<PAGE>

                                                                     EXHIBIT 4.6

                                  ANTHEM, INC.



                            THE CHASE MANHATTAN BANK



                      as Collateral Agent, Custodial Agent

                           and Securities Intermediary


                                       AND



                              THE BANK OF NEW YORK



                           as Purchase Contract Agent


                                PLEDGE AGREEMENT


                          Dated as of November 2, 2001

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                   <C>
ARTICLE I DEFINITIONS..............................................................     2

      SECTION 1.1 Definitions......................................................     2

ARTICLE II PLEDGE; CONTROL AND PERFECTION..........................................     4

      SECTION 2.1 The Pledge.......................................................     4
      SECTION 2.2 Control and Perfection...........................................     5

ARTICLE III PAYMENTS ON PLEDGED COLLATERAL.........................................     7

      SECTION 3.1 Payments.........................................................     7
      SECTION 3.2 Application of Payments..........................................     8

ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES............     9

      SECTION 4.1 Collateral Substitution and the Creation of Stripped Units.......     9
      SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units......     9
      SECTION 4.3 Termination Event................................................    10
      SECTION 4.4 Early Settlement; Merger Early Settlement........................    11
      SECTION 4.5 Remarketing; Application of Proceeds; Settlement.................    11

ARTICLE V VOTING RIGHTS-- DEBENTURES...............................................    14

      SECTION 5.1 Exercise by Purchase Contract Agent..............................    14

ARTICLE VI RIGHTS AND REMEDIES.....................................................    14

      SECTION 6.1 Rights and Remedies of the Collateral Agent......................    14
      SECTION 6.2 Substitutions....................................................    16

ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS..............................    16

      SECTION 7.1 Representations and Warranties of the Holders....................    16
      SECTION 7.2 Representations and Warranties of the Collateral Agent,
                     Custodial Agent and Securities Intermediary...................    17
      SECTION 7.3 Covenants........................................................    17
</TABLE>


                                        i

<PAGE>

<TABLE>
<S>                                                                                                                    <C>
ARTICLE VIII THE COLLATERAL AGENT....................................................................................   18

      SECTION 8.1 Appointment, Powers and Immunities.................................................................   18
      SECTION 8.2 Instructions of the Company........................................................................   19
      SECTION 8.3 Reliance...........................................................................................   20
      SECTION 8.4 Rights in Other Capacities.........................................................................   20
      SECTION 8.5 Non-Reliance on Collateral Agent...................................................................   21
      SECTION 8.6 Compensation and Indemnity.........................................................................   21
      SECTION 8.7 Failure to Act.....................................................................................   22
      SECTION 8.8 Resignation........................................................................................   22
      SECTION 8.9 Right to Appoint Agent or Advisor..................................................................   24
      SECTION 8.10 Survival..........................................................................................   24
      SECTION 8.11 Exculpation.......................................................................................   24

ARTICLE IX AMENDMENT.................................................................................................   24

      SECTION 9.1 Amendment Without Consent of Holders...............................................................   24
      SECTION 9.2 Amendment with Consent of Holders..................................................................   25
      SECTION 9.3 Execution of Amendments............................................................................   26
      SECTION 9.4 Effect of Amendments...............................................................................   26
      SECTION 9.5 Reference to Amendments............................................................................   26

ARTICLE X MISCELLANEOUS..............................................................................................   26

      SECTION 10.1 No Waiver.........................................................................................   26
      SECTION 10.2 GOVERNING LAW.....................................................................................   27
      SECTION 10.3 Notices...........................................................................................   27
      SECTION 10.4 Successors and Assigns............................................................................   27
      SECTION 10.5 Counterparts......................................................................................   28
      SECTION 10.6 Severability......................................................................................   28
      SECTION 10.7 Expenses, Etc.....................................................................................   28
      SECTION 10.8 Security Interest Absolute........................................................................   28
      SECTION 10.9 Waiver of Jury Trial..............................................................................   29
EXHIBIT A     Instruction from Purchase Contract Agent to Collateral Agent

EXHIBIT B     Instruction to Purchase Contract Agent

EXHIBIT C     Instruction to Custodial Agent Regarding Remarketing

EXHIBIT D     Instruction to Custodial Agent Regarding Withdrawal from Remarketing
</TABLE>

                                       ii

<PAGE>

                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT, dated as of November 2, 2001 (this "Agreement"), among
Anthem, Inc., an Indiana corporation (the "Company"), The Chase Manhattan Bank,
a New York banking corporation, not individually but solely as collateral agent
(in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and The Bank of New York, a New York banking
corporation, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as defined herein).

                                    RECITALS

     WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $50 per Unit, all of which will initially be Normal Units.

     WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract and
(b) either beneficial ownership of (i) a Debenture or (ii) following the
remarketing of the Debentures in accordance with the Purchase Contract Agreement
and the Remarketing Agreement, the appropriate Treasury Consideration.

     WHEREAS, in accordance with the terms of the Purchase Contract Agreement, a
holder of Normal Units may separate the Debentures or the appropriate Treasury
Consideration, as applicable, from the related Purchase Contracts by
substituting for such Debentures or the appropriate Treasury Consideration, as
the case may be, Treasury Securities that will pay in the aggregate an amount
equal to the aggregate Stated Amount of such Normal Units. Upon such separation,
the Normal Units will become Stripped Units. Each Stripped Unit will be
comprised of (a) a Purchase Contract and (b) a 1/20 undivided beneficial
interest in a Treasury Security.

     WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Units have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debentures, any
Treasury Consideration and any Treasury Securities delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof.

<PAGE>

          NOW, THEREFORE, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.1 Definitions.

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

          (a) capitalized terms used but not defined herein are used as defined
     in the Purchase Contract Agreement;

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

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

          "Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.

          "Code" has the meaning specified in Section 6.1 hereof.

          "Collateral" has the meaning specified in Section 2.1 hereof.

          "Collateral Account" means the securities account (number G75418 )
maintained at The Chase Manhattan Bank in the name "The Bank of New York, as
Purchase Contract Agent on behalf of the holders of certain securities of
Anthem, Inc., Collateral Account subject to the security interest of The Chase
Manhattan Bank, as Collateral Agent, for the benefit of Anthem, Inc., as
pledgee" and any successor account.

          "Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.

          "Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.

                                      -2-

<PAGE>

         "Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.

         "Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

         "Pledge" has the meaning specified in Section 2.1 hereof.

         "Pledged Debentures" has the meaning specified in Section 2.1 hereof.

         "Pledged Treasury Consideration" has the meaning specified in Section
2.1 hereof.

         "Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.

         "Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.

         "Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.

         "Purchase Contract Agreement" has the meaning specified in the
Recitals.

         "Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.

         "Security Entitlement" has the meaning set forth in Section 8-102(a)
(17) of the Code.

         "Separate Debentures" means any Debentures that are not Pledged
Debentures.

         "TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

         "Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:

         (i) in the case of Collateral consisting of securities which cannot be
     delivered by book-entry or which the parties agree are to be delivered in
     physical form, delivery in appropriate physical form to the recipient
     accompanied by any duly executed instruments of transfer, assignments in
     blank, transfer tax stamps and any other documents necessary to constitute
     a legally valid transfer to the recipient;

                                      -3-

<PAGE>

          (ii) in the case of Collateral consisting of securities maintained in
     book-entry form by causing a "securities intermediary" (as defined in
     Section 8-102(a)(14) of the Code) to (a) credit a "security entitlement"
     (as defined in Section 8-102(a)(17) of the Code) with respect to such
     securities to a "securities account" (as defined in Section 8-501(a) of the
     Code) maintained by or on behalf of the recipient and (b) to issue a
     confirmation to the recipient with respect to such credit. In the case of
     Collateral to be delivered to the Collateral Agent, the securities
     intermediary shall be the Securities Intermediary and the securities
     account shall be the Collateral Account. In addition, any Transfer of
     Treasury Securities and Treasury Consideration hereunder shall be made in
     accordance with the TRADES Regulations and other applicable law.

                                   ARTICLE II

                         PLEDGE; CONTROL AND PERFECTION

          SECTION 2.1 The Pledge.

          (a) The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of the
Purchase Contract Agent and such Holders in:

          (i)  (A) the Debentures, TreasuryConsideration and Treasury
                Securities constituting a part of the Units, (B) any Treasury
                Securities delivered in exchange for any Debentures or Treasury
                Consideration, as applicable, in accordance with Section 4.1
                hereof, and (C) any Debentures or Treasury Consideration, as
                applicable, delivered in exchange for any Treasury Securities in
                accordance with Section 4.2 hereof, in each case that have been
                Transferred to or otherwise received by the Collateral Agent and
                not released by the Collateral Agent to such Holders under the
                provisions of this Agreement;

          (ii)  the Collateral Account and all securities, financial assets,
                security entitlements, cash and other property credited thereto
                and all Security Entitlements related thereto; and

          (iii) all Proceeds of the foregoing (all of the foregoing,
                collectively, the "Collateral").

          (b) Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Units, shall cause the

                                      -4-

<PAGE>

Debentures comprising a part of the Normal Units to be Transferred to the
Collateral Agent for the benefit of the Company.

     (c) The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debentures (or the Debentures that are delivered pursuant to
Section 6.2 hereof), Treasury Consideration or Treasury Securities subject to
the Pledge, excluding any Debentures, Treasury Consideration or Treasury
Securities released from the Pledge as provided in Sections 4.1 and 4.2 hereof,
respectively, are hereinafter referred to as "Pledged Debentures," "Pledged
Treasury Consideration" or the "Pledged Treasury Securities," respectively.
Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from
time to time shall have full beneficial ownership of the Collateral. For
purposes of perfecting the Pledge under applicable law, including, to the extent
applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and
in effect in any applicable jurisdiction, the Collateral Agent shall be the
agent of the Company as provided herein. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Debentures or any other securities held in physical
form in its name.

     (d) Except as may be required in order to release Debentures or Treasury
Consideration, as applicable, in connection with a Holder's election to convert
its investment from a Normal Unit to a Stripped Unit, or except as otherwise
required to release Debentures as specified herein, neither the Collateral
Agent, the Custodial Agent nor the Securities Intermediary shall relinquish
physical possession of any certificate evidencing a Debenture prior to the
termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Debentures evidenced thereby from the Pledge, the
Securities Intermediary shall use its best efforts to obtain physical possession
of a replacement certificate evidencing any Debentures remaining subject to the
Pledge hereunder registered to it or endorsed in blank within fifteen days of
the date it relinquished possession. The Securities Intermediary shall promptly
notify the Company and the Collateral Agent of the Securities Intermediary's
inability to obtain possession of any such replacement certificate as required
hereby.

     SECTION 2.2  Control and Perfection.

     (a) In connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver upon the written direction of the Company with
respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect to any thereof. In the event the Securities
Intermediary receives from the Holders or the Purchase Contract Agent
entitlement

                                      -5-

<PAGE>

orders which conflict with entitlement orders received from the Collateral
Agent, the Securities Intermediary shall follow the entitlement orders received
from the Collateral Agent. Such instructions and entitlement orders may, without
limitation, direct the Securities Intermediary to transfer, redeem, assign, or
otherwise deliver the Debentures, the Treasury Consideration, the Treasury
Securities, and any Security Entitlements with respect thereto or sell,
liquidate or dispose of such assets through a broker designated by the Company,
and to pay and deliver any income, proceeds or other funds derived therefrom to
the Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as agent of the
Company, to, upon written direction of the Company, itself issue instructions
and entitlement orders, and to otherwise take action, with respect to the
Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect thereto, pursuant to the terms and provisions hereof,
all without the necessity of obtaining the further consent of the Purchase
Contract Agent or any of the Holders. The Collateral Agent shall be the agent of
the Company and shall act as directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent shall issue
entitlement orders to the Securities Intermediary when and as directed in
writing by the Company.

         (b)   The Securities Intermediary hereby confirms and agrees that:

         (i)   all securities or other property underlying any financial assets
               credited to the Collateral Account shall be registered in the
               name of the Securities Intermediary, or its nominee, indorsed to
               the Securities Intermediary, or its nominee, or in blank or
               credited to another Collateral Account maintained in the name of
               the Securities Intermediary and in no case will any financial
               asset credited to the Collateral Account be registered in the
               name of the Purchase Contract Agent, the Collateral Agent, the
               Company or any Holder, payable to the order of, or specially
               indorsed to, the Purchase Contract Agent, the Collateral Agent,
               the Company or any Holder except to the extent the foregoing have
               been specially indorsed to the Securities Intermediary or in
               blank;

         (ii)  all property delivered to the Securities Intermediary pursuant to
               this Pledge Agreement (including, without limitation, any
               Debentures, the Treasury Consideration or Treasury Securities)
               will be promptly credited to the Collateral Account;

         (iii) the Collateral Account is an account to which financial assets
               are or may be credited, and the Securities Intermediary shall,
               subject to the terms of this Agreement, treat the Purchase
               Contract Agent as entitled to exercise the rights of any
               financial asset credited to the Collateral Account;

         (iv)  the Securities Intermediary has not entered into, and until the
               termination of this Agreement will not enter into, any agreement
               with any other person

                                      -6-

<PAGE>

              relating to the Collateral Account and/or any financial assets
              credited thereto pursuant to which it has agreed to comply with
              entitlement orders (as defined in Section 8-102(a)(8) of the Code)
              of such other person; and

         (v)  the Securities Intermediary has not entered into, and until the
              termination of this Agreement will not enter into, any agreement
              with the Company, the Collateral Agent or the Purchase Contract
              Agent purporting to limit or condition the obligation of the
              Securities Intermediary to comply with entitlement orders as set
              forth in this Section 2.2 hereof.

         (c)  The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.

         (d)  In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.

         (e)  The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent
or Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any Security Interest hereunder.

                                   ARTICLE III

                         PAYMENTS ON PLEDGED COLLATERAL

         SECTION 3.1 Payments.

         So long as the Purchase Contract Agent is the registered owner of the
Pledged Debentures or Pledged Treasury Consideration, it shall receive all
payments thereon. If the Pledged Debentures are reregistered, such that the
Collateral Agent becomes the registered holder, all payments of the principal
of, or interest on, the Pledged Debentures and all payments of the principal of,
or cash distributions on, any Pledged Treasury Consideration or Pledged Treasury
Securities, that are received by the Collateral Agent and that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:

                                      -7-

<PAGE>

         (i)   in the case of (A) quarterly cash distributions on Normal Units
               which include Pledged Debentures or Pledged Treasury
               Consideration and (B) any payments with respect to any Debentures
               or Treasury Consideration, as the case may be, that have been
               released from the Pledge pursuant to Section 4.3 hereof, to the
               Purchase Contract Agent, for the benefit of the relevant Holders
               of the Normal Units, to the account designated by the Purchase
               Contract Agent for such purpose (The Bank of New York; ABA 021
               000 018; BBK-Attn: Corporate Trust Agency / GLA 111-565; Account
               Name: Anthem, Inc.; Account No. 07 2645, unless and until advised
               otherwise by the Purchase Contract Agent), no later than 12:00
               p.m., New York City time, on the Business Day such payment is
               received by the Collateral Agent (provided that in the event such
               payment or payment instructions are received by the Collateral
               Agent on a day that is not a Business Day or after 9:00 a.m., New
               York City time, on a Business Day, then such payment shall be
               made no later than 9:30 a.m., New York City time, on the next
               succeeding Business Day);

         (ii)  in the case of any payments with respect to any Treasury
               Securities that have been released from the Pledge pursuant to
               Section 4.3 hereof, to the Holders of the Stripped Units to the
               accounts designated by the Purchase Contract Agent in writing for
               such purpose no later than 2:00 p.m., New York City time, on the
               Business Day such payment is received by the Collateral Agent
               (provided that in the event such payment or payment instructions
               are received by the Collateral Agent on a day that is not a
               Business Day or after 10:00 a.m., New York City time, on a
               Business Day, then such payment shall be made no later than 10:30
               a.m., New York City time, on the next succeeding Business Day);
               and

         (iii) in the case of payments in respect of any Pledged Debentures,
               Pledged Treasury Consideration or Pledged Treasury Securities, to
               be paid upon settlement of such Holder's obligations to purchase
               Common Stock under the Purchase Contract, to the Company on the
               Stock Purchase Date in accordance with the procedure set forth in
               Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the
               respective obligations of the Holders under the related Purchase
               Contracts.

         SECTION 3.2 Application of Payments.

         All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of principal on account of any
Debenture or Treasury Consideration, as applicable, that, at the time of such
payment, is a Pledged Debenture or Pledged Treasury Consideration, as the case
may be, or a Holder of a Stripped Unit shall receive any payments of principal
on account of any Treasury Securities that, at the time

                                      -8-

<PAGE>

of such payment, are Pledged Treasury Securities, the Purchase Contract Agent or
such Holder shall hold the same as trustee of an express trust for the benefit
of the Company (and promptly deliver the same over to the Company) for
application to the obligations of the Holders under the related Purchase
Contracts, and the Holders shall acquire no right, title or interest in any such
payments of principal so received.

                                   ARTICLE IV

          SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES

SECTION 4.1 Collateral Substitution and the Creation of Stripped Units.

         At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Normal Units shall have the right
to substitute Treasury Securities for the Pledged Debentures or Pledged Treasury
Consideration, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 20 Normal Units, or after a remarketing of the Debentures pursuant to the
Purchase Contract Agreement, in integral multiples of Normal Units such that
Treasury Securities to be deposited and the applicable Treasury Consideration to
be released are in integral multiples of $1,000, by (a) Transferring to the
Collateral Agent Treasury Securities having an aggregate principal amount equal
to the aggregate Stated Amount of such Normal Units and (b) delivering such
Normal Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the principal amount, the maturities
and the CUSIP numbers of the Treasury Securities Transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Debentures or Pledged Treasury
Consideration, as the case may be, related to such Normal Units, whereupon the
Purchase Contract Agent shall promptly give such instruction to the Collateral
Agent in the form provided in Exhibit A. Upon receipt of Treasury Securities
from a Holder of Normal Units and the related instruction from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Debentures or
Pledged Treasury Consideration, as the case may be, and shall promptly Transfer
such Pledged Debentures or Pledged Treasury Consideration, as the case may be,
free and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent. All items Transferred and/or substituted by any Holder
pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement
shall be Transferred and/or substituted free and clear of all liens, claims and
encumbrances.

         SECTION 4.2 Collateral Substitution and the Re-Creation of Normal
Units.

         At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Stripped Units shall have the
right to reestablish Normal Units (a) consisting of the Purchase Contracts and
Debentures in integral

                                      -9-

<PAGE>

multiples of 20 Normal Units, or (b) after a remarketing of the Debentures
pursuant to the Purchase Contract Agreement, consisting of the Purchase
Contracts and the appropriate Treasury Consideration (identified and calculated
by reference to the Treasury Consideration then comprising Normal Units) in
integral multiples of Stripped Units such that the Treasury Consideration to be
deposited and the Treasury Securities to be released are in integral multiples
of $1,000, by (x) Transferring to the Collateral Agent Debentures or the
appropriate Treasury Consideration, as the case may be, then comprising such
number of Normal Units as is equal to such Stripped Units and (y) delivering
such Stripped Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has transferred Debentures or Treasury Consideration to
the Collateral Agent pursuant to clause (a) above and requesting that the
Purchase Contract Agent instruct the Collateral Agent to release from the Pledge
the Pledged Treasury Securities related to such Stripped Units, whereupon the
Purchase Contract Agent shall give such instruction to the Collateral Agent in
the form provided in Exhibit A. Upon receipt of the Debentures or the
appropriate Treasury Consideration, as the case may be, from such Holder and the
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Treasury Securities and shall promptly Transfer such Treasury
Securities, free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.

         SECTION 4.3 Termination Event.

         (a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Debentures or Pledged Treasury
Consideration, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Normal Units and
the Stripped Units, respectively, free and clear of any lien, pledge or security
interest or other interest created in favor of the Collateral Agent hereby.

         (b) If such Termination Event shall result from the Company's becoming
a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason be unable to promptly effectuate the release and Transfer of all Pledged
Debentures, Pledged Treasury Consideration or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall

         (i) use its best efforts to obtain an opinion of a nationally
             recognized law firm reasonably acceptable to the Collateral Agent
             to the effect that, as a result of the Company's being the debtor
             in such a bankruptcy case, the Collateral Agent will not be
             prohibited from releasing or Transferring the Collateral as
             provided in this Section 4.3, and shall deliver such opinion to the
             Collateral Agent within ten days after the occurrence of such
             Termination Event, and if (y) the Purchase Contract Agent shall be
             unable

                                      -10-

<PAGE>

               to obtain such opinion within ten days after the occurrence of
               such Termination Event or (z) the Collateral Agent shall
               continue, after delivery of such opinion, to refuse to effectuate
               the release and Transfer of all Pledged Debentures, Pledged
               Treasury Consideration or Pledged Treasury Securities, as the
               case may be, as provided in this Section 4.3, then the Purchase
               Contract Agent shall within fifteen days after the occurrence of
               such Termination Event commence an action or proceeding in the
               court with jurisdiction of the Company's case under the
               Bankruptcy Code seeking an order requiring the Collateral Agent
               to effectuate the release and transfer of all Pledged Debentures,
               Pledged Treasury Consideration or Pledged Treasury Securities, as
               the case may be, as provided by this Section 4.3 or

          (ii) commence an action or proceeding like that described in
               subsection (i)(z) hereof within ten days after the occurrence of
               such Termination Event.

          SECTION 4.4  Early Settlement; Merger Early Settlement.

          Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement
or Merger Early Settlement of their respective obligations under the Purchase
Contracts forming a part of such Units in accordance with the terms of the
Purchase Contracts and the Purchase Contract Agreement (setting forth the number
of such Purchase Contracts as to which such Holders have elected to effect Early
Settlement or Merger Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts or Merger Early Settlement
Amounts, as the case may be, pursuant to the terms of the Purchase Contracts and
the Purchase Contract Agreement and that all conditions to such Early Settlement
or Merger Early Settlement, as the case may be, have been satisfied, then the
Collateral Agent shall release from the Pledge (a) Pledged Debentures or Pledged
Treasury Consideration, as the case may be, in the case of a Holder of Normal
Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped
Units, relating to such Purchase Contracts as to which such Holders have elected
to effect Early Settlement or Merger Early Settlement, and shall Transfer all
such Pledged Debentures, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge to the Collateral
Agent created hereby, to the Purchase Contract Agent for the benefit of the
Holders.

          SECTION 4.5  Remarketing; Application of Proceeds; Settlement.

          (a) Pursuant to the Purchase Contract Agreement, the Purchase Contract
Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, the Remarketing Agent and the Collateral Agent of the aggregate
principal amount of Debentures comprising part of Normal Units to be remarketed.
The Collateral Agent

                                      -11-

<PAGE>

shall, by 10:00 a.m., New York City time, on the Business Day immediately
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, without any instruction from Holders of Normal Units, deliver (i) the
Pledged Debentures to be remarketed to the Remarketing Agent for remarketing and
(ii) the remaining Pledged Debentures to the Purchase Contract Agent for
distribution to the Holders that have elected not to participate in the
remarketing in accordance with the Purchase Contract Agreement. The Remarketing
Agent will deliver the Agent-purchased Treasury Consideration (as defined in the
Purchase Contract Agreement) purchased from the proceeds of the remarketing to
the Purchase Contract Agent, which shall thereupon deliver such Agent-purchased
Treasury Consideration to the Collateral Agent. Upon receipt of the
Agent-purchased Treasury Consideration from the Purchase Contract Agent
following a successful remarketing, the Collateral Agent, for the benefit of the
Company, shall thereupon apply such Treasury Consideration to secure such
Holders' obligations under the Purchase Contracts. On the Stock Purchase Date,
the Collateral Agent shall apply that portion of the payments received in
respect of the Pledged Treasury Consideration equal to the aggregate Stated
Amount of the related Normal Units to satisfy in full the obligations of such
Holders of Normal Units to pay the Purchase Price under the related Purchase
Contracts. The remaining portion of such Proceeds, if any, shall be distributed
by the Collateral Agent to the Purchase Contract Agent for payment to such
Holders.

          (b) Within three Business Days following a Failed Remarketing, the
Debentures delivered to the Remarketing Agent and the Purchase Contract Agent
pursuant to Section 4.5(a) shall be returned to the Collateral Agent, together
with written notice from the Remarketing Agent of the Failed Remarketing. The
Collateral Agent, for the benefit of the Company, shall thereupon apply such
Debentures to secure the Normal Units Holders' obligations under the Purchase
Contracts. The Remarketing Agent may make one or more attempts to remarket the
Debentures in accordance with the procedures set forth in the Purchase Contract
Agreement and the Remarketing Agreement between the Remarketing Date and the
Stock Purchase Date, provided that the requirements of Section 5.4(b)(ii) of the
Purchase Contract Agreement have been met. If by 4:00 p.m., New York City time,
on the Business Day immediately preceding the Stock Purchase Date the
Remarketing Agent has failed to remarket the Debentures at 100.5% of the
Remarketing Value (as described in the Purchase Contract Agreement), the Last
Failed Remarketing shall be deemed to have occurred. In this case, the
Remarketing Agent shall advise the Collateral Agent in writing that it cannot
remarket the related Pledged Debentures of such Holders of Normal Units. The
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, deliver or dispose of the Pledged Debentures in accordance with
the Company's written instructions to satisfy in full, from any such disposition
or retention, such Holders' obligations to pay the Purchase Price for the Common
Stock; provided, that if upon the Last Failed Remarketing, the Collateral Agent
delivers or disposes of the Pledged Debentures in accordance with the written
instructions of the Company, any accrued and unpaid interest on such Debentures
will become payable by the Company to the Purchase Contract Agent for payment to
the

                                      -12-

<PAGE>

Holder of the Normal Units to which such Debentures relate in accordance
with the Purchase Contract Agreement.

          (c) In the event a Holder of Stripped Units has not made an Early
Settlement or Merger Early Settlement of the Purchase Contracts underlying its
Stripped Units, such Holder shall be deemed to have elected to pay for the
shares of Common Stock to be issued under such Purchase Contracts from the
payments received in respect of the related Pledged Treasury Securities. Without
receiving any instruction from any such Holder of Stripped Units, the Collateral
Agent shall apply such payments to the settlement of such Purchase Contracts on
the Stock Purchase Date pursuant to written instructions from the Purchase
Contract Agent. In the event the payments received in respect of the related
Pledged Treasury Securities are in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall distribute
such excess, when received, to the Purchase Contract Agent for the benefit of
the Holders.

          (d) Pursuant to the Remarketing Agreement, on or prior to the fourth
Business Day preceding the Remarketing Date or any Subsequent Remarketing Date,
but no earlier than the Payment Date immediately preceding the Remarketing Date
or the Subsequent Remarketing Date, holders of Separate Debentures may elect to
have their Separate Debentures remarketed by delivering their Separate
Debentures, together with a notice of such election, substantially in the form
of Exhibit C hereto, to the Custodial Agent. On the third Business Day prior to
the Remarketing Date and any Subsequent Remarketing Date, by 10:00 a.m. New York
City time, the Custodial Agent shall notify the Remarketing Agent of the
principal amount of such Separate Debentures to be remarketed. The Custodial
Agent will hold such Separate Debentures in an account separate from the
Collateral Account. A holder of Separate Debentures electing to have its
Separate Debentures remarketed will also have the right to withdraw such
election by written notice to the Custodial Agent, substantially in the form of
Exhibit D hereto, prior to the Business Day immediately preceding the
Remarketing Date and any Subsequent Remarketing Date, upon which notice the
Custodial Agent will return such Separate Debentures to such holder. On the
Business Day immediately preceding the Remarketing Date and any Subsequent
Remarketing Date, the Custodial Agent will deliver to the Remarketing Agent for
remarketing all Separate Debentures delivered to the Custodial Agent pursuant to
this Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to such
date. The portion of the proceeds from such remarketing equal to the amount
calculated in respect of such Separate Debentures as set forth in Section 5.4(b)
of the Purchase Contract Agreement will automatically be remitted by the
Remarketing Agent to the Custodial Agent for the benefit of the holders of such
Separate Debentures. In addition, after deducting as the remarketing fee an
amount not exceeding 25 basis points (.25%) of the total proceeds of such
remarketing, the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of such holders. If,
despite using its reasonable best efforts, the Remarketing Agent advises the
Custodial Agent in writing that there has been a Failed Remarketing, the
Remarketing Agent will promptly return such Debentures to the Custodial Agent
for

                                      -13-

<PAGE>

redelivery to such holders. The Custodial Agent shall be entitled to rely
without further inquiry on any written instruction received from a holder of
Separate Debentures and shall have no liability with respect thereto. For
purposes of this Section 4.5(d), a "holder" of a Separate Debenture shall mean
the Person in whose name such Separate Debenture is registered on the books of
the registrar for the Debentures.

                                   ARTICLE V

                           VOTING RIGHTS -- DEBENTURES

          SECTION 5.1  Exercise by Purchase Contract Agent.

          The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged
Debentures or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Debentures; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five Business Days' prior written notice of the
manner in which it intends to exercise, or its reasons for refraining from
exercising, any such right. Upon receipt of any notices and other communications
in respect of any Pledged Debentures, including notice of any meeting at which
holders of Debentures are entitled to vote or solicitation of consents, waivers
or proxies of holders of Debentures, the Collateral Agent shall use reasonable
efforts to send promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent such proxies and other instruments in respect of such
Pledged Debentures (in form and substance satisfactory to the Collateral Agent)
as are prepared by the Purchase Contract Agent with respect to the Pledged
Debentures.

                                   ARTICLE VI

                               RIGHTS AND REMEDIES

          SECTION 6.1  Rights and Remedies of the Collateral Agent.

          (a) In addition to the rights and remedies available at law or in
equity, after an event of default hereunder, the Collateral Agent shall have all
of the rights and remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code (or any successor thereto) as in effect in the
State of New York from time to time (the "Code") (whether or not the Code is in
effect in the jurisdiction where the rights and remedies are asserted) and the
TRADES Regulations and such additional rights and

                                      -14-

<PAGE>

remedies to which a secured party is entitled under the laws in effect in
any jurisdiction where any rights and remedies hereunder may be asserted.
Wherever reference is made in this Agreement to any section of the Code, such
reference shall be deemed to include a reference to any provision of the Code
which is a successor to, or amendment of, such section. Without limiting the
generality of the foregoing, such remedies may include, to the extent permitted
by applicable law, (i) retention of the Pledged Debentures or other Collateral
in full satisfaction of the Holders' obligations under the Purchase Contracts or
(ii) sale of the Pledged Debentures or other Collateral in one or more public or
private sales at the written direction of the Company.

          (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of any Pledged Treasury Consideration
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Units of which such Pledged Treasury
Consideration or Pledged Treasury Securities, as applicable, is a part under the
related Purchase Contracts, the inability to make such payments shall constitute
an event of default hereunder and the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Securities or such Pledged
Treasury Consideration, as applicable, and such obligations of such Holder, any
and all of the rights and remedies available to a secured party under the Code
and the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.

          (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of,
or interest on, the Pledged Debentures, or (ii) the principal amount of the
Pledged Treasury Consideration or Pledged Treasury Securities, subject, in each
case, to the provisions of Article III, and as otherwise granted herein.

          (d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Units, agrees that, from time to time, upon the written
request of the Company or the Collateral Agent (acting upon the written request
of the Company), the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as may be
necessary, including as the Company or the Collateral Agent (acting upon the
written request of the Company) may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder. The Purchase Contract Agent shall have no
liability to any Holder for executing any documents or taking any such acts
requested by the Company or the Collateral Agent (acting upon the written
request of the Company) hereunder, except for liability for its own negligent
act, its own negligent failure to act, its bad faith or its own willful
misconduct.

                                      -15-

<PAGE>

         SECTION 6.2 Substitutions.

         Whenever a Holder has the right to substitute Treasury Securities,
Debentures or Treasury Consideration, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.

                                   ARTICLE VII

                    REPRESENTATIONS AND WARRANTIES; COVENANTS

         SECTION 7.1 Representations and Warranties of the Holders.

         The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:

         (a) such Holder has the power to grant a security interest in and lien
on the Collateral;

         (b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1;

         (c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2); and

         (d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Section 2.1 or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.

                                      -16-

<PAGE>

         SECTION 7.2 Representations and Warranties of the Collateral Agent,
Custodial Agent and Securities Intermediary The Collateral Agent, Custodial
Agent and Securities Intermediary (each an "Agent") hereby represents and
warrants:

         (a) The Chase Manhattan Bank is a banking corporation duly incorporated
and validly existing under the laws of the State of New York;

         (b) The execution, delivery and performance by the Collateral Agent,
the Custodial Agent and the Securities Intermediary of this Agreement have each
been duly authorized by all necessary corporate action on the part of each such
Agent; this Agreement has been duly executed and delivered by the Collateral
Agent, the Custodial Agent and the Securities Intermediary and constitutes a
valid and legally binding obligation of each of the Agents, enforceable against
such Agents in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;

         (c) The execution, delivery and performance by the Collateral Agent,
the Custodial Agent and the Securities Intermediary of this Agreement do not
violate or constitute a breach of the Articles of Incorporation or By-Laws of
any of such Agents; and

         (d) No consent of any federal or state banking authority is required
for the execution, delivery or performance by the Agents of their respective
obligations under this Agreement.

         SECTION 7.3 Covenants.

         The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:

         (a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and

         (b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Units.

                                      -17-

<PAGE>

                                  ARTICLE VIII

                              THE COLLATERAL AGENT

         SECTION 8.1 Appointment, Powers and Immunities.

         (a)   The Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary:

         (i)   shall have no duties or responsibilities except those expressly
               set forth in this Agreement and no implied covenants or
               obligations shall be inferred from this Agreement against any of
               them, nor shall any of them be bound by the provisions of any
               agreement by any party hereto beyond the specific terms hereof;

         (ii)  shall not be responsible for any recitals contained in this
               Agreement, or in any certificate or other document referred to or
               provided for in, or received by it under, this Agreement, the
               Units or the Purchase Contract Agreement, or for the value,
               validity, effectiveness, genuineness, enforceability or
               sufficiency of this Agreement (other than as against the
               Collateral Agent), the Units or the Purchase Contract Agreement
               or any other document referred to or provided for herein or
               therein or for any failure by the Company or any other Person
               (except the Collateral Agent, the Custodial Agent or the
               Securities Intermediary, as the case may be) to perform any of
               its obligations hereunder or thereunder or for the perfection,
               priority or, except as expressly required hereby, existence,
               validity, perfection or maintenance of any security interest
               created hereunder;

         (iii) shall not be required to initiate or conduct any litigation or
               collection proceedings hereunder (except in the case of the
               Collateral Agent, pursuant to directions furnished under Section
               8.2, subject to Section 8.6);

         (iv)  shall not be responsible for any action taken or omitted to be
               taken by it hereunder or under any other document or instrument
               referred to or provided for herein or in connection herewith or
               therewith, except for its own gross negligence, bad faith or
               willful misconduct; and

         (v)   shall not be required to advise any party as to selling or
               retaining, or taking or refraining from taking any action with
               respect to, the Units or other property deposited hereunder.

Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

                                      -18-

<PAGE>

         (b) No provision of this Agreement shall require the Collateral Agent,
the Custodial Agent or the Securities Intermediary to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder. In no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any amount in excess of the
value of the Collateral or for any special, indirect, individual, consequential
damages or lost profits or loss of business, arising in connection with this
Agreement. Notwithstanding the foregoing, the Collateral Agent, the Custodial
Agent, the Purchase Contract Agent and Securities Intermediary, each in its
individual capacity, hereby waive any right of setoff, bankers lien, liens or
perfection rights as securities intermediary or any counterclaim with respect to
any of the Collateral.

         (c) The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral
Agent, Custodial Agent and Securities Intermediary shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; wars; civil or military disturbances; sabotage;
epidemics; riots; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications service; accidents; labor disputes;
acts of civil or military authority; governmental actions; or inability to
obtain labor, material, equipment or transportation.

         SECTION 8.2 Instructions of the Company.

         The Collateral Agent shall not be under any duty or obligation to take
action to effect collection of any amount due on the Pledged Debentures, Pledged
Treasury Consideration or Pledged Treasury Securities in the Collateral Account
whether or not the Collateral upon which such amount is payable is in default,
or if payment is refused after due demand or presentation, unless and until (i)
it shall be directed to take such action by written instructions and (ii) it
shall be assured to its satisfaction of reimbursement of its reasonable costs
and expenses in connection with any such action.

         The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each
receive indemnity reasonably satisfactory to it as provided herein. Nothing in
this Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any

                                      -19-

<PAGE>

action or omit to take any action which it deems proper and which is not
inconsistent with such direction.

         SECTION 8.3 Reliance.

         Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and statements of legal counsel and
other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. It is understood that the
Collateral Agent, the Custodial Agent or the Securities Intermediary and the
beneficiary's bank in any funds transfer may rely solely upon any account
numbers or similar identifying number provided by the other party hereto to
identify (i) the beneficiary, (ii) the beneficiary bank, or (iii) an
intermediary bank. The Collateral Agent, the Custodial Agent or the Securities
Intermediary may apply any of the funds for any payment order it executes using
any such identifying number, even where its use may result in a person other
than the beneficiary being paid, or the transfer of funds to a bank other than
the beneficiary's bank, or an intermediary bank designated. As to any matters
not expressly provided for by this Agreement, the Collateral Agent, the
Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.

         SECTION 8.4 Rights in Other Capacities.

         The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Purchase Contract Agent, any Holder of Units and any holder of Separate
Debentures (and any of their respective subsidiaries or affiliates) as if it
were not acting as the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent
and the Securities Intermediary and their affiliates may accept fees and other
consideration from the Purchase Contract Agent, any Holder of Units or any
holder of Separate Debentures without having to account for the same to the
Company; provided that each of the Securities Intermediary, the Custodial Agent
and the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself (and waives any
right of set-off or banker's lien with respect to) and shall take no affirmative
action to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral and
the Collateral shall not be commingled with any other assets of any such Person.

                                      -20-

<PAGE>

          SECTION 8.5 Non-Reliance on Collateral Agent.

          None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the performance
or observance by the Purchase Contract Agent or any Holder of Units of this
Agreement, the Purchase Contract Agreement, the Units or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Units. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company or the Remarketing Agent with any
credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent, any Holder of Units or any holder of
Separate Debentures (or any of their respective subsidiaries or affiliates) that
may come into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.

          SECTION 8.6 Compensation and Indemnity.

          The Company agrees:

          (a) to pay each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by each
of them hereunder and

          (b) to indemnify the Collateral Agent, the Custodial Agent and the
Securities Intermediary (which for purposes of this paragraph, in each case,
shall include its directors, officers, employees and agents) for, and to hold
each of them harmless from and against, any loss, liability or reasonable
out-of-pocket expense incurred without gross negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each promptly notify the Company of any third
party claim which may give rise to the indemnity hereunder and give the Company
the opportunity to participate in the defense of such claim with counsel
reasonably satisfactory to the indemnified party (provided, however, that if
                                                  --------  -------
there shall exist a conflict of interest between the Company on the one hand,
and the Collateral Agent, the Custodial Agent or the Securities Intermediary on
the other hand, in the conduct of any such defense which makes it impracticable
for a single counsel to represent the Company and the Collateral Agent, the
Custodial Agent or the Securities Intermediary, then the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, shall have
the right to select separate counsel to participate in the defense of such
claim), and no such claim shall be settled without the written consent of the
Company, which consent shall not be unreasonably withheld.

                                      -21-

<PAGE>

          SECTION 8.7 Failure to Act.

          In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent, at
its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent, Custodial Agent nor
the Securities Intermediary shall be or become liable in any way to any of the
parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent, Custodial Agent and the
Securities Intermediary shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, or
(ii) the Collateral Agent, the Custodial Agent or the Securities Intermediary,
as the case may be, shall have received security or an indemnity reasonably
satisfactory to the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, sufficient to save the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, harmless
from and against any and all loss, liability or reasonable out-of-pocket expense
which the Collateral Agent, Custodial Agent or the Securities Intermediary, as
the case may be, may incur by reason of its acting without bad faith, willful
misconduct or gross negligence. The Collateral Agent, Custodial Agent or the
Securities Intermediary may in addition elect to commence an interpleader action
or seek other judicial relief or orders as the Collateral Agent, Custodial Agent
or the Securities Intermediary, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent, Custodial Agent nor the Securities Intermediary shall be
required to take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it or any of its
officers, employees or directors to liability.

          SECTION 8.8 Resignation.

          Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as provided below, (a) the
Collateral Agent, Custodial Agent and the Securities Intermediary may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Units, (b) the Collateral Agent,
Custodial Agent and the Securities Intermediary may be removed at any time by
the Company and (c) if the Collateral Agent, Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent, Custodial Agent or the Securities Intermediary
may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall

                                      -22-

<PAGE>

promptly notify the Company of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or such removal, then the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, may at the Company's expense petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. Upon removal of the
Collateral Agent, Custodial Agent or Securities Intermediary, no fees paid to
the retiring Collateral Agent, Custodial Agent or Securities Intermediary
pursuant to Section 8.6(a) of this Agreement shall be refunded. Each of the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be a
bank which has an office in New York, New York with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, hereunder by a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, such successor shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, and the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall take all appropriate action to transfer
any money and property held by it hereunder (including the Collateral) to such
successor. The retiring Collateral Agent, Custodial Agent or Securities
Intermediary shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder. After any retiring Collateral Agent's, Custodial Agent's or
Securities Intermediary's resignation hereunder as Collateral Agent, Custodial
Agent or Securities Intermediary, the provisions of this Section 8.8 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Collateral Agent, Custodial Agent or
Securities Intermediary. Any resignation or removal of the Collateral Agent
hereunder shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities Intermediary
hereunder.

          Any corporation into which the Collateral Agent, the Custodial Agent
or the Securities Intermediary, in its individual capacity, may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent in
its individual capacity shall be a party, or any corporation to which
substantially all the corporate trust business of the Collateral Agent in its
individual capacity may be transferred, shall be the Collateral Agent, the
Custodial Agent, or the Securities Intermediary, as the case may be,
respectively, under this Agreement without further act.

                                      -23-

<PAGE>

          SECTION 8.9 Right to Appoint Agent or Advisor.

          The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
appointment of agents (other than legal counsel) pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.

          SECTION 8.10 Survival.

          The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.

          SECTION 8.11 Exculpation.

          Anything in this Agreement to the contrary notwithstanding, in no
event shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to negligence, bad faith or
willful misconduct on the part of the Collateral Agent, the Custodial Agent or
the Securities Intermediary.

                                   ARTICLE IX

                                    AMENDMENT

          SECTION 9.1 Amendment Without Consent of Holders.

          Without the consent of any Holders or the holders of any Separate
Debentures, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:

          (i)   to evidence the succession of another Person to the Company, and
                the assumption by any such successor of the covenants of the
                Company; or

          (ii)  to add to the covenants of the Company for the benefit of the
                Holders, or to surrender any right or power herein conferred
                upon the Company so

                                      -24-

<PAGE>

                long as such covenants or such surrender do not adversely affect
                the validity, perfection or priority of the security interests
                granted or created hereunder; or

          (iii) to evidence and provide for the acceptance of appointment
                hereunder by a successor Collateral Agent, Securities
                Intermediary or Purchase Contract Agent; or

          (iv)  to cure any ambiguity, to correct or supplement any provisions
                herein which may be inconsistent with any other such provisions
                herein, or to make any other provisions with respect to such
                matters or questions arising under this Agreement, provided such
                action shall not adversely affect the interests of the Holders.

          SECTION 9.2 Amendment with Consent of Holders.

          With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, when duly authorized, the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the Units; provided,
however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Unit adversely affected thereby,

          (i)   change the amount or type of Collateral underlying a Unit
                (except for the rights of holders of Normal Units to substitute
                the Treasury Securities for the Pledged Debentures or the
                Pledged Treasury Consideration, as the case may be, or the
                rights of Holders of Stripped Units to substitute Debentures or
                the appropriate Treasury Consideration, as applicable, for the
                Pledged Treasury Securities), impair the right of the Holder of
                any Unit to receive distributions on the underlying Collateral
                or otherwise adversely affect the Holder's rights in or to such
                Collateral; or

          (ii)  otherwise effect any action that would require the consent of
                the Holder of each Outstanding Unit affected thereby pursuant to
                the Purchase Contract Agreement if such action were effected by
                an agreement supplemental thereto; or

          (iii) reduce the percentage of Purchase Contracts the consent of whose
                Holders is required for any such amendment.

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

                                      -25-

<PAGE>

     SECTION 9.3  Execution of Amendments.

     In executing any amendment permitted by this Section, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent
shall receive and (subject to Section 6.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied and, in the case of an
amendment pursuant to Section 9.1, that such amendment does not adversely affect
the validity, perfection or priority of the security interests granted or
created hereunder.

     SECTION 9.4  Effect of Amendments.

     Upon the execution of any amendment under this Article IX, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.

     SECTION 9.5  Reference to Amendments.

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent as to any matter provided for in
such amendment. If the Company shall so determine, new Certificates so modified
as to conform, in the opinion of the Purchase Contract Agent and the Company, to
any such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Purchase
Contract Agent in accordance with the Purchase Contract Agreement in exchange
for outstanding Certificates.

                                    ARTICLE X

                                  MISCELLANEOUS

     SECTION 10.1 No Waiver.

     No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by any party hereto or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.

                                      -26-

<PAGE>

     SECTION 10.2 GOVERNING LAW.

     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above choice
of law is expressly agreed to by the Securities Intermediary, the Collateral
Agent, the Custodial Agent and the Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, in connection with the
establishment and maintenance of the Collateral Account, which law, for purposes
of the Code, shall be deemed to be the law governing all Security Entitlements
related thereto. In addition, such parties agree that, for purposes of the Code,
New York shall be the Securities Intermediary's jurisdiction. The Company, the
Collateral Agent and the Holders from time to time of the Units, acting through
the Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in the Borough of
Manhattan in New York City for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby. The
Company, the Collateral Agent and the Holders from time to time of the Units,
acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

     SECTION 10.3 Notices.

     Unless otherwise stated herein, all notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, upon receipt, in each case given or addressed
as aforesaid.

     SECTION 10.4 Successors and Assigns.

     This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Units, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.

                                      -27-

<PAGE>

     SECTION 10.5 Counterparts.

     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.

     SECTION 10.6 Severability.

     If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     SECTION 10.7 Expenses, Etc.

     The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:

     (a) all reasonable out-of-pocket costs and all reasonable expenses of the
Collateral Agent, the Custodial Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent, the Custodial Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;

     (b) all reasonable costs and expenses of the Collateral Agent (which for
purposes of this paragraph shall include its directors, officers, employees and
agents) (including, without limitation, reasonable fees and expenses of counsel)
in connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Units to satisfy its obligations under the
Purchase Contracts forming a part of the Units and (ii) the enforcement of this
Section 10.7; and

     (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.

     SECTION 10.8 Security Interest Absolute.

     All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:

                                      -28-

<PAGE>

     (a) any lack of validity or enforceability of any provision of the Purchase
Contracts or the Units or any other agreement or instrument relating thereto;

     (b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Units under the related Purchase Contracts, or any other amendment or
waiver of any term of, or any consent to any departure from any requirement of,
the Purchase Contract Agreement or any Purchase Contract or any other agreement
or instrument relating thereto; or

     (c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.

     SECTION 10.9 Waiver of Jury Trial.

     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                      -29-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                               ANTHEM, INC.

                               By: /s/  Larry C. Glasscock
                                  ----------------------------------------------
                                  Name: Larry C. Glasscock
                                  Title: President and Chief Executive Officer

                               Address for Notices:

                               Anthem, Inc.
                               120 Monument Circle
                               Indianapolis, Indiana 46204
                               Attention: David R. Frick
                               Telecopy: (317) 488-6891
                               Telephone: (317) 488-6252

                               THE BANK OF NEW YORK, as
                               Purchase Contract Agent and as
                               attorney-in-fact of the Holders
                               from time to time of the Units

                               By:  /s/  Robert A. Massimillo
                                  ----------------------------------------------
                                  Name: Robert A. Massimillo
                                  Title: Vice President

                               Address for Notices:

                               The Bank of New York
                               5 Penn Plaza, 13th Floor
                               New York, New York  10001
                               Attention: Corporate Trust Administration
                               Telecopy: (212) 896-7298
                               Telephone: (212) 896-7223

                                      -30-

<PAGE>

                               THE CHASE MANHATTAN BANK, as Collateral Agent,
                               Custodial Agent and Securities Intermediary

                               By:  /s/  Constantin Vulpescu
                                  ----------------------------------------------
                                  Name: Constantin Vulpescu
                                  Title: Assistant Vice President

                               Address for Notices:

                               The Chase Manhattan Bank
                               Clearance & Collateral Management
                               450 West 33rd Street, 15th Floor
                               New York, New York 10001
                               Attention: Constantin Vulpescu
                               Telecopy: (212) 946-3638
                               Telephone: (212) 946-3213

                                      -31-

<PAGE>

                                    EXHIBIT A

                       INSTRUCTION FROM PURCHASE CONTRACT
                            AGENT TO COLLATERAL AGENT

The Chase Manhattan Bank
Clearance & Collateral Management
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Constantin Vulpescu

            Re: Equity Security Units of Anthem, Inc. (the "Company")

                _________________________________________________

         We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of November 2, 2001, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$_____
aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______
aggregate principal amount of Debentures or $_____ aggregate principal amount of
Treasury Consideration (CUSIP No. _____)] in exchange for the related [Pledged
Debentures or Pledged Treasury Consideration] [Pledged Treasury Securities] held
by you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Debentures or the
Treasury Consideration] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Debentures or
Pledged Treasury Consideration], to release the [Debentures or the Treasury
Consideration] [Treasury Securities] related to such [Normal Units] [Stripped
Units] to us in accordance with the Holder's instructions. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

Date: _____________________

                                            By: ______________________
                                                Name:
                                                Title:

                                      A-1

<PAGE>

Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or Treasury Consideration] for the [Pledged
Debentures or the Pledged Treasury Consideration] [Pledged Treasury Securities]:


Name:                                      Social Security or other Taxpayer
                                           Identification Number, if any:

Address:

                                      A-2

<PAGE>

                                    EXHIBIT B

                     INSTRUCTION TO PURCHASE CONTRACT AGENT


The Bank of New York
5 Penn Plaza, 13th Floor
New York, New York  10001
Attention: Corporate Trust Administration

            Re: Equity Security Units of Anthem, Inc. (the "Company")
                -----------------------------------------------------

         The undersigned Holder hereby notifies you that it has delivered to The
Chase Manhattan Bank, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities (CUSIP No. _____)] [$_______ aggregate principal amount
of Debentures or $_____ principal amount of Treasury Consideration (CUSIP No.
_____)] in exchange for the related [Pledged Debentures or Pledged Treasury
Consideration] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section 4.1 of the Pledge Agreement, dated as of November 2,
2001 (the "Pledge Agreement"), between you, the Company and the Collateral
Agent. The undersigned Holder hereby instructs you to instruct the Collateral
Agent to release to you on behalf of the undersigned Holder the [Pledged
Debentures or the Pledged Treasury Consideration] [Pledged Treasury Securities]
related to such [Normal Units] [Stripped Units]. Capitalized terms used herein
but not defined shall have the meaning set forth in the Pledge Agreement.

Date: ___________________            Signature:_________________________________

                                    Signature Guarantee: _______________________


Please print name and address of Registered Holder:

Name:                                        Social Security or other Taxpayer
                                             Identification Number, if any:

Address:

                                      B-1

<PAGE>

                                    EXHIBIT C

              INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING


The Chase Manhattan Bank
Clearance & Collateral Management
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Constantin Vulpescu

                 Re: Debentures of Anthem, Inc. (the "Company")
                     ------------------------------------------


         The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of November 2, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Normal Units and Stripped Units from time to
time, that the undersigned elects to deliver on the fourth Business Day
immediately preceding the Remarketing Date or any Subsequent Remarketing Date
$__________ aggregate principal amount of Separate Debentures for delivery to
the Remarketing Agent for remarketing pursuant to Section 4.5(d) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Debentures tendered hereby.

         The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of a Failed Remarketing, upon receipt of the Debentures tendered herewith
from the Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."

         With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Debentures tendered hereby and that the undersigned is the record
owner of any Debentures tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Debentures
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms

                                      C-1

<PAGE>

and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.

Date: _______________
                                            Signature:__________________________

                                            Signature Guarantee:


Name:     ________________________________
          (Please Print)

Address:  ________________________________
          (Please Print)

Country:

Zip Code:

Telecopy (include country code if outside U.S.):

Telephone (include country code if outside U.S.):

(Tax Identification or Social Security Number):


A.  PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

Name(s):  ________________________________
          (Please Print)
Address:  ________________________________
          (Please Print)

Zip Code:

Country:

Telecopy (include country code if outside U.S.):

Telephone (include country code if outside U.S.):

(Tax Identification or Social Security Number):

                                      C-2

<PAGE>

B.  DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.

Name(s):   ________________________________
           (Please Print)

Address:   ________________________________
           (Please Print)
Zip Code:

Country:

Telecopy (include country code if outside U.S.):

Telephone (include country code if outside U.S.):

(Tax Identification or Social Security Number):


In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party:                                  DTC Account Number:

                                      C-3

<PAGE>

                                    EXHIBIT D

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING


The Chase Manhattan Bank
Clearance & Collateral Management
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Constantin Vulpescu

                 Re: Debentures of Anthem, Inc. (the "Company")
                     ------------------------------------------

         The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of November 2, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Normal Units and Stripped Units from time to
time, that the undersigned elects to withdraw the $_____ aggregate principal
amount of Debentures delivered to the Custodial Agent on ___________, 2004 for
remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The undersigned
hereby instructs you to return such Debentures to the undersigned in accordance
with the undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.5(d) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.

Date: _______________
                                            Signature:__________________________

                                            Signature Guarantee:

Name(s):   ________________________________
           (Please Print)
Address:   ________________________________
           (Please Print)
Zip Code:

Country:

Telecopy (include country code if outside U.S.):

Telephone (include country code if outside U.S.):

(Tax Identification or Social Security Number):

                                      D-1

<PAGE>

A.  DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.

Name(s):  ________________________________
          (Please Print)

Address:  ________________________________
          (Please Print)
Zip Code:

Country:

Telecopy (include country code if outside U.S.):

Telephone (include country code if outside U.S.):

(Tax Identification or Social Security Number):


In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party:                                  DTC Account Number:

                                       D-2