AMERICAN SKIING COMPANY

                      $76,673,300 (plus accreted interest)

                       JUNIOR SUBORDINATED NOTES DUE 2012

                                    INDENTURE

                          Dated as of November 24, 2004

                                  Madeleine LLC

                                     Trustee

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                                TABLE OF CONTENTS

                                                                            Page


ARTICLE I. DEFINITIONS.........................................................1
         Section 1.01        Definitions.......................................1
         Section 1.02        Other Definitions.................................8
         Section 1.03        Rules of Construction.............................9

ARTICLE II. THE NOTES..........................................................9
         Section 2.01        Form and Dating...................................9
         Section 2.02        Title and Terms..................................11
         Section 2.03        Execution and Authentication.....................12
         Section 2.04        Registrar and Paying Agent.......................13
         Section 2.05        Paying Agent to Hold Money in Trust..............13
         Section 2.06        Holder Lists.....................................13
         Section 2.07        Transfer and Exchange............................13
         Section 2.08        Replacement Notes................................18
         Section 2.09        Outstanding Notes................................18
         Section 2.10        Treasury Notes...................................18
         Section 2.11        Temporary Notes; Global Notes....................19
         Section 2.12        Cancellation.....................................20

ARTICLE III. REDEMPTION.......................................................20
         Section 3.01        Notices to Trustee...............................20
         Section 3.02        Selection of Notes to be Redeemed................20
         Section 3.03        Notice of Redemption.............................20
         Section 3.04        Effect of Notice of Redemption...................21
         Section 3.05        Deposit of Redemption Price......................21
         Section 3.06        Notes Redeemed in Part...........................21
         Section 3.07        Optional Redemption..............................21
         Section 3.08        Mandatory Redemption.............................22

ARTICLE IV. COVENANTS.........................................................22
         Section 4.01        Payment of Notes.................................22
         Section 4.02        Reports..........................................22
         Section 4.03        Compliance Certificate...........................22
         Section 4.04        Stay, Extension and Usury Laws...................23
         Section 4.05        Corporate Existence..............................23
         Section 4.06        Restricted Payments..............................23
         Section 4.07        Change of Control................................24
         Section 4.08        Compliance with Laws.............................26
         Section 4.09        Taxes............................................26

ARTICLE V. SUBORDINATION......................................................26
         Section 5.01        Agreement to Subordinate.........................26

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         Section 5.02        Liquidation; Dissolution, Bankruptcy.............27
         Section 5.03        Default on Senior Debt; No Stock Collateral......27
         Section 5.04        Acceleration of Notes............................28
         Section 5.05        When Distribution Must Be Paid Over..............28
         Section 5.06        Notice...........................................29
         Section 5.07        Subrogation......................................29
         Section 5.08        Relative Rights..................................29
         Section 5.09        Subordination May Not Be Impaired by Company.....30
         Section 5.10        Distribution or Notice to Representative.........31
         Section 5.11        Rights of Trustee and Paying Agent...............31
         Section 5.12        Authorization to Effect Subordination............32
         Section 5.13        Payment..........................................32
         Section 5.14        No Claims Against Subsidiaries...................32
         Section 5.15        Amendments.......................................32

ARTICLE VI. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..............33
         Section 6.01        Company May Consolidate, Etc. Only On Certain
                                Terms.........................................33
         Section 6.02        Successor Substituted............................34

ARTICLE VII. DEFAULTS AND REMEDIES............................................34
         Section 7.01        Events of Default................................34
         Section 7.02        Acceleration.....................................35
         Section 7.03        Other Remedies...................................36
         Section 7.04        Waiver of Past Defaults..........................36
         Section 7.05        Control by Majority..............................36
         Section 7.06        Limitation on Suits..............................36
         Section 7.07        Rights of Holders to Receive Payment.............37
         Section 7.08        Collection Suit by Trustee.......................37
         Section 7.09        Trustee May File Proofs of Claim.................37
         Section 7.10        Priorities.......................................37
         Section 7.11        Undertaking for Costs............................38
         Section 7.12        Additional Interest..............................38

ARTICLE VIII. TRUSTEE.........................................................39
         Section 8.01        Duties of Trustee................................39
         Section 8.02        Rights of Trustee................................39
         Section 8.03        Individual Rights of Trustee.....................40
         Section 8.04        Trustee's Disclaimer.............................40
         Section 8.05        Notice of Defaults...............................40
         Section 8.06        [Intentionally Omitted]..........................40
         Section 8.07        Compensation and Indemnity.......................40
         Section 8.08        Replacement of Trustee...........................41
         Section 8.09        Successor Trustee by Merger, etc.................42
         Section 8.10        Eligibility; Disqualification....................42
         Section 8.11        Preferential Collection of Claims Against
                                Company.......................................43

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ARTICLE IX. DISCHARGE OF INDENTURE............................................43
         Section 9.01        Termination of Company's Obligations.............43
         Section 9.02        Repayment to Company.............................43

ARTICLE X. AMENDMENTS, SUPPLEMENTS AND WAIVERS................................44
         Section 10.01       Without Consent of Holders.......................44
         Section 10.02       With Consent of Holders..........................44
         Section 10.03       Revocation and Effect of Consents................45
         Section 10.04       Notation on or Exchange of Notes.................46
         Section 10.05       Trustee Protected................................46

ARTICLE XI. MISCELLANEOUS.....................................................46
         Section 11.01       [Intentionally Omitted]..........................46
         Section 11.02       Notices..........................................46
         Section 11.03       Communication by Holders with other Holders......48
         Section 11.04       Certificate and Opinion as to Conditions
                                Precedent.....................................48
         Section 11.05       Statements Required in Certificate or Opinion....48
         Section 11.06       Rules by Trustee and Agents......................48
         Section 11.07       Legal Holidays...................................49
         Section 11.08       No Recourse Against Others.......................49
         Section 11.09       Counterparts and Facsimile Signatures............49
         Section 11.10       Governing Law, Submission to Jurisdiction........49
         Section 11.11       No Adverse Interpretation of other Agreements....49
         Section 11.12       Successors.......................................49
         Section 11.13       Severability.....................................49
         Section 11.14       Table of Contents, Headings, etc.................50

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                  INDENTURE, dated as of November 24, 2004, between American
Skiing Company, a Delaware corporation (the "COMPANY"), and Madeleine LLC, as
trustee (the "TRUSTEE").

                  Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders (as defined in
Section 1.01 hereof) of the Company's Junior Subordinated Notes due 2012 (the
"NOTES"):

                                    ARTICLE I

                                   DEFINITIONS

        Section 1.01    Definitions.

                  "Accreted Value" means, for any Note, as of any date of
determination, the sum of (i) the Original Issue Price of the Note and (ii) any
interest in respect of such Note added to such Accreted Value pursuant to
Section 2.02 of this Indenture and the terms of such Note. Initially, upon the
Issuance Date, the amount under clause (ii) shall be zero.

                  "Affiliate" of any specified Person means any other Person
directly indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.

                  "Agent" means any Registrar or Paying Agent.

                  "Bank Credit Agreements" means (i) the Senior Credit
Agreements, (ii) any other credit, loan, reimbursement or other similar
agreements among the Company, any Subsidiary and any bank, insurance company,
finance company or other institutional lender, (iii) each instrument pursuant to
which Obligations under any of the agreements described in (i) or (ii) above,
are amended, deferred, extended, increased, renewed, replaced, refunded or
refinanced, in whole or in part, and (iv) each instrument now or hereafter
evidencing, governing, guarantying or securing any Indebtedness under any
agreements described in (i), (ii) or (iii) above, in each case, as modified,
amended, reformed, renewed, extended, restated or supplemented from time to
time.

                  "Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board of Directors.

                  "Business Day" means any day that is not a Legal Holiday.
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                  "Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.

                  "Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, including, without limitation, partnership interests.

                  "Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries, taken as a whole, to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than the Permitted Holders, or
(ii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as such term
is used in Section 13(d)(3) of the Exchange Act), other than the Permitted
Holders, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50%
of the voting power of the Capital Stock of the Company, unless, in the case of
this clause (ii), the Permitted Holders retain the right or ability, by voting
power, contract or otherwise, to elect or designate a majority of the Board of
Directors of the Company.

                  "Company" means the party named as such above until a
successor replaces it in accordance with Article VI and thereafter means the
successor.

                   "Default" means any event that is, or with the passage of
time or the giving of notice or both would be, an Event of Default.

                  "Depositary" shall mean The Depository Trust Company, its
nominees and their respective successors.

                  "Designated Senior Debt" means the Company's Obligations under
the Bank Credit Agreements, Subordinated Convertible Notes and any other Senior
Debt of such Person permitted to be incurred by the Company the principal amount
of which is $25.0 million or more and that has been designated by the Board of
Directors as "Designated Senior Debt" by notice to the Trustee from both the
Company and the Senior Agent.

                   "Disqualified Capital Stock" means any Capital Stock that,
either by its terms or by the terms of any security into which it is convertible
or exchangeable or otherwise, is or upon the happening of an event or passage of
time would be, required to be redeemed prior to the one year anniversary of the
final Stated Maturity of the principal of the Notes or is redeemable at the
option of the holder thereof at any time prior to one year anniversary of the
final Stated Maturity, or is convertible into or exchangeable for debt
securities at any time prior to one year anniversary of the final Stated
Maturity at the option of the holder thereof; provided, however, that (i) any
class of Capital Stock of the Company that, by its terms, authorizes the Company
to satisfy in full its obligations with respect to the payment of dividends or
upon maturity, redemption (pursuant to a sinking fund or otherwise) or

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repurchase thereof or otherwise by the delivery of Qualified Capital Stock and
that is not convertible into, puttable or exchangeable for Disqualified Capital
Stock, shall not be deemed to be Disqualified Capital Stock so long as the
Company satisfies its obligations with respect thereto solely by the delivery of
Qualified Capital Stock and (ii) any class of Capital Stock which permits the
holders thereof to require the Company to repurchase their Capital Stock upon a
Change of Control shall not be deemed to be Disqualified Capital Stock so long
as the terms of such Capital Stock provide that no repurchase may occur until
after the Company has complied with all of its obligations under Section 4.07
hereunder.

                  "Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock, but excluding any Indebtedness
that is convertible into, or exchangeable for Capital Stock.

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

                  "GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are in effect on the Issuance Date and are applied
on a consistent basis.

                  "Guarantee" means a guarantee, other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.

                  "Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest and currency rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest or currency exchange rates.

                  "Holder" means a Person in whose name a Note is registered in
the register referred to in Section 2.04.

                  "Indebtedness" means, with respect to any Person, without
duplication, (i) any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing Capital Lease Obligations or
representing the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in

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accordance with GAAP, all indebtedness of others secured by a lien on any asset
of such Person (whether or not such indebtedness is assumed by such Person) and,
to the extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person. The amount of any Indebtedness outstanding as
of any date shall be the accreted value thereof, in the case of any Indebtedness
issued with original issue discount. Indebtedness shall not include liabilities
for taxes of any kind.

                  "Indenture" means this Indenture, as modified, amended,
reformed, renewed, extended, restated or supplemented from time to time.

                  "Insolvency or Liquidation Proceeding" means, with respect to
any Person, (i) any insolvency or bankruptcy or similar case or proceeding, or
any reorganization, receivership, liquidation, dissolution or winding up of such
Person, whether voluntary or involuntary, or (ii) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of such Person.

                  "Interest Accrual Date" means, with respect to any installment
of interest on any Notes, the dates specified in Section 2.02 as the fixed dates
on which such installment of interest accrues and is added to the Accreted Value
in effect immediately prior to the applicable Interest Accrual Date.

                  "Issuance Date" means the date on which the Notes are first
authenticated and issued.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).

                  "Majority Holders" means, at any time, the Holders of a
majority in aggregate Accreted Value of the then outstanding Notes.

                  "Maturity" means, with respect to any Note, the date on which
the Accreted Value of such Note becomes due and payable as therein provided and
as provided in this Indenture, whether at the Stated Maturity, the Purchase Date
or otherwise.

                  "Notes" has the meaning set forth in the preamble hereto.

                  "Obligations" with respect to any instrument or agreement
means any and all principal, Accreted Value, interest (including Post-Petition
Interest), penalties, premiums, fees (including, without limitation, to the
extent provided for in such instrument or agreement, fees and expenses of
counsel), indemnifications, reimbursements, damages and other charges,
obligations and liabilities existing from time to time under such instrument or
agreement, whether direct or indirect, joint or several, actual, absolute or

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contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, including any
obligations or liabilities to repay, redeem, repurchase, retire, acquire or
defease any Indebtedness under such instrument or agreement, or any obligation
to establish a sinking fund for any such purpose.

                  "Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.

                  "Officers' Certificate" means a certificate of the Company
signed by two Officers, one of whom must be the Chairman of the Board, the
President, the Treasurer or a Vice President of the Company.

                  "Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the Company or the
Trustee.

                  "Original Issue Price" means, with respect to any Note, the
amount designated as original issue price on the face of such Note.

                  "Permitted Holders" means (a) Leslie B. Otten (or, in the
event of his incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which Leslie B. Otten and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective affiliates and associates.

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

                  "Post-Petition Interest" means, with respect to any
Indebtedness of any Person, all interest accrued or accruing on such
Indebtedness after the commencement of any Insolvency or Liquidation Proceeding
against such Person in accordance with and at the contract rate (including,
without limitation, any rate applicable upon default) specified in the agreement
or instrument creating, evidencing or governing such Indebtedness, whether or
not, pursuant to applicable law or otherwise, the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding.

                   "Purchasers" means Madeleine LLC and its Affiliates.

                  "Qualified Capital Stock" of any Person means any and all
Capital Stock of such Person other than Disqualified Capital Stock.
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                  "Representative" means, with respect to any Senior Debt, the
agent or other representative(s), if any, of holders of such Senior Debt.

                  "Responsible Officer," when used with respect to the Trustee,
means (i) with respect to Madeleine LLC or any of its Affiliates as Trustee,
means Mark A. Neporent, Vice President and Chief Operating Officer of Madeleine
LLC or Kevin Genda, Vice President of Madeleine LLC, or any successor thereto
and (ii) with respect to any other Person as Trustee, any Trust Officer of the
Trustee or, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.

                  "SEC" means the Securities and Exchange Commission.

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

                  "Senior Agents" means, collectively, (i) (A) until all
Indebtedness under the Bank Credit Agreements is paid in full in cash, the agent
(or the institution performing similar functions) under the Bank Credit
Agreement under which the greatest aggregate principal amount of Indebtedness is
outstanding and (B) if all Indebtedness under the Bank Credit Agreements has
been paid in full, the Person (or representative of the Persons) holding the
greatest amount of Senior Debt other than Senior Notes, (ii) until all
Indebtedness under the Senior Notes has been paid in full in cash, the trustee
under the Senior Indenture, and (iii) until all Indebtedness under the
Subordinated Convertible Notes has been paid in full in cash, the trustee under
the Subordinated Convertible Notes Indenture.

                   "Senior Credit Agreements" means the credit agreements, dated
November 24, 2004, between the Company, as borrower, General Electric Capital
Corporation, as administrative agent, the lenders named therein, Credit Suisse
First Boston ("CSFB"), as syndication agent, GECC Capital Markets Group, Inc.
and CSFB, as co-lead arranging agents, and certain other parties named therein,
as modified, amended, increased, restated or supplemented from time to time.

                  "Senior Debt" of any Person means and includes all principal
of, premium and interest on and other Obligations with respect to (i) the Bank
Credit Agreements, (ii) the Senior Notes, (iii) the Subordinated Convertible
Notes, (iv) any other Indebtedness of such Person (other than as otherwise
provided in this definition), and (v) any trade payables incurred in the
ordinary course of business, whether outstanding on the date of issuance of the
Notes or thereafter incurred. Notwithstanding the foregoing, Senior Debt shall
not include (1) the portion of any Indebtedness incurred in violation of this
Indenture, (2) any Indebtedness that expressly provides that it shall rank pari
passu with, or subordinated to, in right of payment with the Notes, (3)
Indebtedness evidenced by the Notes, (4) Indebtedness which when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code is without recourse to the Company or any of its Subsidiaries,
(5) any liability for foreign, federal, state, local or other taxes owed or
owing by the Company, (6) Indebtedness of such Person to the extent such

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liability constitutes Indebtedness to a Subsidiary of the Company or (7)
Indebtedness owed by the Company for compensation to employees.

                  "Senior Indenture" means the Indenture, dated as of June 28,
1996, between the Company (as successor to ASC East, Inc.), and United States
Trust Company of New York as trustee, as modified, amended, restated or
supplemented from time to time.

                  "Senior Notes" means the 12% Series A and Series B Senior
Subordinated Notes due 2006, issued by the Company pursuant to the Senior
Indenture.

                  "Stated Maturity" when used with respect to any Indebtedness
or any installment of interest thereon, means the dates specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness, the
Accreted Value or such installment of interest, as the case may be, is due and
payable.

                  "Stock Collateral" means any Equity Interests in any
Subsidiary of the Company.

                   "Subordinated Obligations" means all Indebtedness and other
Obligations of the Company or any of its Subsidiaries, contingent or otherwise,
now or hereafter existing under or in respect of the Notes (pursuant to the
terms thereof or any other agreement or instrument relating thereto) or this
Indenture.

                  "Subordinated Convertible Notes" means the 11.3025%
Convertible Subordinated Notes due 2007, issued by the Company pursuant to the
Subordinated Convertible Notes Indenture.

                  "Subordinated Convertible Notes Indenture" means the
Indenture, dated as of August 31, 2001, between the Company and Oak Hill Capital
Partners, L.P. as trustee, as modified, amended, restated or supplemented from
time to time.

                  "Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner of
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).

                  "Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means such successor.
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                  "Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.

        Section 1.02    Other Definitions.


                  TERM                                            DEFINED
                                                                 IN SECTION

                  "AGENT MEMBERS"......................             2.01

                  "BANKRUPTCY LAW".....................             7.01

                  "CEDEL"..............................             2.01

                  "CHANGE OF CONTROL PAYMENT"..........             4.07

                  "COMMENCEMENT DATE"..................             4.07

                  "CUSTODIAN"..........................             7.01

                  "EUROCLEAR"..........................             2.01

                  "EVENT OF DEFAULT"...................             7.01

                  "GLOBAL NOTES".......................             2.01

                  "LEGAL HOLIDAY"......................            11.07

                  "NON-DEFAULT COVENANT BREACH"........             7.12

                  "OFFER AMOUNT".......................             4.07

                  "PAYING AGENT".......................             2.04

                  "PAYMENT BLOCKAGE NOTICE"............             5.03

                  "PAYMENT DEFAULT"....................             7.01

                  "PURCHASE DATE"......................             4.07

                  "PURCHASE OFFER".....................             4.07

                  "QIBS"...............................             2.01

                  "REGISTRAR"..........................             2.04

                  "REGULATION S GLOBAL NOTE"...........             2.01

                  "REGULATION S".......................             2.01

                  "RESTRICTED NOTES"...................             2.01

                  "RULE 144A GLOBAL NOTE"..............             2.01

                  "RULE 144A"..........................             2.01

                  "SURVIVING ENTITY"...................             6.01

                  "TENDER PERIOD"......................             4.07
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        Section 1.03    Rules of Construction.

        Unless the context otherwise requires:

          (a) a term has the meaning assigned to it;

          (b) an accounting term not otherwise  defined has the meaning assigned
     to it in accordance with GAAP consistently applied;

          (c) "OR" is not exclusive;

          (d)  words in the  singular  include  the  plural,  and in the  plural
     include the singular;

          (e) provisions apply to successive events and transactions;

          (f)  references to sections of or rules under the Securities Act shall
     be deemed to include substitute, replacement or successor sections or rules
     adopted by the SEC from time to time; and

          (g) a reference to "$" or U.S. Dollars is to United States dollars.

                                   ARTICLE II

                                    THE NOTES

        Section 2.01    Form and Dating.

     (a) General.  The Notes and the  Trustee's  certificate  of  authentication
shall be  substantially  in the  form of  Exhibit  A  hereto,  which  is  hereby
incorporated by reference and expressly made a part of this Indenture. The Notes
may have  notations,  legends or  endorsements  required by law,  stock exchange
rule,  agreements  to which the Company is subject,  if any, or usage  (provided
that any such notation,  legend or  endorsement  is in a form  acceptable to the
Company).  The Company  shall furnish any such legend not contained in Exhibit A
to  the  Trustee  in  writing.  Each  Note  shall  be  dated  the  date  of  its
authentication.  The Notes  shall be issued  only in  denominations  of Accreted
Value with $100 of Original  Issue Price and  integral  multiples  thereof.  The
terms  and  provisions  of the  Notes  set  forth in  Exhibit A are part of this
Indenture and to the extent  applicable,  the Company and the Trustee,  by their
execution  and  delivery of this  Indenture,  expressly  agree to such terms and
provisions and to be bound thereby.  However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture,  the provisions of
this Indenture shall govern and be controlling.

     (b) Global Notes.  Notes  transferred in reliance on Regulation S under the
Securities  Act  ("REGULATION  S"), as provided in Section  2.07(a)(ii)  hereof,

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shall be issued in the form of one or more permanent Global Notes in definitive,
fully  registered form without interest coupons with the Global Notes Legend and
Restricted  Notes Legend set forth in Exhibit A hereto (the "REGULATION S GLOBAL
NOTE"),  which  shall be  deposited  on  behalf of the  transferee  of the Notes
represented  thereby with the Trustee,  at its New York office, as custodian for
the  Depositary,  and registered in the name of the Depositary or the nominee of
the  Depositary  for the accounts of designated  agents holding on behalf of the
Euroclear  System  ("EUROCLEAR")  or Cedelbank  ("CEDEL"),  duly executed by the
Company and authenticated by the Trustee as hereinafter provided.  The aggregate
principal  amount  of the  Regulation  S Global  Note  may from  time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.

     Notes transferred to Qualified Institutional Buyers ("QIBS") in reliance on
Rule 144A  under the  Securities  Act  ("RULE  144A"),  as  provided  in Section
2.07(a)(ii) hereof,  shall be issued in the form of one or more permanent Global
Notes in definitive,  fully  registered form without  interest  coupons with the
Global  Notes Legend and  Restricted  Notes Legend set forth in Exhibit A hereto
("RULE 144A GLOBAL NOTE"),  which shall be deposited on behalf of the purchasers
of the Notes  represented  thereby with the Trustee,  at its New York office, as
custodian for the Depositary,  and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A
Global Note may from time to time be increased or decreased by adjustments  made
on the records of the Trustee and the  Depositary or its nominee as  hereinafter
provided.

     Notwithstanding  the  foregoing,  for so long as the  Purchasers  hold  the
Notes, the Notes shall be held by them in certificated form.

     (c)  Book-Entry  Provisions.  This Section  2.01(c) shall apply only to the
Regulation S Global Note and the Rule 144A Global Note issued in the form of one
or more permanent Global Notes (collectively, the "GLOBAL NOTES") deposited with
or on behalf of the Depositary.

     The Company shall execute and the Trustee  shall,  in accordance  with this
Section  2.01(c),  authenticate  and deliver  initially one or more Global Notes
that (a) shall be registered in the name of the  Depositary for such Global Note
or Global Notes or the nominee of such  Depositary and (b) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's  instructions or
held by the Trustee as custodian for the Depositary.

     Members of, or participants in, the Depositary ("AGENT MEMBERS") shall have
no rights  under this  Indenture  with  respect to any Global Note held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global Note, and the  Depositary  may be treated by the Company,  the
Trustee  and any agent of the Company or the  Trustee as the  absolute  owner of
such Global Note for all purposes  whatsoever.  Notwithstanding  the  foregoing,

<PAGE>
                                                                              11


nothing  herein  shall  prevent  the  Company,  the  Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other  authorization  furnished  by the  Depositary  or impair,  as between  the
Depositary  and its Agent Members,  the operation of customary  practices of the
Depositary  governing  the  exercise  of the rights of an owner of a  beneficial
interest in any Global Note.

     Notwithstanding  the  foregoing,  for so long as the  Purchasers  hold  the
Notes, the Notes shall not be issued in the form of Global Notes.

     (d) Certificated  Notes.  Notes  transferred to "accredited  investors" (as
defined in Rule 501 (a) (1),  (2),  (3),  (4),  (5), (6) and (7) of Regulation D
under the Securities Act), as provided in Section 2.07(a), or to any Person in a
transaction  exempt from the  registration  requirements  of the Securities Act,
other than a Person who elects to receive a Global Note as provided elsewhere in
the Indenture,  shall be issued in the form of one or more certificated Notes in
definitive,  fully  registered form without interest coupons with the Restricted
Notes Legend set forth in Exhibit A hereto ("RESTRICTED NOTES"),  which shall be
registered in the name of such Accredited Investor or its nominee, duly executed
by the Company and  authenticated by the Trustee as hereinafter  provided.  Such
Restricted  Notes may only be transferred in reliance on Regulation S or to QIBs
in reliance on Rule 144A,  pursuant to another exception from registration under
the Securities Act or pursuant to an effective registration statement.

     In  addition  to the  provisions  of  Section  2.11,  owners of  beneficial
interests  in Global  Notes may, if the  Company,  at its option,  notifies  the
Trustee in writing that it elects to cause the issuance of  certificated  Notes,
receive a certificated  Note, which  certificated Note shall bear the Restricted
Notes  Legend set forth in Exhibit A hereto  unless  otherwise  provided in this
Section 2.01(d) and Section 2.07(b) hereof.

        Section 2.02    Title and Terms.

     The aggregate  Original Issue Price of Notes which may be authenticated and
delivered  under this  Indenture  is limited  to  $76,673,300,  except for Notes
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, other Notes pursuant to Sections 2.03, 2.04, 2.07, 2.08, 4.07 and
10.04.

     The Notes shall be known and designated as the "Junior  Subordinated  Notes
due 2012" of the Company. The Stated Maturity of the Accreted Value of the Notes
shall be May 24,  2012 and the Notes shall each bear  interest  on the  Accreted
Value thereof at rates as indicated  below  (subject to the increase as provided
in Section 7.12 hereof) from November 24, 2004 until the Stated  Maturity of the
Accreted Value.

                       Year                 Interest Rate
                -----------------           --------------
                Remainder of 2004               11.25%
                       2005                     11.25%
                       2006                     11.25%
                       2007                     11.75%
<PAGE>
                                                                              12
                       2008                     12.50%
                       2009                     12.50%
                       2010                     12.75%
                       2011                     13.00%
                       2012                     13.00%


     On each January 1 on which the Notes are outstanding, commencing January 1,
2005, and at the Stated  Maturity of the Accreted  Value,  interest on the Notes
shall accrue and be paid  through the addition of such  interest to the Accreted
Value in effect  immediately  prior to the applicable  Interest Accrual Date. On
the applicable  Interest  Accrual Date, the Accreted Value shall increase by the
amount of such interest.

     On Maturity, the Accreted Value shall be payable at the office or agency of
the Company  maintained  for such  purpose.  If a Holder so  requests,  Accreted
Value,  accrued and unpaid interest thereon, and premium, if any, may be paid by
wire transfer of immediately  available funds to an account previously specified
in writing by such Holder to the Company and the Trustee.

     Holders  shall have the right to require  the Company to  repurchase  their
Notes,  in whole or in part,  in the event of a Change of  Control,  pursuant to
Section 4.07.

        Section 2.03    Execution and Authentication.

     One  Officer  shall sign the Notes for the  Company by manual or  facsimile
signature.

     If an Officer  whose  signature is on a Note no longer holds that office at
the time the Note is authenticated, the Note shall nevertheless be valid.

     A Note shall not be valid until authenticated by the manual signature of an
authorized  officer of the Trustee.  The signature shall be conclusive  evidence
that the Note has been authenticated under this Indenture.

     The  Trustee  shall,  upon a  written  order of the  Company  signed  by an
Officer,  authenticate  Notes for Original Issue Price up to an amount stated in
paragraph 4 of the Note.  The aggregate  Notes  outstanding  at any time may not
have an  aggregate  Original  Issue  Price that  exceeds  $76,673,300  except as
provided in Section 2.08.

     The Trustee may appoint an  authenticating  agent acceptable to the Company
to authenticate  Notes. An authenticating  agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes  authentication by such agent. An authenticating  agent has the
same rights as an Agent to deal with Holders, the Company or an Affiliate.
<PAGE>
                                                                              13


        Section 2.04    Registrar and Paying Agent.

     The Company shall  maintain (i) offices or agencies  where the Notes may be
presented for  registration of transfer or for exchange  ("REGISTRAR")  and (ii)
offices  or  agencies  where the Notes may be  presented  for  payment  ("PAYING
AGENT");  provided that if the only Holders are the Purchasers,  such offices or
agencies  shall be the executive  offices of the Company as set forth in Section
11.02. The Company shall act initially as principal  Registrar and Paying Agent.
The principal Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and, one or more
additional paying agents in such other locations as it shall determine. The term
"Registrar"  includes any co-registrar and, the term "Paying Agent" includes any
additional  paying  agent.  The Company may change any Paying Agent or Registrar
without prior notice to any Holder.  The Company shall notify the Trustee of the
name and  address  of any Agent not a party to this  Indenture.  If the  Company
fails to appoint or maintain  another  entity as Registrar or Paying Agent,  the
Trustee  shall act as such.  The  Company  or any of its  Affiliates  may act as
Paying Agent or Registrar.

        Section 2.05    Paying Agent to Hold Money in Trust.

     The Company shall require each Paying Agent other than the Trustee to agree
in writing  that the Paying  Agent will hold in trust for the benefit of Holders
or the  Trustee  all  money  held by the  Paying  Agent for the  payment  of the
Accreted  Value at  Maturity,  and will notify the Trustee of any default by the
Company  in making  any such  payment.  While any such  default  continues,  the
Trustee  may  require a Paying  Agent to pay all money held by it to the Trustee
and to  account  for any money  disbursed  by it.  The  Company  at any time may
require a Paying Agent to pay all money held by it to the Trustee.  Upon payment
over to the Trustee, the Paying Agent (if other than the Company or an Affiliate
of the Company) shall have no further liability for the money. If the Company or
an Affiliate of the Company acts as Paying Agent, it shall segregate and hold in
a separate  trust fund for the  benefit of the  Holders  all money held by it as
Paying Agent.

        Section 2.06    Holder Lists.

     The  Trustee  shall  preserve  in  as  current  a  form  as  is  reasonably
practicable  the most recent list  available to it of the names and addresses of
Holders.  If the Trustee is not the Registrar,  the Company shall furnish to the
Trustee at such times as the  Trustee may request in writing a list in such form
and as of such  date as the  Trustee  may  reasonably  require  of the names and
addresses of Holders.

        Section 2.07    Transfer and Exchange.

     Where Notes are presented to the Registrar or a co-registrar with a request
to  register a  transfer  or to  exchange  them for one or more new Notes of any
authorized  denomination or denominations,  of a like aggregate  Accreted Value,
the  Registrar  shall  register  the  transfer  or  make  the  exchange  if  its
requirements for such transactions are met. To permit registrations of transfers
and exchanges,  the Company shall issue and the Trustee shall authenticate Notes
at the Registrar's request. No service charge shall be made for any registration

<PAGE>
                                                                              14


of transfer or exchange (except as otherwise  expressly  permitted herein),  but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer tax or similar  governmental  charge payable upon exchanges pursuant to
Sections 2.11 or 10.05 hereof).

     (a)  Notwithstanding  any  provision to the contrary  herein,  so long as a
Global Note remains  outstanding  and is held by or on behalf of the Depositary,
transfers of a Global Note, in whole or in part, or of any  beneficial  interest
therein,  shall only be made in accordance with Section 2.01(b) and this Section
2.07(a);  provided,  however,  that beneficial interests in a Global Note may be
transferred  to Persons who take  delivery  thereof in the form of a  beneficial
interest in the same Global Note in  accordance  with the transfer  restrictions
set forth in the Restricted Notes Legend.

          (i) Except for transfers or exchanges made in accordance  with clauses
     (ii) through (iv) of this Section 2.07(a), transfers of a Global Note shall
     be limited to transfers of such Global Note in whole,  but not in part,  to
     nominees of the  Depositary  or to a successor  of the  Depositary  or such
     successor's nominee.

          (ii) Rule 144A Global Note to Regulation S Global Note. If an owner of
     a  beneficial  interest  in the Rule 144A Global  Note  deposited  with the
     Depositary  or the Trustee as custodian  for the  Depositary  wishes at any
     time to transfer its interest in such Rule 144A Global Note to a Person who
     is  required  to take  delivery  thereof in the form of an  interest in the
     Regulation  S Global  Note,  such  owner  may,  subject  to the  rules  and
     procedures  of the  Depositary,  exchange  or cause  the  exchange  of such
     interest for an equivalent  beneficial  interest in the Regulation S Global
     Note. Upon receipt by the principal  Registrar of (1) instructions given in
     accordance with the Depositary's  procedures from an Agent Member directing
     the  principal  Registrar  to credit or cause to be  credited a  beneficial
     interest  in the  Regulation  S  Global  Note  in an  amount  equal  to the
     beneficial  interest in the Rule 144A Global  Note to be  exchanged,  (2) a
     written  order  given  in  accordance  with  the  Depositary's   procedures
     containing  information regarding the participant account of the Depositary
     and the  Euroclear or Cedel  account to be credited  with such increase and
     (3) a  certificate  in the form of Exhibit B attached  hereto  given by the
     Holder of such  beneficial  interest,  then the principal  Registrar  shall
     instruct the Depositary to reduce or cause to be reduced the Accreted Value
     of the Rule 144A Global Note and to increase or cause to be  increased  the
     Accreted  Value of the  Regulation S Global Note by the aggregate  Accreted
     Value of the beneficial  interest in the Rule 144A Global Note equal to the
     beneficial  interest in the  Regulation  S Global Note to be  exchanged  or
     transferred, to credit or cause to be credited to the account of the Person
     specified in such  instructions  a beneficial  interest in the Regulation S
     Global Note equal to the  reduction in the Accreted  Value of the Rule 144A
     Global  Note and to debit or cause to be  debited  from the  account of the
     Person making such exchange or transfer the beneficial interest in the Rule
     144A Global Note that is being exchanged or transferred.
<PAGE>
                                                                              15


          (iii)  Regulation S Global Note to Rule 144A Global Note.  If an owner
     of a beneficial interest in the Regulation S Global Note deposited with the
     Depositary  or with the Trustee as custodian for the  Depositary  wishes at
     any time to transfer  its  interest in such  Regulation  S Global Note to a
     Person who is required to take delivery  thereof in the form of an interest
     in the Rule 144A Global  Note,  such  Holder may,  subject to the rules and
     procedures of Euroclear or Cedel,  as the case may be, and the  Depositary,
     exchange  or  cause  the  exchange  of  such  interest  for  an  equivalent
     beneficial  interest  in the Rule 144A  Global  Note.  Upon  receipt by the
     principal  Registrar  of (1)  instructions  from  Euroclear  or  Cedel,  if
     applicable, and the Depositary, directing the principal Registrar to credit
     or cause to be credited a beneficial  interest in the Rule 144A Global Note
     equal to the  beneficial  interest  in the  Regulation  S Global Note to be
     exchanged or transferred,  (2) a written order given in accordance with the
     Depositary's  procedures  containing  information regarding the participant
     account of the  Depositary  and (3) a certificate  in the form of Exhibit C
     attached  hereto  given by the  owner  of such  beneficial  interest,  then
     Euroclear  or Cedel or the  principal  Registrar,  as the case may be, will
     instruct the Depositary to reduce or cause to be reduced the Accreted Value
     of the  Regulation  S Global Note and to increase or cause to be  increased
     the Accreted  Value of the Rule 144A Global Note by the aggregate  Accreted
     Value of the  beneficial  interest  in the  Regulation  S Global Note to be
     exchanged or  transferred,  and the principal  Registrar shall instruct the
     Depositary,  concurrently  with  such  reduction,  to credit or cause to be
     credited  to the account of the Person  specified  in such  instructions  a
     beneficial  interest in the Rule 144A Global Note equal to the reduction in
     the Accreted Value of the Regulation S Global Note and to debit or cause to
     be debited from the account of the Person  making such exchange or transfer
     the  beneficial  interest  in the  Regulation  S Global  Note that is being
     exchanged or transferred.

          (iv)  Global  Note to  Restricted  Note.  If an owner of a  beneficial
     interest in a Global Note deposited with the Depositary or with the Trustee
     as custodian for the Depositary wishes at any time to transfer its interest
     in such Global Note to a Person who is required to take delivery thereof in
     the form of a  Restricted  Note,  such owner may,  subject to the rules and
     procedures of Euroclear or Cedel, if applicable, and the Depositary,  cause
     the  exchange  of such  interest  for one or more  Restricted  Notes of any
     authorized denomination or denominations and of the same aggregate Accreted
     Value.  Upon receipt by the principal  Registrar of (1)  instructions  from
     Euroclear  or  Cedel,  if  applicable,  and the  Depositary  directing  the
     principal  Registrar  to  authenticate  and deliver one or more  Restricted
     Notes of the same aggregate  Accreted  Value as the beneficial  interest in
     the Global Note to be exchanged,  such  instructions to contain the name or
     names  of  the  designated   transferee  or  transferees,   the  authorized
     denomination or  denominations  of the Restricted Notes to be so issued and
     appropriate delivery instructions, (2) a certificate in the form of Exhibit
     D attached  hereto  given by the owner of such  beneficial  interest to the
     effect  set  forth  therein,  (3) a  certificate  in the form of  Exhibit E
     attached  hereto given by the Person  acquiring  the  Restricted  Notes for
     which such interest is being  exchanged,  to the effect set forth  therein,
     and (4) such other  certifications,  legal opinions or other information as
     the Company may  reasonably  require to confirm that such transfer is being
     made pursuant to an exemption from, or in a transaction not subject to, the
     registration  requirements  of the Securities Act, then Euroclear or Cedel,
     if  applicable,  or the  principal  Registrar,  as the  case  may be,  will
     instruct the  Depositary  to reduce or cause to be reduced such Global Note
     by the aggregate  Accreted Value of the beneficial  interest  therein to be

<PAGE>
                                                                              16


     exchanged  and to  debit or cause to be  debited  from the  account  of the
     Person making such transfer the beneficial interest in the Global Note that
     is being  transferred,  and concurrently  with such reduction and debit the
     Company shall execute,  and the Trustee shall authenticate and deliver, one
     or more Restricted Notes of the same aggregate Accreted Value in accordance
     with the instructions referred to above.

          (v)  Restricted  Note to Restricted  Note. If a Holder of a Restricted
     Note wishes at any time to transfer such Restricted Note to a Person who is
     required to take delivery  thereof in the form of a Restricted  Note,  such
     Holder may, subject to the restrictions on transfer set forth herein and in
     such Restricted Note, cause the exchange of such Restricted Note for one or
     more Restricted Notes of any authorized  denomination or denominations  and
     of the  same  aggregate  Accreted  Value.  Upon  receipt  by the  principal
     Registrar of (1) such Restricted  Note,  duly endorsed as provided  herein,
     (2)  instructions  from such Holder  directing the  principal  Registrar to
     authenticate and deliver one or more Restricted Notes of the same aggregate
     Accreted Value as the Restricted Note to be exchanged, such instructions to
     contain  the  name  or  authorized  denomination  or  denominations  of the
     Restricted Notes to be so issued and appropriate delivery instructions, (3)
     a certificate from the Holder of the Restricted Note to be exchanged in the
     form of Exhibit D attached hereto, (4) a certificate in the form of Exhibit
     E attached  hereto given by the Person  acquiring the Restricted  Notes for
     which such interest is being  exchanged,  to the effect set forth  therein,
     and (5) such other  certifications,  legal opinions or other information as
     the Company may  reasonably  require to confirm that such transfer is being
     made pursuant to an exemption from, or in a transaction not subject to, the
     registration  requirements  of the Securities Act, then the Registrar shall
     cancel  or cause  to be  canceled  such  Restricted  Note and  concurrently
     therewith,  the Company shall execute,  and the Trustee shall  authenticate
     and deliver,  one or more Restricted  Notes of the same aggregate  Accreted
     Value, in accordance with the instructions referred to above.

          (vi)  Restricted  Note to Rule  144A  Global  Note.  If an  owner of a
     Restricted  Note registered in the name of such owner wishes at any time to
     transfer such  Restricted Note to a Person who is required to take delivery
     thereof  in the form of an  interest  in the Rule 144A  Global  Note,  such
     Holder may, subject to the rules and procedures of the Depositary, exchange
     or cause the exchange of such Restricted Note for an equivalent  beneficial
     interest  in the Rule 144A  Global  Note.  Upon  receipt  by the  principal
     Registrar of (1)  instructions  from the Company,  directing  the principal
     Registrar  (A) to credit or cause to be credited a  beneficial  interest in
     the Rule 144A Global  Note equal to the  Accreted  Value of the  Restricted
     Note to be exchanged or transferred  and (B) to cancel such Restricted Note
     to be exchanged or  transferred,  (2) a written  order given in  accordance
     with the  Depositary's  procedures  containing  information  regarding  the
     participant  account of the Depositary and (3) a certificate in the form of
     Exhibit C attached hereto given by the owner of such Restricted  Note, then
     the principal Registrar will instruct the Trustee to cancel such Restricted
     Note and will instruct the  Depositary to increase or cause to be increased
     the Accreted  Value of the Rule 144A Global Note by the  Accreted  Value of

<PAGE>
                                                                              17


     the  Restricted  Note to be exchanged  or  transferred,  and the  principal
     Registrar   shall   instruct  the   Depositary,   concurrently   with  such
     cancellation  of the Restricted  Note, to credit or cause to be credited to
     the  account of the Person  specified  in such  instructions  a  beneficial
     interest in the Rule 144A Global  Note equal to the  Accreted  Value of the
     Restricted Note to be canceled by the Trustee.

          (vii)  Restricted  Note to  Regulation S Global Note. If an owner of a
     Restricted  Note registered in the name of such owner wishes at any time to
     transfer such  Restricted Note to a Person who is required to take delivery
     thereof in the form of an interest in the  Regulation S Global  Note,  such
     owner may,  subject to the rules and  procedures of the Euroclear or Cedel,
     as the case may be,  exchange or cause the exchange of such Restricted Note
     for an equivalent beneficial interest in the Regulation S Global Note. Upon
     receipt by the principal  Registrar of (1)  instructions  from the Company,
     directing the  principal  Registrar (A) to credit or cause to be credited a
     beneficial  interest in the  Regulation S Global Note equal to the Accreted
     Value of the  Restricted  Note to be  exchanged or  transferred  and (B) to
     cancel such Restricted  Note to be exchanged or transferred,  (2) a written
     order  given in  accordance  with the  Depositary's  procedures  containing
     information  regarding  the  participant  account of the Euroclear or Cedel
     account to be credited with such increase and (3) a certificate in the form
     of Exhibit B attached hereto given by the Holder of such  Restricted  Note,
     then the  principal  Registrar  will  instruct  the  Trustee to cancel such
     Restricted Note and will instruct the Depositary to increase or cause to be
     increased  the  Accreted  Value  of the  Regulation  S  Global  Note by the
     Accreted Value of the Restricted Note to be exchanged or  transferred,  and
     the principal  Registrar shall instruct the Depositary,  concurrently  with
     such cancellation of the Restricted Note, to credit or cause to be credited
     to the account of the Person  specified in such  instructions  a beneficial
     interest in the Regulation S Global Note equal to the Accreted Value of the
     Restricted Note to be canceled by the Trustee.

          (viii) Other Exchanges.  In the event that a beneficial  interest in a
     Global Note is exchanged for a certificated  Note in definitive  registered
     form  pursuant  to  Section  2.11,  such  Notes  may be  exchanged  only in
     accordance  with such procedures as are  substantially  consistent with the
     provisions of clauses (ii) through (v) above  (including the  certification
     requirements  intended to ensure that such transfers comply with Rule 144A,
     Rule 144,  Regulation S or any other available exemption from registration,
     as the case may be) and such other  procedures  as may from time to time be
     adopted by the Company.

     (b) If Notes are issued upon the transfer, exchange or replacement of Notes
bearing the Restricted  Securities Legend set forth in Exhibit A hereto, or if a
request is made to remove such  Restricted  Notes Legend on Notes,  the Notes so
issued shall bear the Restricted  Notes Legend,  or the Restricted  Notes Legend
shall not be  removed,  as the case may be,  unless  there is  delivered  to the
Company  such  satisfactory  evidence,  which may  include an opinion of counsel
licensed to practice law in the State of New York, as may be reasonably required
by the  Company,  that neither the legend nor the  restrictions  on transfer set
forth  therein are  required to ensure that  transfers  thereof  comply with the
provisions of Rule 144A, Rule 144, Regulation S or any other available exemption
from registration under the Securities Act or, with respect to Restricted Notes,
that such Notes are not  "restricted"  within the  meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory  evidence,  the Trustee,  at
the direction of the Company,  shall  authenticate and deliver Notes that do not
bear the legend.
<PAGE>
                                                                              18


     (c) Neither the Company nor the Trustee shall have any  responsibility  for
any actions taken or not taken by the  Depositary  and the Company shall have no
responsibility  for any  actions  taken or not taken by the  Trustee as agent or
custodian of the Depositary.

        Section 2.08    Replacement Notes.

     If the Holder of a Note  claims that the Note has been lost,  destroyed  or
wrongfully taken or if such Note is mutilated and is surrendered to the Trustee,
the Company shall issue and the Trustee shall authenticate a replacement Note if
the Trustee's and the Company's requirements are met. If required by the Trustee
or the Company,  an indemnity bond must be sufficient in the judgment of both to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss which any of them may suffer if a Note is replaced.  The Company may charge
for its reasonable expenses in replacing a Note.

     In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable,  the Company in its discretion may,  instead of
issuing a new Note, pay such Note.

     Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

        Section 2.09    Outstanding Notes.

     The Notes  outstanding at any time are all the Notes  authenticated  by the
Trustee except for those canceled by it, those delivered to it for cancellation,
and those described in this Section as not outstanding.

     If a Note is replaced,  paid or purchased  pursuant to Section 2.08 hereof,
it ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced,  paid or purchased Note is held by a bona fide purchaser.  If
the Accreted Value of any Note is considered paid under Section 4.01 hereof,  it
ceases to be outstanding and interest on it ceases to accrue.

     Except as set forth in  Section  2.10  hereof,  a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.

        Section 2.10    Treasury Notes.

     In determining  whether the Holders of the required Accreted Value of Notes
have concurred in any direction,  waiver or consent,  Notes owned by the Company
or a  Subsidiary  of the  Company  shall be  considered  as though  they are not
outstanding,  except that for the  purposes of  determining  whether the Trustee
shall be protected  in relying on any such  direction,  waiver or consent,  only
Notes that the Trustee knows are so owned shall be so disregarded.
<PAGE>
                                                                              19


        Section 2.11    Temporary Notes; Global Notes.

     (a) Until definitive Notes are ready for delivery,  the Company may prepare
and the Trustee shall  authenticate  temporary  Notes.  Temporary Notes shall be
substantially  in the form of definitive  Notes but may have variations that the
Company considers  appropriate for temporary Notes.  Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary  Notes.  Holders of temporary  Notes shall be entitled to
all of the benefits of this Indenture.

     (b) A Global  Note  deposited  with the  Depositary  or with the Trustee as
custodian for the  Depositary  pursuant to Section 2.01 shall be  transferred to
the  beneficial  owners  thereof  in the  form  of  certificated  Notes  only in
accordance with Section  2.01(d) or if such transfer  complies with Section 2.07
and (i) the  Depositary  notifies  the Company that it is unwilling or unable to
continue as  Depositary  for such Global Note or if at any time such  Depositary
ceases  to be a  "clearing  agency"  registered  under  the  Exchange  Act and a
successor  Depositary  is not  appointed  by the  Company  within 90 days  after
receipt of such notice or after it becomes  aware of such  cessation  or (ii) an
Event of Default has occurred and is continuing.

     (c) Any Global Note that is transferable  to the beneficial  owners thereof
in the form of certificated Notes pursuant to Section 2.01(d) or to this Section
2.11 shall be surrendered by the Depositary to the Trustee to be so transferred,
in whole or from time to time in part,  without  charge,  and the Trustee  shall
authenticate  and  deliver,  upon such  transfer of each  portion of such Global
Note, an equal aggregate Accreted Value of Notes of authorized  denominations in
the  form of  certificated  Notes.  Any  portion  of a Global  Note  transferred
pursuant to this  Section 2.11 shall be executed,  authenticated  and  delivered
only in  denominations  of Accreted  Value with $100 of Original Issue Price and
any integral  multiple  thereof and  registered in such names as the  Depositary
shall direct.  Any Note in the form of certificated  Notes delivered in exchange
for an interest  in the Global  Notes  shall,  except as  otherwise  provided by
Section 2.07(b), bear the Restricted Notes Legend set forth in Exhibit A hereto.

     (d) The registered  Holder of a Global Note may grant proxies and otherwise
authorize  any  Person,  including  Agent  Members  and  Persons  that  may hold
interests  through Agent Members,  to take any action which a Holder is entitled
to take under this Indenture or the Notes.

     (e) In the event of the  occurrence  of either of the events  specified  in
Section  2.11(b),  the Company  will  promptly  make  available to the Trustee a
reasonable  supply of certificated  Notes in definitive,  fully  registered form
without interest coupons.
<PAGE>
                                                                              20


        Section 2.12    Cancellation.

     The Company at any time may deliver Notes to the Trustee for  cancellation.
The  Registrar  and  Paying  Agent  shall  forward  to  the  Trustee  any  Notes
surrendered  to them for  registration  of  transfer,  exchange or payment.  The
Trustee  shall  promptly  cancel  all  Notes  surrendered  for  registration  of
transfer,  exchange,  payment,  replacement or cancellation and shall dispose of
canceled  Notes as the Company  directs.  The Company may not issue new Notes to
replace  Notes that it has paid or that have been  delivered  to the Trustee for
cancellation.

                                  ARTICLE III

                                   REDEMPTION

        Section 3.01    Notices to Trustee.

     If the Company elects to redeem Notes  pursuant to the optional  redemption
provisions of the Notes and Section 3.07 hereof,  it shall notify the Trustee of
the redemption date and the Accreted Value of Notes to be redeemed.  The Company
shall give each notice provided for in this Section 3.01 at least 45 days before
the  redemption  date  (unless  a  shorter  notice  period  shall be  reasonably
satisfactory to the Trustee).

        Section 3.02    Selection of Notes to be Redeemed.

     If less than all of the Notes are to be redeemed at any time,  selection of
Notes  shall be made by the  Trustee  on a pro rata basis or by lot or by method
that  complies  with the  requirements  of any  exchange  on which the Notes are
listed and that the Trustee  considers  fair and  appropriate,  provided that no
Notes with Accreted  Value with Original  Issue Price of less than $100 shall be
redeemed in part. The Trustee shall make the selection not more than 60 days and
not less than 30 days  before the  redemption  date from Notes  outstanding  not
previously called for redemption.  Notes and portions of Notes selected shall be
in amounts of  Accreted  Value with $100 of  Original  Issue  Price or  integral
multiples  thereof.  Provisions of this Indenture that apply to Notes called for
redemption  also apply to portions of Notes called for  redemption.  The Trustee
shall notify the Company promptly of the Notes or portions of Notes to be called
for redemption.

        Section 3.03    Notice of Redemption.

     At least 30 days but not more than 60 days before a  redemption  date,  the
Company  shall mail,  by first class mail, a notice of redemption to each Holder
whose Notes are to be  redeemed  at its  registered  address.  The notice  shall
identify the Notes to be redeemed and shall state:

          (a) the redemption date;
<PAGE>
                                                                              21


          (b) the redemption price;

          (c) if any Note is to be  redeemed  in part only,  the  portion of the
     Accreted Value with $100 Original Issue Price thereof  redeemed,  and that,
     after the  redemption  date,  upon  surrender  of such Note,  a new Note in
     Accreted  Value and Original  Issue Price equal to the  unredeemed  portion
     thereof shall be issued in the name of the Holder thereof upon cancellation
     of the original Note;

          (d) the name and address of the Paying Agent;

          (e) that Notes called for redemption must be surrendered to the Paying
     Agent to collect the redemption price plus accrued interest, if any;

          (f) that interest on Notes called for  redemption  ceases to accrue on
     and after the redemption date; and

          (g) the paragraph of the Notes  pursuant to which the Notes called for
     redemption are being redeemed.

     At the  Company's  request,  the Trustee shall give notice of redemption in
the  Company's  name and at its expense;  provided  that the Company  shall have
delivered  to the Trustee,  at least 45 days prior to the  redemption  date,  an
Officers'  Certificate  requesting that the Trustee give such notice and setting
forth the information to be stated in such notice,  as provided in the preceding
paragraph.

        Section 3.04    Effect of Notice of Redemption.

     Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become due and payable on the redemption date at the
price set forth in the Notes. A notice of redemption may not be conditional.

        Section 3.05    Deposit of Redemption Price.

     On or before the  redemption  date,  the  Company  shall  deposit  with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued  interest  on all Notes to be redeemed on that date.  The Trustee or
the Paying  Agent shall  return to the Company any money not  required  for that
purpose.

        Section 3.06    Notes Redeemed in Part.

     Upon  surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall  authenticate for the Holder at the expense of the Company
a new Note equal in Accreted  Value and Original  Issue Price to the  unredeemed
portion of the Note surrendered.

        Section 3.07    Optional Redemption.
<PAGE>
                                                                              22


     The Company may redeem all or any portion of the Notes,  upon the terms and
at the redemption prices set forth in the Notes. Any redemption pursuant to this
Section 3.07 shall be made  pursuant to the  provisions  of Section 3.01 through
3.06 hereof.

        Section 3.08    Mandatory Redemption.

     The Company shall not be required to make mandatory  redemption payments or
sinking fund payments with respect to the Notes.

                                   ARTICLE IV

                                    COVENANTS

        Section 4.01    Payment of Notes.

     The Company  shall pay the Accreted  Value and any other amounts due on the
Notes,  if any, at Maturity in the manner  provided in the Notes.  The  Accreted
Value and other amounts due on the Notes,  if any,  shall be considered  paid on
the date due if the Paying  Agent (other than the Company or an Affiliate of the
Company)  holds on that date  money  designated  for and  sufficient  to pay all
Accreted Value and such other amounts payable on the Notes, if any, then due. To
the extent  lawful,  the Company  shall pay  interest  (including  Post-Petition
Interest in any proceeding  under any Bankruptcy Law) on overdue  Accreted Value
and any other amounts due on the Notes,  if any, at the rate borne by the Notes,
compounded annually.

        Section 4.02    Reports.

     Whether or not required by the rules and regulations of the SEC, so long as
any Notes are  outstanding,  the Company shall furnish  within 45 days after the
end of each fiscal  quarter of the  Company (90 days with  respect to the end of
the Company's fiscal year) to the Trustee and to the Holders,  all quarterly and
annual financial statements required to be contained in a filing with the SEC on
Forms 10-Q and 10-K and, with respect to the annual  information  only, a report
thereon by the Company's  certified  independent  accountants,  in each case, as
required by the rules and  regulations  of the SEC as in effect on the  Issuance
Date.

        Section 4.03    Compliance Certificate.

     The Company shall  deliver to the Trustee,  within 90 days after the end of
each fiscal year of the Company, an Officers'  Certificate stating that a review
of the  activities  of the Company  and its  Subsidiaries  during the  preceding
fiscal year has been made under the  supervision of the signing  Officers with a
view to  determining  whether  the  Company has kept,  observed,  performed  and
fulfilled its obligations  under, and complied with the covenants and conditions
contained  in, this  Indenture,  and further  stating,  as to each such  Officer
signing  such  certificate,  that to the best of his  knowledge  the Company has
kept,  observed,  performed and fulfilled each and every covenant,  and complied
with the  covenants  and  conditions  contained in this  Indenture and is not in
default in the  performance  or observance of any of the terms,  provisions  and
conditions  hereof  (or, if a Default or Event of Default  shall have  occurred,

<PAGE>
                                                                              23


describing  all  such  Defaults  or  Events  of  Default  of  which  he may have
knowledge)  and that to the best of his  knowledge  no event  has  occurred  and
remains in  existence  by reason of which  payments on account of the  aggregate
Accreted Value on the Notes are prohibited.

     One of the Officers signing such Officers' Certificates shall be either the
Company's principal executive officer,  principal financial officer or principal
accounting officer.

     The Company will, so long as any of the Notes are  outstanding,  deliver to
the Trustee, forthwith upon becoming aware of any Default or Event of Default or
any failure to observe or perform any covenant or agreement contained herein for
which an obligation to accrue additional  interest under Section 7.12 may arise,
an  Officers'  Certificate  specifying  such Default or Event of Default or such
failure.

        Section 4.04    Stay, Extension and Usury Laws.

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

        Section 4.05    Corporate Existence.

     Subject to Article V hereof,  to the extent  permitted  by law, the Company
will do or cause to be done all things  necessary  to preserve  and keep in full
force and effect its corporate existence and the corporate, partnership or other
existence of each  Subsidiary of the Company in accordance  with the  respective
organizational  documents  of  each  Subsidiary  and  the  rights  (charter  and
statutory),  licenses and franchises of the Company; provided, however, that the
Company shall not be required to preserve any such right,  license or franchise,
or the  corporate,  partnership  or other  existence of any  Subsidiary,  if the
preservation  thereof is no longer  desirable  in the conduct of the business of
the Company and its Subsidiaries taken as a whole.

        Section 4.06    Restricted Payments.

     The Company shall not, directly or indirectly,  (i) pay any dividend on, or
make any  distribution to holders of, any shares of the Company's  Capital Stock
(other than dividends or distributions payable solely in shares of its Qualified
Capital Stock or in options,  warrants or other rights to acquire shares of such
Qualified  Capital  Stock and  other  than the  accretion  of  dividends  on the

<PAGE>
                                                                              24


Company's  12%  Series C-1  Convertible  Participating  Preferred  Stock and 15%
Series C-2 Preferred  Stock);  or (ii)  purchase,  redeem,  defease or otherwise
acquire or retire for value, directly or indirectly, the Company's Capital Stock
or  options,  warrants  or other  rights to  acquire  such  Capital  Stock.  The
foregoing   provisions   shall  not  prohibit  (x)  the  purchase,   repurchase,
redemption,  or other  acquisition  or retirement for value of any shares of any
class of Capital  Stock of the Company in exchange for other shares of Qualified
Capital Stock of the Company and (y) the purchase,  redemption,  acquisition  or
retirement  for value of  shares  of the  Company's  Capital  Stock or  options,
warrants  or other  rights  to  acquire  such  Capital  Stock so long as (i) the
amounts paid to purchase,  redeem or acquire such  securities does not exceed $5
million  in the  aggregate  and  (ii) no  amount  is paid  to Oak  Hill  Capital
Partners, L.P., Oak Hill Securities Fund, L.P. or any of their Affiliates.

        Section 4.07    Change of Control.

     (a) Upon the occurrence of a Change of Control,  each Holder of Notes shall
have the right to  require  the  Company to  repurchase  all or any part of such
Holder's  Notes  (with  Accreted  Value  with $100 of  Original  Issue  Price or
integral multiples thereof), pursuant to an offer to all Holders of the Notes to
purchase Notes (the "PURCHASE  OFFER") at a purchase price equal to the Accreted
Value of such Notes plus  accrued  and unpaid  interest  to the date of purchase
(the "CHANGE OF CONTROL PAYMENT").

     (b) The  Purchase  Offer shall  remain open for a period  specified  by the
Company  which  shall  be no less  than 30  calendar  days  and no more  than 40
calendar  days  following  its  commencement  (the   "COMMENCEMENT   DATE")  (as
determined  in accordance  with this Section 4.07 hereof),  except to the extent
that a longer period is required by applicable law (the "TENDER  PERIOD").  Upon
the  expiration of the Tender Period (the  "PURCHASE  DATE"),  the Company shall
irrevocably  deposit  with the Paying Agent an amount in  immediately  available
funds  sufficient  to pay the  aggregate  Change of Control  Payment for all the
Notes  required  to be  purchased  pursuant  to this  Section  4.07 (the  "OFFER
AMOUNT"),  to be held for payment in  accordance  with the terms of this Section
4.07.

     (c) The Company shall provide the Trustee with notice of the Purchase Offer
at least 10 days before the Commencement Date.

     (d) Within 40 days  following  any Change of  Control,  the  Company or the
Trustee  (at the expense of the  Company)  shall  send,  by first class mail,  a
notice to each of the  Holders,  which  shall  govern the terms of the  Purchase
Offer and shall state:

          (i) that the Purchase  Offer is being made pursuant to which all Notes
     validly  tendered  will be accepted  for payment and the length of time the
     Purchase Offer will remain open;
<PAGE>
                                                                              25


          (ii) the purchase  price (as  determined  in  accordance  with Section
     4.07(a)  hereof) and the Purchase Date, and that all Notes tendered will be
     accepted for payment;

          (iii) that any Note or portion  thereof not  tendered or accepted  for
     payment will continue to accrue and accrete interest;

          (iv) that,  unless the Company defaults in the payment of the purchase
     price,  any Note or portion  thereof  accepted for payment  pursuant to the
     Purchase Offer will cease to accrue or accrete  interest after the Purchase
     Date;

          (v) that Holders electing to have a Note or portion thereof  purchased
     pursuant to any Purchase Offer will be required to surrender the Note, with
     the form  entitled  "Option of Holder to Elect  Purchase" on the reverse of
     the Note  completed,  to the Paying  Agent at the address  specified in the
     notice prior to the close of business on the third  Business Day  preceding
     the Purchase Date;

          (vi) that Holders will be entitled to withdraw  their  election if the
     Paying Agent  receives,  not later than the close of business on the second
     Business Day preceding  the Purchase  Date, or such longer period as may be
     required by law, a letter or a telegram,  telex or  facsimile  transmission
     (receipt of which is confirmed and promptly  followed by a letter)  setting
     forth the name of the  Holder,  the  Accreted  Value of the Note or portion
     thereof the Holder  delivered for purchase and a statement that such Holder
     is withdrawing his election to have the Note or portion thereof  purchased;
     and

          (vii) that  Holders  whose Notes were  purchased  only in part will be
     issued new Notes equal in Accreted Value to the unpurchased  portion of the
     Notes surrendered.

     (e) On the  Purchase  Date,  the Company  shall,  to the extent  lawful and
subject  to  Article V hereof,  (i) accept  for  payment  the Notes or  portions
thereof properly  tendered pursuant to the Purchase Offer, (ii) deliver or cause
the  depositary  or Paying Agent to deliver to the Trustee Notes so accepted and
(iii)  deliver to the Trustee an  Officers'  Certificate  stating  such Notes or
portions  thereof have been  accepted  for payment by the Company in  accordance
with the terms of this Section 4.07. The Paying Agent shall promptly (but in any
case not later  than ten (10)  calendar  days after the  Purchase  Date) mail or
deliver to each  tendering  Holder an amount equal to the purchase  price of the
Notes tendered by such Holder and accepted by the Company for purchase,  and the
Trustee shall  promptly  authenticate  and mail or deliver to such Holders a new
Note equal in Accreted Value to any unpurchased portion of the Note surrendered.
Any Notes not so accepted shall be promptly  mailed or delivered by or on behalf
of the Company to the Holder thereof.

     (f) The Purchase Offer shall be made by the Company in compliance  with all
applicable provisions of the Exchange Act, and all applicable tender offer rules
promulgated  thereunder,  and  shall  include  all  instructions  and  materials
necessary to enable such Holders to tender their Notes.
<PAGE>
                                                                              26


     (g) If and to the extent that a purchase of Notes  required by this Section
4.07  is  prohibited  under  the  Bank  Credit  Agreements  or the  Subordinated
Convertible Notes Indenture,  then  notwithstanding  any other provision of this
Section 4.07, such purchase shall not occur and be deferred until the first date
on which such purchase shall be permitted to be made under the terms of the Bank
Credit Agreements or the Subordinated Convertible Notes Indenture. Any Note that
is not purchased on a scheduled Purchase Date as otherwise  contemplated by this
Section 4.07 shall  continue to be outstanding  and shall accrue  interest until
such Note is purchased.

     (h) The Company  shall not be required to make a Purchase  Offer if a third
party makes the Purchase Offer in the manner and at the times prescribed by, and
otherwise in compliance  with the  requirements  set forth in, this Section 4.07
and purchases all Notes validly  tendered and not withdrawn  under such Purchase
Offer.

        Section 4.08    Compliance with Laws.

     The Company shall,  and shall cause each of its  Subsidiaries to, comply in
all respects with all laws, rules,  regulations and governmental orders (whether
Federal,  state or local)  applicable to it and the operation of its  businesses
whether now in effect or hereafter  enacted if noncompliance  with any such law,
rule, regulation or governmental order, either individually or in the aggregate,
would have a material adverse effect on (i) the business,  assets,  liabilities,
properties,  operations,  prospects or condition (financial or otherwise) of the
Company  and its  Subsidiaries,  taken as a whole,  or (ii) the  ability  of the
Company to perform its obligations in accordance with the terms hereof or of the
Notes.

        Section 4.09    Taxes.

     The Company shall,  and shall cause each of its  Subsidiaries to, pay prior
to delinquency all material taxes,  assessments and governmental levies,  except
as contested in good faith and by appropriate proceedings.

                                   ARTICLE V

                                  SUBORDINATION

        Section 5.01    Agreement to Subordinate.

     The  Company,  for itself and its  successors,  and each Holder of Notes by
accepting a Note agrees,  that the Subordinated  Obligations are subordinated in
right of payment,  to the extent and in the manner provided in this Article,  to
the prior payment in full in cash of all Obligations with respect to Senior Debt
of the Company  (whether  outstanding  on the date hereof or hereafter  created,
incurred, assumed or guaranteed),  and that the subordination is for the benefit
of the holders of Senior Debt.
<PAGE>
                                                                              27


        Section 5.02    Liquidation; Dissolution, Bankruptcy.

     Upon any distribution of cash, securities or other property to creditors of
the Company in a liquidation  or  dissolution of the Company or in a bankruptcy,
reorganization,  insolvency,  receivership or similar proceeding relating to the
Company or its property,  in an  assignment  for the benefit of creditors or any
marshalling of the Company's assets and liabilities;

     (a)  holders of Senior  Debt of the  Company  shall be  entitled to receive
payment in full in cash of all  Obligations  due in respect of such  Senior Debt
before  Holders of the Notes  shall be  entitled  to receive  any  payment  with
respect to the Notes  (except that, so long as the holders of Senior Debt do not
receive any equity  securities  in exchange for their  Senior Debt,  Holders may
receive  securities that are subordinated to the Indebtedness or debt securities
received, or Senior Debt retained by the holders of the Senior Debt at least the
same extent as the Notes are  subordinated  to the Senior Debt of the  Company);
and

     (b) until all  Obligations  with  respect to Senior Debt of the Company (as
provided in subsection (a) above) are paid in full in cash, any  distribution to
which  Holders of Notes would be entitled but for this Article  shall be made to
holders of such Senior Debt (except  that, so long as the holders of Senior Debt
do not receive any equity securities in exchange for their Senior Debt,  Holders
may  receive  securities  that  are  subordinated  to the  Indebtedness  or debt
securities  received,  or Senior Debt retained by the holders of the Senior Debt
at least the same extent as the Notes to (i) Senior Debt of the Company and (ii)
any  securities  issued in exchange  for Senior Debt of the  Company),  as their
interests may appear.

        Section 5.03    Default on Senior Debt; No Stock Collateral.

     The Company may not make any payment or  distribution to the Trustee or any
Holder in respect of  Obligations  with respect to the Notes and may not acquire
from the  Trustee  or any  Holder  any Notes for cash or  property  (other  than
securities  that  are  subordinated  to  the  Indebtedness  or  debt  securities
received,  or Senior Debt  retained by the holders of the Senior Debt,  at least
the same  extent  as the  Notes to Senior  Debt of the  Company,  so long as the
holders of Senior  Debt do not  receive any equity  securities  in exchange  for
their Senior Debt) until all  principal  and other  Obligations  with respect to
such Senior Debt have been paid in full in cash if:

               (1) a default in the  payment of the  principal  of or premium or
          interest on Senior Debt of the Company occurs and in continuing; or

               (2) a default, other than a payment default, under the agreement,
          indenture,  or other document governing  Designated Senior Debt occurs
          and is continuing that permits  holders of the Designated  Senior Debt
          as to which such default  relates to  accelerate  its maturity and the
          Trustee  receives  a  notice  of such  default  (a  "PAYMENT  BLOCKAGE
          NOTICE") from a Senior Agent. If the Trustee receives any such Payment
          Blockage  Notice,  no  subsequent  Payment  Blockage  Notice  shall be
          effective for purposes of this Section  unless until at least 360 days
          shall have elapsed since the  effectiveness  of the immediately  prior

<PAGE>
                                                                              28


          Payment  Blockage  Notice.  No nonpayment  default that existed or was
          continuing on the date of delivery of any Payment  Blockage  Notice to
          the  Trustee  shall be, or made,  the basis for a  subsequent  Payment
          Blockage Notice.

     The Company may and shall resume payments on and  distributions  in respect
of the Notes and it may acquire them upon:

          (A) in the case of a default  referred to in Section  5.03(1)  hereof,
     the date upon which such default is cured or waived, or

          (B) in the case of a default  referred to in Section  5.03(2)  hereof,
     the  earlier of the date upon  which the  default is cured or waived or 179
     days  after the date on which the  applicable  Payment  Blockage  Notice is
     received, unless the maturity of such Senior Debt has been accelerated,

     if this Article otherwise permits the payment,  distribution or acquisition
at the time of such payment or acquisition.

     The Company agrees that it will not,  directly or  indirectly,  transfer or
pledge or grant any security  interests in any Stock  Collateral  for any of the
Subordinated Obligations, and the Trustee and the Holders agree that neither the
Trustee  nor any Holder  will  demand or accept any such Stock  Collateral,  and
should any transfer or pledge of or security interest in any Stock Collateral at
any time be made to or received by the  Trustee or any such  Holder,  such Stock
Collateral  shall be held for the  benefit of the  holders of Senior Debt of the
Company and, upon request, delivered and transferred to the Senior Agent for the
benefit of the holders of such Senior Debt.

        Section 5.04    Acceleration of Notes.

     If payment of the Notes is accelerated because of an Event of Default,  the
Company  shall  promptly  notify  holders of Senior  Debt of the  Company of the
acceleration.

        Section 5.05    When Distribution Must Be Paid Over.

     In the event that the Trustee or any Holder of Notes  receives  any payment
of any  Obligations  with  respect  to the Notes at a time when such  payment is
prohibited by Section 5.03 hereof,  such payment shall be held by the Trustee or
such Holder,  in trust for the benefit of, and shall be paid  forthwith over and
delivered, upon written request, to the holders of Senior Debt of the Company as
their  interests  may appear  under the  indenture or other  agreement  (if any)
pursuant  to which such Senior Debt may have been  issued,  as their  respective
interests  may  appear as set forth in a writing  provided  to the  Trustee  and
consented  to by all  Representatives  of the  holders  of  Senior  Debt  of the
Company,  for application to the payment of all Obligations with respect to such
Senior Debt remaining  unpaid to the extent necessary to pay such Obligations in
full in  accordance  with their  terms,  after giving  affect to any  concurrent
payment or distribution to or for the holders of such Senior Debt.
<PAGE>
                                                                              29


     With  respect to the  holders of Senior  Debt of the  Company,  the trustee
undertakes  to  perform  such  obligations  on the  part of the  Trustee  as are
specifically  set  forth  in  this  Article  V,  and  no  implied  covenants  or
obligations  with  respect to the holders of such Senior Debt shall be read into
this Indenture  against the Trustee.  The Trustee shall not be deemed to owe any
fiduciary  duty to the holders of Senior Debt of the  Company,  and shall not be
liable to any such holders if the Trustee  shall pay over or distribute to or on
behalf of Holders of Notes of the Company or any other Person money or assets to
which any  holders  of such  Senior  Debt  shall be  entitled  by virtue of this
Article V, except if such payment is made at a time when a  Responsible  Officer
has actual knowledge that the terms of this Article V prohibit such payment.

        Section 5.06    Notice.

     The Company  shall  promptly  notify the  Trustee  and the Paying  Agent in
writing of any facts  known to the  Company  that  would  cause a payment of any
Obligations  with respect to the Notes to violate this  Article,  but failure to
give such notice shall not affect the  subordination  of the Notes to the Senior
Debt of the Company as provided in this Article V.

        Section 5.07    Subrogation.

     After all Senior  Debt of the Company is paid in full in cash and until the
Notes  are paid in full,  Holders  of Notes  shall be  subrogated  (equally  and
ratably with all other  Indebtedness pari passu with the Notes) to the rights of
holders of such Senior Debt to receive  distributions  applicable to such Senior
Debt to the extent that distributions otherwise payable to the Holders have been
applied to the  payment of such  Senior  Debt.  A  distribution  made under this
Article V to holders of Senior Debt of the  Company  that  otherwise  would have
been made to Holders of Notes is not,  as between  the  Company  and  Holders of
Notes, a payment by the Company on the Notes.

        Section 5.08    Relative Rights.

     This Article V defines the relative  rights of Holders of Notes and holders
of Senior Debt of the Company. Nothing in this Indenture shall:

          (i)  impair,  as  between  the  Company  and  Holders  of  Notes,  the
     obligation  of the  Company,  which is absolute and  unconditional,  to pay
     Accreted Value of and premium and interest on the Notes in accordance  with
     their terms;

          (ii) affect the relative  rights of Holders of Notes and  creditors of
     the Company  other than their  rights in relation to holders of such Senior
     Debt; or

          (iii) prevent the Trustee or any Holder of Notes from  exercising  its
     available  remedies  upon a Default  or Event of  Default,  subject  to the
     rights of holders of owners of such  Senior  Debt to receive  distributions
     and payments otherwise payable to Holders of Notes.
<PAGE>
                                                                              30


     If the Company fails because of this Article V to pay Accreted  Value of or
premium or interest on a Note on the due date, the failure is still a Default or
Event of Default.

        Section 5.09    Subordination May Not Be Impaired by Company.

     (a) No right of any holder of Senior  Debt of the  Company  to enforce  the
subordination  of the  Indebtedness  evidenced by the Notes shall be impaired by
any act or  failure to act by the  Company  or any Holder or the  failure of the
Company or any Holder to comply with this Indenture.

     (b) Without in any way limiting Section 5.09(a),  the holders of any Senior
Debt of the Company may, at any time and from time to time,  without the consent
of or notice to any Holders, without incurring any liabilities to any Holder and
without  impairing or releasing the subordination and other benefits provided in
this  Indenture or the Holders'  obligations to the holders of such Senior Debt,
even if any Holder's  right of  reimbursement  or  subrogation or other right or
remedy is affected,  impaired or extinguished thereby, but subject to the second
sentence,  of the  definition  of  "Senior  Debt,"  do any  one or  more  of the
following: (i) amend, renew, exchange, extend, modify, increase or supplement in
any manner such Senior Debt or any  instrument  evidencing  or  guaranteeing  or
securing  such  Senior  Debt or any  agreement  under  which such Senior Debt is
outstanding (including,  but not limited to, changing the manner, place or terms
of  payment or  changing  or  extending  the time of  payment  of, or  renewing,
exchanging,  amending, increasing,  releasing,  terminating or altering, (A) the
terms of such Senior  Debt,  (B) any  security  for, or any  guarantee  of, such
Senior Debt, (C) any liability of any obligor on such Senior Debt (including any
guarantor) or any liability incurred in respect of such Senior Debt); (ii) sell,
exchange,  release,  surrender,  realize upon, enforce or otherwise deal with in
any  manner  and in any order  any  property  pledged,  mortgaged  or  otherwise
securing  such Senior Debt or any  liability  of any  obligor  thereon,  to such
holder, or any liability incurred in respect thereof; (iii) settle or compromise
any such Senior Debt or any other  liability  of any obligor of such Senior Debt
to such holder or any  security  therefor or any  liability  incurred in respect
thereof  and apply  any sums by  whomsoever  paid and  however  realized  to any
liability  (including,  without  limitation,  payment of any Senior Debt) in any
manner or order;  and (iv) release,  terminate or otherwise  cancel,  or fail to
take or to record or  otherwise  perfect,  for any reason or for no reason,  any
lien or security  interest  securing  such Senior  Debt by  whomsoever  granted,
exercise or delay in or refrain from  exercising any right or remedy against any
obligor or any  guarantor or any other  Person,  elect any remedy and  otherwise
deal  freely  with any  obligor  and any  security  for such  Senior Debt or any
liability  of any obligor to the  holders of such  Senior Debt or any  liability
incurred in respect to such Senior Debt.
<PAGE>
                                                                              31


        Section 5.10    Distribution or Notice to Representative.

     Whenever  a  distribution  is to be made or a notice  given to  holders  of
Senior Debt of the Company, the distribution may be made and the notice given to
their Representative.

     Upon any payment or  distribution  of assets of the Company  referred to in
this Article V, the Trustee and the Holders of Notes shall be entitled,  to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such  Representative  or of the  liquidating  trustee or agent or
other Person making any  distribution  to the Trustee or to the Holders of Notes
for the purpose of  ascertaining  the Persons  entitled to  participate  in such
distribution,  the  holders of the  Senior  Debt and other  Indebtedness  of the
Company,  the amount thereof or payable  thereon,  the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article V.

        Section 5.11    Rights of Trustee and Paying Agent.

     Neither the Trustee nor any Paying  Agent shall at any time be charged with
the  knowledge of the  existence of any facts that would  prohibit the making of
any  payment to or by the Trustee or Paying  Agent under this  Article V, unless
and until the Trustee or Paying Agent shall have received written notice thereof
from the Company,  the Senior  Agent,  one or more holders of Senior Debt of the
Company or a Representative  of any holders of Senior Debt of the Company;  and,
prior to the receipt of any such  written  notice,  the Trustee or Paying  Agent
shall be entitled to assume  conclusively  that no such facts exist. The Trustee
shall be  entitled to rely on the  delivery to it of written  notice by a Person
representing itself to be a holder of Senior Debt (or a Representative  thereof)
to establish  that such notice has been given.  In the event that the Trustee or
Paying Agent  determines  in good faith that further  evidence is required  with
respect to the right of any Person as a holder of Senior Debt to  participate in
any payment or  distribution  pursuant to this  Article V, the Trustee or Paying
Agent may request such Person to furnish evidence to the reasonable satisfaction
of the  Trustee  or Paying  Agent as to the  amount of Senior  Debt 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 V, and if such evidence is not furnished,  the Trustee
or  Paying  Agent  may  defer  any  payment  to  such  Person  pending  judicial
determination  as to the right of such Person to receive such payment.  Only the
Company,  a Representative or a holder of Senior Debt of the Company that has no
Representative  may give the notice.  Nothing in this Article V shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 8.07 hereof.

     The Trustee in its  individual  or any other  capacity may hold Senior Debt
with the same rights it would have if it were not Trustee.  Any Agent may do the
same with like rights.
<PAGE>
                                                                              32


        Section 5.12    Authorization to Effect Subordination.

     Each Holder of Notes by the  Holder's  acceptance  thereof  authorizes  and
directs  the  Trustee  on the  Holder's  behalf  to take  such  action as may be
necessary or  appropriate to effectuate  the  subordination  as provided in this
Article V, and appoints the Trustee to act as the Holder's  attorney-in-fact for
any and all such purposes.  If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any  proceeding  referred to in Section
7.09  hereof at least 30 days  before  the  expiration  of the time to file such
claim, a Senior Agent is hereby  authorized to file an appropriate claim for and
on behalf of the Holders of the Notes.

        Section 5.13    Payment.

     For all purposes of this Article V, a "payment or  distribution  on account
of Subordinated  Obligations" shall include,  without limitation,  any direct or
indirect  payment  or  distribution  on  account  of the  purchase,  prepayment,
redemption,  retirement,  defeasance or acquisition of any Note, any recovery by
the  exercise  of any right of  set-off,  any  direct  or  indirect  payment  of
principal,  premium  or  interest  with  respect  to or in  connection  with any
mandatory or optional redemption or purchase provisions,  any direct or indirect
payment  or  distribution  payable  or  distributable  by  reason  of any  other
Indebtedness or Obligation being  subordinated or any Subordinated  Obligations,
and any direct or  indirect  payment or  recovery  on any claim  relating  to or
arising out of this Indenture, any Note or the issuance of the Notes.

        Section 5.14    No Claims Against Subsidiaries.

     The Company and the Holders acknowledge and agree as follows: (a) the Notes
are an  obligation  of the Company  only,  and the Holders have and will have no
claim,  right or demand  against any  Subsidiary of the Company or any assets or
properties of any  Subsidiary of the Company on or in respect of the Notes;  (b)
the Company is, and is  capitalized  as, a separate  legal  entity such that any
claim,  right or demand by the Holders with respect to the assets and properties
of any  Subsidiary  of the Company  would be solely as a creditor of a direct or
indirect  shareholder of such  Subsidiary,  and that such  arrangement  has been
relied  upon by and is for the  benefit of holders of Senior Debt of the Company
or any such guarantor;  and (c) the Company's  direct and indirect  Subsidiaries
have no obligation to pay  dividends to or to make  investments  in the Company,
for the purpose of funding payment  obligations of the Company to the Holders or
otherwise.

        Section 5.15    Amendments.

     The  provisions of this Article V shall not be amended or modified  without
the written consent of the holders of all Senior Debt of the Company.

                                   ARTICLE VI
<PAGE>
                                                                              33


                             CONSOLIDATION, MERGER,
                          CONVEYANCE, TRANSFER OR LEASE

        Section 6.01    Company May Consolidate, Etc. Only On Certain Terms.

     The  Company  shall  not,  in a single  transaction  or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell,  assign,  convey,   transfer,   lease  or  otherwise  dispose  of  all  or
substantially  all of its  properties  and  assets  to any  Person  or  group of
affiliated  Persons,  or permit any of its  Subsidiaries  to enter into any such
transaction  or  transactions  if  such  transaction  or  transactions,  in  the
aggregate,  would result in a sale, assignment,  conveyance,  transfer, lease or
disposition  of all or  substantially  all of the  properties  and assets of the
Company and its  Subsidiaries  on a  consolidated  basis to any other  Person or
group of affiliated Persons, unless at the time and after giving effect thereto:

     (a) either (i) the Company shall be the continuing  corporation or (ii) the
Person (if other than the Company)  formed by such  consolidation  or into which
the  Company  is  merged  or the  Person  which  acquires  by sale,  assignment,
conveyance,  transfer,  lease or  disposition  all or  substantially  all of the
properties  and assets of the Company  and its  Subsidiaries  on a  consolidated
basis (the  "SURVIVING  ENTITY")  shall be a corporation,  partnership,  limited
liability  company,  business  trust or other entity duly  organized and validly
existing  under the laws of the United  States of America,  any state thereof or
the District of Columbia and such Person  expressly  assumes,  by a supplemental
indenture,  executed and delivered to the Trustee, in a form satisfactory to the
Trustee,  all the obligations of the Company under the Notes and this Indenture,
and this Indenture shall remain in full force and effect;

     (b)  immediately  before  and  immediately  after  giving  effect  to  such
transaction  on a pro forma  basis,  no Default  or Event of Default  shall have
occurred and be continuing; and

     (c) at the time of the  transaction,  the Company or the  Surviving  Entity
shall have  delivered,  or caused to be delivered,  to the Trustee,  in form and
substance reasonably  satisfactory to the Trustee, an Officers'  Certificate and
an  Opinion of  Counsel,  each to the effect  that such  consolidation,  merger,
transfer, sale, assignment, conveyance, transfer, lease or other transaction and
the  supplemental  indenture in respect  thereof  comply with this Indenture and
that all conditions  precedent  herein provided for relating to such transaction
have been complied with.

     Paragraph  (b) of this  Section  6.01  shall not apply to any merger of the
Company with or into any wholly owned  Subsidiary  of the Company.  This Section
6.01 shall not apply to the transfer or lease of all or substantially all of the
assets of the Company to any of its wholly owned Subsidiaries.
<PAGE>
                                                                              34


        Section 6.02    Successor Substituted.

     Upon any  consolidation  or merger,  or any sale,  assignment,  conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company in  accordance  with Section 6.01,  the  successor  Person
formed  by such  consolidation  or into  which  the  Company  is  merged  or the
successor Person to which such sale, assignment,  conveyance, transfer, lease or
disposition is made shall succeed to, and be  substituted  for, and may exercise
every right and power of, the Company under this  Indenture and the Notes,  with
the same effect as if such  successor had been named as the Company herein or in
the Notes.  When a successor (other than a successor that is an Affiliate of the
Company) assumes all the Obligations of its predecessor  under this Indenture or
the Notes,  as the case may be, the  predecessor  shall be  released  from those
Obligations; provided that in the case of a transfer of substantially all of the
Company's  assets  (but not all of the  assets),  the  predecessor  shall not be
released from the payment of the aggregate Accreted Value and any other payments
due on the Notes.

                                  ARTICLE VII

                              DEFAULTS AND REMEDIES

        Section 7.01    Events of Default.

                  An "EVENT OF DEFAULT" occurs if:

     (a) the Company defaults in the payment of the aggregate  Accreted Value of
or premium on the Notes when the same  becomes due and payable at  Maturity,  in
connection with a Purchase Offer, upon declaration or otherwise  (whether or not
such payment is prohibited by the provisions of Article V hereof);

     (b) the Company  defaults  for 30 days in the payment when due of any other
amounts  payable on any Note  (whether or not such payment is  prohibited by the
provisions of Article V hereof);

     (c) the  Company  fails to observe or perform for a period of 30 days after
notice any  covenant or  agreement  contained  in Sections  4.07 and 6.01 hereof
(other  than,  in the case of  Section  4.07,  a failure  to  purchase  Notes in
connection with a Purchase Offer);

     (d) the  Company  fails to observe or perform  any  covenant  or  agreement
contained in Section 4.06 hereof;

     (e) the Company pursuant to or within the meaning of any Bankruptcy Law:

          (i) commences a voluntary case;
<PAGE>
                                                                              35


          (ii)  consents  to the entry of an order for  relief  against it in an
     involuntary case;

          (iii)  consents to the  appointment of a Custodian of it or for all or
     substantially all of its property;  (iv) makes a general assignment for the
     benefit of its creditors; or

          (v) admits in writing its inability generally to pay its debts as they
     become due; and

     (f) a court of competent  jurisdiction  enters an order or decree under any
Bankruptcy Law that:

          (i) is for relief against the Company in an involuntary case;

          (ii)  appoints a Custodian of the Company or for all or  substantially
     all of the property of the Company;

          (iii)  orders the  liquidation  of the Company and the order or decree
     remains unstayed and in effect for 60 consecutive days.

     The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors or the  protection  of creditors.
The term  "CUSTODIAN"  means any  receiver,  trustee,  assignee,  liquidator  or
similar official under any Bankruptcy Law.

        Section 7.02    Acceleration.

     If an Event of Default (other than an Event of Default specified in clauses
(e) and (f) of Section 7.01  hereof)  occurs and is  continuing,  the Trustee by
notice to the  Company,  or the  Holders of at least 25% in  aggregate  Accreted
Value of the then  outstanding  Notes by notice to the Company and the  Trustee,
may  declare all the Notes to be due and  payable.  Upon such  declaration,  the
aggregate Accreted Value plus accrued and unpaid interest thereon, and any other
amounts payable on the Notes shall be due and payable  immediately.  If an Event
of Default  specified in clauses (e) or (f) of Section 7.01 hereof occurs,  such
amounts shall become and be immediately  due and payable without any declaration
or other act on the part of the Trustee or any Holder.

     Notwithstanding the foregoing,  the Trustee and the Holders may not declare
the Notes to be due and payable  under the first  sentence of this  Section 7.02
until five Business Days after receipt by the Senior Agent of written  notice of
the acceleration of the Notes.

     The Majority  Holders by notice to the Trustee may rescind an  acceleration
and its  consequences (i) if the rescission would not conflict with any judgment

<PAGE>
                                                                              36


or decree of a court of competent  jurisdiction  and (ii) if all existing Events
of Default  have been cured or waived  except  nonpayment  of Accreted  Value or
interest on the Notes that has become due solely because of the  acceleration of
the Notes.

        Section 7.03    Other Remedies.

     If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the aggregate Accreted Value plus accrued and unpaid
interest  thereon  and any other  amounts  payable on the Notes,  if any,  or to
enforce the performance of any provision of the Notes or this Indenture.

     The Trustee may  maintain a  proceeding  even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy  accruing upon an
Event of Default  shall not impair the right or remedy or constitute a waiver of
or  acquiescence  in the Event of Default.  All remedies are  cumulative  to the
extent permitted by law.

        Section 7.04    Waiver of Past Defaults.

     The  Majority  Holders by notice to the Trustee may on behalf of all of the
Holders of the Notes  waive an  existing  Default  or Event of  Default  and its
consequences  except a continuing  Default or Event of Default in the payment of
the aggregate Accreted Value, accrued and unpaid interest thereon, and any other
amount  payable  on any Note,  if any.  When a Default  or Event of  Default  is
waived,  it is  cured  and  ceases;  but no  such  waiver  shall  extend  to any
subsequent or other Default or impair any right consequent thereon.

        Section 7.05    Control by Majority.

     The Majority  Holders may 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 it.  However,  the  Trustee  may  refuse to  follow  any
direction that conflicts with law or this  Indenture,  is unduly  prejudicial to
the rights of other Holders, or would involve the Trustee in personal liability.

        Section 7.06    Limitation on Suits.

     A Holder may pursue a remedy with  respect to this  Indenture  or the Notes
only if:

     (a) the  Holder  gives  to the  Trustee  notice  of a  continuing  Event of
Default;

     (b) the  Holders of at least 25% in  aggregate  Accreted  Value of the then
outstanding Notes make a request to the Trustee to pursue the remedy;

     (c) such Holder or Holders offer to the Trustee  indemnity  satisfactory to
the Trustee against any loss, liability or expense;
<PAGE>
                                                                              37


     (d) the  Trustee  does not  comply  with the  request  within 60 days after
receipt of the request and the offer of indemnity; and

     (e) during such 60-day period the Majority  Holders do not give the Trustee
a direction inconsistent with the request.

     A Holder  may not use this  Indenture  to  prejudice  the rights of another
Holder or to obtain a preference or priority over another Holder.

        Section 7.07    Rights of Holders to Receive Payment.

     Notwithstanding  any other  provision of this  Indenture,  the right of any
Holder of a Note to receive  payment of the Accreted  Value,  accrued and unpaid
interest thereon, and other amounts payable on the Note, if any, on or after the
respective due dates expressed in the Note, or to bring suit for the enforcement
of any such payment on or after such respective dates,  shall not be impaired or
affected without the consent of the Holder made pursuant to this Section 7.07.

        Section 7.08    Collection Suit by Trustee.

     If an Event of Default  specified in Section  7.01(a) or (b) hereof  occurs
and is  continuing,  the  Trustee  may  recover  judgment in its own name and as
trustee of an express  trust  against the  Company  for the whole  amount of the
aggregate Accreted Value, accrued and unpaid interest thereon,  remaining unpaid
on the Notes and interest on overdue  Accreted Value and such further amounts as
shall be  sufficient to cover the costs and, to the extent  lawful,  expenses of
collection,  including the reasonable compensation,  expenses, disbursements and
advances of the Trustee, its agents and counsel.

        Section 7.09    Trustee May File Proofs of Claim.

     The Trustee may file such proofs of claim and other  papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Holders  allowed  in any  judicial  proceedings  relative  to the  Company,  its
creditors or its property. Nothing contained herein 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 Notes 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.

        Section 7.10    Priorities.

     If the Trustee  collects any money  pursuant to this Article,  it shall pay
out the money in the following order:

     First: to the Trustee for amounts due under Section 8.07 hereof;

     Second: to the holders of Senior Debt to the extent required by Article V;
<PAGE>
                                                                              38


     Third:  to Holders for amounts due and unpaid on the Notes for the Accreted
Value,  accrued and unpaid interest thereon, and other amounts payable under the
Notes 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 the Notes for the aggregate  Accreted Value,  accrued
and unpaid interest thereon, and other amounts, if any, respectively; and

     Fourth: to the Company.

     The  Trustee  may fix a record  date and  payment  date for any  payment to
Holders made pursuant to this Section 7.10.

        Section 7.11    Undertaking for Costs.

     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 a
Trustee,  a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs,  including  reasonable  attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses  made by the party  litigant.  This Section 7.11
does not apply to a suit by the Trustee,  a suit by a Holder pursuant to Section
7.07 hereof,  or a suit by Holders of more than 10% in aggregate  Accreted Value
of the then outstanding Notes.

        Section 7.12    Additional Interest.

     If the  Company  fails to observe  or perform  any  covenant  or  agreement
contained  herein  (other than any  failure  which may result in a Default or an
Event of Default as provided  in Section  7.01 (a),  (b),  (c) and (d)) and such
failure  continues  for a period of 60 days after notice from the Trustee to the
Company or from  Holders of at least 25% in  aggregated  Accreted  Value of then
outstanding Notes to the Trustee and the Company (each, a "Non-default  Covenant
Breach"),  additional interest will accrue on the Notes over and above the rates
set  forth in the  Notes  and this  Indenture  at a rate of 2% per annum for the
period  immediately  following  the end of the 60 day  cure  period  until  such
failure  is cured or  waived;  provided  that the  Company  shall in no event be
required to pay any additional  interest for more than one Non-default  Covenant
Breach at any one time.
<PAGE>
                                                                              39


                                  ARTICLE VIII

                                     TRUSTEE

        Section 8.01    Duties of Trustee.

     (a) 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 man would
exercise or use under the circumstances in the conduct of his own affairs.

     (b) Except during the  continuance of an Event of Default:  (i) the Trustee
need perform only those duties that are specifically set forth in this Indenture
and no others and (ii) 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.  However,  the
Trustee shall examine the certificates and opinions to determine  whether or not
they  conform  to  the  requirements  of  this  Indenture  and  to  confirm  the
correctness of all mathematical computations.

     (c) The Trustee may not be relieved  from  liability  for its own negligent
action, its own negligent failure to act, or its own willful misconduct,  except
that:  (i) this  subsection  does not limit the effect of subsection (b) of this
Section  8.01;  (ii) the  Trustee  shall not be liable for any error of judgment
made in good  faith by a  Responsible  Officer,  unless  it is  proved  that the
Trustee was negligent in ascertaining  the pertinent facts and (iii) the Trustee
shall not be liable with respect to any action it takes or omits to take in good
faith in  accordance  with a direction  received by it pursuant to Section  7.05
hereof.

     (d)  Every  provision  of this  Indenture  that in any way  relates  to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 8.01.

     (e) The Trustee  may refuse to perform  any duty or  exercise  any right or
power  unless  it  receives  indemnity  satisfactory  to it  against  any  loss,
liability or expense.

     (f) The Trustee  shall not be liable for interest on any money  received by
it except as the Trustee may agree in writing  with the  Company.  Money held in
trust by the  Trustee  need not be  segregated  from other  funds  except to the
extent required by law.

        Section 8.02    Rights of Trustee.

     (a) The Trustee may rely on any  document  believed by it to be genuine and
to have been signed or  presented  by the proper  Person.  The Trustee  need not
investigate any fact or matter stated in the document.
<PAGE>
                                                                              40


     (b) Before the Trustee  acts or  refrains  from  acting,  it may require an
Officers'  Certificate or an Opinion of Counsel,  or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in  reliance on
such Officers' Certificate or Opinion of Counsel.

     (c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

     (d) The  Trustee  shall not be liable  for any  action it takes or omits to
take in good faith which it believes  to be  authorized  or within its rights or
powers.

     (e) The Trustee shall not be charged with knowledge of any Event of Default
under  subsection (c), (d), (e) or (f) (and subsection (a) or (b) if the Trustee
does not act as Paying  Agent) of Section 7.01 unless  either (i) a  Responsible
Officer  shall have actual  knowledge  thereof,  or (ii) the Trustee  shall have
received notice thereof in accordance with Section 11.02 hereof from the Company
or any Holder.

        Section 8.03    Individual Rights of Trustee.

     The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may  otherwise  deal with the Company or an Affiliate  with
the same rights it would have if it were not Trustee.  Any Agent may do the same
with like rights.  However,  subject to the exceptions  set forth  therein,  the
Trustee is subject to Sections 8.10 and 8.11 hereof.

        Section 8.04    Trustee's Disclaimer.

     The Trustee makes no  representation as to the validity or adequacy of this
Indenture or the Notes, it shall not be accountable for the Company's use of the
proceeds from the Notes,  and it shall not be  responsible  for any statement of
the  Company  in the  Indenture  or any  statement  in any Note  other  than its
authentication. Section 8.05......Notice of Defaults.

     If a Default or Event of  Default  occurs  and is  continuing  and if it is
known to the Trustee,  the Trustee shall mail to Holders a notice of the Default
or Event of  Default  within 90 days  after it  occurs.  Except in the case of a
Default or Event of Default in payment on any Note, the Trustee may withhold the
notice if and so long as a committee of its  Responsible  Officers in good faith
determines that withholding the notice is in the interests of Holders.

        Section 8.06    [Intentionally Omitted]

        Section 8.07    Compensation and Indemnity.

     The  Company  shall  pay  to the  Trustee  from  time  to  time  reasonable
compensation for its services hereunder. The Trustee's compensation shall not be

<PAGE>
                                                                              41


limited by any law on compensation of a trustee of an express trust. The Company
shall  reimburse  the Trustee  upon  request for all  reasonable  disbursements,
expenses and advances  incurred or made by it. Such  disbursements  and expenses
may include  the  reasonable  disbursements,  compensation  and  expenses of the
Trustee's agents and counsel.

     The  Company  shall  indemnify  the Trustee  against any loss or  liability
incurred  by it except as set forth in the next  paragraph.  The  Trustee  shall
notify the Company  promptly of any claim for which it may seek  indemnity.  The
Company shall defend the claim and the Trustee  shall  cooperate in the defense.
The Trustee may have separate  counsel and the Company shall pay the  reasonable
fees,  disbursements and expenses of such counsel.  The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.

     The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.

     To secure the  Company's  payment  obligations  in this Section  8.07,  the
Trustee  shall have a lien prior to the Notes on all money or  property  held or
collected by the Trustee, except money or property held in trust to pay Accreted
Value and interest on particular Notes.

     Without  prejudice  to any other  rights  available  to the  Trustee  under
applicable  law, when the Trustee incurs  expenses or renders  services after an
Event of Default specified in Section 7.01(g) or (h) hereof occurs, the expenses
and the  compensation  for the services are intended to  constitute  expenses of
administration under any Bankruptcy Law.

     All amounts  owing to the Trustee  under this Section 8.07 shall be payable
by the Company in United  States  dollars.  This Section 8.07 shall not apply so
long as Madeleine LLC or any of its Affiliates is the Trustee.

        Section 8.08    Replacement of Trustee.

     A  resignation  or removal of the  Trustee and  appointment  of a successor
Trustee shall become effective only upon the successor  Trustee's  acceptance of
appointment as provided in this Section 8.08.

     The Trustee may resign by so notifying  the Company.  The Majority  Holders
may remove the Trustee by so notifying the Trustee and the Company. If Madeleine
LLC or any of its  Affiliates  is not the  Trustee,  the  Company may remove the
Trustee if:

     (a) the Trustee fails to comply with Section 8.10 hereof,;

     (b) the  Trustee is  adjudged a bankrupt  or an  insolvent  or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
<PAGE>
                                                                              42


     (c) a  Custodian  or public  officer  takes  charge of the  Trustee  or its
property; or

     (d) the Trustee becomes incapable of acting.

     If the Trustee  resigns or is removed or if a vacancy  exists in the office
of Trustee  for any  reason,  the  Company  shall  promptly  appoint a successor
Trustee.  Within one year after the successor Trustee takes office, the Majority
Holders  may  appoint a  successor  Trustee to  replace  the  successor  Trustee
appointed by the Company.

     If a  successor  Trustee  does not take  office  within  60 days  after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% of the aggregate  Accreted Value of the then outstanding
Notes may petition any court of competent  jurisdiction for the appointment of a
successor Trustee.

     If the Trustee fails to comply with Section 8.10 hereof, any Holder who has
been a bona fide Holder of a Note for at least six months may petition any court
of competent  jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee; provided, that the foregoing shall not apply if the Trustee
is Madeleine LLC or any of its Affiliates.

     A successor  Trustee shall deliver a written  acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective,  and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture.  The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee  shall  promptly  transfer  all  property  held by it as  Trustee to the
successor  Trustee,  subject to the lien  provided  for in Section  8.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 8.08 hereof,
the  Company's  obligations  under  Section 8.07 hereof  shall  continue for the
benefit of the  retiring  trustee  with  respect  to  expenses  and  liabilities
incurred by it prior to such replacement.

        Section 8.09    Successor Trustee by Merger, etc.

     If the Trustee  consolidates,  merges or converts into, or transfers all or
substantially all of its corporate trust business to, another  corporation,  the
successor corporation without any further act shall be the successor Trustee.

        Section 8.10    Eligibility; Disqualification.

     Except for Madeleine LLC or any of its Affiliates is acting as Trustee, the
Trustee  shall  always  have  a  combined   capital  and  surplus  of  at  least
$100,000,000  as set  forth  in its  most  recent  published  annual  report  of
condition.
<PAGE>
                                                                              43


        Section 8.11    Preferential Collection of Claims Against Company.

     If the  Trustee  shall  be,  or  shall  become,  a  creditor,  directly  or
indirectly, secured or unsecured, of the Company, within three months prior to a
Default,  or subsequent to such a Default,  then,  unless and until such Default
shall be cured,  the Trustee  shall set apart and hold in a special  account for
the benefit of the Trustee individually and the Holders:

     (a) an amount equal to any and all  reductions  in the amount due and owing
upon any claim as such  creditor in respect of principal  or interest,  effected
after the  beginning  of such three  months'  period  and valid as  against  the
Company and its other  creditors,  except any such reduction  resulting from the
receipt or disposition of any property described in paragraph (b) below, or from
the exercise of any right of setoff which the Trustee could have  exercised if a
petition in bankruptcy had been filed by or against the Company upon the date of
such Default; and

     (b) all property received in respect of any claim as such creditor,  either
as security therefor,  or in satisfaction or composition  thereof, or otherwise,
after the  beginning  of such three  months'  period,  or an amount equal to the
proceeds of any such property, if disposed of, subject,  however, to the rights,
if any,  of the  Company  and its  other  creditors  in  such  property  or such
proceeds.

     This Section 8.11 shall not apply if Madeleine LLC or any of its Affiliates
is acting as Trustee.

                                   ARTICLE IX

                             DISCHARGE OF INDENTURE

        Section 9.01    Termination of Company's Obligations.

     This  Indenture  shall  cease  to be of  further  effect  (except  that the
Company's  obligations  under  Sections 8.07 and 9.02 hereof shall survive) when
all outstanding Notes  theretofore  authenticated and issued have been delivered
to the  Trustee  for  cancellation  and the  Company  has paid all sums  payable
hereunder.

        Section 9.02    Repayment to Company.

     The Trustee and the Paying  Agent shall  promptly  pay to the Company  upon
request any excess money or securities held by them at any time.

     The Trustee and the Paying  Agent shall pay to the Company upon request any
money held by them for the payment of Accreted  Value or interest  that  remains
unclaimed for two years after the date upon which such payment shall have become
due; provided,  however, that the Company shall have first caused notice of such
payment to the Company to be mailed to each Holder entitled thereto no less than
30 days prior to such payment. After payment to the Company, the Trustee and the
Paying  Agent  shall have no further  liability  with  respect to such money and
Holders  entitled  to the money must look to the  Company for payment as general
creditors  unless any  applicable  abandoned  property  law  designates  another
Person.
<PAGE>
                                                                              44


                                   ARTICLE X

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

        Section 10.01   Without Consent of Holders.

     The Company and the Trustee may amend or supplement  this  Indenture or the
Notes without the consent of any Holder:

     (a) to cure any ambiguity, defect or inconsistency;

     (b) to comply with Sections 5.12 and 6.01 hereof;

     (c) to  provide  for  uncertificated  Notes in  addition  to or in place of
certificated Notes;

     (d) to make any change that provides  additional  rights or benefits to the
Holders of the Notes; or

     (e) to make  any  change  that  does not  adversely  affect  the  interests
hereunder of any Holder.

        Section 10.02   With Consent of Holders.

     Subject to Section  7.07  hereof,  the Company and the Trustee may amend or
supplement  this Indenture or the Notes with the written consent of the Majority
Holders. Subject to Sections 7.04 and 7.07 hereof, the Majority Holders may also
waive  compliance in a particular  instance by the Company with any provision of
this  Indenture  or the Notes.  However,  without  the  consent  of each  Holder
affected, an amendment, supplement or waiver under this Section 10.02 may not:

     (a)  reduce  the  percentage  in  aggregate  Accreted  Value  of  the  then
outstanding  Notes the consent of whose  Holders is required for any  amendment,
supplement to this Indenture or waiver of any provision of this Indenture;

     (b) change the Stated  Maturity of the Accreted  Value of any Note or alter
the Accreted Value thereof or any amounts  payable thereon under this Indenture,
if any;

     (c) reduce the rate of or change the time for  payment of  interest  on any
Note;
<PAGE>
                                                                              45


     (d) waive a  default  in the  payment  of the  Accreted  Value or any other
amounts  payable on any Note, if any, or impair the right to institute  suit for
the enforcement of any such payment on or after the Maturity  thereof,  except a
rescission of acceleration of the Notes by the Majority  Holders and a waiver of
the payment default that resulted from such acceleration;

     (e) make any Note payable in money other than that stated in the Note;

     (f) make any change in Sections 7.04 or 7.07 hereof;

     (g) modify Article V in a manner adverse to the Holders of Notes;

     (h) except as provided by Article VI, consent to the assignment or transfer
by the Company of any of its rights and obligations under the Indenture; and

     (i) make any change in the  foregoing  amendment  and waiver  provisions of
this Article X.

     To secure a consent of the Holders under this Section  10.02,  it shall not
be  necessary  for the Holders to approve the  particular  form of any  proposed
amendment,  supplement  or waiver,  but it shall be  sufficient  if such consent
approves the substance thereof.

     After an  amendment,  supplement or waiver under this Section 10.02 becomes
effective,  the Company shall mail to Holders a notice  briefly  describing  the
amendment or waiver.

        Section 10.03   Revocation and Effect of Consents.

     Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder and every subsequent
Holder  of a Note or  portion  of a Note  that  evidences  the same  debt as the
consenting  Holder's  Note,  even if  notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
his Note or portion of a Note if the Trustee  receives the notice of  revocation
before  the  date  on  which  the  Trustee  receives  an  Officers'  Certificate
certifying  that the  Holders  of the  requisite  Accreted  Value of Notes  have
consented to the amendment, supplement or waiver.

     The Company may,  but shall not be obligated  to, fix a record date for the
purpose of  determining  the  Holders  entitled  to  consent  to any  amendment,
supplement  or  waiver.  If a record  date is fixed,  then  notwithstanding  the
provisions  of the  immediately  preceding  paragraph,  those  Persons  who were
Holders at such record date (or their duly designated  proxies),  and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given,  whether or not such Persons continue to
be Holders  after such record date.  No consent  shall be valid or effective for
more than 90 days after such  record date unless  consents  from  Holders of the

<PAGE>
                                                                              46


Accreted  Value of Notes  required  hereunder for such amendment or waiver to be
effective  shall have also been given and not revoked within such 90-day period.
After an amendment,  supplement or waiver becomes  effective it shall bind every
Holder,  unless it is of the type described in any of clauses (a) through (i) of
Section  10.02  hereof.  In such case,  the  amendment or waiver shall bind each
Holder who has consented to it and every  subsequent  Holder that  evidences the
same debt as the consenting Holder's Note.

        Section 10.04   Notation on or Exchange of Notes.

     The Trustee may place an appropriate  notation about an amendment or waiver
on any Note thereafter authenticated.  The Company in exchange for all Notes may
issue and the Trustee shall authenticate new Notes that reflect the amendment or
waiver.

     Failure to make such notation on a Note or to issue a new Note as aforesaid
shall not affect the validity and effect of such amendment or waiver.

        Section 10.05   Trustee Protected.

     The Trustee shall sign all supplemental indentures, except that the Trustee
may, but need not, sign any  supplemental  indenture that adversely  affects its
rights.

                                   ARTICLE XI

                                  MISCELLANEOUS

        Section 11.01   [Intentionally Omitted]

        Section 11.02   Notices.

     Any notice or  communication  by the Company or the Trustee to the other is
duly given if in writing and  delivered  in Person or mailed by first class mail
to the other's  address  stated in this  section.  The Company or the Trustee by
notice  to the  other  may  designate  additional  or  different  addresses  for
subsequent notices or communications.

     Any notice or communication to a Holder shall be mailed by first class mail
to his address  shown on the register kept by the  Registrar.  Failure to mail a
notice or  communication  to a Holder or any  defect in it shall not  affect its
sufficiency with respect to other Holders.

     If a notice or  communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.

     If the Company mails a notice or communication to Holders,  it shall mail a
copy to the Trustee and each Agent at the same time.
<PAGE>
                                                                              47


     All other notices or communications shall be in writing.

     In case by reason of the  suspension of regular mail service,  or by reason
of any other cause, it shall be impossible to mail any notice as required by the
Indenture,  then such method of  notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of such notice.

                  The address of the Company's executive office is:

                           American Skiing Company
                           P. O. Box 4552
                           136 Heber Ave.
                           Park City, UT  84060
                           Telecopy:    (435) 615 0340
                           Attention:   Chief Financial Officer

                  with a copy to:

                           American Skiing Company
                           One Monument Way
                           Portland, ME  04101
                           Attention:  Foster Stewart

                  and a copy to:

                           Paul, Weiss, Rifkind, Wharton & Garrison LLP
                           1285 Avenue of the Americas
                           New York, NY  10019
                           Telecopy:  (212) 373-2377
                           Attention:  John C. Kennedy, Esq.

                  The Trustee's address is:

                           Madeleine LLC
                           299 Park Avenue
                           New York, NY 10171
                           Attention:  Mark A. Neporent


                  with a copy to:

                           Stuart D. Freedman, Esq.
                           Schulte Roth & Zabel LLP
                           919 Third Avenue
                           New York, NY 10022
<PAGE>
                                                                              48


        Section 11.03   Communication by Holders with other Holders.

     Holders may  communicate  with other  Holders  with respect to their rights
under this Indenture or the Notes and may have access to information held by the
Trustee. The disclosure of any such information as to the names and addresses of
the Holders by the Trustee or the Company is hereby authorized and permitted and
the Trustee or Company  shall not be held  accountable  by reason of mailing any
material pursuant to a request made by the Holders.

        Section 11.04   Certificate and Opinion as to Conditions Precedent.

     Upon any request or  application  by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:

     (a) an Officers'  Certificate  stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and

     (b) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.

        Section 11.05   Statements Required in Certificate or Opinion.

     Each  certificate or opinion with respect to compliance with a condition or
covenant  provided for in this  Indenture  (other than pursuant to Section 4.03)
shall include:

     (a) a statement that the Person signing such  certificate or rendering such
opinion has read such covenant or condition;

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

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

     (d) a statement as to whether or not, in the opinion of such  Person,  such
condition or covenant has been complied with.

        Section 11.06   Rules by Trustee and Agents.

     The  Trustee  may make  reasonable  rules for action  by, or a meeting  of,
Holders.  The  Registrar  or  Paying  Agent  may make  reasonable  rules and set
reasonable requirements for its functions.
<PAGE>
                                                                              49


        Section 11.07   Legal Holidays.

     A  "LEGAL  HOLIDAY"  is a  Saturday,  a Sunday  or a day on  which  banking
institutions  in the State of New York are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next  succeeding day that is not a Legal  Holiday,  and no interest shall
accrue for the intervening  period.  If any other operative date for purposes of
this  Indenture  shall occur on a Legal  Holiday  then for all purposes the next
succeeding day that is not a Legal Holiday shall be such operative date.

        Section 11.08     No Recourse Against Others.

     A director, officer, employee,  incorporator or shareholder of the Company,
as such,  shall not have any liability for any  Obligations of the Company under
the Notes or this  Indenture  or for any claim  based  on, in  respect  of or by
reason of such  Obligations or their  creation.  Each Holder by accepting a Note
waives and releases all such  liability.  The waiver and release are part of the
consideration for the issue of the Notes.

Se      ction 11.09     Counterparts and Facsimile Signatures.

     This  Indenture  may be executed by manual or  facsimile  signature  in any
number of counterparts and by the parties hereto in separate counterparts,  each
of which when so  executed  shall be deemed to be an  original  and all of which
taken together shall constitute one and the same agreement.

        Section 11.10     Governing Law, Submission to Jurisdiction.

     THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS  INDENTURE AND
THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

        Section 11.11     No Adverse Interpretation of other Agreements.

     This Indenture may not be used to interpret another indenture, loan or debt
agreement  of the  Company or an  Affiliate.  Any such  indenture,  loan or debt
agreement may not be used to interpret this Indenture.

        Section 11.12     Successors.

     All  agreements  of the Company in this  Indenture and the Notes shall bind
its successor.  All  agreements of the Trustee in this Indenture  shall bind its
successor.

        Section 11.13     Severability.

     In case any  provision in this  Indenture or in the Notes 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.
<PAGE>
                                                                              50


        Section 11.14     Table of Contents, Headings, etc.

     The Table of Contents,  Cross-Reference Table, and headings of the Articles
and Sections of this Indenture  have been inserted for  convenience of reference
only,  are not to be  considered  a part  hereof,  and shall in no way modify or
restrict any of the terms or provisions hereof.


<PAGE>


                                   SIGNATURES

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.

                           AMERICAN SKIING COMPANY, as Company


                           By:  /s/ Foster A Stewart, Jr
                              -----------------------------------------
                              Name: Foster A Stewart, Jr
                              Title: Senior Vice President




<PAGE>



                            Madeleine LLC, as Trustee



                            By: /s/ Mark A Neporent
                               ------------------------------------------------
                               Name: Mark A Neporent
                               Title: Vice President and Chief Operating Officer






<PAGE>

                                    EXHIBIT A

                             [FORM OF FACE OF NOTE]

                              [Global Notes Legend]

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY 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 ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                            [Restricted Notes Legend]


THE  SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
     TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
     SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
     EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
     ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
     PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
     SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
     THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
     SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
     SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a)
     TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
     BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
     MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
     REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, (c)
     OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE
     REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN ACCREDITED
     INVESTOR (AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT)THAT, PRIOR

                                      A-1

<PAGE>

     TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
     REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THE NOTES (IN
     SUBSTANTIALLY FORM OF EXHIBIT E OF THE INDENTURE) AND, IF SUCH TRANSFER IS
     IN RESPECT OF AN ACCRETED VALUE WITH AN ORIGINAL ISSUE PRICE (AS DEFINED IN
     THE TERMS OF NOTES) LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
     THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR
     (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
     OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY
     SO REQUESTS), (2) TO THE COMPANY OR ANY SUBSIDIARY THEREOF OR (3) PURSUANT
     TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
     WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
     ANY OTHER APPLICABLE JURISDICTION AND (B) THE PURCHASER WILL, AND EACH
     SUBSEQUENT PURCHASER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER FROM
     IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
     (A) ABOVE.

                                      A-2

<PAGE>


                                                                  No.  ________

                        $76,673,300 Original Issue Price
           or such other amount as is indicated on Schedule A hereof*

                          CUSIP No. [ ]/CINS No. [ ]**

                        JUNIOR SUBORDINATED NOTE DUE 2012

                  American Skiing Company, a Delaware corporation (the
"COMPANY"), promises to pay to Madeleine LLC or registered assigns, the Accreted
Value of this Note (as defined on the reverse hereof) on May 24, 2012, subject
to the further provisions of this Note set forth on the reverse hereof which
further provisions shall for all purposes have the same effect as if set forth
at this place.


 Interest Accrual Dates:              Each January 1, commencing January 1, 2005


                  IN WITNESS WHEREOF, American Skiing Company has caused this
Note to be signed manually or by facsimile by one of its duly authorized
officers.

Dated:
        ----------------------------


                             AMERICAN SKIING COMPANY


                             By:
                                --------------------------------------

                             TRUSTEE'S CERTIFICATE OF AUTHENTICATION
                             This is one of the Junior Subordinated Notes due
                             2012 described in the within-mentioned Indenture.

                             Madeleine LLC, as Trustee


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


                             * Applicable to Global Notes Only


                            ** To be included only if there is a CUSIP number
                                or CINS number for the Notes


                                      A-3

<PAGE>


                            [FORM OF REVERSE OF NOTE]


                             AMERICAN SKIING COMPANY

                        Junior Subordinated Note due 2012

     1.  Interest.   American  Skiing  Company,  a  Delaware   corporation  (the
"COMPANY,"  which  term  includes  any  successor  Person  under  the  Indenture
hereinafter  referred to), is the issuer of Junior  Subordinated  Notes due 2012
(the  "NOTES").  The Company  promises to pay the Accreted Value of this Note on
May 24, 2012. The Notes will accrue interest,  compounded annually,  as provided
in Section 2.02 of the Indenture on the Accreted Value of the Note, at a rate as
indicated  below  (subject to the  increase  as provided in Section  7.12 of the
Indenture):


                         Year                 Interest Rate
                  -----------------           --------------
                  Remainder of 2004               11.25%
                         2005                     11.25%
                         2006                     11.25%
                         2007                     11.75%
                         2008                     12.50%
                         2009                     12.50%
                         2010                     12.75%
                         2011                     13.00%
                         2012                     13.00%

Interest on the Notes will accrue from November 24, 2004 and will be computed on
the basis of a 360-day year of twelve 30-day months. The "ACCRETED VALUE" of
this Note is defined as the sum of (i) the Original Issue Price of this Note,
and (ii) any interest or premium in respect to this Note added to each Accreted
Value pursuant to Section 2.02 of the Indenture and the terms of this Note.

     2.  Method of Payment.  Interest on the Notes shall be payable  through the
addition of such interest to the Accreted Value in effect  immediately  prior to
the applicable  Interest Accrual Date. On the applicable  Interest Accrual Date,
the Accreted Value shall  increase by the amount of such interest.  On maturity,
Holders must surrender  Notes to a Paying Agent to collect the Accreted Value on
such Notes. The Company will pay the Accreted Value, accrued and unpaid interest
thereon,  and premium, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts.  If a Holder so
requests,  Accreted Value,  accrued and unpaid interest thereon, and premium, if
any, may be paid by wire transfer of immediately  available  funds to an account
previously specified in writing by such Holder to the Company and the Trustee.

                                      A-4

<PAGE>

     3. Paying  Agent and  Registrar.  The Company  will act as Paying Agent and
Registrar.  The Company may change any Paying Agent or Registrar  without  prior
notice. The Company or any of its Affiliates may act in any such capacity.

     4. Indenture.  The Company issued the Notes under the Indenture.  The terms
of the Notes  include those stated in the  Indenture.  The Notes are subject to,
and qualified by, all such terms,  certain of which are summarized  hereon,  and
Holders  are  referred  to  the  Indenture.  The  Notes  are  unsecured  general
obligations  of  the  Company  limited  (except  as  otherwise  provided  in the
Indenture) to $76,673,300 in aggregate  Original Issue Price and subordinated in
right of payment to all existing and future Senior Debt of the Company.

     5. Optional Redemption. At any time, the Notes are subject to redemption at
the option of the Company,  in whole or in part,  upon not less than 30 nor more
than 60 days' notice,  at a redemption price equal to the Accreted Value of such
Notes plus  accrued and unpaid  interest  thereon to the  applicable  redemption
date.

     Notice of  redemption  will be mailed at least 30 but not more than 60 days
before the  redemption  date to each  Holder of the Notes to be  redeemed at his
address  of  record.  The  Company  may  redeem  Notes  in  whole  or in part in
denominations  of Accreted  Value with $100 of Original  Issue Price or integral
multiples  thereof.  In the event of a redemption of less than all of the Notes,
the Notes will be chosen for  redemption by the Trustee in  accordance  with the
Indenture.  On and after the redemption  date,  interest ceases to accrue on the
Notes or portions of them called for redemption.

     6. Mandatory Redemption. The Company will not be required to make mandatory
redemption  or  repurchase  payments  with  respect to the  Notes.  There are no
sinking fund payments with respect to the Notes.

     7.  Repurchase  at Option of Holder.  If there is a Change of Control,  the
Company  shall be  required to offer to purchase  all  outstanding  Notes on the
Purchase Date at the purchase  price equal to the Accreted  Value of such Notes,
plus accrued and unpaid interest thereon to the Purchase Date.

     Holders of Notes that are  subject to an offer to purchase  will  receive a
Change of Control offer from the Company prior to any related  Purchase Date and
may elect to have such Notes or  portions  thereof in  authorized  denominations
purchased by completing the form entitled  "Option of Holder to Elect  Purchase"
appearing below.

     8.  Subordination.  The payment of the Accreted  Value,  accrued and unpaid
interest  thereon or any other amounts due on the Notes is subordinated in right
of payment to all existing and future  Senior Debt of the Company,  as described
in the Indenture. Each Holder, by accepting a Note, agrees to such subordination
and  authorizes and directs the Trustee on its behalf to take such action as may
be necessary or  appropriate  to effectuate  the  subordination  so provided and
appoints the Trustee as its attorney-in-fact for such purpose.

                                      A-5

<PAGE>

     9.  Denominations,  Transfer,  Exchange.  The Notes are in registered form,
without coupons,  in denominations of Accreted Value with $100 of Original Issue
Price  and  any  integral  multiples  thereof.  The  transfer  of  Notes  may be
registered,  and Notes may be  exchanged,  as  provided  in the  Indenture.  The
Registrar  may require a Holder,  among  other  things,  to furnish  appropriate
endorsements  and transfer  documents  and to pay any taxes and fees required by
law or permitted by the Indenture.

     10. Persons Deemed Owners.  The registered  Holder of a Note may be treated
as its owner for all purposes.

     11. Unclaimed Money. If money for the payment of Accreted Value or interest
remains  unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request.  After that,  Holders of Notes
entitled to the money must look to the Company for payment  unless an  abandoned
property law designates another Person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.

     12.  Defaults and Remedies.  The Notes shall have the Events of Default set
forth in Section 7.01 of the  Indenture.  Subject to certain  limitations in the
Indenture,  if an Event of Default  occurs  and is  continuing,  the  Trustee by
notice to the Company or the Holders of at least 25% in aggregate Accreted Value
of the then  outstanding  Notes by notice to the  Company  and the  Trustee  may
declare all the Notes to be due and payable immediately, except that in the case
of an Event of Default  arising from certain events of bankruptcy or insolvency,
all unpaid Accreted Value, accrued and unpaid interest thereon and other amounts
payable on the Notes, if any, shall become due and payable  immediately  without
further action or notice.  The Majority Holders by written notice to the Trustee
may rescind an acceleration  and its  consequences  if the rescission  would not
conflict with any judgment or decree and if all existing  Events of Default have
been cured or waived except  nonpayment of Accreted Value, and other amounts due
on the Notes,  if any, that has become due solely  because of the  acceleration.
Holders  may not enforce the  Indenture  or the Notes  except as provided in the
Indenture.  Subject to certain limitations,  the Majority may direct the Trustee
in its  exercise  of any trust or  power.  The  Company  must  furnish  annually
compliance  certificates  to the  Trustee.  The above  description  of Events of
Default and remedies is qualified by reference,  and subject in its entirety, to
the more complete description thereof contained in the Indenture.

     13. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture  or the Notes may be amended or  supplemented  with the consent of the
Majority Holders (including  consents obtained in connection with a tender offer
or exchange  offer for Notes),  and any existing  default may be waived with the
consent  of the  Majority  Holders.  Without  the  consent  of any  Holder,  the
Indenture or the Notes may be amended among other things, to cure any ambiguity,
defect or inconsistency,  to provide for uncertificated  Notes in addition to or
in place of  certificated  Notes,  to provide for  assumption  of the  Company's
obligations to Holders or to make any change that does not adversely  affect the
rights of any Holder.


                                      A-6

<PAGE>

     14. Trustee  Dealings with the Company.  The Trustee,  in its individual or
any  other  capacity  may  become  the  owner or  pledgee  of the  Notes and may
otherwise  deal with the Company or an  Affiliate  with the same rights it would
have, as if it were not Trustee,  subject to certain limitations provided for in
the Indenture. Any Agent may do the same with like rights.

     15. No Recourse Against Others. A director, officer, employee, incorporator
or  shareholder  of the Company,  as such,  shall not have any liability for any
obligations  of the Company  under the Notes or the  Indenture  or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such  liability.
The waiver and release are part of the consideration for the issue of the Notes.

     16.  Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE  INDENTURE  AND THE NOTES  WITHOUT  REGARD  TO  CONFLICT  OF LAW  PROVISIONS
THEREOF.

     17. Authentication. The Notes shall not be valid until authenticated by the
manual  signature of an authorized  officer of the Trustee or an  authenticating
agent.

     18.  Abbreviations.  Customary  abbreviations  may be used in the name of a
Holder or an  assignee,  such as:  TEN COM (=  tenants  in  common),  TEN ENT (=
tenants by the  entireties),  JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian),  and UGMA (= Uniform Gifts to
Minors Act).

     The Company will  furnish to any Holder of the Notes upon  written  request
and without charge a copy of the Indenture. Request may be made to:

                           American Skiing Company
                           P. O. Box 4552
                           136 Heber Ave.
                           Park City, UT  84060
                           Telecopy:    (435) 615 0340
                           Attention:   Chief Financial Officer

                  with a copy to:

                           American Skiing Company
                           One Monument Way
                           Portland, ME  04101
                           Attention:  Foster Stewart

                                      A-7


<PAGE>


                                 ASSIGNMENT FORM

                        To assign this Note, fill in the
                                  form below:

                  (I) or (we) assign and transfer this Note to

               (Insert assignee's social security or tax I.D. no.)

              (Print or type assignee's name, address and zip code)

       and irrevocably appoint _________________________________ agent to
    transfer this Note on the books of the Company. The agent may substitute
                            another to act for him.

                                 Your Signature:
                                                -------------------------------
                                                (Sign exactly as your name
                                                appears on the other side of
                                                this Note)

Date:
       ---------------
                                 Signature Guarantee: *
                                                     ---------------------------


     In  connection  with any  transfer  of any of the Notes  evidenced  by this
certificate occurring prior to the date that is two years after the later of the
date of original issuance of such Notes and the last date, if any, on which such
Notes were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Notes are being transferred:

CHECK ONE BOX BELOW

     (1)  to the Company or any subsidiary thereof,

     (2)  to a qualified institutional buyer in compliance with Rule 144A,

     (3)  outside  the  United  States in compliance  with  Rule 904  under  the
          Securities Act,

     (4)  pursuant to the exemption from registration provided by Rule 144 under
          the Securities Act (if available),

     (5)  to an  Accredited  Investor  (as  defined  in  Regulation  D under the
          Securities Act) in a transaction  exempt from  registration  under the
          Securities Act,

     (6)  pursuant to any other exemption from registration under the Securities
          Act or

                                      A-8

<PAGE>

     (7)  pursuant to an effective  registration  statement under the Securities
          Act.

* Signature  must be  guaranteed by a commercial  bank,  trust company or member
firm of the New York Stock Exchange.  However, such guarantee is not required so
long as a Purchaser holds the Note.

                                      A-9


<PAGE>


Signature

Signature Guarantee*

Signature must be guaranteed

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the  Securities  Act of 1933, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such  information  regarding the Company as the  undersigned has
requested  pursuant  to  Rule  144A  or  has  determined  not  to  request  such
information  and  that it is aware  that  the  transferor  is  relying  upon the
undersigned's  foregoing  representations  in order to claim the exemption  from
registration provided by Rule 144A.

Date:    _____________________

* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange. However, such guarantee is not required so
long as a Purchaser holds the Note.

                  NOTICE: To be executed by an executive officer

                                      A-10

<PAGE>


                       OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note or a portion thereof  repurchased by
the Company pursuant to Section 4.07 of the Indenture, check the box: [ ]

     If the  purchase is in part,  indicate  the portion of Accreted  Value with
Original Issue Price in denominations  of $100 or any integral  multiple thereof
to be purchased:

                         Your Signature:
                                        --------------------------------------
                                        (Sign exactly as your name appears on
                                         the other side of this Note)


Date:
     ------------------

                         Signature Guarantee:**/


                                           -------------------------------------
                                           **/ Signature must be guaranteed by a
                                           commercial bank, trust company or
                                           member firm of the New York Stock
                                           Exchange. However, this guarantee is
                                           not required so long as a Purchaser
                                           holds the Note.



                                      A-11


<PAGE>


                                [TO BE ATTACHED TO GLOBAL NOTES]

                                SCHEDULE A

                                SCHEDULE OF ORIGINAL ISSUE PRICE


     The  original  issue  price of this  Global  Note  shall be  $_______.  The
following  increases or decreases in the Original Issue Price (as defined in the
Indenture) of this Global Note have been made:

<TABLE>
<S>                      <C>                    <C>                <C>                    <C>

                         Amount of increase                            Signature of       Date of exchange
Amount of decrease in    in Original Issue      Original Issue      authorized officer     following such
 Original Issue Price      Price of this         Price of this     of Trustee or Notes       decrease or
 of this Global Note        Global Note           Global Note           Custodian             increase
----------------------  -------------------     ---------------    -------------------    ------------------
</TABLE>



                                      A-12



<PAGE>


                                    EXHIBIT B

                    FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                  FROM RULE 144A GLOBAL NOTE OR RESTRICTED NOTE
                           TO REGULATION S GLOBAL NOTE

  (Transfers pursuant to Section 2.07(a)(ii) or 2.07(a)(vii) of the Indenture)

[Name of Trustee]
as Trustee
[Address]
Attn:

                  Re:      American Skiing Company Junior Subordinated
                           Notes due 2012 (the "NOTES")

     Reference  is hereby made to the  Indenture,  dated as of November 24, 2004
(the  "INDENTURE"),  between American Skiing Company,  as Issuer,  and Madeleine
LLC, as Trustee.

     This letter relates to $[ ] [check one] (i) [ ] aggregate Accreted Value of
Notes  which are held in the form of the Rule 144A Global Note (CUSIP No. ) with
the  Depositary  or (ii) [ ]  Accreted  Value of  Restricted  Note  (CUSIP No. )
registered,   in  either  case,  in  the  name  of  [name  of  transferor]  (the
"TRANSFEROR")  to effect the transfer of the Notes in exchange for an equivalent
beneficial  interest in the Regulation S Global Notes.  The Original Issue Price
of such Notes is $________.

     In connection  with such request,  the Transferor  does hereby certify that
such transfer has been effected in accordance with (i) the transfer restrictions
set forth in the Notes and (ii) that:

     (1) the offer of the Notes was not made to a Person in the United States;

     (2) the  transaction  was  executed in, on or through the  facilities  of a
designated  offshore securities market and neither the Transferor nor any Person
acting on its behalf knows that the transaction was pre-arranged with a buyer in
the United States;

     (3) no directed  selling  efforts  have been made in  contravention  of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable; and

     (4)  the  transaction  is not  part  of a  plan  or  scheme  to  evade  the
registration  requirements  of the  United  States  Securities  Act of 1933,  as
amended (the "SECURITIES ACT").

     In addition,  if the sale is made during a distribution  compliance  period
and the  provisions of Rule  903(c)(2) or (3) or Rule  904(c)(1) of Regulation S
are  applicable  thereto,  we confirm that such sale has been made in accordance
with the applicable  provisions of Rule 903(c)(2) or (3) or Rule  904(c)(1),  as
the case may be.

                                      B-1

<PAGE>

     You and  the  Company  are  entitled  to  rely  upon  this  letter  and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any  administrative  or legal  proceedings  or  official  inquiry  with
respect  to  the  matters  covered  hereby.   Capitalized  terms  used  in  this
certificate  and not otherwise  defined in the  Indenture  have the meanings set
forth in Regulation S.

                               [Name of Transferor]


                                By:
                                   __________________________
                                   Name:
                                   Title:


Dated:
        -------------------

cc:      American Skiing Company
         P. O. Box 4552
         136 Heber Ave.
         Park City, UT  84060
         Telecopy:  (435) 615 0340
         Attention:  Chief Financial Officer

            and:

         American Skiing Company
         One Monument Way
         Portland, ME  04101
         Attention:  Foster Stewart


                                      B-2


<PAGE>

                                    EXHIBIT C

                    FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                FROM REGULATION S GLOBAL NOTE OR RESTRICTED NOTE
                            TO RULE 144A GLOBAL NOTE

  (Transfers pursuant to Section 2.07(a)(iii) or 2.07(a)(vi) of the Indenture)


[Trustee]
as Trustee
[Address]
Attn:
                  Re:      American Skiing Company Junior Subordinated
                           Notes due 2012 (the "NOTES")

     Reference  is hereby made to the  Indenture,  dated as of November 24, 2004
(the  "INDENTURE"),  between American Skiing Company,  as Issuer,  and Madeleine
LLC, as Trustee.  Capitalized  terms used but not defined  herein shall have the
respective meanings given them in the Indenture.

     This letter relates to $[ ] [check one] (i) [ ] aggregate Accreted Value of
Notes  which are held in the form of the  Regulation  S Global  Note  (CUSIP No.
____) with the Depositary or (ii) [ ] Accreted  Value of Restricted  Note (CUSIP
No. )  registered,  in each  case,  in the name of  [name  of  transferor]  (the
"TRANSFEROR")  to effect the transfer of the Notes in exchange for an equivalent
beneficial  interest in the Rule 144A Global Note.  The Original  Issue Price of
such Notes is $_____.

     In  connection  with  such  request,  and in  respect  of  such  Notes  the
Transferor  does  hereby  certify  that  such  Notes are  being  transferred  in
accordance  with (i) the transfer  restrictions  set forth in the Notes and (ii)
Rule 144A under the United  States  Securities  Act of 1933,  as  amended,  to a
transferee that the Transferor  reasonably  believes is purchasing the Notes for
its own account or an account  with  respect to which the  transferee  exercises
sole  investment  discretion  and the  transferee  and  any  such  account  is a
"qualified   institutional  buyer"  within  the  meaning  of  Rule  144A,  in  a
transaction  meeting  the  requirements  of Rule  144A  and in  accordance  with
applicable  securities  laws of any  state of the  United  States  or any  other
jurisdiction.

Dated:                                   [Name of Transferor],
      ------------------------


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


                                      C-1

<PAGE>


cc:      American Skiing Company
         P. O. Box 4552
         136 Heber Ave.
         Park City, UT  84060
         Telecopy:  (435) 615 0340
         Attention:  Chief Financial Officer

            and:

         American Skiing Company
         One Monument Way
         Portland, ME  04101
         Attention:  Foster Stewart




                                      C-2

<PAGE>

                                    EXHIBIT D

                    FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                         FROM GLOBAL NOTE OR RESTRICTED
                             NOTE TO RESTRICTED NOTE

       (Transfers pursuant to Section 2.07(a)(iv) or Section 2.07(a)(v) of
                                 the Indenture)

[Name of Trustee],
as Trustee
[Address]
Attn:

                  Re:      American Skiing Company Junior Subordinated
                           Notes due 2012 (the "NOTES")

     Reference  is hereby made to the  Indenture,  dated as of November 24, 2004
(the  "INDENTURE"),  between American Skiing Company,  as Issuer,  and Madeleine
LLC, as Trustee.  Capitalized  terms used but not defined  herein shall have the
respective meanings given them in the Indenture.

     This  letter  relates to $[ ] aggregate  Accreted  Value of Notes which are
held [in the form of the [Rule  144A/Regulation  S]. [Global]  [Restricted] Note
(CUSIP  No.  [ ] CINS No. [ ])  [with  the  Depositary]  in the name of [name of
transferor] (the "TRANSFEROR") to effect the transfer of the Notes. The Original
Issue Price of such Notes is $_________.




                                      D-1

<PAGE>


     In  connection  with  such  request,  and in  respect  of such  Notes,  the
Transferor  does hereby  certify  that such Notes are being  transferred  (i) in
accordance  with the  transfer  restrictions  set forth in the Notes and (ii) in
accordance with applicable  securities laws of any state of the United States or
any other jurisdiction.

*Insert, if appropriate.

                                [Name of Transferor],


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


Dated:
        -------------------

cc:      American Skiing Company
         P. O. Box 4552
         136 Heber Ave.
         Park City, UT  84060
         Telecopy:  (435) 615 0340
         Attention:  Chief Financial Officer

            and:

         American Skiing Company
         One Monument Way
         Portland, ME  04101
         Attention:  Foster Stewart


                                      D-2



<PAGE>


                                   APPENDIX E

        FORM OF LETTER TO BE DELIVERED BY INVESTORS OR OTHER PERSONS IN A
                      TRANSACTION EXEMPT FROM REGISTRATION

American Skiing Company
P. O. Box 4552
136 Heber Ave.
Park City, UT  84060

Ladies and Gentlemen:

     We are delivering  this letter in connection with our acquisition of Junior
Subordinated Notes due 2012 (the "Notes") of American Skiing Company, a Delaware
corporation (the "Company").

     We hereby confirm that:

     [(i) we are an  "accredited  investor"  within the  meaning of Rule 501 (a)
(1),  (2),  (3) or (7)  under  the  Securities  Act of  1933,  as  amended  (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors  within  the  meaning of Rule 501 (a) (1),  (2),  (3) or (7) under the
Securities Act (an "Institutional Accredited Investor");]

     [(ii) (A) any  purchase  of the Notes by us will be for our own  account or
for the account of one or more other  Institutional  Accredited  Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor"  within the meaning of Rule 501 (a) (7) under the  Securities  Act and
for each of which we exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3 (a) (2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3 (a) (5) (A) of the
Securities  Act that is acquiring  the Notes as fiduciary for the account of one
or more institutions for which we exercise sole investment discretion;]

     (iii) in the event that we purchase any of the Notes, we will acquire Notes
having a minimum  Original  Issue  Price of not less than  $250,000  for our own
account or for any separate account for which we are acting;

     (iv) we have such  knowledge  and  experience  in  financial  and  business
matters that we are capable of evaluating the merits and risks of purchasing the
Notes;

     (v) we are not acquiring the Notes with a view to  distribution  thereof or
with any present  intention  of  offering  or selling  any of the Notes,  except
pursuant to an effective  registration  statement  under the  Securities  Act or
pursuant to an exemption from the registration requirements thereof, as provided
below,  provided  that the  disposition  of our property and the property of any
accounts for which we are acting as  fiduciary  shall remain at all times within
our control; and

                                      E-1

<PAGE>

     (vi) we  acknowledge  that we have had access to such  financial  and other
information,  and have been afforded the  opportunity  to ask such  questions of
representatives of the Company and receive answers thereto, as we deem necessary
in connection with our decision to acquire the Notes.

     We  understand  that the Notes  are  being  offered  in a  transaction  not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes have not been registered  under the Securities
Act, and we agree,  on our own behalf and on behalf of each account for which we
acquire  any  Notes,  that if in the  future  we  decide  to  resell,  pledge or
otherwise  transfer such Notes,  such Notes may be offered,  resold,  pledged or
otherwise  transferred only: (a) to the Company or any of its subsidiaries,  (b)
to a person whom the seller  reasonably  believes  is a Qualified  Institutional
Buyer or "QIB" (as defined in Rule 144A under the Securities Act) purchasing for
its own  account  or for  the  account  of a QIB in a  transaction  meeting  the
requirements  of  Rule  144A,  (c)  in  an  offshore   transaction  meeting  the
requirements of Rule 904 of the Securities Act, (d) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (e) to an Accredited Investor
that, prior to such transfer,  furnishes the trustee a signed letter  containing
certain representations and agreements relating to the transfer of the Notes (in
substantially  this form) and,  if such  transfer  is in respect of an  Accreted
Value with an Original  Issue Price (as defined in the terms of Notes) less than
$250,000,  an opinion of counsel acceptable to the Company that such transfer is
in compliance with the Securities Act, (f) in accordance with another  exemption
from the  registration  requirements  of the  Securities  Act (and based upon an
opinion of counsel  acceptable  to the  Company) or (g) pursuant to an effective
registration  statement  and, in each case,  in accordance  with the  applicable
securities  laws of any state of the  United  States,  or any  other  applicable
jurisdiction.  We understand that the registrar and transfer agent for the Notes
will not be required to accept for  registration  of transfer any Notes acquired
by us, except upon presentation of evidence  satisfactory to the Company and the
transfer  agent that the foregoing  restrictions  on transfer have been complied
with. We further understand that any Notes acquired by us will be in the form of
definitive physical certificates and will bear a legend reflecting the substance
of this paragraph.

     We   acknowledge   that  the   Company   and  others  will  rely  upon  our
confirmations,  acknowledgments and agreements set forth herein, and we agree to
notify  you  promptly  in writing if any of our  representations  or  warranties
herein ceases to be accurate and complete.

                                      E-2

<PAGE>


     THIS LETTER SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,  THE
LAWS OF THE STATE OF NEW YORK,  WITHOUT  REGARD TO  PRINCIPLES  OF  CONFLICTS OF
LAWS.

Dated:
        ----------------------------

                                       --------------------------------
                                       (Name of Purchaser)


                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:
                                           Address:


cc:

American Skiing Company
One Monument Way
Portland, ME  04101
Attention:  Foster Stewart


                                      E-3