                    GUARANTEE

SECTION 5.1. Guarantee...................................................... 13
SECTION 5.2. Waiver of Notice and Demand.................................... 13
SECTION 5.3. Obligations Not Affected....................................... 13
SECTION 5.4. Rights of Holders.............................................. 14
SECTION 5.5. Guarantee of Payment........................................... 14
SECTION 5.6. Subrogation.................................................... 14
SECTION 5.7. Independent Obligations........................................ 15


                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

SECTION 6.1. Subordination.................................................. 15
SECTION 6.2. Pari Passu Guarantees.......................................... 15


                                   ARTICLE VII

                                   TERMINATION

SECTION 7.1. Termination.................................................... 16


                                  ARTICLE VIII

                                  MISCELLANEOUS

SECTION 8.1. Successors and Assigns......................................... 16
SECTION 8.2. Amendments..................................................... 16
SECTION 8.3. Notices........................................................ 16
SECTION 8.4. Exchange Offer................................................. 17
SECTION 8.5. Benefit........................................................ 17
SECTION 8.6. Governing Law.................................................. 18
SECTION 8.7. Counterparts................................................... 18


                                      -ii-


<PAGE>



         GUARANTEE AGREEMENT, dated as of July15, 1997, between HSB GROUP, INC.,
a Connecticut corporation (the "Guarantor"),  having its principal office at One
State  Street,  Hartford,  Connecticut  06102  and The  First  National  Bank of
Chicago, a national banking association,  as trustee (the "Guarantee  Trustee"),
for the  benefit of the Holders  (as  defined  herein)  from time to time of the
Capital  Securities (as defined  herein) of HSB Capital I, a Delaware  statutory
business trust (the "Issuer Trust").

                           RECITALS OF THE CORPORATION

         WHEREAS, pursuant to an Amended and Restated Trust Agreement,  dated as
of July 15, 1997 (the "Trust  Agreement"),  among HSB Group, Inc., as Depositor,
The First National Bank of Chicago, as Property Trustee,  First Chicago Delaware
Inc. as Delaware Trustee,  and the  Administrative  Trustees named therein,  the
Issuer Trust is issuing $110,000,000 aggregate Liquidation Amount (as defined in
the Trust  Agreement) of its Global Floating Rate Capital  Securities,  Series A
(liquidation  amount $1,000 per capital  security)  (the "Capital  Securities"),
representing  preferred  undivided  beneficial  interests  in the  assets of the
Issuer Trust and having the terms set forth in the Trust Agreement; and

         WHEREAS,  the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's  Common  Securities  (as defined  herein),  will be used to purchase the
Debentures  (as  defined  in  the  Trust  Agreement)  of  the  Guarantor,  which
Debentures  will be  deposited  with The  First  National  Bank of  Chicago,  as
Property Trustee under the Trust Agreement, as trust assets; and

         WHEREAS,   as  an  incentive  for  the  Holders  to  purchase   Capital
Securities,  the Guarantor desires  irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee  Payments (as defined  herein) on the terms and  conditions  set forth
herein.

         WHEREAS,   the  Guarantor  is  executing  and  delivering  a  guarantee
agreement (the "Common  Securities  Guarantee"),  with  substantially  identical
terms to this Guarantee Agreement,  for the benefit of the holders of the Common
Securities (as defined  herein),  except that if an Event of Default (as defined
in the Declaration) has occurred and is continuing, the rights of holders of the
Common  Securities to receive  Guarantee  Payments  under the Common  Securities
Guarantee  are  subordinated,  to the  extent and in the manner set forth in the
Common  Securities  Guarantee,  to the  rights of  holders  of  Initial  Capital
Securities and the Exchange  Capital  Securities to receive  Guarantee  Payments
under this Guarantee Agreement and the Exchange Capital Securities Guarantee, as
the case may be.

         NOW, THEREFORE,  in consideration of the purchase of Capital Securities
by each Holder,  which purchase the Guarantor hereby  acknowledges  will benefit
the Guarantor,  the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time.





<PAGE>



                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.1. Definitions.

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

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

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

          (c) The words "include", "includes" and "including" shall be deemed to
     be followed by the phrase "without limitation";

         (d) All accounting  terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted  accounting
principles;

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

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

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

         "Board of  Directors"  means the board of directors of the Guarantor or
the Executive Committee of the board of directors of the Guarantor (or any other
committee  of the  board  of  directors  of  the  Guarantor  performing  similar
functions) or a committee  designated by the board of directors of the Guarantor
(or such committee),  comprised of two or more members of the board of directors
of the Guarantor or officers of the Guarantor, or both.

         "Capital Securities" means the Initial Capital Securities together with
the Exchange Capital Securities.


                                       -2-


<PAGE>



         "Common Securities" means the securities  representing common undivided
beneficial interests in the assets of the Issuer Trust.

         "Event of Default"  means (i) a default by the  Guarantor in any of its
payment  obligations  under this  Guarantee  Agreement  or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 90 days.

          "Exchange  Capital  Securities"  has  the  meaning  specified  in  the
Recitals to this Guarantee Agreement.

          "Exchange Capital  Securities  Guarantee" has the meaning specified in
Section 8.4 hereof.

         "Guarantee  Agreement"  means this  Guarantee  Agreement,  as modified,
amended or supplemented from time to time.

         "Guarantee  Payments"  means the following  payments or  distributions,
without duplication,  with respect to the Capital Securities,  to the extent not
paid or made by or on behalf of the Issuer  Trust:  (i) any  accrued  and unpaid
Distributions  required to be paid on the Capital Securities,  to the extent the
Issuer  Trust  has  funds on hand  available  therefor  at such  time,  (ii) the
Redemption Price with respect to any Capital  Securities  called for redemption,
to the extent  the Issuer  Trust has funds on hand  available  therefor  at such
time,  and (iii) upon a  voluntary  or  involuntary  termination,  winding up or
liquidation of the Issuer Trust (unless the Junior  Subordinated  Debentures are
distributed to the Holders) the lesser of (a) the Liquidation  Distribution  (as
defined in the Trust Agreement) with respect to the Capital Securities,  and (b)
the amount of assets of the Issuer Trust remaining available for distribution to
Holders on liquidation of the Issuer Trust.

         "Guarantee Trustee" means The First National Bank of Chicago, solely in
its capacity as Guarantee  Trustee and not in its individual  capacity,  until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee  Agreement,  and  thereafter  means each
such Successor Guarantee Trustee.

          "Guarantor"  has the meaning  specified in the first paragraph of this
Guarantee Agreement.

         "Holder"  means any Holder (as defined in the Trust  Agreement)  of any
Capital Securities;  provided,  however, that in determining whether the holders
of the  requisite  percentage  of Capital  Securities  have  given any  request,
notice,  consent or waiver hereunder,  "Holder" shall not include the Guarantor,
the  Guarantee  Trustee,  or any  Affiliate of the  Guarantor  or the  Guarantee
Trustee.

         "Indenture" means the Junior Subordinated  Indenture,  dated as of July
__, 1997,  between HSB Group,  Inc. and The First  National Bank of Chicago,  as
trustee, as the same may be modified, amended or supplemented from time to time.

                                       -3-


<PAGE>




          "Initial Capital Securities" has the meaning specified in the Recitals
to the Guarantee Agreement.

          "Issuer  Trust" has the meaning  specified  in the first  paragraph of
this Guarantee Agreement.

         "List of Holders" has the meaning specified in Section 2.2(a).

         "Majority  in  Liquidation  Amount of the  Capital  Securities"  means,
except as provided by the Trust Indenture Act, Capital  Securities  representing
more than 50% of the  aggregate  Liquidation  Amount  (as  defined  in the Trust
Agreement) of all Capital  Securities then  Outstanding (as defined in the Trust
Agreement).

         "Officers' Certificate" means a certificate signed by one of the Senior
Vice Presidents or Chief  Executive  Officer or the President or Vice Presidents
of the Guarantor,  and by the Treasurer,  an Assistant Treasurer,  the Corporate
Secretary  or an  Assistant  Secretary of the  Guarantor,  and  delivered to the
Guarantee  Trustee.  Any  Officers'   Certificate   delivered  with  respect  to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:

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

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

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

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

         "Person" means a legal person,  including any individual,  corporation,
estate, partnership,  joint venture, association,  joint-stock company, company,
limited liability company, trust, business trust, unincorporated association, or
government or any agency or political  subdivision  thereof, or any other entity
of whatever nature.

         "Registration   Rights   Agreement"  means  the   Registration   Rights
Agreement,  dated as of July 15, 1997,  by and among the  Guarantor,  the Issuer
Trust and the Initial Purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.

         "Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice  President,  any Vice President,  any Assistant Vice President,  the
Secretary, any Assistant

                                       -4-


<PAGE>



Secretary,  the  Treasurer,  any  Assistant  Treasurer,  any  Trust  Officer  or
Assistant Trust Officer or any other officer of the Corporate  Trust  Department
of the Guarantee  Trustee and also means,  with respect to a particular  matter,
any other  officer to whom such  matter is  referred  because of that  officer's
knowledge of and familiarity with the particular subject.

         "Successor  Guarantee  Trustee"  means a  successor  Guarantee  Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

         "Trust Agreement" means the Amended and Restated Trust Agreement of the
Issuer  Trust  referred  to in the  recitals  to this  Guarantee  Agreement,  as
modified, amended or supplemented from time to time.

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


                                   ARTICLE II

                               TRUST INDENTURE ACT

         SECTION 2.1. Trust Indenture Act; Application.

         Except as otherwise  expressly provided herein, the Trust Indenture Act
shall apply as a matter of contract to this Guarantee  Agreement for purposes of
interpretation,  construction and defining the rights and obligations hereunder,
and this Guarantee  Agreement,  the Guarantor and the Guarantee Trustee shall be
deemed  for all  purposes  hereof to be  subject  to and  governed  by the Trust
Indenture  Act to the  same  extent  as  would  be the  case if  this  Guarantee
Agreement were qualified under that Act on the date hereof.  Except as otherwise
expressly  provided  herein,  if and to the extent  that any  provision  of this
Guarantee  Agreement  limits,  qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive,  of the Trust Indenture Act, such imposed duties
shall control.

         SECTION 2.2. List of Holders.

         (a) The  Guarantor  shall  furnish  or  cause  to be  furnished  to the
Guarantee  Trustee (a)  quarterly,  on or before  January 1, April 1, July 1 and
October 1 of each  year,  a list,  in such  form as the  Guarantee  Trustee  may
reasonably  require,  of the  names and  addresses  of the  Holders  (a "List of
Holders") as of a date not more than 15 days prior to the delivery thereof,  and
(b) at such other times as the Guarantee Trustee may request in writing,  within
30 days  after the  receipt  by the  Guarantor  of any such  request,  a List of
Holders  as of a date not more  than 15 days  prior  to the  time  such  list is
furnished,  in each case to the extent such  information is in the possession or
control of the Guarantor and has not otherwise been received by the Guarantee

                                       -5-


<PAGE>



Trustee in its capacity as such.  The Guarantee  Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

         (b) The Guarantee Trustee shall comply with the requirements of Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

         SECTION 2.3. Reports by the Guarantee Trustee.

         Not later than 60 days  following May 15 of each year,  commencing  May
15, 1998, the Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313 of the Trust  Indenture  Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. If this Guarantee
Agreement shall have been qualified under the Trust Indenture Act, the Guarantee
Trustee shall also comply with the  requirements  of Section 313(d) of the Trust
Indenture Act.

         SECTION 2.4. Periodic Reports to the Guarantee Trustee.

         The Guarantor  shall  provide to the Guarantee  Trustee and the Holders
such documents,  reports and information,  if any, as required by Section 314 of
the Trust Indenture Act and the compliance  certificate  required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act, provided that such documents, reports
and  information  shall not be required to be  provided  to the  Securities  and
Exchange  Commission  unless this Guarantee  Agreement shall have been qualified
under the Trust Indenture Act.

         SECTION 2.5. Evidence of Compliance with Conditions Precedent.

         The Guarantor  shall provide to the Guarantee  Trustee such evidence of
compliance  with  such  conditions  precedent,  if  any,  provided  for in  this
Guarantee  Agreement  that  relate to any of the  matters  set forth in  Section
314(c) of the Trust  Indenture Act. Any  certificate  or opinion  required to be
given by an officer of the Guarantor  pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.

         SECTION 2.6. Events of Default; Waiver.

         The Holders of at least a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders of all the Capital Securities,
waive any past  default  or Event of  Default  and its  consequences.  Upon such
waiver,  any such  default or Event of  Default  shall  cease to exist,  and any
default  or Event of  Default  arising  therefrom  shall be  deemed to have been
cured, for every purpose of this Guarantee  Agreement,  but no such waiver shall
extend to any  subsequent  or other  default  or Event of  Default or impair any
right consequent thereon.


                                       -6-


<PAGE>



         SECTION 2.7. Event of Default; Notice.

         (a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default known to it, transmit by mail,  first class postage prepaid,
to the  Holders,  notice of any such  Event of  Default,  unless  such  Event of
Default has been cured before the giving of such notice,  provided that,  except
in the case of a default in the payment of a Guarantee  Payment,  the  Guarantee
Trustee  shall be  protected  in  withholding  such notice if and so long as the
board of directors,  the executive  committee or a trust  committee of directors
and/or  Responsible  Officers of the Guarantee  Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.

         (b) The Guarantee  Trustee shall not be deemed to have knowledge of any
Event of Default  unless the  Guarantee  Trustee  shall  have  received  written
notice,  or a  Responsible  Officer  charged  with  the  administration  of this
Guarantee  Agreement  shall have  obtained  actual  knowledge,  of such Event of
Default.

         SECTION 2.8. Conflicting Interests.

         The  Trust   Agreement  and  the  Indenture   shall  be  deemed  to  be
specifically  described in this  Guarantee  Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.


                                   ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

         SECTION 3.1. Powers and Duties of the Guarantee Trustee.

         (a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders,  and the  Guarantee  Trustee shall not transfer this
Guarantee  Agreement to any Person  except to a Successor  Guarantee  Trustee on
acceptance by such  Successor  Guarantee  Trustee of its  appointment  to act as
Guarantee  Trustee  hereunder.  The right,  title and interest of the  Guarantee
Trustee, as such,  hereunder shall automatically vest in any Successor Guarantee
Trustee,  upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or
not  conveyancing  documents  have been executed and  delivered  pursuant to the
appointment of such Successor Guarantee Trustee.

         (b)  If an  Event  of  Default  has  occurred  and is  continuing,  the
Guarantee Trustee shall enforce this Guarantee  Agreement for the benefit of the
Holders.

         (c) The  Guarantee  Trustee,  before  the  occurrence  of any  Event of
Default  and after the curing of all Events of Default  that may have  occurred,
shall undertake to perform only such

                                       -7-


<PAGE>



duties as are  specifically  set forth in this  Guarantee  Agreement  (including
pursuant  to  Section  2.1),  and no implied  covenants  shall be read into this
Guarantee  Agreement against the Guarantee  Trustee.  If an Event of Default has
occurred  (that has not been  cured or waived  pursuant  to  Section  2.6),  the
Guarantee  Trustee shall  exercise such of the rights and powers vested in it by
this  Guarantee  Agreement,  and use the same  degree  of care and  skill in its
exercise  thereof,  as  a  prudent  person  would  exercise  or  use  under  the
circumstances in the conduct of his or her own affairs.

         (d) No  provision  of this  Guarantee  Agreement  shall be construed to
relieve the Guarantee Trustee from liability for its own negligent  action,  its
own negligent failure to act or its own wilful misconduct, except that:

                  (i) Prior to the  occurrence of any Event of Default and after
         the  curing or  waiving  of all such  Events of  Default  that may have
         occurred:

                           (A)  the  duties  and  obligations  of the  Guarantee
                  Trustee shall be determined  solely by the express  provisions
                  of this  Guarantee  Agreement  (including  pursuant to Section
                  2.1), and the Guarantee Trustee shall not be liable except for
                  the   performance  of  such  duties  and  obligations  as  are
                  specifically set forth in this Guarantee Agreement  (including
                  pursuant to Section 2.1); and

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

                  (ii) The  Guarantee  Trustee shall not be liable for any error
         of  judgment  made  in  good  faith  by a  Responsible  Officer  of the
         Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
         was  negligent  in  ascertaining  the  pertinent  facts upon which such
         judgment was made.

                  (iii) The  Guarantee  Trustee shall not be liable with respect
         to any  action  taken or  omitted  to be  taken by it in good  faith in
         accordance  with  the  direction  of the  Holders  of not  less  than a
         Majority in Liquidation  Amount of the Capital  Securities  relating to
         the time,  method and place of conducting any proceeding for any remedy
         available to the Guarantee  Trustee,  or exercising  any trust or power
         conferred upon the Guarantee Trustee, under this Guarantee Agreement.


                                       -8-


<PAGE>



                  (iv)  Subject to Sections  3.1(b) and 3.1(d),  no provision of
         this Guarantee  Agreement shall require the Guarantee Trustee to expend
         or risk its own funds or otherwise incur personal  financial  liability
         in the  performance  of any of its duties or in the  exercise of any of
         its rights or powers,  if the Guarantee  Trustee shall have  reasonable
         grounds for believing  that the repayment of such funds or liability is
         not  reasonably  assured  to it  under  the  terms  of  this  Guarantee
         Agreement or adequate  indemnity  against such risk or liability is not
         reasonably assured to it.

         SECTION 3.2. Certain Rights of Guarantee Trustee.

         (a) Subject to the provisions of Section 3.1:

                  (i)  The  Guarantee  Trustee  may  rely  and  shall  be  fully
         protected  in acting or  refraining  from acting  upon any  resolution,
         certificate,  statement,  instrument, opinion, report, notice, request,
         direction,  consent,  order, bond,  debenture,  note, other evidence of
         indebtedness or other paper or document reasonably believed by it to be
         genuine and to have been signed,  sent or presented by the proper party
         or parties.

                  (ii) Any  direction or act of the  Guarantor  contemplated  by
         this  Guarantee  Agreement  shall  be  sufficiently   evidenced  by  an
         Officers' Certificate unless otherwise prescribed herein.

                  (iii)  Whenever,  in  the  administration  of  this  Guarantee
         Agreement,  the Guarantee Trustee shall deem it desirable that a matter
         be proved or established  before taking,  suffering or omitting to take
         any action  hereunder,  the Guarantee Trustee (unless other evidence is
         herein specifically prescribed) may, in the absence of bad faith on its
         part,  request  and rely  upon an  Officers'  Certificate  which,  upon
         receipt of such request from the Guarantee  Trustee,  shall be promptly
         delivered by the Guarantor.

                  (iv) The Guarantee Trustee may consult with legal counsel, and
         the written  advice or opinion of such legal  counsel  with  respect to
         legal matters shall be full and complete  authorization  and protection
         in respect of any action  taken,  suffered or omitted to be taken by it
         hereunder in good faith and in accordance  with such advice or opinion.
         Such legal  counsel may be legal counsel to the Guarantor or any of its
         Affiliates  and may be one of its or  their  employees.  The  Guarantee
         Trustee  shall  have  the  right  at  any  time  to  seek  instructions
         concerning  the  administration  of this  Guarantee  Agreement from any
         court of competent jurisdiction.

                  (v) The  Guarantee  Trustee  shall be under no  obligation  to
         exercise  any of the  rights or powers  vested in it by this  Guarantee
         Agreement at the request or direction of any Holder  unless such Holder
         shall have provided to the Guarantee Trustee such adequate security and
         indemnity as would  satisfy a reasonable  person in the position of the
         Guarantee  Trustee against the costs,  expenses  (including  attorneys'
         fees and  expenses)  and  liabilities  that might be  incurred by it in
         complying with such request or direction,

                                       -9-


<PAGE>



         including such reasonable advances as may be requested by the Guarantee
         Trustee;  provided  that nothing  contained  in this Section  3.2(a)(v)
         shall be taken to relieve the Guarantee Trustee, upon the occurrence of
         an Event of  Default,  of its  obligation  to  exercise  the rights and
         powers vested in it by this Guarantee Agreement.

                  (vi)  The  Guarantee  Trustee  shall  not be bound to make any
         investigation  into the  facts or  matters  stated  in any  resolution,
         certificate,  statement,  instrument, opinion, report, notice, request,
         direction,  consent,  order, bond,  debenture,  note, other evidence of
         indebtedness or other paper or document,  but the Guarantee Trustee, in
         its  discretion,  may make such further inquiry or  investigation  into
         such facts or matters as it may see fit.

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

                  (viii)  Whenever  in  the  administration  of  this  Guarantee
         Agreement  the  Guarantee  Trustee  shall deem it  desirable to receive
         instructions  with respect to  enforcing  any remedy or right or taking
         any other  action  hereunder,  the  Guarantee  Trustee  (A) may request
         instructions  from the  Holders,  (B) may refrain from  enforcing  such
         remedy or right or taking such other action until such instructions are
         received,  and (C) shall be protected in acting in accordance with such
         instructions.

         (b) No provision of this Guarantee  Agreement shall be deemed to impose
any duty or obligation  on the  Guarantee  Trustee to perform any act or acts or
exercise any right, power, duty or obligation  conferred or imposed on it in any
jurisdiction  in which it shall be illegal,  or in which the  Guarantee  Trustee
shall be  unqualified  or  incompetent  in accordance  with  applicable  law, to
perform  any such act or acts or to  exercise  any such  right,  power,  duty or
obligation.  No permissive power or authority available to the Guarantee Trustee
shall  be  construed  to be a duty to act in  accordance  with  such  power  and
authority.

         SECTION 3.3. Compensation; Fees.

         The Guarantor agrees:

                  (a) to pay to the  Guarantee  Trustee  from  time to time such
         reasonable  compensation  for all services  rendered by it hereunder as
         may be agreed by the Guarantor  and the Guarantee  Trustee from time to
         time (which  compensation  shall not be limited by any provision of law
         in regard to the compensation of a trustee of an express trust); and

                  (b)  except  as  otherwise   expressly   provided  herein,  to
         reimburse  the  Guarantee  Trustee  upon  request  for  all  reasonable
         expenses, disbursements and advances incurred

                                      -10-


<PAGE>



         or made by the Guarantee  Trustee in  accordance  with any provision of
         this Guarantee Agreement (including the reasonable compensation and the
         expenses and disbursements of its agents and counsel),  except any such
         expense,  disbursement  or  advance  as  may  be  attributable  to  its
         negligence or bad faith; and

                  (c) to the fullest  extent  permitted  by  applicable  law, to
         indemnify  and  hold  harmless  (i) the  Guarantee  Trustee,  (ii)  any
         Affiliate of the Guarantee  Trustee,  and (iii) any officer,  director,
         shareholder, employee, representative or agent of the Guarantee Trustee
         (referred  to herein as an  "IndemnifiedPerson"),  from and a any loss,
         damage, liability, tax, penalty, expense or claim of any kind or nature
         whatsoever  incurred by such Indemnified Person in connection with this
         Guarantee Agreement or any act or omission performed or omitted by such
         Indemnified  Person in good faith and in manner such Indemified  Person
         reasonably  believed to be within the scope of  authority  conferred on
         such  Indemnified  Person by this Guarantee  Agreement,  except that no
         Indemnified  Person shall be entitled to be  indemnified  in respect of
         any loss, damage or claim incurred by such Indemnified Person by reason
         of  negligence  or  willful  misconduct  with  respect  to such acts or
         omissions.

         The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee  Payments  as a result of any amount  due to it under  this  Guarantee
Agreement.

         The  provisions  of this Section 3.3 shall survive the  termination  of
this Guarantee Agreement or the resignation or removal of the Guarantee Trustee.


                                   ARTICLE IV

                                GUARANTEE TRUSTEE

         SECTION 4.1. Guarantee Trustee; Eligibility.

         (a) There shall at all times be a Guarantee Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a Person  that is a national or state  chartered  bank
         and eligible  pursuant to the Trust  Indenture Act to act as such,  and
         that has at the time of such appointment securities rated in one of the
         three highest rating categories by a nationally recognized  statistical
         rating  organization  and a combined  capital  and  surplus of at least
         $50,000,000,  and shall be a corporation  meeting the  requirements  of
         Section  310(a)  of  the  Trust  Indenture  Act.  If  such  corporation
         publishes reports of condition at least annually, pursuant to law or to
         the requirements of its supervising or examining  authority,  then, for
         the  purposes of this  Section 4.1 and to the extent  permitted  by the
         Trust  Indenture  Act,  the  combined   capital  and  surplus  of  such
         corporation shall be deemed to be its

                                      -11-


<PAGE>



          combined capital and surplus as set forth in its most recent report of
          condition so published.

         (b) If at any time the Guarantee  Trustee shall cease to be eligible to
so act under Section 4.1(a),  the Guarantee Trustee shall immediately  resign in
the manner and with the effect set out in Section 4.2.

         (c) If the  Guarantee  Trustee has or shall  acquire  any  "conflicting
interest"  within the meaning of Section 310(b) of the Trust  Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

          SECTION 4.2.  Appointment,  Removal and  Resignation  of the Guarantee
          Trustee.

         (a) Subject to Section 4.2(c),  the Guarantee Trustee may be appointed
or removed at any time by the Guarantor.

         (b) Subject to Section  4.2(c),  the Guarantee  Trustee may resign from
office  (without  need for prior or  subsequent  accounting)  by giving  written
notice  thereof to the Holders and the  Guarantor  and by appointing a successor
Guarantee Trustee.

         (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor  Guarantee  Trustee shall have been  appointed and shall have accepted
such  appointment.  No removal or  resignation  of a Guarantee  Trustee shall be
effective  until a  Successor  Guarantee  Trustee  has  been  appointed  and has
accepted  such  appointment  by written  instrument  executed by such  Successor
Guarantee  Trustee  and  delivered  to the  Guarantor  and,  in the  case of any
resignation, the resigning Guarantee Trustee.

         (d) If the  Guarantee  Trustee  shall  resign,  be  removed  or  become
incapable  of  acting  as  Guarantee  Trustee  and a  replacement  shall  not be
appointed prior to such  resignation or removal,  or if a vacancy shall occur in
the office of  Guarantee  Trustee for any  reason,  and no  Successor  Guarantee
Trustee shall have been  appointed and accepted  appointment as provided in this
Section 4.2 within 60 days after  delivery to the Holders and the Guarantor of a
notice of  resignation,  the resigning  Guarantee  Trustee may petition,  at the
expense of the Guarantor, any court of competent jurisdiction for appointment of
a Successor Guarantee Trustee. Such court may thereupon,  after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.



                                      -12-


<PAGE>



                                    ARTICLE V

                                    GUARANTEE

         SECTION 5.1. Guarantee.

         The Guarantor irrevocably and unconditionally  agrees to pay in full to
the Holders the Guarantee Payments (without  duplication of amounts  theretofore
paid by or on behalf of the Issuer  Trust),  as and when due,  regardless of any
defense,  right of set-off  or  counterclaim  that the Issuer  Trust may have or
assert,  except the defense of payment.  The  Guarantor's  obligation  to make a
Guarantee  Payment may be satisfied by direct payment of the required amounts by
the  Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.

         SECTION 5.2. Waiver of Notice and Demand.

         The Guarantor  hereby  waives  notice of  acceptance of this  Guarantee
Agreement  and of any  liability to which it applies or may apply,  presentment,
demand  for  payment,  any  right to  require a  proceeding  first  against  the
Guarantee  Trustee,  the  Issuer  Trust or any other  Person  before  proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.

         SECTION 5.3. Obligations Not Affected.

         The  obligations,  covenants,  agreements  and duties of the  Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:

                  (a) the release or waiver,  by  operation  of law or otherwise
         (other than by Act (as defined in the Trust Agreement) of the Holders),
         of the  performance or observance by the Issuer Trust of any express or
         implied agreement,  covenant, term or condition relating to the Capital
         Securities to be performed or observed by the Issuer Trust;

                  (b) the  extension of time for the payment by the Issuer Trust
         of all or any portion of the Distributions  (other than an extension of
         time for payment of  Distributions  that results from the  extension of
         any  interest  payment  period on the  Debentures  as  provided  in the
         Indenture),  Redemption  Price,  Liquidation  Distribution or any other
         sums payable under the terms of the Capital Securities or the extension
         of time for the performance of any other obligation under,  arising out
         of, or in connection with, the Capital Securities;

                  (c) any failure,  omission,  delay or lack of diligence on the
         part  of  the  Holders  to  enforce,  assert  or  exercise  any  right,
         privilege,  power or remedy  conferred  on the Holders  pursuant to the
         terms  of the  Capital  Securities,  or any  action  on the part of the
         Issuer Trust granting indulgence or extension of any kind;


                                      -13-


<PAGE>



                  (d) the  voluntary or  involuntary  liquidation,  dissolution,
         receivership,  insolvency,  bankruptcy,  assignment  for the benefit of
         creditors, reorganization,  arrangement, composition or readjustment of
         debt of, or other similar  proceedings  affecting,  the Issuer Trust or
         any of the assets of the Issuer Trust;

                  (e) any  invalidity  of,  or defect or  deficiency  in,  the
         Capital Securities; 

                  (f)  the   settlement  or   compromise  of  any   obligation
         guaranteed hereby or hereby incurred;

                  (g) the consummation of the Exchange Offer; or

                  (h) any other  circumstance  whatsoever  that might  otherwise
         constitute  a legal or  equitable  discharge  or defense of a guarantor
         (other than payment of the underlying obligation),  it being the intent
         of this Section 5.3 that the  obligations  of the  Guarantor  hereunder
         shall be absolute and unconditional under any and all circumstances.

There  shall be no  obligation  of the  Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

         SECTION 5.4. Rights of Holders.

         The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited  with the Guarantee  Trustee to be held for the benefit of the
Holders;  (ii) the  Guarantee  Trustee has the right to enforce  this  Guarantee
Agreement  on  behalf  of the  Holders;  (iii)  the  Holders  of a  Majority  in
Liquidation  Amount of the Capital Securities have the right to direct the time,
method and place of conducting any  proceeding  for any remedy  available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power  conferred upon the Guarantee  Trustee under this Guarantee  Agreement;
and (iv) any  Holder may  institute  a legal  proceeding  directly  against  the
Guarantor to enforce its rights under this  Guarantee  Agreement  without  first
instituting a legal proceeding against the Guarantee  Trustee,  the Issuer Trust
or any other Person.

         SECTION 5.5. Guarantee of Payment.

         This  Guarantee  Agreement  creates a  guarantee  of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without  duplication of amounts theretofore paid
by the  Issuer  Trust) or upon the  distribution  of  Debentures  to  Holders as
provided in the Trust Agreement.

         SECTION 5.6. Subrogation.

         The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer  Trust in respect of any  amounts  paid to the Holders by the
Guarantor under this Guarantee

                                      -14-


<PAGE>



Agreement; provided, however, that the Guarantor shall not (except to the extent
required by mandatory  provisions of law) be entitled to enforce or exercise any
rights  which  it  may  acquire  by  way  of   subrogation   or  any  indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee  Agreement,  if, at the time of any such payment,  any amounts are due
and unpaid under this  Guarantee  Agreement.  If any amount shall be paid to the
Guarantor in violation of the preceding  sentence,  the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

         SECTION 5.7. Independent Obligations.

         The  Guarantor   acknowledges   that  its  obligations   hereunder  are
independent  of the  obligations of the Issuer Trust with respect to the Capital
Securities  and that the  Guarantor  shall be liable as principal  and as debtor
hereunder to make  Guarantee  Payments  pursuant to the terms of this  Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.


                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

         SECTION 6.1. Subordination.

         The  obligations of the Guarantor  under this Guarantee  Agreement will
constitute unsecured  obligations of the Guarantor and will rank subordinate and
junior  in right of  payment  to all  Senior  Indebtedness  (as  defined  in the
Indenture)  of the  Guarantor  to the  extent and in the manner set forth in the
Indenture with respect to the Debentures,  and the provisions of Article XIII of
the Indenture will apply, mutatis mutandis,  to the obligations of the Guarantor
hereunder.  The obligations of the Guarantor  hereunder do not constitute Senior
Indebtedness (as defined in the Indenture) of the Guarantor.

         SECTION 6.2. Pari Passu Guarantees.

         The obligations of the Guarantor  under this Guarantee  Agreement shall
rank pari passu with the  obligations  of the  Guarantor  under (i) any  similar
guarantee  agreements  issued  by the  Guarantor  on behalf  of the  holders  of
preferred  or capital  securities  issued by any Issuer Trust (as defined in the
Indenture);  (ii) the Indenture and the Securities (as defined  therein)  issued
thereunder;  and (iii) any  other  security,  guarantee  or other  agreement  or
obligation  that is expressly  stated to rank pari passu with the obligations of
the Guarantor  under this Guarantee  Agreement or with any obligation that ranks
pari passu with the obligations of the Guarantor under this Guarantee Agreement.



                                      -15-


<PAGE>



                                   ARTICLE VII

                                   TERMINATION

         SECTION 7.1. Termination.

         This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full  payment of the  Redemption  Price (as defined in the Trust
Agreement) of all Capital Securities, (ii) the distribution of Debentures to the
Holders in exchange for all of the Capital Securities,  or (iii) full payment of
the amounts  payable in accordance  with Article IX of the Trust  Agreement upon
liquidation of the Issuer Trust.  Notwithstanding the foregoing,  this Guarantee
Agreement will continue to be effective or will be  reinstated,  as the case may
be, if at any time any Holder is required to repay any sums paid with respect to
Capital Securities or this Guarantee Agreement.


                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.1. Successors and Assigns.

         All  guarantees and  agreements  contained in this Guarantee  Agreement
shall bind the successors,  assigns, receivers,  trustees and representatives of
the  Guarantor  and shall  inure to the  benefit of the  Holders of the  Capital
Securities then outstanding.  Except in connection with a consolidation,  merger
or sale  involving  the  Guarantor  that is permitted  under Article VIII of the
Indenture and pursuant to which the  successor or assignee  agrees in writing to
perform the Guarantor's  obligations  hereunder,  the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in accordance
with this provision shall be void.

         SECTION 8.2. Amendments.

         Except with  respect to any changes  that do not  adversely  affect the
rights of the Holders in any  material  respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation  Amount
of the Capital  Securities.  The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.

         SECTION 8.3. Notices.

         (a) Any notice, request or other communication required or permitted to
be given  hereunder  shall be in writing,  duly signed by the party  giving such
notice, and delivered, by facsimile or first class mail as follows:

                                      -16-


<PAGE>



               (i) if given to the Guarantor, to the address or facsimile number
          set forth  below or such  other  address  or  facsimile  number as the
          Guarantor may give notice to the Guarantee Trustee and the Holders:

                  HSB Group, Inc.
                  One State Street
                  Hartford, Connecticut  06102
                  General Counsel
                  Facsimile: (860) 722-1818

               (ii)  if  given  to the  Guarantee  Trustee,  at the  address  or
          facsimile  number set forth below or such other  address or  facsimile
          number as the  Guarantee  Trustee may give notice to the Guarantor and
          the Holders:

                  The First National Bank of Chicago
                  One First National Plaza, Suite #0126
                  Chicago, Illinois  60070-0126
                  Corporate Trust Division
                  Facsimile:  (312) 407-1708

               (iii) if given to any Holder,  in the manner set forth in Section
          10.8 of the Trust Agreement.

         (b) All  notices  hereunder  shall be deemed to have  been  given  when
received in person,  by  facsimile  with receipt  confirmed,  or mailed by first
class  mail,  postage  prepaid,  except  that if a notice or other  document  is
refused delivery or cannot be delivered because of a changed address of which no
notice was given,  such  notice or other  document  shall be deemed to have been
delivered on the date of such refusal or inability to deliver, provided that any
notice  given as  provided in Section  8.3(a)(iii)  shall be deemed to have been
given at the time specified in Section 10.8 of the Trust Agreement.

         SECTION 8.4. Exchange Offer.

         In the event an Exchange  Offer  Registration  Statement (as defined in
the Registration Rights Agreement) becomes effective and the Issuer Trust issues
any Exchange Capital  Securities in the Exchange Offer, the Guarantor will enter
into  a new  capital  securities  guarantee  agreement  (the  "Exchange  Capital
Securities  Guarantee"),  in  substantially  the  same  form as  this  Guarantee
Agreement, with respect to the Exchange Capital Securities.

         SECTION 8.5. Benefit.

         This  Guarantee  Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.


                                      -17-


<PAGE>



         SECTION 8.6. Governing Law.

         THIS  GUARANTEE  AGREEMENT  SHALL  BE  GOVERNED  BY  AND  CONSTRUED  IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         SECTION 8.7. Counterparts.

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

                                      -18-


<PAGE>


         IN WITNESS  WHEREOF,  the parties  hereto  have  caused this  Guarantee
Agreement  to be duly  executed,  and  their  respective  corporate  seals to be
hereunto affixed, all as of the day and year first above written.


                                 HSB GROUP, INC.


                                 By:______________________________

                                    Name: Saul L. Basch
                                    Title: President, Treasurer and
                                           Chief Financial Officer


                                 THE FIRST NATIONAL BANK OF CHICAGO,
                                 as Guarantee Trustee


                                 By:______________________________

                                    Name: Mellisa Weisman
                                    Title: Vice President


<PAGE>




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



                          FIRST SUPPLEMENTAL INDENTURE

                                     between

                                 HSB GROUP, INC.

                                       and

                       THE FIRST NATIONAL BANK OF CHICAGO

                            Dated as of July 15, 1997


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




<PAGE>



                                TABLE OF CONTENTS
                                                                            Page

                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1.   Definition of Terms...........................................  2

                                   ARTICLE II
                 GENERAL TERMS AND CONDITIONS OF THE SECURITIES

SECTION 2.1.   Designation and Principal Amount..............................  3
SECTION 2.2.   Maturity......................................................  3
SECTION 2.3.   Form and Payment..............................................  4
SECTION 2.4.   Global Security...............................................  4
SECTION 2.5.   Interest......................................................  5

                                   ARTICLE III
                          REDEMPTION OF THE SECURITIES

SECTION 3.1.   Tax Event Redemption..........................................  8
SECTION 3.2.   Optional Redemption by Corporation............................  8
SECTION 3.3.   No Sinking Fund...............................................  9

                                   ARTICLE IV
                      EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.1.   Extension of Interest Payment Period..........................  9

                                    ARTICLE V
                          ORIGINAL ISSUE OF SECURITIES

SECTION 5.1.   Original Issue of Securities.................................. 10

                                   ARTICLE VI
                            RIGHT TO SHORTEN MATURITY

SECTION 6.1.   Right to Shorten Maturity..................................... 10
SECTION 6.2.   Form of Securities............................................ 10

                                   ARTICLE VII
                                  MISCELLANEOUS

SECTION 7.1.   Ratification of Indenture..................................... 10
SECTION 7.2.   Trustee Not Responsible for Recitals.......................... 11
SECTION 7.3.   Governing Law................................................. 11
SECTION 7.4.   Separability.................................................. 11
SECTION 7.5.   Counterparts.................................................. 11





<PAGE>



                  FIRST SUPPLEMENTAL  INDENTURE,  dated as of July 15, 1997 (the
"First Supplemental Indenture"), between HSB Group, Inc., a Delaware corporation
(the  "Corporation"),  and The First  National Bank of Chicago,  as trustee (the
"Trustee"),  under  the  Indenture  dated  as  of  July  15,  1997  between  the
Corporation and the Trustee (the "Indenture").

                  WHEREAS,  the Corporation executed and delivered the Indenture
to the Trustee to provide for the future issuance of the Corporation's unsecured
junior  subordinated  debt  securities  to be issued from time to time in one or
more series as might be determined by the Corporation under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;

                  WHEREAS,   pursuant  to  the  terms  of  the  Indenture,   the
Corporation  desires to  provide  for the  establishment  of a new series of its
Securities  to be known as its  Floating  Rate  Junior  Subordinated  Deferrable
Interest Debentures, Series A (the "Securities"), the form and substance of such
Securities and the terms,  provisions and conditions  thereof to be set forth as
provided in the Indenture and this First Supplemental Indenture;

                  WHEREAS,  HSB Capital I, a Delaware  statutory  business trust
(the  "Trust"),  has offered to the public  $110,000,000  aggregate  liquidation
amount of its Global  Floating Rate Capital  Securities,  Series A (the "Capital
Securities"),  representing  undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering,  together with the
proceeds of the issuance and sale by the Trust to the  Corporation of $3,403,000
aggregate  liquidation amount of its Global Floating Rate Common Securities,  in
$113,403,000 aggregate principal amount of the Securities; and

                  WHEREAS,  the  Corporation  has  requested  that  the  Trustee
execute and deliver this First  Supplemental  Indenture pursuant to Article 3 of
the Indenture  and all  requirements  necessary to make this First  Supplemental
Indenture  a valid  instrument  in  accordance  with its terms,  and to make the
Securities,  when executed by the Corporation and authenticated and delivered by
the Trustee, the valid obligations of the Corporation,  have been performed, and
the  execution and delivery of this First  Supplemental  Indenture has been duly
authorized in all respects:

                  NOW THEREFORE, in consideration of the purchase and acceptance
of the Securities by the Holders thereof,  and for the purpose of setting forth,
as provided in the  Indenture,  the form and substance of the Securities and the
terms,  provisions and conditions thereof, the Corporation  covenants and agrees
with the Trustee as follows:





<PAGE>



                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1.               Definition of Terms.

                  Unless the context otherwise requires:

                    (a) a term  defined in the  Indenture  has the same  meaning
               when used in this First Supplemental Indenture;

                    (b) a term  defined  anywhere  in  this  First  Supplemental
               Indenture has the same meaning throughout;

                    (c) the singular includes the plural and vice versa;

                    (d) a  reference  to a Section or Article is to a Section or
               Article of this First Supplemental Indenture;

                    (e) headings are for  convenience  of reference  only and do
               not affect interpretation;

                    (f) the following  terms have the meanings  given to them in
               the Trust  Agreement:  (i) Business Day;  (ii)  Clearing  Agency;
               (iii)  Delaware  Trustee;  (iv)  Property  Trustee;  (v) Property
               Trustee Account; (vi) Capital Securities;  (vii) Adminis- trative
               Trustees; (viii) Tax Event; and (ix) Purchase Agreement;

                    (g) the following  terms have the meanings  given to them in
               this Section 1.1(g):

                    "Additional  Interest"  shall have the  meaning set forth in
               Section 4.1.

                    "Additional  Sums"  shall  have  the  meaning  set  forth in
               Section 2.5.

                    "Depositary",  with  respect  to the  Securities,  means The
               Depository  Trust  Corporation or such other  successor  Clearing
               Agency.

                    "Dissolution  Event" means the  liquidation  of the Trust by
               the   Administrative   Trustees  in  accordance  with  the  Trust
               Agreement,  and the  distribution  of the Securities  held by the
               Property Trustee to the holders of the Trust Securities issued by
               the Trust pro rata in accordance with the Trust Agreement.

                    "Interest" shall have the meaning set forth in Section 2.5.

                    "Lead Manager" means Goldman, Sachs & Co.



                                        2

<PAGE>



                    "Liquidated  Damages" has the meaning ascribed to such terms
               in the registration Rights Agreement.

                    "Maturity Date" shall mean July 15, 2027.

                    "Non Book-Entry Securities" shall have the meaning set forth
               in Section 2.4.

                    "Purchase Agreement" means the Purchase Agreement naming the
               Corporation,  the Trust, and the Initial Purchasers named therein
               providing for the purchase of the Capital Securities.

                    "Redemption   Price"   shall  mean,   with  respect  to  any
               redemption of the Securities  pursuant to Article III hereof,  an
               amount  in  cash  equal  to 100% of the  principal  amount  to be
               redeemed plus any accrued and unpaid interest thereon,  including
               Additional  Interest,  Additional  Sums,  if any, and  Liquidated
               Damages, if any, to the date of such redemption.

                    "Registration  Rights Agreement" shall mean the Exchange and
               Registration  Rights Agreement among the Corporation,  the Trust,
               and  the  Initial  purchasers  named  in the  Purchase  Agreement
               providing  for  the  registration  and  exchange  of the  Capital
               Securities, the Securities, and the Guarantees.

                    "Trust Securities" shall mean the Capital Securities and the
               Common Securities, collectively.


                                   ARTICLE II
                 GENERAL TERMS AND CONDITIONS OF THE SECURITIES

SECTION 2.1.               Designation and Principal Amount.

                  There is hereby  authorized a series of Securities  designated
the "Global Floating Rate Junior Subordinated Debentures,  Series A", limited in
aggregate  principal amount to $113,403,000,  which amount shall be as set forth
in any written order of the Corporation for the  authentication  and delivery of
Securities pursuant to Section 3.03 of the Indenture.

SECTION 2.2.               Maturity.

                  The Maturity Date (which shall  constitute the Stated Maturity
of the Securities for purposes of the Indenture)  shall be the date on which the
Securities  mature and on which the  principal  thereof shall be due and payable
together  with all accrued and unpaid  interest  thereon  (including  Additional
Interest and Additional Sums, if any).



                                        3

<PAGE>



SECTION 2.3.               Form and Payment.

                  Except as provided in Section  2.4,  the  Securities  shall be
issued in fully registered certificated form without interest coupons in minimum
denominations  of  $1,000  and in  integral  multiples  thereof.  Principal  and
interest on the  Securities  issued in  certificated  form will be payable,  the
transfer of such  Securities  will be registrable  and such  Securities  will be
exchangeable for Securities bearing identical terms and provisions at the office
or agency of the  Corporation  as set forth in the last sentence of Section 10.2
of the Indenture;  provided,  however,  that payment of interest may be made, at
the option of the Corporation,  by check mailed to the Holder at such address as
shall  appear  in the  Security  Register  or by  wire  transfer  to an  account
designated  by a Holder in  writing  not less than ten days prior to the date of
payment.  The Corporation  selects each of the City of New York, New York as the
Place of Payment for the Securities and hereby  appoints The First National Bank
of Chicago as  Securities  Registrar  for the  Securities.  Notwithstanding  the
foregoing,  so long as the Holder of any Securities is the Property Trustee, the
payment of the  principal of and  interest  (including  Additional  Interest and
Additional Sums, if any) on such Securities held by the Property Trustee will be
made at such place and to such  account  as may be  designated  by the  Property
Trustee.

SECTION 2.4.               Global Security.

                  (a)  In connection with a Dissolution Event,

                           (i)  the  Securities  in  certificated  form  may  be
         presented  to the Trustee by the  Property  Trustee in  exchange  for a
         Global Security in an aggregate principal amount equal to the aggregate
         principal amount of all outstanding Securities, to be registered in the
         name of the Depositary, or its nominee, and delivered by the Trustee to
         or upon the order of the  Depositary  for  crediting to the accounts of
         its  participants  pursuant to the  instructions of the  Administrative
         Trustees.  The Corporation upon any such  presentation  shall execute a
         Global Security in such aggregate principal amount and deliver the same
         to the Trustee for  authentication  and delivery in accordance with the
         Indenture  and  this  First  Supplemental  Indenture.  Payments  on the
         Securities  issued as a Global Security will be made to the Depositary;
         and

                           (ii)  if  any  Capital  Securities  are  held  in non
         book-entry  certificated  form, the Securities in certificated form may
         be presented to the Trustee by the Property  Trustee and any Definitive
         Capital Securities will be deemed to represent  beneficial interests in
         Securities  presented to the Trustee by the Property  Trustee having an
         aggregate


                                        4

<PAGE>



         principal  amount  equal to the  aggregate  liquidation  amount  of the
         Definitive   Capital  Securities  until  such  Capital  Securities  are
         presented to the Security Registrar for transfer or reissuance at which
         time  such  Capital  Securities  will  be  cancelled  and  a  Security,
         registered  in the name of the holder of the Capital  Securities or the
         transferee  of the holder of such Capital  Securities,  as the case may
         be,  with  an  aggregate   principal  amount  equal  to  the  aggregate
         liquidation  amount  of  the  Capital  Securities  cancelled,  will  be
         executed  by  the   Corporation   and  delivered  to  the  Trustee  for
         authentication  and delivery in accordance  with the Indenture and this
         First  Supplemental  Indenture.  Upon the issuance of such  Securities,
         Securities  with an  equivalent  aggregate  principal  amount that were
         presented by the Property Trustee to the Trustee will be deemed to have
         been cancelled.

                  (b) A Global Security may be transferred,  in whole but not in
part, only to another nominee of the  Depositary,  or to a successor  Depositary
selected  or  approved  by the  Corporation  or to a nominee  of such  successor
Depositary.

SECTION 2.5.               Interest.

                  (a) Each  Security will bear interest at the Interest Rate (as
defined  below) from July 15, 1997 until the principal  thereof  becomes due and
payable,  and on any overdue  principal at the Interest  Rate and (to the extent
that  payment of such  interest  is  enforceable  under  applicable  law) on any
overdue  installment  of interest at the Interest  Rate,  compounded  quarterly,
payable  (subject to the  provisions  of Article  Four)  quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year  commencing on October
15, 1997, to the Person in whose name such Security or any predecessor  Security
is  registered,  at the close of  business on the January 1, April 1, July 1 and
October 1 prior to the applicable  Interest Payment Date. The amount of interest
payable for any period  will be  computed  on the basis of the actual  number of
days in the  applicable  payment  period  (which  actual  number of days,  shall
include the first day but exclude the last day of such payment  period)  divided
by 360. The term  "interest"  as used herein shall  include  quarterly  interest
payments,  Additional  Interest,  Liquidated  Damages  and  Additional  Sums (as
defined below), as applicable.

                  (b) The Interest Rate in respect of the  Securities  will be a
variable rate per annum of LIBOR,  determined as described below,  plus a margin
of 0.91%. First Chicago,  as Calculation Agent (the "Calculation  Agent"),  will
calculate the Interest Rate for each  quarterly  interest  period based on LIBOR
determined  as of two London  Business  Days  (defined as any day,  other than a
Saturday or Sunday, on which banks are open for business in London) prior to the
first day of such interest


                                        5

<PAGE>



period (each, a "Determination Date").  "LIBOR" means, with
respect to a quarterly interest period relating to an Interest
Payment Date (in the following order of priority):

                  (1)  the  rate  (expressed  as a  percentage  per  annum)  for
         Eurodollar  deposits  having a  three-month  maturity  that  appears on
         Telerate  Page  3750 as of 11:00  a.m.  (London  time)  on the  related
         Determination Date;

                  (2) if such rate does not appear on  Telerate  Page 3750 as of
         11:00 a.m. (London Time) on the related  Determination Date, LIBOR will
         be the  arithmetic  mean (if necessary  rounded  upwards to the nearest
         whole multiple of 0.00001%) of the rates  (expressed as percentages per
         annum) for  Eurodollar  deposits  having a  three-month  maturity  that
         appears on Reuters  Monitor  Money  Rates  Page  LIBOR  ("Reuters  Page
         LIBOR") as of 11:00 a.m. (London time) on such Determination Date;

                  (3) if such rate does not appear on  Reuters  Page LIBOR as of
         11:00  a.m.  (London  time)  on the  related  Determination  Date,  the
         Calculation  Agent will request the  principal  London  offices of four
         leading  banks in the London  interbank  market to provide  such banks'
         offered quotations  (expressed as percentages per annum) to prime banks
         in the  London  interbank  market  for  Eurodollar  deposits  having  a
         three-month   maturity  as  of  11:00  a.m.   (London   time)  on  such
         Determination Date. If at least two quotations are provided, LIBOR will
         be the  arithmetic  mean (if necessary  rounded  upwards to the nearest
         whole multiple of 0.00001%) of such quotations;

                  (4)  if  fewer  than  two  such  quotations  are  provided  as
         requested in clause (3) above, the Calculation  Agent will request four
         major New York City banks to provide  such  banks'  offered  quotations
         (expressed  as  percentages  per annum) to leading  European  banks for
         loans in  Eurodollars  having a  three-month  maturity as of 11:00 a.m.
         (London  time)  on  such  Determination  Date.  If at  least  two  such
         quotations  are  provided,  LIBOR  will  be  the  arithmetic  mean  (if
         necessary rounded upwards to the nearest whole multiple of 0.00001%) of
         such quotations; and

                  (5)  if  fewer  than  two  such  quotations  are  provided  as
         requested in clause (4) above, LIBOR will be LIBOR as determined on the
         previous Determination Date.

         If the rate for Eurodollar deposits having a three-month  maturity that
initially  appears on Telerate Page 3750 or Reuters Page LIBOR,  as the case may
be,  as of  11:00  a.m.  (London  Time)  on the  related  Determination  Date is
superseded on Telerate Page 3750 or Reuters Page LIBOR, as the case may be, by a
corrected


                                        6

<PAGE>



rate before 12:00 noon (London Time) on such  Determination  Date, the corrected
rate as so substituted on the applicable  page will be the applicable  LIBOR for
such Determination Date.

         Absent manifest error, the Calculation  Agent's  determination of LIBOR
and its  calculation  of the applicable  Interest Rate for each interest  period
will be final and  binding.  Investors  may  obtain the  interest  rates for the
current and  preceding  interest  period by writing or calling  Corporate  Trust
Administration  at the  Calculation  Agent at The First  National  Plaza  #0126,
Chicago Illinois 60670-0126 (telephone (800) 524-9472).

                  The term "Interest Period" means each period beginning on, and
including,  any Interest  Payment Date, and ending on, but  excluding,  the next
succeeding  Interest Payment Date, and each successive  period beginning on, and
including,  an  Interest  Payment  Date and ending on, but  excluding,  the next
succeeding Interest Payment Date.

                  The Interest  Rate for any Interest  Period will at no time be
higher than the maximum  rate then  permitted by New York law as the same may be
modified by United States law.

                  All percentages resulting from any calculations referred to in
this First Supplemental Indenture will be rounded, if necessary,  to the nearest
multiple of 1/100 of 1% and all U.S.  dollar  amounts used in or resulting  from
such  calculations  will be rounded to the nearest cent (with  one-half  cent or
more being rounded upwards).

                  (c) The Calculation  Agent shall, as soon as practicable after
11:00 a.m., London time, on each Determination Date, determine the Interest Rate
and  calculate  the amount of  Interest  payable  in  respect  of the  following
Interest  Period and  inform  the  Trustee  and the  Paying  Agent  and,  if any
Securities are held by the Property Trustee, the Property Trustee. The amount of
interest so payable in respect of such period  shall be  calculated  by applying
the Interest Rate to the principal amount outstanding at the commencement of the
Interest  Period,  multiplying  each such amount by the actual number of days in
the Distribution Period concerned (which actual number of days shall include the
first day but exclude the last day of such Determination  Period) divided by 360
and rounding the  resultant  figure to the nearest cent (with  one-half  cent or
more being  rounded  upwards).  Unless  otherwise  provided by the Trustee,  the
Paying Agent will calculate the amount of interest  payable on the Securities in
respect of the following Interest Period. The determination of the Interest Rate
by the Calculation Agent and the amount of interest payable by Paying Agent will
(in the  absence  of  wilful  default,  bad faith or  manifest  error) be final,
conclusive and binding on all concerned.  None of the Trustee, the Paying Agent,
the Calculation Agent, the Trust or the Corporation (or any of their


                                        7

<PAGE>



respective officers, directors, agents, beneficiaries,  employees or affiliates)
shall have any  liability to any person for (i) the  selection of any  Reference
Bank or (ii) any inability to retain major banks in the London interbank market,
in the case of the Calculation  Agent,  which is caused by circumstances  beyond
its reasonable control.

                  Upon  the  request  of a holder  of a  Capital  Security,  the
Property  Trustee  will  provide  the  Distribution  Rate then in effect and, if
determined,  the Distribution Rate for the next Distribution Period with respect
to the Capital Securities.

                  (d)    All     certificates,     communications,     opinions,
determinations, calculations, quotations and decisions given, expressed, made or
obtained  for  the  purposes  of the  provisions  relating  to the  payment  and
calculation of interest on the  Securities,  whether by the Reference  Banks (or
any of them) or the  Calculation  Agent,  Trustee or Paying Agent,  will (in the
absence of wilful default, bad faith or manifest error) be binding on the Trust,
the  Corporation,  the Trustee and all of the holders of the Securities,  and no
liability will (in the absence of wilful  default,  bad faith or manifest error)
attach to the Calculation Agent,  Trustee or Paying Agent in connection with the
exercise or non-exercise by any of them of their powers, duties and discretion.

                  (e) In the event that any date on which interest is payable on
the  Securities is not a Business Day, then payment of interest  payable on such
date will be made on the next  succeeding  day which is a Business  Day,  except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately  preceding  Business Day, in each case with the
same force and effect as if made on such date  (each date on which  interest  is
actually payable, an "Interest Payment Date").


                                   ARTICLE III
                          REDEMPTION OF THE SECURITIES

SECTION 3.1.               Tax Event Redemption.

                  If a Tax  Event  has  occurred  and is  continuing  then,  the
Corporation  shall have the right,  within 90 days  following the  occurrence of
such Tax Event, to redeem the Securities, in whole, but not in part, for cash at
the Redemption Price.

SECTION 3.2.               Optional Redemption by Corporation.

                  Subject to the  provisions  of Article Four of the  Indenture,
except as otherwise may be specified in this First Supplemental  Indenture,  the
Corporation shall have the right to redeem the Securities,  in whole or in part,
from time to time, on


                                        8

<PAGE>



or after July 15, 2007, at the Redemption Price. Pursuant to this paragraph will
be made upon not less than 30 days nor more than 60 days  notice to the  Holders
of the  Securities.  If the Securities are only partially  redeemed  pursuant to
this Section 3.2, the  Securities  will be redeemed pro rata or by lot or by any
other method utilized by the Securities Registrar; provided, that if at the time
of redemption the Securities are registered as a Global Security, the Depositary
shall determine, in accordance with its procedures, the principal amount of such
Securities beneficially held by each Holder of Securities to be redeemed.

SECTION 3.3.               No Sinking Fund.

                  The  Securities are not entitled to the benefit of any sinking
fund.


                                   ARTICLE IV
                      EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.1.               Extension of Interest Payment Period.

                  Subject  to Section  3.12 of the  Indenture,  the  Corporation
shall have the right,  at any time and from time to time  during the term of the
Securities,  to defer  payments of interest by extending  the  interest  payment
period of such  Securities for an Extension  Period not exceeding 20 consecutive
quarters,  during which  Extension  Period no interest shall be due and payable;
provided that no Extension  Period may extend beyond the Maturity Date or end on
a date  other  than  an  Interest  Payment  Date.  To the  extent  permitted  by
applicable law, interest,  the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1, will bear
interest  thereon at the Interest Rate compounded  quarterly for each quarter of
the  Extension  Period  ("Additional  Interest").  At the  end of the  Extension
Period,  the  Corporation  shall  pay all  interest  accrued  and  unpaid on the
Securities,  including any Additional Sums,  Additional  Interest and Liquidated
Damages,  if applicable,  that shall be payable to the Holders of the Securities
in whose names the  Securities  are  registered in the Security  Register on the
record date relating to the Interest  Payment Date on which the Extension Period
ends.  Before the  termination  of any Extension  Period,  the  Corporation  may
further defer payments of interest by further  extending  such period,  provided
that such period,  together with all such further extensions thereof,  shall not
exceed 20  consecutive  quarters,  or extend  beyond  the  Maturity  Date of the
Securities  or end on a date  other  than an  Interest  Payment  Date.  Upon the
termination of any Extension  Period and the payment of all Additional  Interest
then due, the  Corporation may commence a new Extension  Period,  subject to the
foregoing requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof.


                                        9

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                                    ARTICLE V
                          ORIGINAL ISSUE OF SECURITIES

SECTION 5.1.               Original Issue of Securities.

                  Securities in the aggregate  principal  amount of $113,403,000
may, upon  execution of this First  Supplemental  Indenture,  be executed by the
Corporation  and  delivered  to the  Trustee for  authentication  as provided in
Sections 3.1 and 3.3 of the Indenture.


                                   ARTICLE VI
                            RIGHT TO SHORTEN MATURITY

SECTION 6.1.               Right to Shorten Maturity.

                  Upon the  occurrence  and  during  the  continuation  of a Tax
Event,  the Corporation  may, at its option,  shorten the Stated Maturity of the
Securities  to the minimum  extent,  but in no event to a date not earlier  than
April 15,  2012,  such  that,  in the  opinion  of  counsel  to the  Corporation
experienced in such matters that, after advancing the Stated Maturity,  interest
paid on the Securities will be deductible for U.S.  federal income tax purposes.
Upon the exercise of the right to shorten the Stated Maturity of the Securities,
the  Corporation  will not have the right to redeem the Securities  prior to the
new Stated Maturity upon the occurrence of a Tax Event or to further shorten the
maturity of the Securities.

SECTION 6.2.               Form of Securities.

                  The Securities may be distributed under certain  circumstances
to purchases of Capital Securities. If so distributed, unless the Securities are
otherwise  registered  under the Securities Act, such Securities  shall bear the
same legends and be subject to the same  restrictions  applicable to the Capital
Securities.


                                   ARTICLE VII
                                  MISCELLANEOUS

SECTION 7.1.               Ratification of Indenture.

                  The  Indenture,  as  supplemented  by this First  Supplemental
Indenture,   is  in  all  respects  ratified  and  confirmed,   and  this  First
Supplemental  Indenture  shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.



                                       10

<PAGE>



SECTION 7.2.               Trustee Not Responsible for Recitals.

                  The recitals herein  contained are made by the Corporation and
not  by  the  Trustee,  and  the  Trustee  assumes  no  responsibility  for  the
correctness  thereof.  The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.

SECTION 7.3.               Governing Law.

                  This First  Supplemental  Indenture and each Security shall be
construed in accordance with and governed by the laws of the State of New York.

SECTION 7.4.               Separability.

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

SECTION 7.5.               Counterparts.

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

SECTION 7.6.               Registration Rights Agreement.

                  Holders of the  Securities are entitled to the benefits of the
Registration Rights Agreement.




                                       11

<PAGE>


                  IN WITNESS WHEREOF,  the parties hereto have caused this First
Supplemental  Indenture to be duly executed and attested, as of the day and year
first above written.

                                            HSB GROUP, INC.



                                            By________________________________
                                            Name:     Saul L. Basch
                                            Title:    Senior Vice President,
                                                      Treasurer and Chief Finan-
                                                      cial Officer

Attest:


By:___________________
   Corporate Secretary


                                            THE FIRST NATIONAL BANK OF CHICAGO,
                                            as Trustee



                                             By________________________________
                                             Name:
                                             Title:

Attest:


By:___________________





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