<PAGE>   1



                                                                EXHIBIT 4.10


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

                                  $115,000,000
                     PENINSULA PORTS AUTHORITY OF VIRGINIA
                     PORT FACILITY REFUNDING REVENUE BONDS
                             (ZEIGLER COAL PROJECT)
                                 SERIES 1997

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









                                TRUST INDENTURE

                                    between


                     PENINSULA PORTS AUTHORITY OF VIRGINIA



                                   As Issuer



                                      and

                                 PNC BANK, N.A.


                                   As Trustee





<PAGE>   2







                               TABLE OF CONTENTS


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                                  ARTICLE I

                                 DEFINITIONS
Definitions.............................................................................. 3

                                  ARTICLE II

                                  THE BONDS


Section 2.01.  Issuance of Bonds........................................................ 13
Section 2.02.  Form and Denominations of Bonds; Bonds as Special,
               Limited Obligation of Issuer............................................. 13
Section 2.03.  Execution................................................................ 13
Section 2.04.  Authentication........................................................... 14
Section 2.05.  Registration, Transfer and Exchange...................................... 14
Section 2.06.  Mutilated, Destroyed, Lost or Stolen Bonds............................... 14
Section 2.07.  Payments of Principal, Redemption Price and Interest;
               Persons Entitled Thereto................................................. 15
Section 2.08.  Temporary Bonds.......................................................... 16
Section 2.09.  Cancellation and Disposition of Surrendered Bonds........................ 17
Section 2.10.  Acts of Registered Owners; Evidence of Ownership......................... 17
Section 2.11.  Book Entry System........................................................ 17
Section 2.12.  Payments to Cede & Co.; Payments to Beneficial Owners.................... 18


                                   ARTICLE III

                            INTEREST RATES ON BONDS

Section 3.01.  Interest Rate............................................................ 18
Section 3.02.  Determination of Interest Rates.......................................... 19
Section 3.03.  Conversions Between Rate Periods......................................... 22


                                ARTICLE IV

                        TENDER AND PURCHASE OF BONDS

Section 4.01.  Optional Tenders for Purchase............................................ 23
Section 4.02.  Mandatory Tenders for Purchase........................................... 24
Section 4.03.  Remarketing and Purchase................................................. 25
Section 4.04.  Inadequate Funds for Tenders............................................. 28
Section 4.05.  Tenders by Investment Companies.......................................... 28
Section 4.06.  Bond Purchase Fund....................................................... 28


                              ARTICLE V

                        DEPOSIT OF BOND PROCEEDS

Section 5.01.  Deposit of Proceeds of Bonds............................................. 29
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                                 ARTICLE VI

                         DEBT SERVICE FUND AND REBATE FUND

Section 6.01.   Establishment of Certain Funds and Accounts.....................................30
Section 6.02.   Debt Service Fund...............................................................30
Section 6.03.   Return of Monies from Non-Delivery of Bonds.....................................31
Section 6.04.   Rebate Fund; Covenants Regarding Rebate.........................................31
Section 6.05.   Intentionally Omitted...........................................................33
Section 6.06.   Moneys to be Held for All Registered Owners, With Certain Exceptions............33
Section 6.07.   Additional Accounts and Subaccounts.............................................33

                                   ARTICLE VII

                                LETTER OF CREDIT

Section 7.01.   Extension or Replacement in Anticipation of Expiration..........................33
Section 7.02.   Other Replacement...............................................................34
Section 7.03.   Notice to Holders...............................................................35
Section 7.04.   Reduction.......................................................................35
Section 7.05.   Other Credit Enhancement; No Credit Enhancement.................................35

                                   ARTICLE VIII

                                   INVESTMENTS

Section 8.01.   Investment of Funds.............................................................35
Section 8.02.   Covenants Regarding Tax Exemption...............................................36

                                   ARTICLE IX

                                REDEMPTION OF BONDS

Section 9.01.   Bonds Subject to Redemption.....................................................38
Section 9.02.   Selection of Bonds for Redemption...............................................40
Section 9.03.   Notice of Redemption............................................................40
Section 9.04.   Effect of Redemption............................................................42
Section 9.05.   Optional Redemption only at Direction of Company................................42

                                    ARTICLE X

                                COVENANTS OF ISSUER

Section 10.01.  Payment of Principal and Interest on Bonds......................................42
Section 10.02.  Issuer to Use Best Efforts to Require Company to Make Payments..................42
Section 10.03.  Take Further Action.............................................................42
Section 10.04.  No Disposition of Pledged Revenues..............................................43
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Section 10.05.  Faithful Performance; Due Authorization.........................................43

                                ARTICLE XI

                        EVENTS OF DEFAULT AND REMEDIES

Section 11.01.  Events of Default Defined.......................................................43
Section 11.02.  Acceleration and Annulment Thereof..............................................44
Section 11.03.  Legal Proceedings by Trustee....................................................45
Section 11.04.  Discontinuance of Proceedings by Trustee........................................45
Section 11.05.  Registered Owners May Direct Proceedings........................................45
Section 11.06.  Limitations on Actions by Registered Owners.....................................46
Section 11.07.  Trustee May Enforce Rights Without Possession of Bonds..........................46
Section 11.08.  Remedies Not Exclusive..........................................................46
Section 11.09.  Delays and Omissions Not to Impair Rights.......................................46
Section 11.10.  Application of Moneys in Event of Default.......................................46
Section 11.11.  Trustee's Right to Receiver.....................................................47
Section 11.12.  Trustee and Registered Owners Entitled to All Remedies..........................47
Section 11.13.  Waiver of Past Defaults.........................................................47

                                    ARTICLE XII

                                   THE TRUSTEE

Section 12.01.  Certain Duties and Responsibilities of Trustee..................................47
Section 12.02.  Notice if Default Occurs or Notice of Taxability Occurs.........................49
Section 12.03.  Certain Rights of Trustee.......................................................49
Section 12.04.  Not Responsible for Recitals or Issuance of Bonds, etc..........................51
Section 12.05.  May Hold Bonds..................................................................51
Section 12.06.  Money Held in Trust.............................................................52
Section 12.07.  Corporate Trustee Required; Eligibility.........................................52
Section 12.08.  Resignation and Removal of Trustee; Appointment of Successor....................52
Section 12.09.  Acceptance of Appointment by Successor Trustee..................................53
Section 12.10.  Merger, Conversion, Consolidation or Succession to Business.....................53
Section 12.11.  Fees, Charges and Expenses of Trustee...........................................54
Section 12.12.  No Obligation to Review Reports.................................................54

                              ARTICLE XIII

                            THE PAYING AGENT

Section 13.01.  The Paying Agent................................................................54
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                                       ARTICLE XIV

                                 THE REMARKETING AGENT
Section 14.01.  The Remarketing Agent...........................................................54
Section 14.02.  Qualifications of Remarketing Agent.............................................55

                                       ARTICLE XV

                                AMENDMENTS AND SUPPLEMENTS

Section 15.01.  Amendments and Supplements Without Registered Owners' Consent...................55
Section 15.02.  Amendments With Registered Owners' Consent......................................56
Section 15.03.  Amendments to Agreement.........................................................56
Section 15.04.  Amendment of Letter of Credit...................................................57
Section 15.05.  Other Matters Relating to Amendments and Supplements............................57
Section 15.06.  Consent of Bank.................................................................57

                                        ARTICLE XVI

                                        DEFEASANCE

Section 16.01.  Defeasance......................................................................57
Section 16.02.  Deposit of Funds for Payment of Bonds...........................................58

                                        ARTICLE XVII

                                 MISCELLANEOUS PROVISIONS

Section 17.01.  Limitations on Recourse; Immunity of Certain Persons............................59
Section 17.02.  No Rights Conferred on Others...................................................59
Section 17.03.  Illegal, etc. Provisions Disregarded............................................59
Section 17.04.  Substitute Publication of Notice................................................60
Section 17.05.  Mailed Notice...................................................................60
Section 17.06.  Governing Law...................................................................61
Section 17.07.  Successors and Assigns..........................................................61
Section 17.08.  Action by Company...............................................................61
Section 17.09.  Headings and Subheadings for Convenience Only...................................61
Section 17.10.  Counterparts....................................................................61

                Execution.......................................................................62


EXHIBIT A.......................................................................................A-1
EXHIBIT B.......................................................................................B-1
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                                TRUST INDENTURE


     THIS TRUST INDENTURE is entered into as of August 1, 1997, by and between
the PENINSULA PORTS AUTHORITY OF VIRGINIA, a public body corporate and a
political subdivision of the Commonwealth of Virginia  (the "Issuer"), and PNC
BANK, N.A., a national banking association, having a principal corporate trust
office in Pittsburgh, Pennsylvania, and being qualified to accept and
administer the trusts hereby created (the "Trustee").

                             W I T N E S S E T H :

     WHEREAS, Chapter 46 of the Acts of Assembly of 1952 of the Commonwealth of
Virginia, as amended  (the "Act"), authorizes the Issuer to issue revenue bonds
and refunding revenue bonds;

     WHEREAS, the Issuer has previously issued its revenue bonds (in 1981) and
its refunding revenue bonds (in 1982 and 1987) to assist Massey Coal Terminal
Corporation ("Massey") and its successor Shell Coal Terminal Company ("Shell"),
in the financing and refinancing of the Plant (hereinafter defined);

     WHEREAS, a Financing Agreement, dated as of August 1, 1997 (the
"Agreement"), relating to the Bonds (hereinafter defined) and the refinancing
of the Plant has been executed between the Issuer and Zeigler Coal Holding
Company, a corporation organized and existing under and by virtue of the laws
of the State of Delaware, and the successor to Massey and Shell (the
"Company");

     WHEREAS, the Issuer duly adopted resolutions at public meetings duly
called and held on July 16, 1997 and August 14, 1997, at which meetings a
quorum was present and acting throughout  (together, including any amendment or
supplement to such resolutions as authorized therein, the "Bond Resolution");

     WHEREAS, the Bond Resolution authorized the issuance of the Issuer's Port
Facility Refunding Revenue Bonds (Zeigler Coal Project) Series 1997 in the
aggregate principal amount of $115,000,000  (the "Bonds");

     WHEREAS, the Bonds, and the interest thereon, are and shall be payable
from and secured by a first and superior lien on and pledge of the payments
designated as "Debt Service Payments" to be made by the Company pursuant to the
Agreement in amounts sufficient to provide for the payment of the principal of,
premium, if any, and interest on the Bonds, when due, and the fees and expenses
of the Trustee and any paying agent for the Bonds, all as required by the Bond
Resolution;

     WHEREAS, the Company has caused to be delivered to the Trustee an
irrevocable letter of credit issued by Bank of America National Trust and
Savings Association (the "Bank") in an amount equal to the principal amount of
the Bonds plus an amount equal to 45 days' interest on the Bonds computed at an
assumed maximum rate of 10% per annum and expiring on October 19, 1997;

     WHEREAS, certified copies of the Bond Resolution have been duly filed with
the Trustee;

     WHEREAS, the Trustee has agreed to accept the trusts herein created upon
the terms herein set forth; and

<PAGE>   7

     WHEREAS, all things necessary to make the Bonds, when issued as provided
in this Indenture, the legal, valid and binding special, limited obligations of
the Issuer according to the import thereof, and to constitute this Indenture a
valid assignment of the amounts pledged to the payment of the principal of,
premium, if any, and interest on the Bonds have been done and performed, and
the creation, execution and delivery of this Indenture and the execution and
issuance of the Bonds, subject to the terms hereof, in all respects have been
duly authorized;

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     That the Issuer in consideration of the premises, the acceptance by the
Trustee of the trusts hereby created, the mutual covenants herein contained and
the purchase and acceptance of the Bonds by the Owners thereof, and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
intending to be legally bound and in order to secure the payment of the
principal of, and interest and premium, if any, and Purchase Price of the Bonds
according to their tenor and effect, and the performance and observance by the
Issuer of all the covenants and conditions herein and therein contained (a) has
executed and delivered this Indenture and (b) has agreed to sell, assign,
transfer, set over and pledge, and by these presents does hereby sell, assign,
transfer, set over and pledge unto the Trustee, and to its successors in trust
and its assigns forever, to the extent provided in this Indenture, all of the
right, title and interest of the Issuer in and to (i) the Agreement (except for
the Purchase Price Payments, the Administrative Expenses and the
indemnification rights and Issuer expense reimbursement rights contained in the
Agreement), and (ii) the Pledged Revenues consisting of (a) the Debt Service
Payments, (b) amounts (other than amounts required to be deposited in the
Rebate Fund) on deposit in the Debt Service Fund and the Project Fund as
hereinafter in this Indenture provided and (c) any money paid to the Trustee
under the Letter of Credit; provided, however, that nothing in the Bonds or in
this Indenture shall be construed as pledging the general credit or taxing
power of the Issuer, the Commonwealth of Virginia or any political corporation,
subdivision or agency of the Commonwealth of Virginia, nor shall this Indenture
or the Bonds give rise to a pecuniary liability of the Issuer;

     TO HAVE AND TO HOLD the same and any other revenues, property, contracts
or contract rights, chattel paper, instruments, general intangibles or other
rights, and the proceeds thereof, which may by delivery, assignment or
otherwise be subject to the lien and security interest created by this
Indenture;

     IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth for the
equal and ratable benefit and security of those who shall hold or own the Bonds
issued hereunder, or any of them, without preference of any one Bond over any
other Bond by reason of priority in the time of the issue or negotiation
thereof or by reason of the date or maturity thereof, or for any other reason
whatsoever, except as otherwise provided herein.

     IT IS HEREBY COVENANTED, declared and agreed by and between the parties
hereto, that all Bonds are to be issued, authenticated and delivered and that
all property subject or to become subject hereto, including the Pledged
Revenues, is to be held and applied upon and subject to the further covenants,
conditions, uses and trusts hereinafter set forth; and the Issuer, for itself
and its successors, does hereby covenant and agree to and with the Trustee and
its successors in trust, for the benefit of those who shall hold the Bonds, or
any of them, as follows:



                                      2
<PAGE>   8




                                   ARTICLE I

                                  DEFINITIONS

     The following terms have the meanings set forth in the recitals hereto:


                      Act                       Company
                      Bond Resolution           Issuer
                      Bonds                     Trustee



     "Administrative Expenses" means fees and expenses of the Trustee and the
Issuer.

     "Affiliate" means any Person directly or indirectly controlling,
controlled by or under common control with the Company as certified to the
Trustee and the Remarketing Agent by the Company, and "control," when used with
respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise.  In addition, the term
"Affiliate" shall also include (i) any general partner of the Company and (ii)
any Person who has guaranteed the payment of the Company's obligations under
the Agreement or the Reimbursement Agreement.

     "Agreement" means the Financing Agreement dated as of August 1, 1997,
between the Issuer and the Company as the same may be amended from time to time
to the extent permitted hereby.

     "Alternate Letter of Credit" means an irrevocable letter of credit
authorizing drawings thereunder by the Trustee, issued by a national banking
association, a bank, a trust company or other financial institution as the
Bank, and satisfying the requirements of Article VII.

     "Authorized Company Representative" means any person or persons at the
time designated to act on behalf of the Company by a written certificate,
signed on behalf of the Company by any one of its officers or authorized
representatives and furnished to the Trustee, containing the specimen signature
of each such person.

     "Bank" means, initially, Bank of America National Trust and Savings
Association, a national banking association, as issuer of the Letter of Credit,
and its successors and assigns in that capacity and, in the event an Alternate
Letter of Credit is outstanding, the issuer of the Alternate Letter of Credit.

     "Bankruptcy Code" means Title 11 of the United States Code, as amended, or
any successor statutory provisions.

     "Bond Counsel" means nationally recognized bond counsel selected by the
Company and acceptable to the Issuer and the Trustee.

     "Bond Documents" means the Financing Documents and all other agreements,
certificates, documents and instruments delivered in connection with any of the
Financing Documents.


                                      3
<PAGE>   9

     "Bond Obligations" means (a) the Debt Service due and payable and to
become due and payable and any other amounts which may be owed by the Company
to, or on behalf of, the Issuer or the Trustee under the Bond Documents, (b)
Purchase Price Payments and (c) the Rebate Amount.

     "Bond Purchase Fund" means the special fund of that name created pursuant
to Section 4.06 hereof.

     "Bond Year" means the period as defined in Section 1.148-1(b) of the
Regulations or the applicable definition contained in any successor provisions
thereto.

     "Business Day" means a day on which the New York Stock Exchange is not
closed and on which banks located in the Commonwealth of  Virginia, the City of
New York, New York or the city in which the principal office of the Trustee or
the office of Bank at which drawing documents are required to be presented
under the Letter of Credit is located are not required or authorized to close.

     "Calculation Date" means the date as of which the calculation of the
Rebate Amount is made, which date shall be the last day of each Bond Year and
the date upon which the last Bond is actually paid and retired.

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

     "Company" means Zeigler Coal Holding Company, a corporation organized and
existing under the laws of the State of Delaware, and its permitted successors
and assigns.

     "Company Bonds" means any Bonds ownership of which is registered in the
name of the Company or any Affiliate, other than Pledged Bonds.

     "Company Debt Service Account" means the special account of that name
within the Debt Service Fund established pursuant to Section 6.01 hereof.

     "Company Purchase Account" means the special account of that name within
the Bond Purchase Fund established pursuant to Section 4.06 hereof.

     "Conversion Date" means  the day on which a particular type of interest
rate becomes effective for the Bonds which is not immediately preceded by a day
on which the Bonds accrued interest at the same type of rate (and, when used
with respect to any Term Rate Period, a date which is not preceded by a Term
Rate Period of the same duration).  Each Conversion Date shall be an Interest
Payment Date for the Rate Period from which the Bonds are converted.

     "Daily Rate" means the interest rate to be determined for the Bonds on
each Business Day pursuant to Section 3.02(c) hereof.

     "Daily Rate Conversion Date" means the day on which the Bonds accrue
interest at a Daily Rate pursuant to Section 3.03 which is immediately preceded
by a day on which the Bonds did not accrue interest at a Daily Rate.

     "Daily Rate Period" means each period during which the Bonds accrue
interest at a particular Daily Rate.



                                      4
<PAGE>   10

     "Debt Service" means the principal of and premium, if any, and interest on
the Bonds.

     "Debt Service Fund" means the special fund of that name created pursuant
to Section 6.01 hereof.

     "Debt Service Payments" means the payments required to be made by the
Company to amortize the Bonds, as provided for in this Indenture and in the
Agreement, including the principal of, premium, if any, and interest on the
Bonds when due (whether at stated maturity, upon redemption prior to stated
maturity, or upon acceleration of stated maturity).  Debt Service Payments do
not include Purchase Price Payments.

     "Delivery" or "deliver," when used with respect to Bonds held in the
book-entry system pursuant to Section 2.11 hereof, means the making of or the
irrevocable authorization to make appropriate entries on the books of DTC or
any Participant.

     "Determination of Taxability" means a Final Determination by the Internal
Revenue Service or by a court of competent jurisdiction in the United States
that, or an opinion of Bond Counsel to the effect that, as a result of failure
by the Company to observe or perform any covenant, condition or agreement on
its part to be observed or performed under the Agreement or as a result of the
inaccuracy of any representation made by the Company under the Agreement, the
interest payable on any Bond is includable in the gross income of the
Registered Owner or a beneficial owner of such Bond (other than a Registered
Owner or beneficial owner who is a substantial user or related person within
the meaning of Section 147(a) of the Code).

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

     "Electronic" notice means notice through a time sharing terminal.

     "Event of Bankruptcy" means the filing of a petition in bankruptcy or the
commencement of a proceeding under the Bankruptcy Code or any other applicable
law concerning insolvency, reorganization or bankruptcy by or against the
Company as debtor other than any involuntary proceeding which has been finally
dismissed without entry of an order for relief or similar order and without
effect on any amounts held in the Debt Service Fund, the Project Fund or the
Bond Purchase Fund and as to which all appeal periods have expired.

     "Event of Default" means any of the events described in Section 11.01
hereof.

     "Excess Earnings Amount" shall have the meaning given to such term in
Section 6.04 hereof.

     "Expiration Date" means the stated expiration date of the Letter of
Credit, as such date may be extended from time to time by the Bank.

     "Extraordinary Optional Redemption" means any redemption of Bonds made
pursuant to Section 9.01(c) hereof.

     "Favorable Opinion of Bond Counsel" shall mean an opinion of Bond Counsel
addressed to the Issuer, the Trustee and the Company to the effect that: (i)
the action proposed to be taken is authorized or permitted by the laws of the
State and this Indenture and complies with their respective terms; and (ii)
such action will not adversely affect (A) the exclusion from gross income of
the interest on the Bonds for purposes of federal


                                      5
<PAGE>   11

income taxation, and (B) any applicable exemption from taxation under the laws
of the State related to the Bonds or interest thereon.

     "Final Determination" means, with respect to a private letter ruling or a
technical advice memorandum of the Internal Revenue Service, written notice
thereof in a proceeding in which the Company had an opportunity to participate
and otherwise means written notice of a determination from which no further
right of appeal exists or from which no appeal is timely filed with any court
of competent jurisdiction in the United States in a proceeding to which the
Company was a party or in which the Company had the opportunity to participate.

     "Financing Documents" means this Indenture, the Agreement and the Bonds.

     "Flexible Rate" means, when used with respect to any particular Bond, the
interest rate determined for each Flexible Rate Period applicable thereto
pursuant to Section 3.02(b) hereof.

     "Flexible Rate Conversion Date" means each day on which the Bonds accrue
interest at Flexible Rates which is immediately preceded by a day on which the
Bonds did not accrue interest at Flexible Rates.

     "Flexible Rate Period" means each period during which a Bond accrues
interest at a Flexible Rate.

     "Fund" means any of the funds established with the Trustee under this
Indenture.

     "Government Obligations" means direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America.

     "Gross Proceeds" means (i) the net amount (after payment of all expenses
of issuing the Bonds) received by the Issuer as a result of the sale of the
Bonds, (ii) amounts received at any time, such as dividends and interest,
resulting from the investment of any proceeds of the Bonds in Nonpurpose
Investments and amounts received as interest or otherwise received with
respect to the Agreement, (iii) transferred proceeds as defined in Section 148
of the Code, (iv) amounts held in the Debt Service Fund, or any similar fund, to
the extent that it is reasonably expected that such fund will be used to pay
Debt Service, (v) amounts invested in a reasonably required reserve or
replacement fund (as defined in Section 148 of the Code), (vi) securities or
obligations pledged as security for payment of Debt Service by the Company (or a
"related person" as such term is defined in Section 147(a) of the Code) or the
Issuer, (vii) other amounts used to pay Debt Service, and (viii) other amounts
received as a result of investing any of the foregoing; provided, however, that
if the aggregate gross earnings (including investment income on the earnings) on
amounts held in one or more bona fide debt service funds (as such term is
defined in the Regulations) do not exceed $100,000 in a Bond Year, such gross
earnings will not be treated as Gross Proceeds.

     "Income Amount" means, in the case of any Bond Year as of which the Excess
Earnings Amount is positive, that amount of income which is attributable to the
lesser of (a) the Excess Earnings Amount as of the Calculation Date for that
Bond Year, or (b) the amount by which the Excess Earnings Amount as of the
Calculation Date in question exceeds the Excess Earnings Amount as of the
Calculation Date for the preceding Bond Year, but only to the extent that such
income is earned from the close of the Bond Year in question to the date of
transfer of amounts to the Excess Earnings Account required by Section 6.04
hereof.

     "Indemnified Parties" means the Indemnified Parties as defined in the
Agreement.



                                      6
<PAGE>   12

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

     "Interest Payment Date" means (a) when used with respect to any particular
Bond accruing interest at a Flexible Rate, the day after the last day of each
Flexible Rate Period applicable thereto; (b) when used with respect to Bonds
accruing interest at Daily or Weekly Rates, the first Business Day of each
calendar month following a month in which interest at such rate has accrued;
and (c) when used with respect to Bonds accruing interest at a Term Rate, the
first day of the sixth calendar month following the month in which the Term
Rate Conversion Date occurs and the first day of each sixth month thereafter to
which interest at such rate has accrued, except that the last Interest Payment
Date for any Term Rate Period which is followed by a Flexible, Daily or Weekly
Rate Period shall be the first Business Day of the sixth month following the
preceding Interest Payment Date; provided that in the event of a conversion
from a Term Rate Period on a date on which the Bonds are subject to redemption
pursuant to Section 9.01(a) hereof, such date shall be an Interest Payment Date

     "Interest Period" or "Interest Rate Period" means the period from and
including any Interest Payment Date to and including the day immediately
preceding the next following Interest Payment Date.

     "Interest Rate" means a Flexible, Daily, Weekly or Term Rate.

     "Investment Company" means any investment company registered under the
Investment Company Act of 1940, as amended.

     "Investment Securities" means and includes any of the following securities
on which neither the Company nor any of its subsidiaries is the obligor:  (a)
direct obligations of, or obligations guaranteed by, the United States of
America, and any bonds or other obligations of the Federal National Mortgage
Association (including Participation Certificates), Government National
Mortgage Association, Federal Farm Credit Banks, Federal Intermediate Credit
Banks, Federal Banks for Cooperatives, Federal Land Banks, Federal Home
Loan Mortgage Corporation and Federal Home Loan Banks; (b) any obligation
secured by a pooling of one or more of the foregoing; (c) obligations of a
state, a territory, or a possession of the United States, or any political
subdivision of any of the foregoing, or of the District of Columbia as
described in Section 103(a) of the Code which are rated by two nationally
recognized rating agencies in any of their three highest rating categories or
any obligation secured by a pooling of one or more of such obligations; (d)
banker's acceptances, Eurodollar deposits, certificates of deposit or interest
accruing demand deposits of banks or trust companies (including the Trustee)
organized under the laws of the United States or Canada or any state or
province thereof, or domestic branches of foreign banks, having a capital and
surplus of $25,000,000 or more;  (e) other corporate securities rated A or
better (or in the case of commercial paper, A-1 or better) by Standard & Poor's
Ratings Group or rated equivalently by Moody's Investors Service, Inc. or by
another nationally recognized rating service; and (f) repurchase agreements,
the maturity of which are less than thirty (30) days, entered into (i) with a
bank or trust company rated P-1 by Moody's and rated A-1 by S&P, organized
under the laws of any state of the United States or with a national banking
association, insurance company, or government bond dealer reporting to, trading
with, and recognized as a primary dealer by the Federal Reserve Bank of New
York and which is a member of the Security Investors Protection Corporation or
(ii) with a dealer which is rated P-1 by Moody's and rated A-1 by S&P; provided
that such repurchase agreement must be continuously and fully secured by
obligations of the type described in (a) or (c) above which have a fair market
value, exclusive of accrued interest, at least equal to the amount invested in
the repurchase agreement and which are held by the Trustee or its agent or, in
the case of uncertificated securities, are registered in the name of the
Trustee as pledgee; and (g) money market funds invested solely in the
obligations described in (a) through (f) above.



                                      7
<PAGE>   13

     "Issue Date" means for each Bond the actual date of first authentication
and delivery of that Bond.

     "Issuer Representative" means the Chairman or Vice-Chairman or such other
officer or commissioner of the Issuer as shall be appointed by the Issuer.  In
each case, a specimen signature of such individual shall be given to the
Trustee, certified by the Secretary of the Issuer.

     "Letter of Credit" means the irrevocable letter of credit issued by the
Bank to the Trustee on the date of execution and delivery of this Indenture and
any Alternate Letter of Credit delivered pursuant to Article VII hereof.

     "Letter of Credit Debt Service Account" means the special account of that
name within the Debt Service Fund established pursuant to Section 6.01 hereof.

     "Letter of Credit Purchase Account" means the special account of that name
within the Bond Purchase Fund established pursuant to Section 4.06 hereof.

     "Letter of Representations" means the letter agreement between DTC, the
Trustee, Paying Agent, the Bond Registrar and Remarketing Agent entered into in
connection with DTC's book-entry system; or the Blanket Issuer Letter of
Representations dated August 1, 1997, from the Issuer to DTC.

     "Nonpurpose Investment" means any obligation acquired with Gross Proceeds,
within the meaning of Section 148(b)(2) of the Code.

     "Optional Redemption" means any redemption of Bonds made pursuant to
Section 9.01(a) hereof.

     "Outstanding" when used with reference to Bonds means all Bonds
authenticated and delivered under this Indenture as of the time in question,
except:

            (a) All Bonds theretofore cancelled or required to be cancelled
     under Section 2.09 hereof;

            (b) On or after any purchase date for Bonds pursuant to Article IV
     hereof, all Bonds (or portions of Bonds) which are tendered or deemed to

     have been tendered for purchase on such date, provided that funds
     sufficient for such purchase are on deposit with the Trustee or any Paying
     Agent;

            (c) Bonds for the payment or redemption of which provision has been
     made in accordance with Section 9.04 or Article XVI hereof; provided that,
     if such Bonds are being redeemed, the required notice of redemption shall
     have been given or irrevocable instructions therefor shall have been given
     to the Trustee; and

            (d) Bonds in substitution for which other Bonds have been
     authenticated and delivered pursuant to Article II hereof.

     In determining whether the Registered Owners of a requisite aggregate
principal amount of Bonds Outstanding have concurred in any request, demand,
authorization, direction, notice, consent or waiver under the provisions
hereof, Bonds which are held by or on behalf of the Company (unless all of the
Outstanding Bonds are then owned by or on behalf of the Company) or an
"Affiliate" of the Company and Bonds which are held by or on behalf of the Bank
(unless all of the Outstanding Bonds are then held by or on behalf of the



                                      8
<PAGE>   14

Bank) shall be disregarded for the purpose of any such determination and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Bonds which the Trustee knows to be so owned
shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which
have been pledged in good faith shall not be disregarded as aforesaid and shall
be deemed Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Bonds and that the
pledgee is not the Company or an Affiliate of the Company.  Bonds held by the
Remarketing Agent shall not be deemed to be held on behalf of the Company for
the purpose of this paragraph unless held by the Remarketing Agent as agent for
the Company.

     "Owner" when all Bonds are held by a securities depository, means the
beneficial owner of the Bond in question determined under the rules of that
securities depository; otherwise "Owner" means "Registered Owner."

     "Participant" means (i) any person for which, from time to time, DTC
effectuates book-entry transfers and pledges of securities pursuant to the
book-entry system referred to in Section 2.11 hereof or (ii) any securities
broker or dealer, bank, trust company or other person that clears through or
maintains a custodial relationship with a person referred to in (i).

     "Paying Agent" means PNC Bank, N.A., as paying agent, or any successor
paying agent, appointed pursuant to Article XIII hereof.  The principal office
of the Paying Agent shall be the business address designated in writing to the
Issuer and the Remarketing Agent as its principal office for its duties as
Paying Agent hereunder.

     "Person" means an individual, a corporation, a partnership, an
association, a joint stock company, a trust, an unincorporated organization, a
governmental body or a political subdivision, a municipal corporation, a public
corporation or any other group or organization of individuals.

     "Plant" means the coal transshipment facility of the Company located at
Pier 9, Harbor Access Road, Newport News, Virginia, together with any
additions, modifications and substitutions to such facility.  The Company
acquired the Plant in connection with its acquisition of all of the issued and
outstanding stock of Shell in 1992.  Previously, in 1981, 1982 and 1987, the
Issuer issued its revenue and refunding revenue bonds to finance and refinance
the Plant for the benefit of its prior owner-operators, Massey and Shell.

     "Pledged Bonds" shall have the meaning assigned to such term in Section
4.03(b)(v) hereof.

     "Pledged Revenues" means and includes all payments by or on behalf of the
Company, including specifically the Debt Service Payments and all monies
received under the Agreement to be paid into the Debt Service Fund and any
money paid to the Trustee under the Letter of Credit, including the income
thereon and the investment thereof, if any.  Pledged Revenues do not include
(i) payments with respect to the indemnification or reimbursement of certain
expenses of the Issuer, the Trustee and the Remarketing Agent under Sections
4.2(b), (c) and (d), 4.3, 6.2, 7.5 and 10.8 of the Agreement or under any other
guaranty or indemnification agreement, (ii) any monies required to be deposited
in the Rebate Fund or (iii) Purchase Price Payments and other monies required
to be deposited in the Bond Purchase Fund.



                                      9
<PAGE>   15

     "Project" means the refunding of the 1987 Bonds providing financing for
the Plant and all replacements, improvements, extensions, substitutions,
restoration or additions made to the aforesaid facilities pursuant to the
Agreement.

     "PSA Municipal Index" means the Public Securities Association Municipal
Index as of the most recent date for which such index was published or such
other weekly, high-grade index comprised of seven-day, tax-exempt variable rate
demand notes produced by Municipal Market Data, Inc., or its successor, or as
otherwise designated by the Public Securities Association; provided, however,
that, if such index is no longer produced by Municipal Market Data, Inc. or its
successor, then "PSA Municipal Index" shall mean such other reasonably
comparable index selected by the Company.

     "Purchase Price" for any Bond shall equal 100% of the principal amount of
such Bond plus accrued interest, if any, plus in the case of a Bond subject to
mandatory tender for purchase pursuant to Section 4.02 (a) or (b) hereof on a
date when such Bond is also subject to optional redemption at a premium, an
amount equal to the premium that would be payable on such Bond if redeemed on
such date.

     "Purchase Price Payments" means the payments to be made by the Company
pursuant to the Agreement to pay the Purchase Price of Bonds.

     "Rate Period" means the period during which a particular rate of interest
determined for the Bonds is to remain in effect pursuant to Article III hereof.

     "Rating Service" means Moody's Investors Service, if the Bonds are rated
by such at the time, and Standard & Poor's Ratings Group, if the Bonds are
rated by such at the time, and their successors and assigns, or if either shall
be dissolved or no longer assigning credit ratings to long term debt, then any
other nationally recognized entity assigning credit ratings to long term debt
designated by the Issuer and satisfactory to the Trustee.

     "Rebate Amount" means, as of any Calculation Date, (a) the Excess Earnings
Amount less (b) the amount previously paid to the United States of America as
part of the Rebate Amount.

     "Rebate Fund" means the special fund of that name created pursuant to
Section 6.01 hereof.

     "Registered Owner" means the Person in whose name any Bond is registered
pursuant to Article II hereof.

     "Regular Record Date" means the close of business on either (a) the day
(whether or not a Business Day) immediately preceding an Interest Payment Date
in the case of Bonds accruing interest at Flexible, Daily or Weekly Rates or
(b) the 15th day (whether or not a Business Day) of the calendar month
immediately preceding the Interest Payment Date in the case of Bonds accruing
interest at Term Rates.

     "Regulations" means the applicable proposed, temporary or final Income Tax
Regulations promulgated under the Code, as such regulations may be amended or
supplemented from time to time.

     "Reimbursement Agreement" or "Credit Agreement" means, collectively,  the
Credit Agreements dated as of October 19, 1994 and April 24, 1997,
respectively, between the Company, the Bank and certain other


                                      10
<PAGE>   16

parties relating, among other matters, to the Letter of Credit and the Bonds, as
amended, supplemented or replaced from time to time.

     "Remarketing Account" means the special account of that name within the
Bond Purchase Fund established pursuant to Section 4.06 hereof.

     "Remarketing Agent" means Goldman, Sachs & Co., or any successor
Remarketing Agent appointed pursuant to Article XIV hereof.

     "Remarketing Agreement" means any remarketing agreement executed by the
Company and the Remarketing Agent pursuant to Article XIII hereof.

     "Securities Depository" means any "clearing agency" registered under
Section 17A of the Securities Exchange Act of 1934, as amended.

     "Special Mandatory Redemption" means any redemption of Bonds made pursuant
to Section 9.01(b) hereof.

     "Special Record Date" means the date and time established by the Trustee
for determination of which Registered Owners shall be entitled to receive
overdue interest on the Bonds pursuant to Section 2.07(b)(iii) hereof.

     "State" means the Commonwealth of Virginia.

     "Supplemental Indenture" or "indenture supplemental hereto" means any
indenture amending or supplementing this Indenture which may be entered into in
accordance with the provisions of this Indenture.

     "Term Rate" means the interest rate to be determined for the Bonds for a
term of one or more years pursuant to Section 3.02(e) hereof.

     "Term Rate Conversion Date" means each day on which the Bonds accrue
interest at a Term Rate pursuant to Section 3.03 hereof which is immediately
preceded by a day on which the Bonds did not accrue interest at a Term Rate or
accrued interest at a Term Rate for a Term Rate Period of different duration.

     "Term Rate Period" means each period during which the Bonds accrue
interest at a particular Term Rate.

     "Trustee" means PNC Bank, N.A., as trustee, or any successor trustee,
appointed pursuant to Article XI hereof.  The principal office of the Trustee
shall be the business address designated in writing to the Issuer and the
Remarketing Agent as its principal office for its duties as Trustee hereunder.

     "Underwriting Agreement" means the Underwriting Agreement among the
Issuer, the Company and Goldman, Sachs & Co. in its capacity as the underwriter
of the Bonds.

     "Weekly Rate" means the interest rate to be determined for the Bonds on a
weekly basis pursuant to Section 3.02(d) hereof.



                                      11
<PAGE>   17

     "Weekly Rate Conversion Date" means each day on which the Bonds accrue
interest at a Weekly Rate pursuant to Section 3.03 hereof which is immediately
preceded by a day on which the Bonds did not accrue interest at a Weekly Rate.

     "Weekly Rate Period" means the period during which the Bonds accrue
interest at a particular Weekly Rate.

     "Yield" means yield as determined in accordance with Section 148(h) of the
Code.

     "1987 Bonds" shall mean the $115,000,000 Peninsula Ports Authority of
Virginia Unit Priced Demand Adjustable Port Facility Refunding Revenue Bonds
(Shell Coal and Terminal Company Project) 1987 Series.

     The words "hereof," "herein," "hereto," "hereby," and "hereunder" (except
in the form of Bond) refer to the entire Indenture.  All words and terms
importing the singular number shall, where the context requires, import the
plural number and vice versa, and all words and terms used in this Indenture
and not defined herein shall, if defined in the Agreement, have the meaning set
forth therein.













                                      12
<PAGE>   18





                                   ARTICLE II

                                   THE BONDS

     Section 2.01. Issuance of Bonds.  Upon the execution and delivery hereof,
the Issuer shall execute the Bonds in the principal amount of $115,000,000 and
deliver the Bonds to the Trustee for authentication.  At the direction of the
Issuer, the Trustee shall deliver the Bonds to the purchasers thereof
identified in such direction upon receipt by the Trustee of the amount due the
Issuer for the initial delivery of the Bonds as set forth in such direction.

     Section 2.02. Form and Denominations of Bonds; Bonds as Special, Limited
Obligation of Issuer.

             (a)   Form and Authorized Denominations.  All Bonds shall be issued
     as fully registered bonds dated as of the Issue Date and shall mature on
     May 1, 2022.  The Bonds shall be in substantially the form attached hereto
     as Exhibit A.  In authenticating the Bonds, the Trustee may add the actual
     date of its authentication of Bonds.  All Bonds accruing interest at Daily
     or Weekly Rates shall be issued in denominations of $100,000 or whole
     multiples thereof.  All Bonds accruing interest at Flexible Rates shall be
     issued in denominations of $100,000 and integral multiples of $1,000 in
     excess thereof. All Bonds accruing interest at a Term Rate shall be in
     denominations of $5,000 or whole multiples thereof.  Bonds shall be
     numbered consecutively upward from R-1.

             (b)   Bonds as Limited Obligations of Issuer.  The Bonds shall be
     special, limited obligations of the Issuer and shall be payable by the
     Issuer solely out of the Pledged Revenues and the other sources derived by
     the Issuer under the Agreement, together with the security therefor, and
     pledged hereunder in the Granting Clauses hereof.  The Bonds shall never be
     payable out of any funds of the Issuer.

             (c)   NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL
     SUBDIVISION THEREOF, INCLUDING THE ISSUER, SHALL BE OBLIGATED TO PAY THE
     PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER COSTS
     INCIDENT THERETO EXCEPT FROM THE REVENUES, RECEIPTS AND PAYMENTS PLEDGED
     THEREFOR BY THE ISSUER.  NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER
     OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF,
     INCLUDING THE ISSUER, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
     PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO.
     THE BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
     CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.  THE ISSUER HAS
     NO TAXING POWER.

     Section 2.03. Execution.  The Bonds shall be executed by the manual or
facsimile signature of the Chairman or Vice Chairman of the Issuer, and its
seal thereon (which may be in facsimile) shall be attested by the manual or
facsimile signature of its Secretary-Treasurer or Assistant
Secretary-Treasurer.  The validity of any Bond so executed shall not be
affected by the fact that one or more of the officers whose signatures appear
on such Bond have ceased to hold office at the time of issuance or
authentication or at any time thereafter.





                                      13
<PAGE>   19


     Section 2.04. Authentication.  No Bonds shall be valid for any purpose
hereunder until the certificate of authentication printed thereon is duly
executed by the manual signature of an authorized signatory of the Trustee.
Such authentication shall be proof that the Registered Owner is entitled to the
benefit of the trusts hereby created.

     Section 2.05. Registration, Transfer and Exchange.

             (a)   The ownership of each Bond shall be recorded in the
     registration books of the Issuer, which books shall be kept by the Trustee,
     acting as bond registrar, at its principal office, and shall contain such
     information as is necessary for the proper discharge of the duties of the
     Trustee hereunder.

             (b)   Bonds may be transferred or exchanged as follows:

                   (i)   Any Bond may be transferred if duly endorsed for such
             transfer or accompanied by an instrument of transfer in form
             satisfactory to the Trustee, duly executed by the Registered Owner
             or his attorney duly authorized in writing and delivered by such
             Registered Owner or his duly appointed attorney to the Trustee,
             whereupon the Trustee shall authenticate and deliver to the
             transferee a new Bond or Bonds and in the same denominations as the
             Bond delivered for transfer or in different authorized
             denominations equal in the aggregate to the principal amount of the
             delivered Bond and accruing interest at the same Interest Rate
             Mode.

                   (ii)  Any Bond or Bonds may be exchanged for one or more
             Bonds and in the same aggregate principal amount and accruing
             interest at the same Interest Rate Mode, but in a different
             authorized denomination or denominations if duly endorsed or
             accompanied by an instrument of transfer in form satisfactory to
             the Trustee, duly executed by the Registered Owner or his attorney
             duly authorized in writing.  Each Bond so to be exchanged shall be
             delivered by the Registered Owner thereof or his duly appointed
             attorney to the Trustee, whereupon a new Bond or Bonds shall be
             authenticated and delivered to the Registered Owner.

                   (iii) In the case of any Bond properly delivered for partial
             redemption, the Trustee shall authenticate and deliver a new Bond
             in exchange therefor, such new Bond to be in a denomination equal
             to the unredeemed principal amount of the delivered Bond.

     Except as provided in subparagraph (iii) above or in Article IV hereof,
the Trustee shall not be required to effect any transfer or exchange during the
15 days immediately preceding the date of mailing of any notice of redemption
or at any time following the mailing of any such notice in the case of Bonds
selected for such redemption.  No charge shall be imposed upon Registered
Owners in connection with any transfer or exchange, except for taxes or
governmental charges related thereto.  No transfers or exchanges shall be valid
for any purposes hereunder except as provided above and in Article IV hereof.

     Section 2.06. Mutilated, Destroyed, Lost or Stolen Bonds.

             (a) If any Bond is mutilated, lost, stolen or destroyed, the
     Registered Owner thereof shall be entitled to the issuance of a
     substitute Bond provided that:




                                      14
<PAGE>   20



           (i)   in all cases, the Registered Owner may be required by the
       Issuer, the Company or the Trustee to provide indemnity to the Issuer,
       the Company and the Trustee in a form acceptable to the Issuer and the
       Trustee against any and all claims arising out of or otherwise related
       to the issuance of substitute Bonds pursuant to this Section;

           (ii)  in the case of a mutilated Bond the Registered Owner shall
       deliver the Bond to the Trustee for cancellation; and

           (iii) in the case of a lost, stolen or destroyed Bond, the Registered
       Owner shall provide evidence, satisfactory to the Trustee, of the
       ownership and the loss, theft or destruction of the affected Bond.

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

       (b) Every substituted Bond issued pursuant to this Section 2.06 shall
constitute an additional contractual obligation of the Issuer, whether or not
the Bond alleged to have been destroyed, lost or stolen shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Bonds duly issued
hereunder.

       (c) All Bonds shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any
and all other rights or remedies, unless expressly inconsistent with any law or
statute existing or hereafter enacted with respect to the replacement or payment
of negotiable instruments, investments or other securities without their
delivery.

Section 2.07. Payments of Principal, Redemption Price and Interest; Persons
Entitled Thereto.

       (a) The principal or redemption price of each Bond shall be payable upon
delivery of such Bond to  the Trustee at its principal office.  During Flexible,
Daily or Weekly Rate Periods, the principal or redemption price of the Bonds
shall be payable by wire transfer of immediately available funds. During Term
Rate Periods the principal or redemption price of the Bonds shall be payable by
check in clearinghouse funds, provided that any Registered Owner of $1,000,000
or more in aggregate principal amount of the Bonds may, upon written request
given to the Trustee at least five Business Days prior to the maturity or
redemption date designating an account in a domestic bank, be paid by wire
transfer of immediately available funds.  Such payments shall be made to the
Registered Owner of the Bond so delivered, as shown on the registration books
maintained by the Trustee on the date of payment.

       (b) Subject to the further provisions of Article III hereof, each Bond
shall accrue interest and be payable as to interest as follows:





                                      15
<PAGE>   21






                     (i)    Each Bond shall accrue interest (at the applicable
             rate determined pursuant to Article III hereof) (A) from the date
             of authentication, if authenticated on an Interest Payment Date to
             which interest has been paid or duly provided for, or (B) from the
             last preceding Interest Payment Date to which interest has been
             paid in full or duly provided for (or the Issue Date if no interest
             thereon has been paid or duly provided for) in all other cases.

                     (ii)   Subject to the provisions of subparagraph (iii)
             below, the interest due on any Bond on any Interest Payment Date
             shall be paid to the Registered Owner of such Bond as shown on the
             registration books kept by the Trustee as of the Regular Record
             Date.  The amount of interest so payable on any Interest Payment
             Date shall be computed (A) on the basis of a 365- or 366-day year
             for the number of days actually elapsed during Daily Rate Periods,
             (B) on the basis of a 365- or 366-day year for the number of days
             actually elapsed based on the calendar year in which the Flexible
             or Weekly Rate Period commences, during Weekly or Flexible Rate
             Periods, and (C) on the basis of a 360-day year of twelve 30-day
             months during Term Rate Periods.

                     (iii)  If the available funds under this Indenture are
             insufficient on any Interest Payment Date to pay the interest then
             due, the Regular Record Date shall no longer be applicable with
             respect to the Bonds.  If funds for the payment of such overdue
             interest thereafter become available, the Trustee shall immediately
             establish a special interest payment date for the payment of the
             overdue interest and a Special Record Date (which shall be a
             Business Day) for determining the Registered Owners entitled to
             such payments.  Notice of such Special Record Date shall be mailed
             by the Trustee to each Registered Owner promptly after the
             determination of such Special Record Date, but not more than 30
             days prior to the special interest payment date.  The overdue
             interest shall be paid on the special interest payment date to the
             Registered Owners, as shown on the registration books kept by the
             Trustee as of the close of business on the Special Record Date.

                      (iv)  All payments of interest on the Bonds shall be
             paid to the Registered Owner entitled thereto (i) by check mailed
             to such Registered Owner or (ii) in immediately available funds by
             wire transfer to a bank within the continental United States or
             deposited to a designated account if such account is maintained
             with the Trustee as directed by the Registered Owner in writing or
             as otherwise directed in writing by the Registered Owner five
             Business Days prior to the time of payment with respect to Bonds
             accruing interest at a Flexible Rate or two Business Days prior to
             the Interest Payment Date with respect to Bonds accruing interest
             at Daily or Weekly Rates.

                      (v)   Interest accrued during any Flexible Rate Period
             or due at the maturity or redemption of the Bonds shall be paid
             only upon presentation and surrender of Bonds.

     Section 2.08. Temporary Bonds.  The Issuer may issue, in lieu of
definitive Bonds, one or more temporary printed or typewritten Bonds in
authorized denominations, of substantially the tenor recited above.  At the
request of the Issuer, the Trustee shall authenticate definitive Bonds, which
may be typewritten or printed, in exchange for and upon surrender of an equal
principal amount of temporary Bonds.  Until so exchanged, temporary Bonds shall
have the same rights, remedies and security hereunder as definitive Bonds.
Temporary Bonds shall be numbered consecutively upward from TR-1.


                                      16
<PAGE>   22

     Section 2.09. Cancellation and Disposition of Surrendered Bonds.  The
Trustee shall cancel  (a) all Bonds surrendered for transfer or exchange, for
payment at maturity or for redemption, and (b) all Bonds purchased at the
direction of the Company and surrendered to the Trustee for cancellation, and
the Trustee shall dispose of such Bonds in accordance with the Trustee's
document retention policies.  The Trustee shall deliver to the Issuer a
certificate of cancellation or disposition in respect of all Bonds cancelled or
disposed of in accordance with this Section.

     Section 2.10. Acts of Registered Owners; Evidence of Ownership.  Any
action to be taken by Registered Owners may be evidenced by one or more
concurrent written instruments of similar tenor signed or executed by such
Registered Owners in person or by an agent appointed in writing.  The fact and
date of the execution by any Person of any such instrument may be proved by
acknowledgment before a notary public or other officer empowered to take
acknowledgments or by an affidavit of a witness to such execution or by any
other method satisfactory to the Trustee.  Any action by the Registered Owner
of any Bond shall bind all future Registered Owners of the same Bond or of any
Bond issued upon the exchange or registration of transfer thereof in respect of
anything done or suffered by the Issuer or the Trustee in pursuance thereof.

     Section 2.11. Book Entry System.

     (a) DTC will act as securities depository (the "Securities Depository")
for the Bonds.  The Bonds shall be initially issued in the form of a single
fully registered Bond registered in the name of Cede & Co., as nominee for DTC.
So long as Cede & Co. is the Registered Owner of the Bonds, as nominee of DTC,
references herein to Registered Owners, Bondholders or holders of the Bonds
shall mean Cede & Co. and shall not mean the beneficial owners of the Bonds.

     (b) The interest of each of the beneficial owners of the Bonds will be
recorded through the records of a DTC Participant.  Transfers of beneficial
ownership interests in the Bonds which are registered in the name of Cede & Co.
will be accompanied by book entries made by DTC and, in turn, by the DTC
Participants who act on behalf of the beneficial owners of the Bonds.

     (c) With respect to Bonds registered in the name of Cede & Co. as nominee
of DTC, the Issuer, the Bond Registrar and the Trustee shall have no
responsibility or obligation to any DTC Participant or to any person on behalf
of whom such a DTC Participant holds an interest in the Bonds, except as
provided in this Indenture.  Without limiting the immediately preceding
sentence, the Issuer and the Trustee shall have no responsibility or obligation
with respect to (i) the accuracy of the records of the DTC, Cede & Co. or any
DTC Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any DTC Participant or any other person, other than a Registered
Owner, as shown on the Registration Books, of any notice with respect to the
Bonds, including any notice of redemption, or (iii) the payment to any DTC
Participant or any other person, other than a Registered Owner, as shown in the
Registration Books of any amount with respect to principal of, premium, if any,
Purchase Price or interest on, the Bonds.

     (d) Notwithstanding any other provisions of this Indenture to the
contrary, the Issuer, the Bond Registrar and the Trustee shall be entitled to
treat and consider the person in whose name each Bond is registered in the
Registration Books as the absolute owner of such Bond for the purpose of
payment of principal, premium, if any, Purchase Price, and interest with
respect to such Bond, for the purpose of giving notices of redemption and other
matters with respect to such Bond, for the purpose of registering transfers
with respect to such Bond, and for all other purposes whatsoever.  The Trustee
shall pay all principal of, premium, if any, Purchase Price, and interest on
the Bonds only to or upon the order of the respective Registered Owners,



                                      17
<PAGE>   23

as shown in the Registration Books as provided in this Indenture, or their
respective attorneys duly authorized in writing, and all such payments shall be
valid and effective to fully satisfy and discharge the Issuer's obligations with
respect to payment of principal of, premium, if any, Purchase Price, and
interest on, the Bonds to the extent of the sum or sums so paid.

     (e) No person other than a Registered Owner, as shown in the Registration
Books, shall receive a Bond certificate evidencing the obligation of the Issuer
to make payments of principal, premium, if any, and interest, pursuant to this
Indenture.

     (f) Any provision of this Indenture permitting or requiring the delivery
of Bonds shall, while the book-entry system is in effect, be satisfied by the
notation on the books of DTC or a DTC Participant, if applicable, of the
transfer of the beneficial owner's interest in such Bond.

     (g) So long as the book-entry system is in effect, the Trustee and the
Bond Registrar shall comply with the terms of the Letter of Representations.

     (h) DTC may determine to discontinue providing its service with respect to
the Bonds at any time by giving written notice and all relevant information on
the beneficial owners of the Bonds to the Issuer, the Company and the Trustee
and discharging its responsibilities with respect thereto under applicable law.
If there is no successor Securities Depository appointed by the Issuer, the
Trustee shall authenticate and deliver Bonds to the beneficial owners thereof.
The Issuer may determine not to continue participation in the system of book
entry transfers through DTC (or a successor Securities Depository) at any time
by giving reasonable written notice to DTC (or a successor Securities
Depository) and the Trustee.  In such event, the Issuer shall execute and
deliver to the Trustee, and the Trustee shall authenticate and deliver the
Bonds to the beneficial owners thereof.

     Section 2.12. Payments to Cede & Co.; Payments to Beneficial Owners.

     (a) Notwithstanding any other provision of this Indenture to the contrary,
so long as any Bond is registered in the name of Cede & Co., as nominee of DTC,
all payments with respect to principal of, premium, if any, Purchase Price, and
interest on, such Bond and all notices with respect to such Bond shall be made
and given, respectively, pursuant to DTC's rules and procedures.

     (b) Payments by the DTC Participants to beneficial owners will be governed
by standing instructions and customary practices, as is now the case with
municipal securities held for the accounts of customers in bearer form or
registered in "street  name," and will be the responsibility of such DTC
Participant and not of DTC, the Trustee or the Issuer, subject to any statutory
and regulatory requirements as may be in effect from time to time.


                                  ARTICLE III

                            INTEREST RATES ON BONDS

     Section 3.01. Interest Rate.  All Bonds shall accrue interest at Daily
Rates on the date of original issuance and thereafter at Daily Rates unless and
until the Rate Period for the Bonds is converted to a different Rate Period
pursuant to Section 3.03.  Notwithstanding anything to the contrary in this
Article, in no event




                                      18
<PAGE>   24

shall the cumulative amount of interest paid or payable on the Bonds exceed the
"net interest cost" which will produce a "net effective interest rate" equal to
the maximum rate permitted by Virginia law.

     Section 3.02. Determination of Interest Rates.

             (a)  Determination by Remarketing Agent.

                       (i)  The Interest Rate shall be determined by the
             Remarketing Agent as the rate of interest which, in the judgment of
             the Remarketing Agent, would cause the Bonds to have a market value
             as of the date of determination equal to the principal amount
             thereof, taking into account prevailing market conditions; provided
             that so long as a Letter of Credit is in place, the interest rate
             borne by the Bonds shall not exceed the maximum interest rate with
             respect to the Bonds specified in the Letter of Credit.  With
             respect to Flexible Rates, the Remarketing Agent shall determine
             the Flexible Rate and the Flexible Rate Period for each Bond at
             such rate and for such period as it deems advisable in order to
             minimize the net interest cost on the Bonds, taking into account
             prevailing market conditions.

                       (ii)   In the event the Remarketing Agent fails for any
             reason to determine or notify the Trustee of the Interest Rate for
             any Interest Rate Period:

                              (A) The Interest Rate then in effect for Bonds
                       that accrue interest at Daily Rates will remain in effect
                       from day to day until the Trustee is notified of a new
                       Daily Rate determined by the Remarketing Agent.

                              (B) The Interest Rate then in effect for Bonds
                       that accrue interest at Weekly Rates will remain in
                       effect from week to week until the Trustee is notified of
                       a new Weekly Rate determined by the Remarketing Agent.

                              (C) The Interest Rate for any Bond that accrues
                       interest at Flexible Rates and for which a Flexible Rate
                       and Flexible Rate Period is not determined shall be equal
                       to the PSA Municipal Index and the Interest Rate Period
                       for such Bond shall extend through the day preceding the
                       next Business Day, until the Trustee is notified of a new
                       Flexible Rate and Flexible Rate Period determined for
                       such Bond by the Remarketing Agent.

                              (D) The Interest Rate then in effect for Bonds
                       that accrue interest at the Term Rate will be
                       automatically converted to Flexible Rates with Flexible
                       Rate Periods beginning on each Business Day and extending
                       through the day preceding the next Business Day until the
                       Trustee is notified of a new Flexible Rate and Flexible
                       Rate Period determined for such Bond by the Remarketing
                       Agent.

                       (iii)  All determinations of Interest Rates pursuant to
             this Section shall be conclusive and binding upon the Issuer, the
             Company, the Trustee and the Owners of the Bonds to which such
             rates are applicable.



                                      19
<PAGE>   25

                       (iv) The Interest Rate in effect for Bonds during any
             Interest Rate Period shall be available to Owners between 1:00 p.m.
             and 5:00 p.m., New York City time on any Business Day, from the
             Remarketing Agent or the Trustee at their principal offices.

             (b)  Flexible Rates.  (i) The Flexible Rate Period for each Bond
shall be of such duration, not exceeding 270 days, as may be offered by the
Remarketing Agent and specified by the purchaser; provided that if a Letter of
Credit is then in effect and such Letter of Credit provides less than 275 days'
interest coverage, such period shall not be longer than a period equal to the
maximum number of days' interest coverage provided by such Letter of Credit
minus 5 days or the Trustee shall not authenticate any Bond for a Flexible Rate
Period at a Flexible Rate providing an amount of interest which, when added to
the aggregate interest to accrue on all outstanding Flexible Rate Bonds, would
exceed the maximum amount available under the Letter of Credit for the payment
of interest minus an amount equal to 5 days' maximum interest coverage on all
Flexible Rate Bonds.  Any Bond may accrue interest at a Flexible Rate for a
Flexible Rate Period different from any other Bond.  Each Flexible Rate Period
shall commence on a Business Day and end on a day immediately preceding a
Business Day.  The Remarketing Agent shall offer and accept purchase commitments
for the Bonds for such Flexible Rate Periods and at such Flexible Rates as it
deems to be advisable in order to minimize the net interest cost on the Bonds
taking into account prevailing market conditions; provided, however, that the
foregoing shall not prohibit the Remarketing Agent from accepting purchase
commitments for longer Flexible Rate Periods (and at higher Flexible Rates) than
are otherwise available at the time of any remarketing if the Remarketing Agent
determines that, taking into account prevailing market conditions, a lower net
interest cost on the Bonds can be achieved over the longer Flexible Rate
Period.  Notwithstanding the foregoing, no Flexible Rate Period may be
established which exceeds 270 days (or such lower number as is permitted above)
or, if the Remarketing Agent has given or received notice of any conversion to
a Daily, Weekly or Term Rate Period, the remaining number of days prior to the
Conversion Date, and if a Letter of Credit is then in effect, no Flexible Rate
Period may be established which extends beyond the remaining term of such
Letter of Credit minus 5 days.

                       (ii) Each Flexible Rate and Flexible Rate Period
             shall be determined not later than 1:00 p.m., New York City time,
             on the First Business Day of the Flexible Rate Period to which it
             relates and provided to the Trustee by the Remarketing Agent by
             telephonic or Electronic notice by 1:00 p.m., New York City time,
             on that same day.  The Trustee will deliver certificates for such
             Bonds to the Remarketing Agent not later than 2:15 p.m. New York
             City time on such Business Day against receipt therefor.

             (c)  Daily Rates.  A Daily Rate shall be established for each
Daily Rate Period as follows:

                       (i)   Daily Rate Periods shall commence on a Daily Rate
             Conversion Date which shall be a Business Day and thereafter, prior
             to the next Conversion Date, on each Business Day thereafter until
             the Rate Period for the Bonds is converted to another Rate Period
             and shall extend to, but not include, the next succeeding Business
             Day.

                       (ii)  The Daily Rate for each Daily Rate Period shall be
             effective from and including the commencement date thereof and
             shall  remain in effect to, but not including, the next succeeding
             Business Day.  Each such Daily Rate shall be determined not later
             than 10:30 a.m., New York City time, on the first Business Day of
             the Daily Rate Period to which it



                                      20
<PAGE>   26

             relates and provided to the Trustee by the Remarketing Agent by
             telephonic or Electronic notice by 1:00 p.m., New York City time,
             on that same day; provided that no notice need be given if the
             Daily Rate then in effect is to be the Daily Rate for the next
             Daily Rate Period.

             (d)  Weekly Rates.  A Weekly Rate shall be determined for each
Weekly Rate Period as follows:


                     (i)   Weekly Rate Periods shall commence on a Wednesday and
             end on Tuesday of the following week and each Weekly Rate Period
             shall be followed by another Weekly Rate Period until the Rate
             Period of the Bonds is converted to another Rate Period; provided
             that (A) in the case of a conversion to a Weekly Rate Period from a
             different Rate Period, the Weekly Rate Period shall commence on the
             Weekly Rate Conversion Date and shall end on Tuesday of the
             following week; and (B) in the case of a conversion from a Weekly
             Rate Period to a different Rate Period, the last Weekly Rate Period
             prior to conversion shall end on the last day immediately preceding
             the Conversion Date to the new Rate Period.

                     (ii)  The Weekly Rate for each Weekly Rate Period shall be
             effective from and including the commencement date of such period
             and shall remain in effect through and including the last day
             thereof.  Each such Weekly Rate shall be determined by the
             Remarketing Agent no later than 10:00 a.m., New York City time, on
             the commencement date of the Weekly Rate Period to which it relates
             and provided to the Trustee by the Remarketing Agent by written,
             telephonic or Electronic notice by 12:00 Noon, New York City time,
             on such Business Day.

             (e)  Term Rates.  A Term Rate shall be determined for each Term
Rate Period as follows:

                     (i)  Term Rate Periods shall (A) commence on a Term Rate
             Conversion Date and subsequently on the first day of a calendar
             month which is an integral multiple of twelve (12) calendar months
             thereafter and (B) end on the day preceding either the commencement
             date of the following Term Rate Period or the Conversion Date on
             which a different Rate Period shall become effective or the
             maturity date of the Bonds; provided that if a Letter of Credit is
             then in effect, no Term Rate Period shall extend beyond the
             remaining term of such Letter of Credit minus 5 days.  Each Term
             Rate Period shall be followed by another Term Rate Period of the
             same duration until the Rate Period of the Bonds is converted to
             another Rate Period or a Term Rate Period of a different duration
             or until maturity.

                     (ii)  The Term Rate for each Term Rate Period shall be
             effective from and including the commencement date of such period
             and remain in effect through and including the last day thereof.
             Each such Term Rate shall be determined not later than 12:00 noon,
             New York City time, on the Business Day immediately preceding the
             commencement date of such period and provided to the Trustee and
             the Bank by the Remarketing Agent by written, telephonic or
             Electronic notice by the close of business on such Business Day.




                                      21
<PAGE>   27

     Section 3.03. Conversions Between Rate Periods.  The Company may elect to
convert the Bonds from one Rate Period to another as follows:

     (a)   Conversion Dates.

           (i)   If the conversion is from Flexible Rate Periods, the Conversion
     Date must be a date on which interest is payable on all Bonds accruing
     interest at Flexible Rates.

           (ii)  If the conversion is from a Daily or Weekly Rate Period, the
     Conversion Date must be an Interest Payment Date on which interest is
     payable for the Daily or Weekly Rate Period from which the conversion is
     made.

           (iii)  If the conversion is from a Term Rate Period, the Conversion
     Date may be any date on which the Bonds are also subject to optional
     redemption pursuant to Section 9.01(a) hereof.

     (b)  Notices by Company.  The Company shall give notice of any proposed
conversion to the Trustee, the Bank and the Remarketing Agent not fewer than 25
days before the proposed conversion from a Flexible, Daily or Weekly Rate
Period and not fewer than 45 days before the proposed conversion from a Term
Rate Period.

     (c)  Notices by Trustee.  The Trustee shall give notice by first class
mail, of proposed conversion to the Registered Owners of bonds accruing
interest at Flexible, Daily or Weekly Rates not less than 15 days before the
proposed Conversion Date and to Registered Owners of Bonds accruing interest at
a Term Rate not less than 30 days before the proposed Conversion Date.  Such
notice shall state:

           (i)   the proposed Conversion Date;

           (ii)  that the Bonds will be subject to mandatory tender for
     purchase on the Conversion Date (except in the case of conversions
     between Daily and Weekly Rate Periods);

           (iii) the conditions, if any, to the conversion pursuant to
     subsection (d) below; and

           (iv) if the Bonds are in certificated form, information with
     respect to required delivery of Bond certificates and payment of the
     Purchase Price.

     (d)  Conditions to Conversion.  No conversion of Interest Rate Periods
will become effective unless:

          (i)  if the conversion is from Flexible Rate Periods, the Trustee has
     received, prior to the date on which notice of conversion is required to be
     given to Registered Owners, written confirmation from the Remarketing Agent
     that it has not established and will not establish any Flexible Rate
     Periods extending beyond the day before the Conversion Date;

          (ii)  if the conversion is from Flexible, Daily or Weekly Rate Periods
     to a Term Rate Period, or from a Term Rate Period to a Flexible, Daily or
     Weekly Rate Period, the Trustee has been provided, no later than one day
     before the Conversion Date, with a Favorable Opinion of Bond Counsel with
     respect to the conversion; and



                                      22
<PAGE>   28

          (iii)  if a Letter of Credit will be held by the Trustee after the
     Conversion Date, such Letter of Credit (A) will cover the principal of and
     interest (computed on the basis of a 365-day year, in the case of
     conversion to a Flexible, Daily or Weekly Rate Period, and on the basis of
     a 360-day year consisting of twelve 30-day months, in the case of
     conversion to a Term Rate Period) which will accrue on the Outstanding
     Bonds for the maximum permitted period between Interest Payment Dates for
     the proposed Interest Rate Period plus 5 days, and (B) in the case of
     conversion to a Term Rate Period, (i) extends for a period which shall not
     end on a date that is earlier than five days after the first date on which
     the Bonds can be called for optional redemption, and (ii) covers the
     premium, if any, which would be included in the Purchase Price upon
     mandatory purchase of the Bonds pursuant to Section 4.02(c) hereof if such
     Letter of Credit were not extended beyond the Expiration Date set forth
     therein.

          (iv)  if a Letter of Credit is then in effect and the Purchase Price
     determined under Section 4.02(c) hereof payable on the Conversion Date
     includes any premium, the Trustee has received, prior to the date on which
     notice of conversion is required to be given to Registered Owners, written
     confirmation from the Bank that it can draw under the Letter of Credit on
     the proposed Conversion Date in an aggregate amount sufficient to cover
     such premium due upon mandatory purchase of the Bonds pursuant to Section
     4.02(c) hereof.


                                   ARTICLE IV

                          TENDER AND PURCHASE OF BONDS

     Section 4.01. Optional Tenders for Purchase.

     (a) Purchase Dates.  The Owners or Registered Owners of Bonds accruing
interest at Daily, Weekly or Term Rates may elect to have their Bonds (or
portions thereof in amounts equal to the lowest denomination then authorized
pursuant to Section 2.02 hereof or whole multiples of such lowest denomination)
purchased at the Purchase Price on the following purchase dates:

         (i)   Bonds accruing interest at Daily Rates may be tendered for
     purchase at a Purchase Price payable in immediately available funds on any
     Business Day prior to conversion from a Daily Rate Period to a different
     Rate Period, upon personal, Electronic or telephonic notice of tender given
     to the Trustee, directly or through the Owner's DTC Participant, not later
     than 11:00 a.m., New York City time, on the purchase date.

         (ii)  Bonds accruing interest at Weekly Rates may be tendered for
     purchase at a Purchase Price payable in immediately available funds on any
     Business Day prior to conversion from a Weekly Rate Period to a different
     Rate Period upon written or Electronic notice of tender to the Trustee,
     directly or through the Owner's DTC Participant, not later than 5:00 p.m.,
     New York City time, on a Business Day not fewer than seven days prior to
     the purchase date.

         (iii) Bonds accruing interest at a Term Rate may be tendered for
     purchase on the commencement date of the succeeding Rate Period for such
     Bonds at a Purchase Price payable in clearinghouse funds upon written or
     Electronic notice of tender to the Trustee, directly or through the


                                      23
<PAGE>   29


     Owner's DTC Participant, not later than 5:00 p.m., New York City time, on a
     Business Day which is not fewer than seven days prior to the purchase date.

     (b) Notice of Tender.  Each notice of tender:

         (i)   shall, in the case of a written notice, be delivered to the
     Trustee at its principal office and be in form satisfactory to the Trustee;

         (ii)  shall state, whether delivered personally, in writing,
     Electronically or by telephone (A) the principal amount of the Bond to
     which the notice relates, (B) that the Owner or Registered Owner
     irrevocably demands purchase of such Bond or a specified portion thereof in
     an amount equal to the lowest denomination then authorized pursuant to
     Section 2.02 hereof or a whole multiple of such lowest denomination, (C)
     the date on which such Bond or portion is to be purchased, (D) and payment
     instructions with respect to the Purchase Price; and

         (iii) shall automatically constitute, whether delivered personally, in
     writing, Electronically or by telephone (A) an irrevocable offer to sell
     the Bond (or portion thereof) to which the notice relates on the purchase
     date at a Purchase Price equal to the principal amount of such Bond (or
     portion thereof) plus, with respect to Bonds accruing interest at a Daily
     Rate or a Weekly Rate, any interest thereon accrued and unpaid as of the
     purchase date, (B) an irrevocable authorization and instruction to the
     Trustee to effect transfer of such Bond (or portion thereof) upon payment
     of the Purchase Price to the Trustee on the purchase date, (C) an
     irrevocable authorization and instruction to the Trustee to effect the
     exchange of the Bond to be purchased in whole or in part for other Bonds in
     an equal aggregate principal amount so as to facilitate the sale of such
     Bond (or portion thereof to be purchased), and (D) an acknowledgment that
     such Owner or Registered Owner will have no further rights with respect to
     such Bond (or portion thereof) upon payment of the Purchase Price thereof
     to the Trustee on the purchase date, except for the right of such Owner or
     Registered Owner to receive such Purchase Price upon delivery of such Bond
     to the Trustee and that after the purchase date such Owner or Registered
     Owner will hold any undelivered certificate as agent for the Trustee.  The
     determination of the Trustee as to whether a notice of tender has been
     properly delivered pursuant to the foregoing shall be conclusive and
     binding upon the Owner or Registered Owner.

     (c) Bonds to be Remarketed.  Not later than 11:00 a.m., New York City
time, on the Business Day immediately following the date of receipt of any
notice of tender (or immediately upon such receipt, in the case of Bonds
accruing interest at Daily Rates), the Trustee shall notify, by telephone,
promptly confirmed in writing, the Company and the Remarketing Agent of the
principal amount of Bonds (or portions thereof) to be purchased and the date of
purchase.

     Section 4.02. Mandatory Tenders for Purchase.

     (a)     Flexible Rate Bonds.  Each Bond accruing interest at a Flexible
Rate shall be subject to mandatory tender for purchase on the day after the last
day of each Flexible Rate Period applicable to such Bond, at a Purchase Price
equal to 100% of the principal amount thereof, plus interest accrued during such
Flexible Rate Period.  The Registered Owner of any Bond accruing interest at a
Flexible Rate and tendered for purchase as provided in this Section 4.02(a)
shall provide the Trustee with payment instructions for the Purchase Price of
its Bond on or before tender thereof to the Trustee.



                                      24
<PAGE>   30

     (b) Conversions between Interest Rate Periods.  Bonds to be converted from
one Interest Rate Period to a different Interest Rate Period (except
conversions from the Daily Rate to the Weekly Rate or from the Weekly Rate to
the Daily Rate) or from a Term Rate Period to a Term Rate Period of different
duration, are subject to mandatory tender for purchase on the Conversion Date
at a Purchase Price equal to the principal amount thereof plus accrued
interest; provided that the Purchase Price for Bonds converted from a Term Rate
Period on a date when such Bonds are also subject to optional redemption at a
premium shall include an amount equal to the premium that would be payable if
such Bonds were redeemed on such date.

     (c) Prior to Expiration of Letter of Credit.  The Bonds are subject to
mandatory tender for purchase on the Interest Payment Date next preceding the
Expiration Date of the Letter of Credit unless at least 45 days (or such
shorter period as shall be acceptable to the Trustee) prior to such Interest
Payment Date the Trustee has received notice that the Letter of Credit has been
or will be extended or an Alternate Letter of Credit will be provided pursuant
to Section 7.01, at a Purchase Price equal to the principal amount thereof plus
accrued interest plus the premium, if any, which would be payable if the Bonds
were redeemed on the mandatory tender date.  The Trustee shall give notice of
such mandatory tender for purchase to the Registered Owners of Bonds by first
class mail, not less than 15 days before the mandatory tender date.  If the
Bonds are in certificated form, such notice shall include information with
respect to required delivery of Bond certificates and payment of the Purchase
Price.

     Section 4.03. Remarketing and Purchase.

     (a) Remarketing of Tendered Bonds.  Unless otherwise instructed by the
Company, the Remarketing Agent shall offer for sale and use its best efforts to
find purchasers for all Bonds or portions thereof for which notice of tender
has been received pursuant to Section 4.01(c) or which are subject to mandatory
tender.  While the Bonds are in book-entry only form, the Remarketing Agent
will make payment of the Purchase Price for tendered Bonds in accordance with
the procedures established by DTC.  If the book-entry only system is not in
effect, the terms of any sale by the Remarketing Agent shall provide for the
payment of the Purchase Price for tendered Bonds by the Remarketing Agent to
the Trustee (i) in immediately available funds at or before 3:00 p.m., New York
City time, on the purchase date, in the case of Bonds accruing interest at
Flexible Rates, (ii) in immediately available funds at or before 4:00 p.m., New
York City time, on the purchase date, in the case of Bonds accruing interest at
Daily Rates or Weekly Rates, and (iii) in clearinghouse funds at or before
12:00 noon, New York City time, on the purchase date, in the case of Bonds
accruing interest at Term Rates.  The Remarketing Agent shall not sell any Bond
as to which a notice of conversion from one type of Rate Period to another has
been given by the Trustee unless the Remarketing Agent has advised the Person
to whom the sale is made of the conversion.

     (b) Purchase of Tendered Bonds.

         (i) Notice.  At or before 3:00 p.m., New York City time, on the
     Business Day immediately preceding the date fixed for purchase of tendered
     Bonds (or 12:45 p.m., New York City time, on the purchase date in the case
     of Bonds accruing interest at Daily or Flexible Rates), the Remarketing
     Agent shall give notice by telephone, telegram, telecopy, telex,
     Electronically or by other similar communication to the Trustee of the
     principal amount of tendered Bonds which were remarketed and the amounts
     that will be transferred pursuant to Section 4.03(a).  Not later than 4:00
     p.m. (or 1:00 p.m., in the case of Bonds accruing interest at Daily or
     Flexible Rates), New York City time, on the date of receipt of such notice
     the Trustee shall give notice by telephone, telegram, telecopy,
     Electronically or by other similar communication to the Bank and the
     Company, specifying




                                      25
<PAGE>   31

the principal amount of tendered Bonds as to which the Remarketing Agent has not
found a purchaser at that time.  At or before 3:00 p.m., New York City time, on
the Business Day prior to the purchase date to the extent known to the
Remarketing Agent, but in any event, no later than 11:00 a.m. (or 1:00 p.m., in
the case of Bonds accruing interest at Daily, Weekly or Flexible Rates), New
York City time, on the date fixed for purchase, (or two Business Days prior to
the date fixed for purchase in the event tendered Bonds accrue interest at Term
Rates), the Remarketing Agent shall give notice to the Trustee by telephone
(promptly confirmed in writing or Electronically) of the names, addresses and
taxpayer identification numbers of the purchasers, the denominations of Bonds to
be delivered to each purchaser and, if available, payment instructions for
regularly scheduled interest payments, or of any changes in any such information
previously communicated.

       (ii)  Sources of Payments; Drawings on Letter of Credit.  The Remarketing
Agent shall cause to be paid to the Trustee on the date fixed for purchase of
tendered Bonds, all amounts representing proceeds of the remarketing of such
Bonds, such payments to be made in the manner and at the time specified in
subsection 4.03(a) above.  If such amounts will not be sufficient to pay the
principal amount thereof plus the accrued and unpaid interest thereon (if any)
to the purchase date, the Trustee shall by 1:15 p.m., New York City time, on the
purchase date draw under the Letter of Credit, if any, then held by the Trustee
in accordance with its terms in a manner so as to furnish immediately available
funds by 3:00 p.m., New York City time on such purchase date, in an amount
sufficient, together with the remarketing proceeds available for such purchase,
to enable the Trustee to pay the purchase price of Bonds to be purchased on such
purchase date.  If no Letter of Credit is then held by the Trustee, the Company
shall deliver or cause to be delivered to the Trustee (A) immediately available
funds in an amount equal to such deficiency prior to 2:30 p.m., New York City
time, on the date set for purchase of tendered Bonds accruing interest at Daily
Rates and Weekly Rates (3:00 p.m., New York City time, in the case of Flexible
Rate Bonds), and (B) clearinghouse funds in an amount equal to such deficiency
prior to 12:15 p.m., New York City time, on the date set for purchase of
tendered Bonds accruing interest at Term Rates (the obligation of the Company to
deliver such moneys not being conditioned on receipt by the Company of the
foregoing notice from the Trustee).  All monies received by the Trustee as
remarketing proceeds or from drawings on the Letter of Credit and additional
amounts, if any, received from the Company shall be deposited by the Trustee in
the appropriate account of the Bond Purchase Fund to be used solely for the
payment of the Purchase Price of tendered Bonds and shall not be commingled with
other funds held by the Trustee.

       (iii) Payments by the Trustee.  At or before 3:00 p.m., New York City
time, on the date set for purchase of tendered Bonds and upon receipt by the
Trustee of 100% of the aggregate Purchase Price of the tendered Bonds, the
Trustee shall pay or receipt the Purchase Price of such Bonds to the Registered
Owners thereof.  Such payments shall be made in immediately available funds (or
by wire transfer), unless the Bonds to be purchased accrue interest at Term
Rates, in which event such payments shall be made in clearinghouse funds.  The
Trustee shall apply in order (A) monies paid to it by the Remarketing Agent as
proceeds of the remarketing of such Bonds by the Remarketing Agent (which monies
shall not include any monies of the Issuer, the Company or any guarantors
thereof), (B) proceeds of a drawing of the Letter of Credit, and (C) other
monies made available by the Company.  If sufficient funds are not available for
the purchase of all tendered Bonds, no purchases shall be consummated, all as
further set forth in Section 4.04 hereof.



                                      26
<PAGE>   32

       (iv)  Registration and Delivery of Tendered or Purchased Bonds.  On the
date of purchase, the Trustee shall register and deliver (or hold) or cancel all
Bonds purchased on any purchase date as follows:  (A) Bonds purchased or
remarketed by the Remarketing Agent shall be registered and made available to
the Remarketing Agent by 2:15 p.m., New York City time, in accordance with the
instructions of the Remarketing Agent; (B) Bonds purchased with proceeds of a
drawing on the Letter of Credit shall be held as Pledged Bonds in accordance
with subparagraph (v) below; and (C) Bonds purchased with amounts provided by
the Company shall be registered in the name of the Company and shall be held in
trust by the Trustee on behalf of the Company and shall not be released from
such trust unless the Trustee shall have received written instructions from the
Company.  Notwithstanding anything herein to the contrary, so long as the Bonds
are held under the book-entry only system in accordance with Section 2.11
hereof, Bonds will not be delivered as set forth above; rather, transfers of
beneficial ownership of the Bonds to the person indicated above will be effected
on the registration books of DTC pursuant to its rules and procedures.

       (v)   Pledged Bonds.  Bonds purchased with proceeds of a drawing on the
Letter of Credit pursuant to this Section shall constitute "Pledged Bonds" and
shall be held by the Trustee as agent for the Bank as pledgee of the Company
pursuant to the Reimbursement Agreement (and shall be shown as such on the
registration books maintained by the Trustee) unless and until (1) the Trustee
has written confirmation from the Bank to the extent contemplated by the terms
of the Letter of Credit that the Letter of Credit has been reinstated with
respect to such drawing and (2) the Bank has notified the Trustee by telephone
(thereafter promptly confirmed in writing) that such Bonds have been released
from the pledge pursuant to the Reimbursement Agreement and are no longer
Pledged Bonds.  Pending reinstatement of the Letter of Credit and release of
such pledge as aforesaid, the Bank shall be entitled to receive all payments of
principal of and interest on Pledged Bonds as pledgee of the Company and such
Bonds shall not be transferable or deliverable to any party (including the
Company) except the Bank pursuant to the Reimbursement Agreement.  The
Remarketing Agent shall, at the request of the Bank, continue to use its best
efforts to arrange for the sale of any Pledged Bonds, subject to full
reinstatement of the Letter of Credit with respect to the drawings with which
such Bonds were purchased, at a price equal to the principal amount thereof plus
accrued interest.

       Notwithstanding anything to the contrary in this subsection, if and for
so long as the Bonds are to be registered in accordance with Section 2.11
hereof, the registration requirements under this subsection (v) shall be deemed
satisfied if Pledged Bonds are (1) registered in the name of the Securities
Depository or its nominee in accordance with Section 2.11 hereof, (2) credited
on the books of the Securities Depository to the account of the Trustee (or its
nominee) and (3) further credited on the books of the Trustee (or such nominee)
to the account of the Bank (or its designee).

       (vi)  Resale of Bonds Purchased by the Company.  In the event that any
Bonds are registered to the Company pursuant to subparagraph (iv) above to the
extent requested by the Company, the Remarketing Agent shall offer for sale and
use its best efforts to sell such Bonds at a price equal to the principal amount
thereof plus accrued interest.

       (vii) Delivery of Tendered Bonds; Effect of Failure to Surrender Bonds.
All Bonds to be purchased on any date shall be required to be delivered to the
principal office of the Trustee at or before (A) 1:00 p.m., New York City time,
on the purchase date in the case of Bonds accruing interest at Flexible or Daily
Rates; (B) 12:00 noon, New York City time, on the purchase date in the case of
Bonds accruing interest at Weekly Rates; or (C) 5:00 p.m., New York City time,
on the second



                                      27
<PAGE>   33

     Business Day prior to the purchase date in the case of Bonds accruing
     interest at Term Rates, except for Bonds delivered by or on behalf of an
     Investment Company in accordance with Section 4.05 hereof which may be
     delivered by 3:00 p.m., New York City time, on the purchase date.  If the
     Owner of any Bond (or portion thereof) in certificated form that is subject
     to optional or mandatory purchase pursuant to this Article fails to deliver
     such Bond to the Trustee for purchase on the purchase date, and if the
     Trustee is in receipt of the Purchase Price therefor, such Bond (or portion
     thereof) shall nevertheless be deemed purchased on the day fixed for
     purchase thereof and ownership of such Bond (or portion thereof) shall be
     transferred to the purchaser thereof as provided in subsection (e)(iv)
     above. Any Owner who fails to deliver such Bond for purchase shall have no
     further rights thereunder except the right to receive the Purchase Price
     thereof upon presentation and surrender of said Bond to the Trustee.  The
     Trustee shall, as to any tendered Bonds which have not been delivered to it
     (i) promptly notify the Remarketing Agent of such nondelivery and (ii)
     place a stop transfer against an appropriate amount of Bonds registered in
     the name of such Registered Owner(s) on the bond registration books.  The
     Trustee shall place such stop(s) commencing with the lowest serial number
     Bond registered in the name of such Registered Owner(s) until stop
     transfers have been placed against an appropriate amount of Bonds until the
     appropriate tendered Bonds are delivered to the Trustee.  Upon such
     delivery, the Trustee shall make any necessary adjustments to the bond
     registration books.

     Section 4.04. Inadequate Funds for Tenders.  If the funds available for
purchases of Bonds pursuant to this Article IV are inadequate for the purchase
of all Bonds tendered on any purchase date, the Trustee shall, after any
applicable grace period:  (a) return all tendered Bonds to the Registered
Owners thereof; (b) return all moneys received for the purchase of such Bonds
to the Persons providing such monies; and (c) notify the Issuer and the
Remarketing Agent of the return of such Bonds and moneys and the failure to make
payment for tendered Bonds.

     Section 4.05. Tenders by Investment Companies.  The Owner of any Bond
issued hereunder that is an Investment Company, or is holding Bonds on behalf
of an Investment Company, may, at its option, notify the Remarketing Agent and
the Trustee of such fact in writing and in such notice irrevocably elect to
have its Bond(s) purchased on the next date on which such Bond(s) may be
purchased pursuant to Section 4.01 hereof.  Any notice delivered by an
Investment Company with respect to its Bond(s) shall contain the information
required under Section 4.01(b) hereof and shall be irrevocable with the same
effect described in Section 4.01(b)(iii).

     Section 4.06. Bond Purchase Fund.  There is hereby created with the
Trustee a segregated trust fund to be designated the "Bond Purchase Fund".  The
Bond Purchase Fund shall consist of three sub-accounts to be designated
respectively the "Remarketing Account", the "Letter of Credit Purchase Account"
and the "Company Purchase Account".

     The Trustee shall deposit or cause to be deposited into the Remarketing
Account, when and as received, all moneys delivered to the Trustee as and for
the Purchase Price of remarketed Bonds by or on behalf of the Remarketing
Agent.  The Trustee shall disburse moneys from the Remarketing Account to pay
the Purchase Price of Bonds properly tendered for purchase upon surrender of
such Bonds.

     The Trustee shall deposit or cause to be deposited into the Letter of
Credit Purchase Account, when and as received, all proceeds from a drawing on
the Letter of Credit pursuant to Section 4.03(b).  The Trustee shall disburse
moneys from the Letter of Credit Purchase Account to pay the Purchase Price of
Bonds properly



                                      28
<PAGE>   34

tendered for purchase upon surrender of such Bonds; provided that such proceeds
shall not be applied to purchase Pledged Bonds or Company Bonds.

     The Trustee shall deposit or cause to be deposited into the Company
Purchase Account, when and as received, all moneys delivered to the Trustee by
or for the account of the Company pursuant to the Agreement.  The Trustee shall
disburse moneys from the Company Purchase Account to pay the Purchase Price of
Bonds properly tendered for purchase by or on behalf of the Company upon
surrender of such Bonds or to reimburse the Bank for drawing under the Letter
of Credit for such purpose.

     The funds held by the Trustee in the Bond Purchase Fund shall not be
considered Pledged Revenues as that term is defined herein and shall not
constitute part of the trust estate which is subject to the lien of this
Indenture.  The moneys in the Bond Purchase Fund shall be used solely to pay
the Purchase Price of Bonds as aforesaid (or to reimburse the Bank for drawings
under the Letter of Credit for such purpose) and may not be used for any other
purposes.  It shall be the duty of the Trustee to hold the moneys in the Bond
Purchase Fund, without liability for interest thereon, for the benefit of the
Registered Owners of Bonds which have been properly tendered for purchase or
deemed tendered on the purchase date, and if sufficient funds to pay the
Purchase Price for such tendered Bonds shall be held by the Trustee in the Bond
Purchase Fund for the benefit of the Registered Owners thereof, each such
Registered Owner shall thereafter be restricted exclusively to the Bond
Purchase Fund for any claim of whatever nature on such Registered Owner's part
under this Indenture or on, or with respect to, such tendered Bond.  The
provisions of Section 6.03 hereof shall govern any funds held in the Bond
Purchase Fund for such Registered Owners of the Bonds which remain unclaimed
for a period of two years after the applicable purchase date.


                                   ARTICLE V

                            DEPOSIT OF BOND PROCEEDS

     Section 5.01. Deposit of Proceeds of Bonds.  The initial proceeds of the
Bonds and the other amounts delivered to the Trustee pursuant to Section 2.01
hereof shall be deposited by the Trustee as follows:

             (a) in the Debt Service Fund, established pursuant to Section 6.01
     hereof, a sum equal to the accrued interest, if any, paid by the initial
     purchasers of the Bonds, and

             (b) in a separate escrow account established outside of this
     Indenture with PNC Bank, N.A. in accordance with the escrow agreement dated
     the Issue Date (the "Escrow Agreement") between PNC Bank, N.A. and the
     Company, the balance of the proceeds received from the initial purchasers
     of the Bonds (such proceeds to be used in connection with the redemption of
     the 1987 Bonds on or before November 13, 1997).




                                      29
<PAGE>   35

                                   ARTICLE VI

                       DEBT SERVICE FUND AND REBATE FUND

     Section 6.01. Establishment of Certain Funds and Accounts.  The Issuer
hereby establishes with the Trustee the Debt Service Fund, within which there
is hereby established a Company Debt Service Account and a Letter of Credit
Debt Service Account and the Rebate Fund.

     Section 6.02. Debt Service Fund.  The Trustee shall maintain the Debt
Service Fund as follows:

             (a)   The Trustee shall deposit into the Company Debt Service
     Account all amounts received by the Trustee or for the account of the
     Company pursuant to Section 5.01(a) hereof and all Debt Service Payments
     received pursuant to the Agreement.

             (b)   The Trustee shall deposit into the Letter of Credit Debt
     Service Account all moneys received by the Trustee from drawings under the
     Letter of Credit to pay principal of, premium, if any, on and interest on
     the Bonds.

             (c)   Moneys in the Letter of Credit Debt Service Account shall be
     applied to the payment when due of principal of, premium, if any, on and
     interest on the Bonds (other than Pledged Bonds or Company Bonds).

             (d)   Moneys in the Company Debt Service Account shall be applied
     to the following in the order of priority indicated:

                   (1) the reimbursement of the Bank when due for moneys drawn
             under the Letter of Credit and deposited in the Letter of Credit
             Debt Service Account for payment of principal of, premium, if any,
             on and interest on the Bonds;

                   (2) when insufficient moneys have been received under the
             Letter of Credit for application pursuant to Subsection 6.02(c),
             the payment when due of principal of, premium, if any, on and
             interest on the Bonds, other than Company Bonds or Pledged Bonds;

                   (3) the payment when due of principal of, premium, if any,
             on and interest on Pledged Bonds; and

                   (4) the payment when due of principal of, premium, if any,
             on and interest on Company Bonds, provided that if the Trustee
             shall have received written notice from the Bank that any amounts
             are due and owing to the Bank under the Reimbursement Agreement,
             such payments shall be made to the Bank for the account of the
             Company.

             (e) By 12:00 noon on the Business day immediately preceding each
     Interest Payment Date, each redemption date and the maturity date of the
     Bonds, the Trustee shall present the requisite draft and certificate for a
     drawing on the letter of Credit so as to comply with the provisions of the
     Letter of Credit for payment to be made in sufficient time for the Trustee
     to receive the proceeds of such drawing at or before 10:00 a.m. on such
     Interest Payment Date, redemption date or maturity date, as the case may
     be, to pay principal of, premium, if any, on and interest on the Bonds due
     on such



                                      30
<PAGE>   36

     date.  In addition, the Trustee shall draw on the Letter of Credit pursuant
     to its terms in accordance with and in order to satisfy the requirements of
     Section 11.02(b).  By 5:00 p.m. on each date it presents the requisite
     documents for a drawing on the Letter of Credit, the Trustee shall give
     notice to the Company by telephone, promptly confirmed in writing, of the
     amount so drawn. The Trustee shall promptly notify the Company by oral or
     telephonic communication confirmed in writing if the Bank fails to transfer
     funds in accordance with the Letter of Credit upon the presentment of the
     requisite draft and certificate.  In calculating the amount to be drawn on
     the Letter of Credit for the payment of principal of and interest on the
     Bonds, whether on an Interest Payment Date, at maturity or upon redemption
     or acceleration, the Trustee shall not take into account the potential
     receipt of funds from the Company under the Agreement on such Interest
     Payment Date, or the existence of any other moneys in the Bond Fund, but
     shall draw on the Letter of Credit for the full amount of principal and
     interest coming due on the Bonds.

     Section 6.03. Return of Monies from Non-Delivery of Bonds.  In the event
any Bond shall not be delivered for payment when the principal thereof becomes
due, either at maturity, at the date fixed for redemption thereof, or
otherwise, and is not thereafter delivered for payment, or if interest thereon
is unclaimed, any funds which shall be held for such purpose by the Trustee and
which remain unclaimed by the Registered Owner of the Bond for a period of two
years after such due date thereof, shall, upon request in writing by the
Company, and subject to applicable unclaimed property or similar laws of the
State, be paid to the Company for the benefit of the Registered Owner thereof
free of any trust or lien and thereafter the Registered Owner of such Bond
shall look only to the Company for payment without any interest thereon, and
the Trustee shall not have any further responsibility with respect to such
moneys.  In addition, if at any time after there are no longer any Bonds
Outstanding the Trustee determines that the amounts on deposit in the Funds and
accounts created under this Indenture are in excess of the amounts necessary to
pay the Bond Obligations, the Trustee shall pay such excess to the Bank, to the
extent of any amount certified by the Bank as due from the Company under the
Reimbursement Agreement, and then to the Company as an overpayment of the Debt
Service Payments free of any trust or lien.

     Section 6.04. Rebate Fund; Covenants Regarding Rebate.

     (a) Upon written notice from the Company, the Trustee shall establish a
Rebate Fund in accordance with the provisions of this Section 6.04.  Such Fund
shall be for the sole benefit of the United States of America and shall not be
subject to the claim of any other Person, including without limitation the
Registered Owners.  The Rebate Fund is established for the purpose of complying
with Section 148 of the Code and the Regulations promulgated pursuant thereto.
The money deposited in the Rebate Fund, together with all investments thereof
and investment income therefrom, shall be held in trust and applied solely as
provided in this Section.  The Rebate Fund is not a portion of the Trust Estate
and is not subject to the lien of this Indenture.

     (b)  At the close of each Bond Year, the Company, or its agent, shall
compute the amount of "Excess Earnings," if any, for the period beginning on
the Issue Date and ending at the close of such Bond Year, transmit a copy of
such computation to the Trustee, and pay to the Trustee for deposit to the
Rebate Fund an amount equal to the difference, if any, between the amount then
in the Rebate Fund and the "Excess Earnings" so computed.  If, at the close of
any Bond Year, the amount in the Rebate Fund exceeds the amount that would be
required to be paid to the United States of America under paragraph (d) below
if the Bonds had been paid in full, such excess may be transferred from the
Rebate Fund and paid to the Company to be used for such purposes for which, or
to be redeposited to such fund from which, such amounts were originally
intended.



                                      31
<PAGE>   37

     (c)  In general, "Excess Earnings" for any period of time means the sum of

              (i)  the excess of --

                        (A)  the aggregate amount earned during such period of
              time on all Nonpurpose Investments (including gains on the
              disposition of such obligations) in which Gross Proceeds of the
              Bonds are invested (other than amounts attributable to an excess
              described in this subparagraph (c)(i)), over

                        (B)  the amount that would have been earned during such
              period of time if the Yield on such Nonpurpose Investments (other
              than amounts attributable to an excess described in this
              subparagraph (c)(i)) had been equal to the Yield on the Bonds,
              plus

              (ii)  any income during such period of time attributable to the
     excess described in subparagraph (c)(i) above.

     (d)  The Trustee shall pay to the United States of America at least once
every five years an amount, as determined by the Company and provided in
writing to the Trustee, that ensures that at least 90 percent of the Excess
Earnings from the Issue Date to the close of the period for which the payment
is being made will have been paid.  The Trustee shall pay to the United States
of America not later than 60 days after the Bonds have been paid in full 100
percent of the amount, as determined by the Company and provided in writing to
the Trustee, then required to be paid under Section 148(f) of the Code as a
result of Excess Earnings.  The Company shall provide to the Trustee any
completed Internal Revenue Service form that must accompany each payment to the
United States of America.

     (e)  The amounts to be computed, paid, deposited or disbursed under this
section shall be determined by the Company acting on behalf of the Issuer
within ten days after each successive anniversary date of the Issue Date of
each issue or series of Bonds.  By such date, the Company shall also notify, in
writing, the Trustee and the Issuer of the determinations the Company has made
and the payment to be made pursuant to the provisions of this section.  Upon
written request of any Registered Owner of Bonds, the Company shall furnish to
such Registered Owner of Bonds a certificate (supported by reasonable
documentation, which may include calculation by Bond Counsel or by some other
service organization) showing compliance with this section and other applicable
provisions of Section 148 of the Code.

     (f)  Notwithstanding anything contained herein to the contrary, the
provisions of this section shall not apply to the Trustee, the Issuer or the
Company if (i) within 180 days from the Issue Date, all Gross Proceeds are
expended to finance the Project or (ii) the proceeds of the Bonds including any
investment earnings thereon, have been applied in a manner which, in the
written opinion of Bond Counsel delivered to the Trustee, will not adversely
affect the tax-exempt status of interest on the Bonds.

     (g)  The Trustee shall maintain a record of the periodic determinations by
the Company of the tentative Rebate Amount for a period beginning on the first
anniversary date of the Issue Date and ending on the date six years after the
final retirement of the Bonds.  Such records provided by the Company shall
state each such anniversary date and summarize the manner in which the
tentative Rebate Amount, if any, was determined.  This provision shall not be
applicable if the Gross Proceeds are expended within 180 days of the Issue Date
of the applicable series or issue of Bonds.



                                      32
<PAGE>   38

     (h)  If the Trustee shall declare the principal of the Bonds and the
interest accrued thereon immediately due and payable as the result of an Event
of Default specified in this Indenture, or if the Bonds are optionally or
mandatorily prepaid or redeemed prior to maturity as a whole in accordance with
their terms, any amount remaining in any of the funds shall be transferred to
the Rebate Fund to the extent that the amount therein is less than the
tentative Rebate Amount computed by the Company as of the date of such
acceleration or redemption, and the balance of such amount shall be used
immediately by the Trustee for the purpose of paying principal of, premium, if
any, and interest on the Bonds when due.  In furtherance of such intention, the
Issuer hereby authorizes and directs its officers and commissioners to execute
any documents, certificates or reports required by the Code and to make such
elections, on behalf of the Issuer, which may be permitted by the Code and
which are requested by either the Company or the Trustee, as are consistent
with the purpose for the issuance of the Bonds.

     (i)  If the Company fails to provide any of the information,
certifications, calculations or moneys to the Trustee as required in this
Section 6.04, neither the Trustee nor the Issuer shall have any obligation to,
and shall not, make any calculation required hereunder.

     Section 6.05. Intentionally Omitted.

     Section 6.06. Moneys to be Held for All Registered Owners, With Certain
Exceptions.  Until applied as herein provided, moneys and investments held in
all Funds and accounts established hereunder (other than funds held in the Bond
Purchase Fund and the Rebate Fund) shall be held in trust for the benefit of
the Registered Owners of all Outstanding Bonds, except that on and after the
date on which the interest on or principal or redemption price of any
particular Bond or Bonds is due and payable from the Debt Service Fund, the
unexpended balance of the amount deposited or reserved in such Fund for the
making of such payments shall, to the extent necessary therefor, be held for
the benefit of the Registered Owner or Registered Owners entitled thereto.

     Section 6.07. Additional Accounts and Subaccounts.  At the written request
of the Company, the Trustee shall establish and maintain additional accounts
within the Funds or subaccounts within the accounts established hereunder as
the Company may reasonably request; provided that (a) in each case, the written
request of the Company shall set forth in reasonable detail the sources of
deposits into and disbursements from the account or subaccount to be
established, (b) in each case, the sources of deposits into and disbursements
from the account or subaccount to be established shall be limited to the
sources of deposits permitted or required under this Indenture to be made into
and the disbursements permitted or required to be made from the fund or account
within which it is to be established, and (c) each additional account or
subaccount established hereunder shall be held in trust for the benefit of the
Registered Owners of all Outstanding Bonds, except as provided in Section 6.06
hereof.


                                  ARTICLE VII

                                LETTER OF CREDIT

     Section 7.01. Extension or Replacement in Anticipation of Expiration.  At
least 45 days (or such shorter period as shall be acceptable to the Trustee)
prior to the Interest Payment Date next preceding the Expiration Date of the
current Letter of Credit, the Company may provide for the delivery to the
Trustee of (1) an amendment to the Letter of Credit which extends the
Expiration Date to a date that is not earlier than



                                      33
<PAGE>   39

one year from its then current Expiration Date (provided, however, that
notwithstanding anything herein to the contrary, the Letter of Credit initially
delivered under this Indenture may be extended, in the manner otherwise provided
for herein, for successive periods of not less than 90 days) or (2) an Alternate
Letter of Credit issued by a national banking association, a bank, a trust
company or other financial institution or credit provider, which shall have
terms which are the same in all material respects (except Expiration Date and
except any changes pursuant to this Indenture with respect to interest or
premium coverage in connection with a concurrent interest rate reset or
conversion) as the current Letter of Credit and which shall have an Expiration
Date that is not earlier than one year from the Expiration Date of the Letter of
Credit then in effect.  The institution issuing the Alternate Letter of Credit
must be such as to maintain a rating on the Bonds equal to or higher than the
then current rating on the Bonds given by the Rating Service, and the Trustee
shall have received, on or before the date of delivery of the Alternate Letter
of Credit, written notice from the Rating Service that the issuance of the
Alternate Letter of Credit and substitution thereof for the then current Letter
of Credit will result in a rating on the Bonds equal to or higher than the then
current rating on the Bonds.  The Trustee shall not accept an Alternate Letter
of Credit under this Section unless there shall have been delivered to the
Trustee (1) a written notice from the Rating Service as provided in the
immediately preceding sentence, (2) an opinion of counsel to the Bank
satisfactory to the Trustee with respect to the validity, binding effect and
enforceability of such Alternate Letter of Credit and (3) an opinion of Bond
Counsel to the effect that such action will not adversely affect the exclusion
from gross income of interest on the Bonds for federal income tax purposes.  If
the Letter of Credit is so extended or if an Alternate Letter of Credit
complying with the requirements of this Section is so provided, the mandatory
tender for purchase pursuant to clause (c) of Section 4.02, shall not occur.
Unless all of the conditions of this Section which are required to be met 45
days (or such shorter period as shall be acceptable to the Trustee) preceding
the Interest Payment Date next preceding the Expiration Date of the Letter of
Credit have been satisfied, the Trustee shall take all action necessary to call
the Bonds for mandatory tender for purchase pursuant to clause (c) of Section
4.02 on the Interest Payment Date next preceding such Expiration Date; provided
that if the Company shall have notified the Trustee in writing that it expects
to meet all the conditions for the delivery of an amendment extending the
existing Letter of Credit, or the delivery of an Alternate Letter of Credit from
a bank identified in such notice, meeting all of the requirements of this
Section on or before the Interest Payment Date next preceding the Expiration
Date of the existing Letter of Credit, then the notice of mandatory tender for
purchase pursuant to the clause (c) of Section 4.02 shall state that it is
subject to rescission, and the Trustee shall rescind such notice, if such
conditions are so met (in which case such mandatory purchase shall not occur).
The provisions of this Section with respect to the substitution of an Alternate
Letter of Credit in the event that the Expiration Date of the Letter of Credit
is not extended shall apply equally to the substitution of another Alternate
Letter of Credit in the event that the Expiration Date of an existing Alternate
Letter of Credit is not extended.

     Section 7.02. Other Replacement.  The delivery of an Alternate Letter of
Credit in anticipation of the expiration of current Letter of Credit shall be
governed by Section 7.01.  Otherwise, if at any time, when the Bonds are
subject to optional purchase pursuant to Section 4.01, the Company shall
provide for the delivery to the Trustee of (1) an Alternative Letter of Credit
which shall have terms which are the same in all material respects (except as
to Expiration Date and except any changes pursuant to this Indenture with
respect to interest or premium coverage in connection with a concurrent
interest rate reset or conversion) as the current Letter of Credit, which shall
have an Expiration Date that is not less than one year from the date of its
delivery and not sooner than the Expiration Date of the current Letter of
Credit then in effect and which shall be issued by a national banking
association, a bank, a trust company or other financial institution or credit
provider, (2) an opinion of counsel to the Bank satisfactory to the Trustee
with respect to the validity, binding effect and enforceability of such
Alternate Letter of Credit, and (3) an opinion of Bond Counsel to the effect
that such action will not adversely affect the exclusion from gross income of
interest on the Bonds for federal income



                                      34
<PAGE>   40

tax purposes, and if the requirements set forth in this Section are met, then
the Trustee shall accept such Alternate Letter of Credit and promptly surrender
for cancellation the previously held Letter of Credit to the issuer thereof in
accordance with the terms of such Letter of Credit.  The institution issuing the
Alternate Letter of Credit must be such as to maintain a rating on the Bonds
equal to or higher than the then current rating on the Bonds given by the Rating
Service.  The replacement of the Letter of Credit by the Alternate Letter of
Credit must not, by itself, adversely affect the current rating or ratings on
the Bonds, and the absence of such an adverse effect shall be evidenced in
writing by the Rating Service to the Trustee at or prior to such replacement.

     Section 7.03. Notice to Holders.  The Trustee shall give notice to the
Registered Owners, in the name of the Issuer, of the proposed replacement of
the current Letter of Credit with an Alternate Letter of Credit, by first class
mail, postage prepaid, not less than 30 days prior to the interest Payment Date
next preceding the proposed replacement date.

     Section 7.04. Reduction.  In each case that Bonds are redeemed or deemed
to have been paid pursuant to Article XVI, the Trustee shall take such action
as may be permitted under the Letter of Credit to reduce the amount available
thereunder to an amount equal to the principal amount of the outstanding Bonds,
plus interest for the maximum period between Interest Payment Dates plus 15
days; provided that such action by the Trustee shall not be required if the
Letter of Credit so reduces automatically pursuant to its terms.  Upon
reduction of the amount available under the Letter of Credit pursuant to the
terms of the Letter of Credit and this Section as a result of redemption of
Bonds, the Bank shall have the right, at its option, to require the Trustee to
promptly surrender the outstanding Letter of Credit to the Bank and to accept
in substitution therefor a substitute Letter of Credit in the same form, dated
the date of such substitution, for an amount equal to the amount available
under the Letter of Credit as so reduced, but otherwise having terms identical
to the then outstanding Letter of Credit.

     Section 7.05. Other Credit Enhancement; No Credit Enhancement.  After a
mandatory purchase of the Bonds pursuant to clause (c) of Section 4.02, nothing
in this Article VII shall limit the Company's right to provide other credit
enhancement (such as a letter of credit not meeting the requirement of this
Article VII or bond insurance) or no credit enhancement as security for the
Bonds; provided that any such credit enhancement shall have administrative
provisions reasonably satisfactory to the Trustee and the Company shall have
furnished to the Trustee with respect thereto an opinion of Bond Counsel to the
effect such action will not adversely effect the exclusion from gross income of
interest on the Bonds for federal income tax purposes.


                                  ARTICLE VIII

                                  INVESTMENTS

     Section 8.01. Investment of Funds.    (a)  Pending disbursement of the
amounts on deposit in any Fund, the Trustee is hereby directed to invest and
reinvest such amounts (other than amounts held pursuant to Section 6.03 and
amounts held in the Bond Purchase Fund or in the Letter of Credit Debt Service
Account, which shall be held uninvested) in Investment Securities promptly upon
receipt of, and, subject to the limitations set forth in this Article, in
accordance with, the written instructions of the Company executed by an
Authorized Company Representative, which instructions shall specify particular
investments and shall certify that such investments constitute Investment
Securities.  All such investments shall be credited to the Fund from which the
money used to acquire such investments shall have come, and all income and
profits on



                                      35
<PAGE>   41

such investments shall be credited to, and all losses thereon shall be charged
against, such Fund.  As amounts invested are needed for disbursement from any
Fund, the Trustee on receipt of written instruction from the Company shall cause
a sufficient amount of the investments credited to that Fund to be redeemed or
sold and converted into cash to the credit of that Fund.  The Trustee shall not
be liable or responsible for any loss resulting from any such investment or
reinvestment as herein authorized or for its inability, after reasonable effort
and within a reasonable time, to make such investment or reinvestment; except
that the Trustee shall be liable for any loss resulting from its willful or
negligent failure, within a reasonable time after receiving the direction from
the Company to make any investment or reinvestment in the manner provided for
herein at the Company's direction.

     (b)  Any investment made in accordance with this Indenture may (i) be
executed by the Trustee or the Issuer with or through the Trustee or its
affiliates, and (ii) be made in securities of any entity for which the Trustee
or any of its affiliates serves as distributor, advisor or other service
provider.  If the Company does not give directions as to investment of money
held by the Trustee, or if an Event of Default has occurred and is continuing
hereunder, the Trustee shall make such investments in Investment Securities as
are permitted under applicable law and as it deems advisable.  The Trustee
shall be permitted to charge to the Company its standard fees and all expenses
in connection with any services performed in accordance with this Section 8.01.

     (c)  The Company by its execution of the Agreement covenants to restrict
the investment of money in the Funds created under this Indenture in such
manner and to such extent, if any, as may be necessary, after taking into
account reasonable expectations at the time the Bonds are delivered to their
original purchasers, so that the Bonds will not constitute arbitrage bonds
under Section 148 of the Code and the Regulations, and the Trustee hereby
agrees to comply with the Company's written instructions executed by an
Authorized Company Representative with respect to the investment of money in
the Funds created under this Indenture.  It is expressly provided that, because
investments hereunder are to be made by the Trustee pursuant to instructions of
the Company, the Trustee shall have no liability with respect thereto if, as a
result of an investment made pursuant to such instructions, the Bonds become
"arbitrage bonds" within the meaning of Section 148 of the Code.

     Section 8.02. Covenants Regarding Tax Exemption.  The Issuer covenants to
refrain from taking any action which would adversely affect, and to take such
action as is reasonable and available and within its control to ensure, the
treatment of the Bonds as obligations described in Section 103 of the Code (or
Section 1312 of the Tax Reform Act of 1986), the interest on which is not
includable in the "gross income" of the holder (other than the income of a
"substantial user" of the Project or a "related person" within the meaning of
Section 147(a) of the Code) for purposes of federal income taxation.  In
particular, but not by way of limitation thereof, the Issuer, based solely upon
representations and covenants of the Company, covenants as follows:

             (a)  to refrain from taking any action that would result in the
     Bonds being "federally guaranteed" within the meaning of Section 149(b) of
     the Code;

             (b)  to refrain from using any portion of the proceeds of the
     Bonds, directly or indirectly, to acquire investment property or to replace
     funds which were used, directly or indirectly, to acquire investment
     property (as defined in Section 148(b)(2) of the Code) which produces a
     yield over the term of the Bonds that is materially higher (as defined in
     the Regulations) than the yield on the Bonds, other than investment
     property acquired with --



                                      36
<PAGE>   42

                  (1) proceeds of the Bonds invested for a reasonable temporary
             period of three years of less, or until such proceeds are needed
             for the purpose for which the Bonds are issued,

                  (2) amounts invested in a bona fide debt service fund, within
             the meaning of Section 1.103-13(b)(12) of the Treasury Regulations,
             and

                  (3) amounts deposited in any reasonably required reserve or
             replacement fund to the extent such amounts do not exceed ten
             percent of the proceeds of the Bonds and to the extent that at no
             time during any Bond Year will the aggregate amount so invested
             exceed 150 percent of debt service on the Bonds for such year;

             (c) to otherwise restrict the use of proceeds of the Bonds or
     amounts treated as proceeds of the Bonds, as may be necessary, to satisfy
     the requirements of Section 148 of the Code (relating to arbitrage);

             (d) to use no more than two percent of the proceeds from the sale
     of the Bonds for the payment of Costs of Issuance; and

             (e) to use no portion of the proceeds of the Bonds to provide any
     airplane, skybox or other private luxury box, health club facility,
     facility to be used for gambling, or store the principal business of which
     is the sale of alcoholic beverages for consumption off premises.

It is the understanding of the Issuer and the Trustee that the covenants
contained herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury
pursuant thereto.  In the event that regulations or rulings are hereafter
promulgated which modify or expand provisions of the Code, as applicable to the
Bonds, the Issuer will not be required to comply with any covenant contained
herein to the extent that such modification or expansion, in the opinion of
Bond Counsel, will cause noncompliance with such covenant to not adversely
affect the exemption from federal income taxation of interest on the Bonds
under the Code.  In the event that regulations or rulings are hereafter
promulgated which impose additional requirements which are applicable to the
Bonds, the Issuer agrees to comply with the additional requirements to the
extent necessary, in the opinion of Bond Counsel, to preserve the exemption
from federal income taxation of interest on the Bonds under Section 103 of the
Code.

     It is expressly provided that, because investments hereunder are to be
made by the Trustee pursuant to instructions of the Company, the Issuer shall
have no liability with respect thereto if, as a result of an investment made
pursuant to such instructions, the Bonds become "arbitrage bonds" within the
meaning of Section 148 of the Code.  Furthermore, it is expressly provided
that, because the Company will instruct the Trustee as to the disposition of
the gross proceeds of the Bonds and moneys in the Project Fund and the Rebate
Fund, neither the Trustee nor the Issuer shall have any liability with respect
thereto if, as a result of dispositions made pursuant to such instructions, or
not made due to a lack of such instructions, there is a breach of the Issuer's
covenants contained herein.



                                      37
<PAGE>   43


                                   ARTICLE IX

                              REDEMPTION OF BONDS

     Section 9.01. Bonds Subject to Redemption.  The Bonds shall be subject to
redemption prior to maturity as set forth below:

             (a)   Optional Redemption.  The Bonds shall be subject to optional
     redemption, in whole or in part, and if in part at the lowest authorized
     denomination or any whole multiple thereof, at the direction of the
     Company, from funds available for such purpose in the Debt Service Fund, as
     follows:

                   (i)   If the Bonds accrue interest at Flexible, Daily or
             Weekly Rates, the Bonds shall be subject to Optional Redemption on
             any Interest Payment Date at an Optional Redemption price equal to
             100% of the principal amount thereof, together with accrued
             interest to the redemption date.

                   (ii)  If the Bonds accrue interest at a Term Rate, the Bonds
             shall be subject to Optional Redemption (i) at any time on and
             after the dates and at the Optional Redemption prices set forth
             below, together with accrued interest, if any, to the redemption
             date and (ii) on the day after the end of each Term Rate Period at
             the redemption price of 100% of the principal amount thereof,
             together with accrued interest, if any, to the redemption date:


<TABLE>
<CAPTION>
                                    Commencement of Redemption
Length of Term Rate Period                  Period                       Redemption Price
--------------------------------    --------------------------    -------------------------------
<S>                               <C>                             <C>
Greater than or equal to           Tenth anniversary of the       102%, declining by 0.5% on
                                   commencement of Term Rate      each succeeding anniversary of
                                   Period                         the first day of the redemption
                                                                  period until reaching 100% and
                                                                  thereafter at 100%

Less than 15 years and greater
than or equal to 5 years           Eighth anniversary of the      101.5%, declining by 0.5% on each
                                   commencement of Term Rate      succeeding anniversary of the first
                                   Period                         day of the redemption period until
                                                                  reaching 100% and thereafter at 100%

Less than 10 years and greater
than or equal to 5 years           Fifth anniversary of the       101%, declining by 0.5% on each
                                   commencement of Term Rate      succeeding anniversary of the first
                                   Period                         day of the redemption period until
                                                                  reaching 100% and thereafter at 100%


Less than 5 years                  Bonds not subject to
                                   optional redemption
                                   until commencement
</TABLE>



                                      38
<PAGE>   44

     The optional redemption dates and redemption prices set forth above may be
changed by a supplemental indenture approved by the Company and the Issuer and
filed with the Trustee, provided that any such supplemental indenture shall be
accompanied by a Favorable Opinion of Bond Counsel.

     If a Letter of Credit is then in effect and the redemption price includes
any premium, the right of the Company to direct an optional redemption is
subject to the condition that the Trustee has received, prior to the date on
which notice of redemption is required to be given to Registered Owners,
written confirmation from the Bank that it can draw under the Letter of Credit
on the proposed redemption date in an aggregate amount sufficient to cover the
principal of and premium and interest due on the redemption date.

              (b) Special Mandatory Redemption.

              The Bonds shall be subject to special mandatory redemption prior
     to maturity on a date selected by the Company not later than 180 days after
     the occurrence of a Determination of Taxability at a redemption price equal
     to 100% of the principal amount thereof, plus accrued interest to the
     redemption date.  Any such special mandatory redemption shall be in whole
     unless it is finally determined as evidenced by an opinion of Bond Counsel
     delivered to and addressed to the Trustee that the interest on an amount
     less than all the Bonds (which amount shall be set forth in such opinion)
     is so includable in the gross income of Owners, in which case only such
     amount need be redeemed.

              If the Trustee receives written notice from any Owner or
     Registered Owner stating that (i) the Owner or Registered Owner has been
     notified in writing by the Internal Revenue Service that it proposes to
     include the interest on any Bond in the gross income of such Owner or
     Registered Owner for the reasons stated in the definition of "Determination
     of Taxability" set forth herein or any other proceeding has been instituted
     against such Owner or Registered Owner which may lead to a Final
     Determination as described in the aforesaid definition, and (ii) such Owner
     or Registered Owner will afford the Company the opportunity to contest the
     same, either directly or in the name of the Owner or Registered Owner, and
     until a conclusion of any appellate review, if sought, then the Trustee
     shall promptly give notice thereof to the Company and the Issuer and to the
     Owner or Registered Owners of Bonds then Outstanding.  If a Final
     Determination thereafter occurs, the Trustee shall make demand for
     prepayment of the unpaid Debt Service Payments or necessary portions
     thereof from the Company and give notice of the special mandatory
     redemption of the appropriate amount of Bonds on the date selected by the
     Company within the required period of 180 days.  In taking any action or
     making any determination under this Section 9.01(b), the Trustee may rely
     on an opinion of counsel.

              (c) Extraordinary Optional Redemption.

              The Bonds will be subject to extraordinary optional redemption by
     the Issuer, at the direction of the Company, in whole or in part, at a
     redemption price of 100% of the principal amount thereof plus accrued
     interest to the redemption date on any date within one year of the
     occurrence of any of the following events:

                  (a) The Plant shall have been damaged or destroyed to such
              extent that, in the opinion of the Company, (i) normal operations
              at the Plant are prevented or are likely to be prevented for a
              period of four consecutive months, or (ii) the restoration of the
              Plant is not economically feasible.



                                      39
<PAGE>   45

                      (b) Title to, or the temporary use of, all or substantial
             all of the Plant shall have been under the exercise of the power
             of eminent domain by any governmental authority or person, firm or
             corporation acting under governmental authority which, in the
             opinion of the Company, is likely to result in normal operations
             at the Plant being prevented for a period of four consecutive
             months.

                      (c) Changes, which the Company cannot reasonably control
             or overcome, in the economic availability of materials, supplies,
             labor, equipment and other properties and things necessary for the
             efficient operation of the Plant shall have occurred, or
             technological or other changes shall have occurred which, in the
             opinion of the Company, render uneconomic the continued design,
             acquisition, construction, installation or operation of the Plant.

                      (d) Any court or administrative body shall enter a
             judgment, order or decree requiring cessation of all or any
             substantial part of operations at the Plant, to such an extent
             that, in the opinion of the Company, normal operations at the
             Plant are likely to be prevented for a period of four consecutive
             months.

                      (e) As a result of any changes in the Virginia
             Constitution or the Constitution of the United States of America
             or as a result of legislation or administrative action (whether
             state or federal) or by final decree, judgment or order of any
             court or administrative body (whether state or federal) entered
             after the contest thereof by the Company in good faith, the
             Agreement shall have become void or unenforceable or impossible of
             performance in accordance with the intent and purposes of the
             parties, or shall have been declared to be unlawful, or
             unreasonable burdens or excessive liabilities shall have been
             imposed on the Issuer or the Company, including without limitation
             federal, state or other ad valorem, property, income or other
             taxes not being imposed on the date of the Agreement.

     Section 9.02. Selection of Bonds for Redemption.  In the event that fewer
than all Bonds subject to redemption are to be redeemed, Bonds shall be
selected for redemption in the following manner provided that the Bonds that
remain outstanding shall be in authorized denominations:

             (a)  In the case of any Optional, Extraordinary Optional or Special
     Mandatory Redemption, Bonds shall be selected for redemption (i) by DTC,
     in accordance with its rules and procedures, so long as DTC or its nominee
     is the sole Registered Owner of the Bonds, or (ii) by the Trustee by lot,
     first, from Bonds subject to such redemption (other than Bonds owned of
     record by the Company), and, second, from Bonds subject to such redemption
     owned of record by the Company.

             (b) In the case of Bonds of varying denominations, the Trustee
     shall treat each Bond as representing that number of Bonds which is
     obtained by dividing the face amount thereof by the smallest authorized
     denomination.

     Section 9.03. Notice of Redemption.  (a)  The Company shall deliver notice
to the Trustee and the Bank of its intention to prepay the Debt Service
Payments and cause the Bonds to be called for Optional Redemption or
Extraordinary Optional Redemption at least 25 days prior to the proposed
redemption date of Daily Rate and Weekly Rate Bonds, and at least 45 days prior
to the proposed redemption date of Flexible Rate and Term Rate Bonds.  The
Trustee shall cause notice of any redemption of Bonds hereunder, which notice
shall be prepared by the Company, to be mailed by first class mail, postage
prepaid (except when DTC is the



                                     40
<PAGE>   46

Registered Owner of all of the Bonds and except for persons or entities owning
or providing evidence of ownership satisfactory to the Trustee of a legal or
beneficial ownership in at least $1,000,000 of principal amount of Bonds who so
request, in which cases, by certified mail, return receipt requested), to the
Registered Owners of all Bonds to be redeemed at the registered addresses
appearing in the registration books kept for such purpose pursuant to Article
II hereof.  Each such notice shall (i) be mailed at least 15 days prior to the
redemption date for Daily, Weekly and Flexible Rate Bonds and at least 30 days
prior to the redemption date for Term Rate Bonds, (ii) identify the Bonds to be
redeemed if less than all Bonds are to be redeemed (specifying the CUSIP
numbers, if any, assigned to the Bonds), (iii) specify the redemption date and
the redemption price, and (iv) state that on the redemption date the Bonds
called for redemption will be payable at the principal office of the Trustee,
that from that date interest will cease to accrue and that no representation is
made as to the accuracy or correctness of the CUSIP numbers printed therein or
on the Bonds; provided, however, that so long as DTC or its nominee is the sole
Registered Owner of the Bonds under the Book-Entry Only System, redemption
notices will be sent to Cede & Co.  Any failure on the part of DTC, or a DTC
Participant to give such notice to the Owner or any defect therein shall not
affect the sufficiency or validity of any proceedings for the redemption of the
Bonds.  No defect affecting any Bond, whether in the notice of redemption or
mailing thereof (including any failure to mail such notice), shall affect the
validity of the redemption proceedings for any other Bonds.

     (b) Conditional Notice.  If at the time of mailing of notice of an
Optional Redemption there shall not have been deposited with the Trustee moneys
sufficient to redeem all the Bonds called for redemption, such notice may state
that it is conditional, that is, subject to the deposit with the Trustee on or
prior to the redemption date of moneys sufficient to pay the redemption price
of the Bonds to be redeemed plus interest accrued thereon to the date of
redemption, and such notice shall be of no effect unless such moneys are so
deposited.

     (c)  Additional Notice of Redemption.  In addition to the redemption
notice required above, if there is more than one Registered Owner of the Bonds,
further notice (the "Additional Notice") shall be given by the Trustee as set
out below.  No defect in the Additional Notice nor any failure to give all or
any portion of the Additional Notice shall in any manner defeat the
effectiveness of a call for redemption if notice is given as prescribed in
paragraph (a) above.

              (1)  Each Additional Notice shall contain the information
     required in paragraph (a) above for an official notice of redemption plus
     (i) the date of the Bonds as originally issued; (ii) the interest rate
     determination method for, or the rate of interest borne by each Bond being
     redeemed; (iii) the maturity date of each Bond being redeemed; and (iv)
     any other descriptive information needed to identify accurately the Bonds
     being redeemed.

              (2)  Each Additional Notice shall be published one time in a
     financial newspaper or journal which regularly carries notices of
     redemption of other obligations similar to the Bonds, such publication to
     be made at least 30 days (15 days in the case of Bonds accruing interest
     at Daily, Weekly or Flexible Rates) prior to the date fixed for
     redemption.

              (3)  Each Additional Notice shall be sent at least 30 days (15
     days in the case of Bonds accruing interest at Daily, Weekly or Flexible
     Rates) before the redemption date by registered or certified mail or
     overnight delivery service to the following registered securities
     depositories: Depository Trust Company of New York, New York, Midwest
     Securities Trust Company of Chicago, Illinois and Philadelphia Depository
     Trust Company of Philadelphia, Pennsylvania and to such other



                                     41
<PAGE>   47

     registered securities depositories as may be specified by the Company to
     the Trustee in writing and to one or more national information services
     that disseminate notices of redemption of obligations such as the Bonds as
     shall be specified by the Company to the Trustee in writing.

             (4)   The Trustee's agreement to give the notices specified in this
     subsection (c) is made as a matter of courtesy and accommodation only and
     the Trustee shall incur no liability to any Person for its failure to give
     such notices.

     (d)  CUSIP Identification.  Upon the payment of the redemption price of
the Bonds being redeemed, each check or other transfer of funds issued for such
purpose shall bear the CUSIP number identifying, by issue and maturity, the
Bonds being redeemed with the proceeds of such check or other transfer,
provided that neither the Issuer, the Company, nor the Trustee shall be deemed
to have made any representation as to the correctness of such CUSIP number.

     Section 9.04.  Effect of Redemption.  If payment of the redemption price of
the Bonds has been duly provided for on the redemption date, then interest on
the Bonds called for redemption will cease to accrue on such date, and the
Registered Owners will have no rights with respect to such Bonds nor will they
be entitled to the benefits of the Indenture except to receive payment of the
redemption price thereof and unpaid interest accrued to the date fixed for
redemption.

     Section 9.05.  Optional Redemption only at Direction of Company.  Optional
redemption of the Bonds by the Issuer pursuant to Sections 9.01(a) and (c)
shall only be made at the direction and in the sole discretion of the Company,
and the Issuer shall take no action with respect to Sections 9.01(a) or (c)
without the prior written direction of the Company.


                                   ARTICLE X

                              COVENANTS OF ISSUER

     Section 10.01. Payment of Principal and Interest on Bonds.  The Issuer
shall promptly pay the interest on and the principal of every Bond issued
hereunder according to the terms thereof, together with interest on defaulted
principal and interest (to the extent permitted by law) from the date such
payment was due, but only out of the Pledged Revenues and only in the manner
set forth in Article II hereof.

     Section 10.02. Issuer to Use Best Efforts to Require Company to Make
Payments.  So long as any of the Bonds are Outstanding, the Issuer, when
requested to do so by the Trustee and after having been properly indemnified to
its satisfaction, shall use its best efforts to require the Company to pay all
of the payments and other costs and charges payable by the Company under the
Agreement.

     Section 10.03. Take Further Action.  The Issuer covenants that it shall
from time to time execute and deliver such further instruments and take such
further action as may be requested of the Issuer by the Trustee or the Company,
if such request is reasonable and is required to carry out the purpose of this
Indenture; provided, however, that no such instruments or actions shall cause
the Issuer to incur any cost, expense or liability, or pledge the credit of the
Issuer.



                                     42
<PAGE>   48

     Section 10.04. No Disposition of Pledged Revenues.  Except as otherwise
permitted in this Indenture or the Agreement, the Issuer shall not pledge,
assign or otherwise dispose of or encumber any of the Pledged Revenues.

     Section 10.05. Faithful Performance; Due Authorization.  The Issuer
covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions required to be performed by it and
contained in this Indenture, in any and every Bond executed and delivered
hereunder and in all of its proceedings pertaining hereto.  The Issuer
covenants that it is duly authorized under the laws of the State, including
particularly and without limitation the Act, to issue the Bonds authorized
hereby and to execute this Indenture, to assign the Agreement and amounts
payable under the Agreement and to assign the payments and amounts hereby
assigned in the manner and to the extent herein set forth; that all action on
its part for the issuance of the Bonds and the execution and delivery of this
Indenture has been duly and effectively taken.


                                   ARTICLE XI

                         EVENTS OF DEFAULT AND REMEDIES

     Section 11.01. Events of Default Defined.

     (a)     Each of the following shall be an Event of Default hereunder:

             (i)    payment of any installment of interest, principal, premium,
     if any or Purchase Price on the Bonds is not made when the same becomes
     due and payable; or

             (ii)   an Event of Bankruptcy shall occur, provided that, in the
     event of a filing of an involuntary case in bankruptcy under the United
     States Bankruptcy Code or the commencement of a proceeding under any other
     applicable law concerning bankruptcy, insolvency or reorganization against
     the Company such petition or proceeding shall remain undismissed or
     unstayed for a period of 90 days; or

             (iii)  failure by the Company to observe or perform any covenant,
     condition or agreement on its part to be observed or performed under the
     Indenture or the Agreement, other than as referred to in (i) above, for a
     period of 30 days after written notice, specifying such failure,
     requesting that it be remedied and stating that such notice is a "Notice
     of Default" hereunder, is given to the Company by the Trustee or to the
     Company and the Trustee by the Issuer; provided, however, that if the
     default is such that it cannot be remedied within such period, it shall
     not constitute an Event of Default if the default, in the judgment of the
     Trustee in reliance upon advice of counsel, is correctable without
     material adverse effect on the Bonds and if corrective action is
     instituted by the Company within such period and is being diligently
     pursued until the default is remedied; or

             (iv)  failure by the Issuer to observe or perform any covenant,
     condition or agreement on its part to be observed or performed under the
     Indenture, other than as referred to in (i) above, for a period of 30 days
     after written notice, specifying such failure, requesting that it be
     remedied and stating that such notice is a "Notice of Default" hereunder,
     is given by the Trustee; provided, however, that such period shall be
     extended if corrective action is instituted within such period and is
     being diligently   pursued until the default is remedied; or




                                     43

<PAGE>   49


           (v)    receipt by the Trustee of a written notice from the Bank
     stating that an Event of Default has occurred under the Reimbursement
     Agreement and directing the Trustee to declare the principal of the
     outstanding Bonds immediately due and payable; or

           (vi)   receipt by the Trustee of a written notice from the Bank,
     prior to the eighth Business Day following payment of a drawing under the
     Letter of Credit for interest on Bonds which remain outstanding after the
     application of the proceeds of such drawing, stating that the Letter of
     Credit will not be reinstated with respect to such interest.

     (b)   The Trustee shall immediately notify the Issuer, the Remarketing
Agent, and the Company of the occurrence of any Event of Default.

     (c)   Force Majeure.  The provisions of Section 11.01(a)(iii) and (iv)
hereof are subject to the following limitations:  if by reason of acts of God;
strikes, lockouts or other industrial disturbances; acts of public enemies;
orders of any kind of the Government of the United States or of the State or
any department, agency, political subdivision, court or official of any of
them, or any civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornadoes;
storms; floods; washouts; droughts; arrests; restraint of government and
people; civil disturbances; explosions; breakage or accident to machinery;
partial or entire failure of utilities; or any cause or event not reasonably
within the control of the Company, the Company is unable in whole or in part to
carry out any one or more of its agreements or obligations contained in the
Agreement other than its payment obligations and its agreements to comply with
arbitrage and other tax covenants, the Company shall not be deemed in default
by reason of not carrying out said agreement or agreements or performing said
obligation or obligations during the continuance of such inability so long as
the Company shall make reasonable effort to remedy with all reasonable dispatch
the cause or causes preventing it from carrying out its agreements; provided,
that the settlement of strikes, lockouts and other industrial disturbances
shall be entirely within the discretion of the Company, and the Company shall
not be required to make settlement of strikes, lockouts and other disturbances
by acceding to the demands of the opposing party or parties when such course is
in the judgment of the Company unfavorable to the Company.

     Section 11.02. Acceleration and Annulment Thereof.

     (a)   If any Event of Default has occurred and is continuing the Trustee
(with the written consent of the Bank if the Bank has not dishonored a drawing
on the Letter of Credit) may and, at the written direction of the Bank or the
Registered Owners of 25% or more in principal amount of the Bonds then
Outstanding, or with respect to an Event of Default under subsection
11.01(a)(i), (v) or (vi) hereof, shall, by notice in writing to the Issuer, the
Bank and the Company, declare the principal of all Bonds then Outstanding to be
immediately due and payable, and upon such declaration the said principal,
together with interest accrued thereon, shall become due and payable
immediately at the place of payment provided therein, anything in this
Indenture or in the Bonds to the contrary notwithstanding; provided, however,
that no such declaration shall be made if the Company cures such Event of
Default prior to the date of the declaration.

     (b)   Upon any such declaration hereunder, the Trustee shall immediately,
on the date of such declaration, draw upon the Letter of Credit to the full
extent permitted by the terms thereof (such drawing to include amounts in
respect of interest accruing on the Bonds through the date payment of such
drawing by the Bank is due).  Upon receipt by the Trustee of payment of the
full amount drawn on the Letter of Credit and provided sufficient moneys are
available in the Debt Service Fund to pay pursuant to Section 6.02 all sums


                                     44
<PAGE>   50

due on the Bonds, (i) interest on the Bonds shall cease to accrue and (ii)
the Bank shall succeed to and be subrogated to the right, title and interest of
the Trustee and the Registered Owners in and to the Agreement, all funds held
under this Indenture (except any funds held in the Debt Service Fund or the
Bond Purchase Fund which are identified for the payment of the Bonds or of the
purchase price of undelivered Bonds and any funds held in the Rebate Fund) and
any other security held for the payment of the Bonds, all of which, upon
payment of any fees and expenses due and payable to the Trustee pursuant to the
Agreement or this Indenture, shall be assigned by the Trustee to the Bank.

     (c) If after the principal of the Bonds has been so declared to be due and
payable and before a judgment or decree for payment of the money due has been
obtained by the Trustee all arrears of interest upon the Bonds, together with
interest on unpaid principal and interest (to the extent permitted by law) at
the Late Payment Rate, are paid or caused to be paid, and the reasonable
charges of the Trustee and the Registered Owners, including reasonable
attorney's fees, are paid or caused to be paid, and all Events of Default,
other than the non-payment of principal due solely by such declaration, have
been cured or waived as provided in Section 11.13, then, and in every such
case, the Trustee shall at the direction of the Registered Owners of a majority
in principal amount of the Bonds then Outstanding annul such declaration and
its consequences and such annulment shall be binding upon the Trustee and upon
all Registered Owners of Bonds issued hereunder; provided that there shall be
no annulment of any declaration resulting from (1) any Event of Default
specified in Subsection 11.01 (v) or (vi) unless the Trustee has received the
prior written consent of the Bank and written notice from the Bank that the
Letter of Credit has been fully reinstated or (2) any Event of Default which
has resulted in a drawing under the Letter of Credit unless the Trustee has
received written notice from the Bank that the Letter of Credit has been fully
reinstated.  No such annulment shall extend to or affect any subsequent default
or impair any right or remedy consequent thereon.

     Section 11.03. Legal Proceedings by Trustee.  If any Event of Default has
occurred and is continuing, the Trustee in its discretion may, and upon the
written request of the Registered Owners of 25% or more in principal amount of
the Bonds then Outstanding and receipt of indemnity from the Registered Owners
to its satisfaction shall, in its own name;

     (a) By mandamus, or other suit, action or proceeding at law or in equity,
enforce all rights of the Registered Owners, including the right to require the
Issuer or the Company to carry out any agreements with, or for the benefit of,
the Registered Owners and to perform its duties under the Agreement or the Act;

     (b) Bring suit upon the Bonds; and

     (c) By action or suit in equity enjoin any acts or things which may be
unlawful or in violation of the rights of the Registered Owners.

     Section 11.04. Discontinuance of Proceedings by Trustee.  If any
proceeding taken by the Trustee on account of any default is discontinued or is
determined adversely to the Trustee, the Issuer, the Trustee, the Company and
the Registered Owners shall be restored to their former positions and rights
hereunder as though no such proceeding had been taken.

     Section 11.05. Registered Owners May Direct Proceedings.  The Registered
Owners of a majority in principal amount of the Bonds then Outstanding
hereunder shall have the right to direct the method and place of conducting all
remedial proceedings by the Trustee hereunder, provided that (i) such
directions shall not be otherwise than in accordance with law or the provisions
of this Indenture, (ii) the Trustee shall have the


                                     45
<PAGE>   51

right to decline to follow any such direction which in the opinion of the
Trustee would be unjustly prejudicial to Registered Owners not parties to such
direction or which could involve the Trustee in personal liability, and (iii)
if a Letter of Credit is in effect and no default has occurred and is
continuing thereunder, then the Bank shall have the right to give such
direction in lieu of such Registered Owners.

     Section 11.06. Limitations on Actions by Registered Owners.  No Registered
Owners shall have any right to pursue any remedy hereunder unless (a) the
Trustee shall have been given written notice of an Event of Default by the
Registered Owners of at least 25% in principal amount of the Bonds then
Outstanding, (b) the Registered Owners of at least 25% in principal amount of
the Bonds then Outstanding shall have requested the Trustee, in writing, to
exercise the powers hereinabove granted or to pursue such remedy in its or
their name or names, (c) the Trustee shall have been offered indemnity
satisfactory to it against costs, expenses and liabilities, and (d) the Trustee
shall have failed to comply with such request within 60 days after receipt of
such notice, request and offer of indemnity.

     Section 11.07. Trustee May Enforce Rights Without Possession of Bonds.
All rights under this Indenture and the Bonds may be enforced by the Trustee
without the possession of any Bonds or the production thereof at the trial or
other proceedings relative thereto, and any proceeding instituted by the
Trustee shall be brought in its name for the ratable benefit of the Registered
Owners of the Bonds.

     Section 11.08. Remedies Not Exclusive.  Except as limited under Section
17.01 of this Indenture, no remedy herein conferred is intended to be exclusive
of any other remedy or remedies, and each remedy is in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.

     Section 11.09. Delays and Omissions Not to Impair Rights.  No delay or
omission in respect of exercising any right or power accruing upon any default
shall impair such right or power or be a waiver of such default, and every
remedy given by this Article may be exercised from time to time and as often as
may be deemed expedient.

     Section 11.10. Application of Moneys in Event of Default.  If any Event of
Default has occurred and is continuing, any moneys on deposit in any Fund or
account established hereunder (except the Bond Purchase Fund and the Rebate
Fund) and any monies received by the Trustee under this Article X, shall,
subject to the provisions of Section 6.04(h) hereof, be applied in the
following order; provided, however, that all moneys received by the Trustee
pursuant to any drawing made upon the Letter of Credit pursuant to Section
11.02(b) shall be applied by the Trustee to and only to the payment of
principal of interest on the Bonds (other than Pledged Bonds and Bonds owned of
record by the Company):

             FIRST:  To the payment of the costs of the Trustee, including
     counsel fees, and any disbursements of the Trustee with interest thereon,
     and its reasonable compensation and any indemnities owing to it;

             SECOND:  To the payment of all interest then due on Outstanding
     Bonds or, if the amount available for the payment of interest is
     insufficient for such purpose, to the payment of interest ratably in
     accordance with the amount due in respect of each Bond (other than Bonds
     owned of record by the Company);

             THIRD:  To the payment of the outstanding principal amount of all
     Bonds or, if the amount available for the payment of principal is
     insufficient for such purpose, to the payment of principal



                                     46
<PAGE>   52

     ratably in accordance with the amount due in respect of each Bond (other
     than Bonds owned of record by the Company); and

              FOURTH:  The surplus, if any, shall to the extent of any
     unreimbursed drawing under the Letter of Credit, or other obligations
     owing to the Bank under the Reimbursement Agreement, be paid to the Bank,
     and any remaining amounts be paid to the Company or the person lawfully
     entitled to receive the same or as a court of competent jurisdiction may
     direct.

Funds on deposit in the Bond Purchase Fund shall be applied in accordance with
Section 4.06 hereof.

     Section 11.11. Trustee's Right to Receiver.  The Trustee shall be entitled
as a matter of right to the appointment of a receiver; and the Trustee, the
Registered Owners and any receiver so appointed shall have such rights and
powers and be subject to such limitations and restrictions as are permitted by
law.

     Section 11.12. Trustee and Registered Owners Entitled to All Remedies.  It
is the purpose of this Article to make available to the Trustee and Registered
Owners all lawful remedies; but should any remedy herein granted be held
unlawful, the Trustee and the Registered Owners shall nevertheless be entitled
to every other remedy provided by law.  It is further intended that, insofar as
lawfully possible, the provisions of this Article shall apply to and be binding
upon any trustee or receiver who may be appointed hereunder.

     Section 11.13. Waiver of Past Defaults.  The Registered Owners of not less
than a majority in principal amount of the Outstanding Bonds may, with the
written consent of the Bank, on behalf of the Registered Owners of all the
Bonds waive any past default hereunder and its consequences, except a default

              (1)  in the payment of the principal of, premium, if any, or
     interest on, or the Purchase Price of, any Bond, or

              (2)  in respect of a covenant or provision hereof which under
     Article XV cannot be modified or amended without the consent of the
     Registered Owner of each Outstanding Bond.

     Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.


                                  ARTICLE XII

                                  THE TRUSTEE

     Section 12.01. Certain Duties and Responsibilities of Trustee.

              (a) The Trustee accepts the trusts hereby created and agrees to
     perform the duties herein required of it upon the terms and conditions
     hereof and hereby acknowledges receipt of an executed copy of the
     Agreement and agrees to perform the duties therein required of it upon the
     terms and conditions thereof.  The Trustee shall have the right, power and
     authority, at all times, to do all things not inconsistent with the
     express provisions of this Indenture which it may deem necessary or
     advisable in order to:  (i) enforce the provisions of this Indenture, (ii)
     take any action with respect to




                                     47
<PAGE>   53

any Event of Default, (iii) institute, appear in or defend any suit or other
proceeding with respect to an Event of Default, or (iv) protect the interests
of the Registered Owners of any Outstanding Bonds.  The Trustee shall be
responsible only for performing those duties of the Trustee specifically
provided for herein and no implied duties or liabilities shall be read into
this Indenture against the Trustee.  In addition to the duties set forth above
the Trustee shall:

          (i)   hold all sums delivered to it by the Company for the payment of
     principal, premium, if any, and interest on the Bonds in trust for the
     benefit of the Registered Owners until such sums shall be paid to such
     Registered Owners or otherwise disposed of as herein provided;

          (ii)  except as otherwise permitted hereby, hold all Bonds tendered to
     it hereunder in trust for the benefit of the respective Registered Owners
     until monies representing the purchase price of such Bonds shall have been
     delivered to or for the account of or to the order of such Registered
     Owners;

          (iii) hold all monies delivered to it hereunder for the purchase of
     Bonds in trust for the benefit of the Person or entity which shall have so
     delivered such monies until the Bonds purchased with such monies shall
     have been delivered to or for the account of such Person or until
     otherwise disposed of as provided herein; and

          (iv)  keep such books and records with respect to the Bonds as shall
     be consistent with prudent industry practice (including specifically the
     Bond registration books) at its principal office and make such books and
     records available for inspection by the parties hereto, the Company and
     the Remarketing Agent at all reasonable times.

     (b)  The permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and, except as provided in the next
succeeding sentence in respect of the period during the continuance of an Event
of Default, the Trustee shall not be liable for any action reasonably taken or
omitted to be taken by it in good faith and reasonably believed by it to be
within the discretion or power conferred upon it hereby, or be responsible
other than for its own negligence or willful misconduct. In case an Event of
Default has occurred and is continuing of which the Trustee has been notified
as provided in Section 12.03(h) or of which it is deemed to have notice
pursuant to such Section, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise under the
circumstances in the conduct of his own affairs.

     (c)  The Trustee shall not be required to give any bond or surety in
respect of the execution of its rights and duties under this Indenture.

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

          (i) this subsection shall not be construed to limit the effect of
     subsection (a) or (b) of this Section;



                                     48
<PAGE>   54

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

                        (iii) the Trustee shall not be liable with respect to
                any action taken or omitted to be taken by it in good faith in
                accordance with any direction of the Registered Owners of a
                majority in aggregate principal amount of the Outstanding Bonds
                permitted to be given by them under this Indenture; and

                        (iv)  no provision of this Indenture shall require the
                Trustee to expend or risk its own funds or otherwise incur any
                financial liability in the performance of any of its duties
                hereunder, or in the exercise of any of its rights or powers,
                if it shall have reasonable grounds for believing that
                repayment of such funds or adequate indemnity, satisfactory to
                the Trustee, against such risk or liability is not assured to
                it.

                (e) Whether or not therein expressly so provided, every
         provision of this Indenture relating to the conduct or
         affecting the liability of or affording protection to the Trustee
         shall be subject to the provisions of this Section.

         Section 12.02. Notice if Default Occurs or Notice of Taxability Occurs.
Within 45 days after the occurrence of any default hereunder of which the
Trustee has been notified as provided in Section 12.03(h) or of which it is
deemed to have notice pursuant to such Section, the Trustee shall give to the
parties to the Financing Documents, the Remarketing Agent, the Bank and the
Registered Owners notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, in the
case of a default of the character described in Section 11.01(a)(iii) or (iv),
the Trustee shall be protected in withholding such notice if and so long as the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Registered Owners; and provided, further, that in the case of
any default of the character described in Section 11.01(a)(iii) or (iv) no such
notice to Registered Owners shall be given until at least 30 days after the
occurrence thereof.  For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.  The Trustee shall also give to the parties to the Financing
Documents, the Bank and the Registered Owners notice of receipt by it of any
notification from the Internal Revenue Service that the interest on the Bonds
is, or may be, subject to federal income taxation.

         Section 12.03. Certain Rights of Trustee.  Except as otherwise
provided in Section 12.01:

                (a) the Trustee may rely and shall be protected in acting or
         refraining from acting upon any resolution, certificate,
         statement, instrument, telephone call, facsimile transmission,
         opinion, report, notice, request, direction, consent, order, bond,
         debenture or other paper or document believed by it to be genuine and
         to have been signed, made or presented by the proper party or parties
         and may accept and rely upon the same as conclusive evidence of the
         truth and accuracy of the statements and opinions contained therein;

                (b) any request or direction of the Issuer, the Bank or the
         Company mentioned herein shall be sufficiently evidenced by a
         writing signed by an Issuer Representative, an authorized officer of
         the Bank or Authorized Company Representative, as the case may be, and
         any resolution of the


                                     49
<PAGE>   55

         Issuer may be sufficiently evidenced by a copy of such resolution
         certified by an officer or commissioner of the Issuer;

                (c) whenever in the administration of this Indenture
         the Trustee shall deem it desirable that a matter be proved or
         established prior to taking, suffering or omitting any action
         hereunder, the Trustee (unless other evidence be herein specifically
         prescribed) may, in the absence of bad faith on its part, rely upon a
         certificate of an Issuer Representative or Authorized Company
         Representative;

                (d) the Trustee may consult with counsel and the written advice
         of such counsel shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in reliance thereon;

                (e) the Trustee shall be under no obligation to exercise any of
         the rights or powers vested in it by this Indenture at the request or
         direction of any of the Registered Owners pursuant to this Indenture,
         unless such Registered Owners shall have offered to the Trustee
         security or indemnity acceptable to the Trustee against the costs,
         expenses and liabilities which might be incurred by it in compliance
         with such request or direction;

                (f) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture or other paper or document, but the
         Trustee, in its discretion, may make such further inquiry or
         investigation into such facts or matters as it may see fit, and, if
         the Trustee shall determine to make such further inquiry or
         investigation, it shall be entitled, upon reasonable notice and during
         regular business hours, and subject further to the Issuer's and the
         Company's safety and confidentiality requirements, to examine the
         books, records and premises of the Issuer or the Company personally or
         by agent or attorney;

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

                (h) the Trustee shall not be required to take notice or be
         deemed to have notice of any default hereunder or under any
         Financing Document unless the Trustee shall be specifically notified
         of such default in writing by the Issuer, the Company, the Bank or by
         any Owner of the Outstanding Bonds, and in the absence of such notice
         the Trustee may conclusively assume that there is no default;
         provided, however, that the Trustee shall be required to take and be
         deemed to have notice of its failure to receive the monies necessary
         to make payments when due of Debt Service and Purchase Price Payments;

                (i) except for information provided by the Trustee concerning
         the Trustee, the Trustee shall have no responsibility with respect to
         any information in any offering memorandum or other disclosure
         material distributed with respect to the Bonds, and the Trustee shall
         have no responsibility for compliance with securities laws in
         connection with issuance and sale of the Bonds;

                (j) in the event the Trustee shall receive inconsistent or
         conflicting requests and indemnity from two or more groups of
         Registered Owners, each representing less than a majority of



                                     50
<PAGE>   56

     the aggregate principal amount of the Bonds then outstanding, the Trustee,
     in its sole discretion, may determine what action, if any, shall be taken;

             (k)    except as otherwise expressly provided by the provisions of
     this Indenture, the Trustee shall not be obligated and may not be required
     to give or furnish any notice, demand, report, request, reply, statement,
     advice or opinion to the Registered Owner of any Bond or to the Company or
     any other Person, and the Trustee shall not incur any liability for its
     failure or refusal to give or furnish same unless obligated or required to
     do so by express provisions hereof;

             (l)    in acting or omitting to act pursuant to the provisions of
     the Agreement, the Trustee shall be entitled to all of the rights and
     immunities accorded to it under this Indenture, including but not limited
     to those set out in this Article XI; and

             (m)    the Trustee shall not be required to give any bond or
     surety  with respect to the performance of its duties or the exercise of
     its powers under this Indenture.

     Section 12.04. Not Responsible for Recitals or Issuance of Bonds, etc..
The recitals contained herein or in the Bonds, except the certificate of
authorization signed on behalf of the Trustee, shall be taken as the statements
of the Issuer, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or any Financing Document, except that the Trustee represents that
said Indenture has been duly authorized, executed and delivered by the Trustee
and represents, based on advice of counsel, that the Indenture constitutes a
legal, valid and binding obligation of the Trustee in accordance with the terms
hereof, except as its enforceability may be subject to (i) the exercise of
judicial discretion in accordance with general equitable principles; and (ii)
applicable liquidation, conservatorship, receivership, bankruptcy, insolvency,
reorganization, moratorium, rearrangement and other laws applicable to national
banks or for the relief of debtors generally heretofore or hereafter enacted
to the extent that the same may be constitutionally applied.  Further, the
Trustee makes no representations as to the validity or sufficiency of the
Bonds.  The Trustee shall not be accountable for the use or application by the
Issuer or the Company of Bonds or, upon disbursement from the Funds created
herein, the proceeds thereof.

     The Trustee shall have no responsibility with respect to compliance by the
Issuer or the Company with (i) Section 148 of the Code or (ii) any covenant
contained in this Indenture or the Agreement regarding the yields on
investments, other than to comply with the specific provisions of this
Indenture and the Agreement and with specific written directions of the Company
or the Issuer as may be provided for in this Indenture or in the Agreement.
Notwithstanding anything elsewhere in this Indenture contained, the Trustee
shall have the right, but shall not be required, to demand, in respect of the
authentication of any Bonds, the withdrawal of any cash, the release of any
property, or any action whatsoever within the purview of this Indenture or the
Agreement, any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, in addition to that by
the terms hereof or thereof required as a condition of such action which is
deemed desirable by the Trustee for the purpose of establishing the right of
the Issuer or the Company to the authentication of any Bonds, the withdrawal of
any cash, or the taking of any other action by the Trustee.

     Section 12.05. May Hold Bonds.  The Trustee or any other agent of the
Issuer or the Company, in its individual or any other capacity, may become the
owner of Bonds and may otherwise deal with the Issuer or the Company with the
same rights it would have if it were not Trustee or such other agent.



                                     51
<PAGE>   57

     Section 12.06. Money Held in Trust.  Except as provided in Section 6.07
hereof, all money held in the Debt Service Fund under any provision of this
Indenture shall be held in trust for the benefit of the Registered Owners but,
except as provided in Article XV of this Indenture, need not be segregated from
other funds held in trust under this Indenture by the Trustee, but shall be
segregated at all times from all funds of the Issuer or the Trustee not held by
the Trustee under this Indenture.  The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise provided in
this Indenture.

     Section 12.07. Corporate Trustee Required; Eligibility.  There shall at
all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America or of any state
that is either a trust company or a bank, authorized under such laws to
exercise trust powers, having a combined capital, surplus and undivided profits
of at least $150,000,000, subject to supervision or examination by federal or
state authority.  If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purpose of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.  If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

     Section 12.08. Resignation and Removal of Trustee; Appointment of
Successor.

             (a) No resignation or removal of the Trustee and no appointment of
     a successor Trustee pursuant to this Article shall become effective until
     the acceptance of appointment by the successor     Trustee under Section
     12.09 of this Indenture.

             (b) The Trustee may resign at any time by giving written notice
     thereof to the Issuer, the Company, the Bank and the Remarketing Agent.
     If an instrument of acceptance by a successor Trustee shall not have been
     delivered to the Trustee within 30 days after the giving of such notice of
     resignation, the resigning Trustee may petition any court of competent
     jurisdiction for the appointment of a successor Trustee.

             (c) The Trustee may be removed at any time by the Registered
     Owners of a majority in aggregate principal amount of the Outstanding
     Bonds, by a written request for removal delivered to the Issuer, the
     Company, the Bank and the Remarketing Agent.

             (d) If at any time:

                 (i)  the Trustee shall cease to be eligible under Section 12.07
             of this Indenture or under applicable law and shall fail to resign
             after written request therefor by any party to a Financing
             Document or by a Registered Owner who has been a bona fide
             Registered Owner for at least six months, or

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



                                     52
<PAGE>   58

     then, in any such case, (x) the Company or the Issuer may remove the
     Trustee, or (y) any Registered Owner who has been a bona fide Registered
     Owner for at least six months may, on behalf of himself and all others
     similarly situated, petition any court of competent jurisdiction for the
     removal of the Trustee and the appointment of a successor Trustee.

             (e) If the Trustee shall resign, be removed or become incapable of
     acting, or if a vacancy shall occur in the office of Trustee for any
     cause, the Issuer, with the prior consent of the Company, shall promptly
     appoint a successor Trustee.  If, within one year after the occurrence of
     such resignation, removal or incapability, or the occurrence of such
     vacancy, a successor Trustee shall be appointed by the Registered Owners
     of a majority in aggregate principal amount of the Outstanding Bonds and
     notice of acceptance of such appointment is delivered to the parties to
     the Financing Documents, the successor Trustee so appointed shall,
     forthwith upon its acceptance of such appointment, become the successor
     Trustee and supersede the successor Trustee appointed by the Issuer.  If
     no successor Trustee shall have been so appointed by the Issuer or the
     Registered Owners and accepted appointment in the manner hereinafter
     provided, any Registered Owner who has been a bona fide Registered Owner
     for at least six months may, on behalf of himself and all other Registered
     Owners similarly situated, petition any court of competent jurisdiction
     for the appointment of a successor Trustee.

             (f) The Issuer shall give notice of each resignation and each
     removal of the Trustee and each appointment of a successor Trustee by
     causing to be mailed, at the expense of the Company, written notice of
     such event to the Registered Owners and to the parties to the Financing
     Documents and the Remarketing Agent.  Each notice shall include the name
     of the successor Trustee and the address of its principal office.

     Section 12.09. Acceptance of Appointment by Successor Trustee.  Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Issuer, the Company, the Remarketing Agent and the retiring Trustee, an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
of its charges and expenses, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.  Upon request
of any such successor Trustee, the Issuer shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor
Trustee all such rights, powers and trusts.

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

     Section 12.10. Merger, Conversion, Consolidation or Succession to
Business.  Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.



                                     53
<PAGE>   59

     Section 12.11. Fees, Charges and Expenses of Trustee.  Pursuant to the
provisions of the Agreement, the Trustee shall be entitled to be paid by the
Company reasonable compensation for its services rendered hereunder and to
reimbursement for its actual out-of-pocket expenses (including reasonable fees
and expenses of its counsel and agents) necessarily incurred in connection
therewith.  The Company may, without creating a default hereunder, contest in
good faith the necessity for and the reasonableness of any such services and
expenses after making payment therefor.  As security for the performance of the
obligations of the Company to the Trustee under the Agreement, the Trustee
shall have a lien prior to the Bonds upon all property and funds held or
collected by the Trustee as such, except (other than as provided in Section
11.10 hereof) funds received from a drawing under the Letter of Credit or funds
held in trust for the payment of principal of, premium, if any, or interest on
or the Purchase Price of Bonds.

     Pursuant to the terms of the Agreement, the Company shall (i) pay the
Trustee reasonable compensation for its services hereunder, and also all its
reasonable expenses and disbursements, including reasonable compensation for
all attorneys and agents engaged by it, and (ii) indemnify the Trustee,
including its officers, directors, employees and agents, against any and all
liabilities which the Trustee or its agents may incur (including reasonable
attorneys fees and expenses) in the exercise and performance of its powers and
duties hereunder, except with respect to the willful misconduct or negligence
of the Trustee.

     Nothing in this Section shall be deemed to excuse the Trustee from its
obligation to perform its duties in accordance with Section 6.02 and Section
11.02 of this Indenture.

     Section 12.12. No Obligation to Review Reports.  The Trustee shall not
have any obligation to review any financial statement or report provided to the
Trustee by the Company or the Issuer pursuant to this Indenture or the
Financing Agreement.  Notwithstanding any provision of this Indenture to the
contrary, the Trustee shall not be deemed to have notice of any item contained
in any such report or Event of Default which may be disclosed therein in any
manner.  The Trustee's sole responsibility with respect to such reports shall
be to act as the depository for such reports for the Registered Owners and to
make such reports available for review by the Registered Owners in accordance
with this Indenture.


                                  ARTICLE XIII

                                THE PAYING AGENT

     Section 13.01. The Paying Agent.  So long as the Bonds are Outstanding,
the Trustee shall serve as Paying Agent for the Bonds.


                                  ARTICLE XIV

                             THE REMARKETING AGENT

     Section 14.01. The Remarketing Agent.  The Issuer shall, at the direction
of the Company, appoint the Remarketing Agent for the Bonds, subject to the
conditions set forth in Section 14.02 hereof.  The Remarketing Agent shall
designate its principal office to the Trustee and signify its acceptance of the
duties and obligations imposed upon it hereunder by a written instrument of
acceptance delivered to the Issuer and the Trustee under which the Remarketing
Agent will agree to:



                                     54
<PAGE>   60

          (a) determine the Interest Rates and, with respect to Flexible Rates,
     Flexible Rate Periods, and give notice of such rates and periods in
     accordance with Article III hereof;

          (b) keep such books and records with respect to its duties as
     remarketing agent as shall be consistent with prudent industry practice;

          (c) use its best efforts to remarket Bonds in accordance with this
     Indenture; and

          (d) hold all moneys delivered to it hereunder for the purchase of
     Bonds for the benefit of the person or entity which shall have so
     delivered such monies until the Bonds purchased with such monies shall
     have been delivered to or for the account of such person or entity.

     Section 14.02. Qualifications of Remarketing Agent.  The Remarketing Agent
shall have a capitalization of at least $100,000,000 and be authorized by law
to perform all the duties imposed upon it by this Indenture.  The Remarketing
Agent may at any time resign and be discharged of the duties and obligations
created by this Indenture by giving at least ten days' notice to the Issuer,
the Company, the Banks and the Trustee.  The Remarketing Agent may be removed
at any time at the direction of the Company, by an instrument filed with the
Remarketing Agent, the Issuer and the Trustee.

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

     In the event that the Issuer shall fail to appoint a Remarketing Agent
hereunder, or in the event that the Remarketing Agent shall resign or be
removed, or be dissolved, or if the property or affairs of the Remarketing
Agent shall be taken under the control of any state or federal court or
administrative body because of bankruptcy or insolvency or for any other
reason, and the Issuer shall not have appointed a successor Remarketing Agent,
the Trustee, notwithstanding the provisions of the first paragraph of this
Section 14.02, shall ipso facto be deemed to be the Remarketing Agent for all
purposes of this Indenture until the appointment by the Issuer with the consent
of the Company of the Remarketing Agent or successor Remarketing Agent, as the
case may be; provided, however, that the Trustee, in its capacity as
Remarketing Agent, shall not be required to sell Bonds or determine the
Interest Rate on the Bonds or to perform the duties set forth in Section 3.02
hereof.


                                   ARTICLE XV

                           AMENDMENTS AND SUPPLEMENTS

     Section 15.01. Amendments and Supplements Without Registered Owners'
Consent.  This Indenture may be amended or supplemented from time to time,
without the consent of the Registered Owners by a Supplemental Indenture
authorized by a certified resolution of the Issuer filed with the Trustee, for
one or more of the following purposes:

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



                                     55
<PAGE>   61

          (b) to cure any ambiguity or to cure, correct or supplement any
     defective (whether because of any inconsistency with any other provision
     hereof or otherwise) provision of this Indenture in such manner as shall
     not be inconsistent with this Indenture or to make any other provisions
     with respect to matters or questions arising under this Indenture,
     provided such action shall not impair the security hereof or adversely
     affect the interests of the Registered Owners; or

          (c) to provide or modify procedures permitting Registered Owners to
     utilize an uncertificated system of registration for Bonds; or

          (d) to modify, alter, amend, supplement or restate the Indenture in
     any and all respects necessary, desirable or appropriate in connection
     with the delivery to the Trustee of a letter of credit, liquidity
     facility, standby bond purchase agreement or other security arrangement
     obtained or provided by the Company; or

          (e) to modify the provisions for optional redemption at the
     commencement of a Term Rate; or

          (f) to modify, alter, amend, supplement or restate the Indenture in
     any and all respects necessary, desirable or appropriate in order to
     satisfy the requirements of any rating agency which may from time to time
     provide a rating on the Bonds, or in order to obtain or retain such rating
     on the Bonds as is deemed necessary by the Company and the Remarketing
     Agent; or

          (g) to provide for an Alternate Letter of Credit or any other credit
     enhancement permitted by the terms of this Indenture.

     Section 15.02. Amendments With Registered Owners' Consent.  This Indenture
may be amended from time to time by a Supplemental Indenture approved by the
Registered Owners of a majority in aggregate principal amount of the Bonds then
Outstanding; provided, that (a) no amendment shall be made which affects the
rights of some but less than all of the Registered Owners of the Outstanding
Bonds without the consent of the Registered Owners of a majority in aggregate
principal amount of the Bonds so affected, and (b) except as expressly
authorized hereunder, no amendment which alters the interest rates on any
Bonds, the maturity date, Interest Payment Dates, purchase upon tender or
redemption provisions of any Bonds, of this Article XV or which adversely
affects the security provisions hereunder may be made without the consent of
the Registered Owners of all Outstanding Bonds affected thereby.

     Section 15.03. Amendments to Agreement.  The Agreement may be amended by
written agreement of the Issuer and the Company, provided that no amendment may
be made which would adversely affect the rights of the Registered Owners
without the consent of the Registered Owners of a majority in aggregate
principal amount of the Bonds then Outstanding; provided further, that no such
amendment may be made which would adversely affect the rights of the Registered
Owners of some but less than all Outstanding Bonds without the consent of the
Registered Owners of a majority in aggregate principal amount of the Bonds so
affected; and no amendment may be made which would (i) decrease the amounts
payable under the Agreement; (ii) change the date of payment or prepayment
provisions under the Agreement; or (iii) change the amendment provisions of the
Agreement, in each case without the consent of all of the Registered Owners of
the Bonds adversely affected thereby, and provided further that the Agreement
may be amended by written agreement of the Issuer and the Company without the
consent of the Trustee in order to make conforming



                                     56
<PAGE>   62

changes with respect to amendments made to this Indenture pursuant to Section
15.01(e), and provided further, that no amendment may be made to Section 6.2 of
the Agreement without the Trustee's consent.

     Section 15.04. Amendment of Letter of Credit.  The Trustee shall notify
the Registered Owners of a proposed amendment of the Letter of Credit which
would adversely affect the interests of the Registered Owners and may consent
thereto with the consent of the owners of at least a majority in aggregate
principal amount of the Bonds then Outstanding which would be affected by the
action proposed to be taken; provided, that the Trustee shall not, without the
unanimous consent of the owners of all Bonds then Outstanding, consent to any
amendment which would (i) decrease the amount payable under the Letter of
Credit or (ii) reduce the term of the Letter of Credit.  Before the Trustee
shall consent to any amendment to the Letter of Credit, there shall have been
delivered to the Trustee an opinion of Bond Counsel that such amendment will
not adversely affect the exclusion from gross income of the interest on the
Bonds for federal income tax purposes and that such amendment is authorized by
the Indenture.

     Section 15.05. Other Matters Relating to Amendments and Supplements.  The
Trustee shall not be obligated to enter into or consent to any Supplemental
Indenture or any amendment to the Agreement or the Letter of Credit which
affects the rights, duties, liabilities and immunities of the Trustee under
this Indenture or otherwise.  Before the Issuer and the Trustee shall enter
into any Supplemental Indenture or before the Trustee shall consent to any
amendment to the Agreement or the Letter of Credit pursuant to this Article XV,
there shall have been delivered to the Trustee and the Issuer a Favorable
Opinion of Bond Counsel, including an opinion that such Supplemental Indenture
or amendment will, upon the execution and delivery thereof, be valid and
binding upon the Issuer, the Company or the Bank, as the case may be, in
accordance with its terms.  Upon the execution and delivery of any
Supplemental Indenture pursuant to the provisions of this Article XV, this
Indenture shall be, and be deemed to be, modified and amended in accordance
therewith, and the respective rights, duties and obligations under this
Indenture of the Issuer, the Trustee and all Registered Owners of the Bonds
then Outstanding shall thereafter be determined, exercised and enforced under
this Indenture subject in all respects to such modifications and amendments.
In addition, no amendment or supplement to the Indenture shall become effective
until signed by the Chairman of the Issuer or such other officer or
commissioner designated by the Issuer and until the Trustee has received the
written approval of such instrument from the Authorized Company Representative.

     Section 15.06. Consent of Bank.  Notwithstanding anything herein
contained, so long as a Letter of Credit is held by the Trustee, no supplement
or amendment shall be made to the Indenture or the Agreement without the prior
written consent of the Bank.


                                  ARTICLE XVI

                                   DEFEASANCE

     Section 16.01. Defeasance.  When interest on, and principal or redemption
price (as the case may be) of, and Purchase Price (if any) of all Bonds issued
hereunder have been paid, or there shall have been deposited with the Trustee
an amount, evidenced by moneys or non-callable Government Obligations the
principal of and interest on which, when due, will provide, sufficient moneys
to fully pay the Bonds at the earlier of the maturity date or date fixed for
redemption thereof or to any date upon which the Bonds could or must be
tendered for purchase, as well as all other sums payable hereunder by the
Issuer, the right, title and interest of the Trustee under the Indenture shall
thereupon cease and the Trustee, on demand of the Issuer at


                                     57
<PAGE>   63

the request of the Company, shall release the lien of this Indenture and shall
execute such documents to evidence such release as may be reasonably required
by the Issuer and, after paying any remaining amounts owed to the Issuer (as
evidenced by a certificate of an Issuer Representative), the Trustee shall turn
over to the Bank such amount, if any, as is certified in writing by the Bank to
the Trustee to be owed to the Bank pursuant to the Reimbursement Agreement, and
then to the Company, the Issuer or such other person or body as may be entitled
to receive the same (as evidenced by a certificate of an Authorized Company
Representative) all balances remaining in any funds hereunder.  Notwithstanding
anything to the contrary contained herein, any defeasance and discharge
hereunder shall not be deemed to release the Trustee from its obligations
hereunder to register and transfer Bonds or to act as paying agent for the
Bonds until the date all the Bonds are scheduled to be paid.  In addition, such
defeasance shall not terminate the obligations of the Issuer under Section
8.02, the Company and the Trustee under Section 6.04, the Issuer, the Company
and the Trustee under Section 9.01(b) or the immunities and protections of the
Trustee hereunder.

     Section 16.02. Deposit of Funds for Payment of Bonds.

             (a) If there is deposited with the Trustee moneys or Government
     Obligations sufficient to pay the principal or redemption price of any
     particular Bond or Bonds becoming due, either at maturity or by call for
     redemption or otherwise (including a mandatory or optional tender for
     purchase), together with all interest accruing thereon to the due date,
     interest on the Bond or Bonds shall cease to accrue on such due date and
     all liability of the Issuer with respect to such Bond or Bonds shall
     likewise cease, except as provided in subsection (b) below; provided that
     the Trustee shall have received an opinion of Bond Counsel to the effect
     that such deposit will not adversely affect the exclusion from gross
     income of the interest on any of the Bonds or cause any of the Bonds to be
     classified as "arbitrage bonds" within the meaning of the Code; and
     provided, further, that if a Letter of Credit is then held by the Trustee,
     such payment and any payment of the purchase price of Bonds pursuant to
     Section 4.01 or 4.02, as applicable, shall be made only from proceeds of a
     drawing under the Letter of Credit deposited directly into the Letter of
     Credit Debt Service Account or the Letter of Credit Purchase Account,
     as applicable, or the Company shall have caused to be delivered to the
     Trustee and the Rating Service an opinion of nationally recognized counsel
     experienced in bankruptcy matters to the effect that any such payment and
     the payment of the purchase price of any Bonds pursuant to Section 4.01 or
     4.02 will not be considered an avoidable "preferential transfer" by the
     Company or the Issuer under Section 547 of the United States Bankruptcy
     Code in the event of a bankruptcy case under the United States Bankruptcy
     Code by the Issuer or by or against the Company or any Affiliate, as
     debtor.  Thereafter such Bond or Bonds shall be deemed not to be
     Outstanding hereunder and the Registered Owner or Registered Owners of
     such Bond or Bonds shall be restricted exclusively to the funds so
     deposited for any claim of whatsoever nature with respect to such Bond or
     Bonds, and the Trustee shall hold such funds in trust for such Registered
     Owner or Registered Owners.

             (b) Moneys deposited with the Trustee pursuant to Section 16.01 or
     16.02(a) hereof may be invested in Government Obligations maturing as
     provided in Section 16.01 or Section 16.02(a), and any such moneys and any
     moneys derived from any Government Obligations deposited under this
     Article XVI which remain unclaimed two years after the date payment
     thereof becomes due shall, upon written request of the Company, if the
     Company is not at the time to the knowledge of the Trustee (evidenced to
     the Trustee as provided in Section 12.03(h)) in default with respect to
     any covenant contained in the Financing Documents, be paid to the Company;
     and the Registered Owners of the Bonds for which the deposit was made
     shall thereafter be limited to a claim against the


                                     58
<PAGE>   64

     Company; provided, however, that the Trustee, before making payment to the
     Company, may, at the expense of the Company, cause a notice to be
     published stating that the moneys remaining unclaimed will be returned to
     the Company after a specified date, such notice to be published in a
     newspaper or newspapers published at least once a day, six days a week,
     and generally circulated in the City of New York, New York.  All payments
     made hereunder shall be subject to all applicable unclaimed property or
     similar laws of the State.  Unclaimed moneys held under this Section shall
     not be invested.

             (c)  Following the deposit of moneys as provided in this Section
     and Section 16.01 the current Interest Rate Period may not be converted to
     another Interest Rate Period and the Remarketing Agent shall not remarket
     any Bonds tendered for purchase.

             (d)  Deposits made with the Trustee in accordance with this
     Section and Section 16.01 during any Daily Rate Period or Weekly Rate
     Period shall be accompanied by written evidence from each Rating Service
     then rating the Bonds that such deposit will not result in a withdrawal or
     reduction of the rating on the Bonds.


                                  ARTICLE XVII

                            MISCELLANEOUS PROVISIONS

     Section 17.01. Limitations on Recourse; Immunity of Certain Persons.  No
recourse shall be had for any claim based on this Indenture or the Bonds
against any past, present or future Indemnified Party, either directly or
through the Issuer or any successor body, under any constitutional provision,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability and all such claims being hereby expressly waived
and released as a condition of, and as consideration for, the execution of this
Indenture and the issuance of the Bonds.  The Bonds are payable solely from the
revenues pledged hereunder, those sources derived from the Company other moneys
held by the Trustee hereunder for such purpose.  The Issuer shall be
conclusively deemed to have complied with all of its covenants and other
obligations hereunder, including but not limited to those set forth in
Articles V, VI and X hereof, by virtue of the covenants of the Company
contained in the Agreement (excepting only any approvals or consents permitted
or required to be given by the Issuer hereunder, and any exceptions to the
performance by the Company of the Issuer's covenants and other obligations
hereunder, as may be contained in the Agreement).  However, nothing contained
in the Agreement shall prevent the Issuer from time to time, in its discretion,
from performing any such covenants or other obligations. The Issuer shall have
no liability for any failure to fulfill, or breach by the Company of, the
Company's obligations under the Bonds, this Indenture, the Agreement, or
otherwise, including without limitation the Company's obligation to fulfill the
Issuer's covenants and other obligations under this Indenture.

     Section 17.02. No Rights Conferred on Others.  Nothing herein contained
shall confer any right upon any person other than the parties hereto and the
Registered Owners of the Bonds.

     Section 17.03. Illegal, etc. Provisions Disregarded.  If any term or
provision of this Indenture or the Bonds or the application thereof for any
reason or circumstances shall to any extent be held invalid or unenforceable,
the remaining provisions or the application of such term or provision to
persons and situations other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision
hereof and thereof shall be valid and enforced to the fullest extent permitted
by law.



                                     59
<PAGE>   65

     Section 17.04. Substitute Publication of Notice.  If for any reason it
shall be impossible to make publication of any notice required hereby in a
newspaper or newspapers, then such publication in lieu thereof as shall be made
with the approval of the Trustee shall constitute a sufficient publication of
such notice.

     Section 17.05. Mailed Notice.  Except as otherwise expressly provided
herein, all notices required or authorized to be given to the Company, the
Issuer, the Trustee and the Remarketing Agent, pursuant to this Indenture shall
be in writing and shall be deemed given when delivered or mailed by registered
mail, postage prepaid to the following address:

     (a) to the Company, to:

         Zeigler Coal Holding Company
         50 Jerome Lane
         Fairview Heights, Illinois 62208

         Attention: Treasurer

     (b) to the Issuer, to:

         Peninsula Ports Authority of Virginia
         12350 Jefferson Avenue, Suite 230
         Newport News, Virginia 23602

         Attention: Chairman

     (c) to the Trustee, to:

         PNC Bank, N.A.
         Corporate Trust Administration
         One Oliver Plaza, 27th Floor
         210 Sixth Avenue
         Pittsburgh, Pennsylvania 15222

         Attention: Mark A. Rullo, Vice President

     (d) to the Remarketing Agent, to:

         Goldman, Sachs & Co.
         85 Broad Street
         New York, New York  10004

         Attention:  Municipal Note Trading Desk

or to such other addresses as may from time to time be furnished to the
parties, effective upon the receipt of notice thereof given as set forth above.



                                     60
<PAGE>   66

     Section 17.06. Governing Law.  This Indenture shall be governed, in all
respects including validity, interpretation and effect by, and shall be
enforceable in accordance with, the laws of the United States of America and of
the State, provided that the immunities and standards of care of the Trustee in
the administration of its trusts and duties hereunder shall be governed by the
laws of the jurisdiction in which its principal office is located.

     Section 17.07. Successors and Assigns.  All the covenants, promises and
agreements in this Indenture contained by or on behalf of the Issuer or by or
on behalf of the Trustee shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed or not.

     Section 17.08. Action by Company.  Any requirement imposed by this
Indenture or the Agreement on the Issuer may, if not performed by the Issuer,
be performed by the Company and such performance by the Company shall
constitute compliance with the requirements of this Indenture or the Agreement
as if performed by the Issuer.

     Section 17.09. Headings and Subheadings for Convenience Only.  The table
of contents and descriptive headings and subheadings in this Indenture are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

     Section 17.10. Counterparts.  This Indenture may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original; but such counterparts shall together constitute but one and the same
instrument.








                                     61
<PAGE>   67




     IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed by
its duly authorized Chairman and its seal to be hereunto affixed and attested
by its Secretary-Treasurer and the Trustee has caused this Indenture to be
executed by one of its authorized officers, all as of the day and year first
above written.


                                     PENINSULA PORTS AUTHORITY OF VIRGINIA


                                     By: /s/ Michael J. Carter
                                        -------------------------------------
                                         Chairman

ATTEST:

By:/s/ G. Mark Ailsworth
  -------------------------------
     Secretary-Treasurer


(SEAL)



                                     PNC BANK, N.A.



                                     By: /s/ Mark A. Rullo
                                        -------------------------------------
                                        Authorized Officer







                                     62
<PAGE>   68





                                   EXHIBIT A


                                  Form of Bond


                                 (FACE OF BOND)

                    THIS BOND IS SUBJECT TO MANDATORY TENDER
                      FOR PURCHASE AT THE TIME AND IN THE
                     MANNER HEREINAFTER DESCRIBED, AND MUST
                      BE SO TENDERED OR WILL BE DEEMED TO
                      HAVE BEEN SO TENDERED UNDER CERTAIN
                       CIRCUMSTANCES AS DESCRIBED HEREIN.


No. R-1                                                 $115,000,000

                            UNITED STATES OF AMERICA
                            COMMONWEALTH OF VIRGINIA

                     PENINSULA PORTS AUTHORITY OF VIRGINIA
                      PORT FACILITY REFUNDING REVENUE BOND
                             (ZEIGLER COAL PROJECT)
                                  SERIES 1997



MATURITY DATE                   ISSUE DATE                   CUSIP

 May 1, 2022                  August 20, 1997              707168DB3


REGISTERED OWNER:    CEDE & CO.

PRINCIPAL AMOUNT     ONE HUNDRED FIFTEEN MILLION DOLLARS



<TABLE>
<S>                               <C>               <C>                   <C>
Last Day of Flexible Rate Period*                    Interest Rate*
                                   ---------                               --------

Number of Days in Period*                            Interest Due at End
                                   ---------          of Period*           --------

                                                     Type of Rate Period if
                                                      other than Flexible   Daily
                                                                           --------
</TABLE>

---------------------------
*Complete only for Bonds accruing Interest at Flexible Rates



                                     A-1
<PAGE>   69

     The Peninsula Ports Authority of Virginia  (the "Issuer"), a public body
corporate and a political subdivision under the laws of the Commonwealth of
Virginia, promises to pay to the registered owner named above, or registered
assigns, but solely from the sources hereinafter mentioned, on the Maturity
Date specified above, unless this Bond shall have been previously called for
redemption in whole or in part and payment of the redemption price shall have
been duly made or provided for, the Principal Amount shown above and to pay
interest thereon, but solely from the sources hereinafter referred to, at the
rate determined as herein provided from the most recent Interest Payment Date
(as hereinafter  defined) to which interest has been paid or duly provided for,
or from the date of authentication hereof if such date is on an Interest
Payment Date to which interest has been paid or duly provided for, or from the
Issue Date specified above if no interest has been paid or duly provided for,
such payments of interest to be made on each Interest Payment Date until the
principal or redemption price hereof has been paid or duly provided for as
aforesaid.  The principal or redemption price of and interest on this Bond may
be paid in any coin or currency of the United States of America which, at the
time of payment, is legal tender for the payment of public or private debts.
The principal or redemption price of this Bond (or of a portion of this Bond,
in the case of a partial redemption) is payable to the registered owner hereof
in immediately available funds or next day funds, depending on the applicable
Interest Rate Period (as defined below) and the instructions of the registered
owner upon presentation and surrender hereof at the principal office of PNC
Bank, N.A. or its successor, as Trustee (the "Trustee"), under the Trust
Indenture dated as of August 1, 1997 (the "Indenture") securing the Series of
Bonds of which this Bond is one.  Interest shall be paid to the registered
owner hereof whose name appears on the registration books kept by the Trustee
as of the close of business on the applicable regular or special record date by
check mailed to such registered owner, provided that interest for any Flexible,
Daily or Weekly Rate Period (as described herein) shall be paid in immediately
available funds by wire transfer to a bank within the continental United States
or by deposit to the account of the registered owner hereof if such account is
maintained by the Trustee as specified by the Remarketing Agent (as defined
below) or as otherwise directed by the registered owner hereof five Business
Days prior to the time of payment with respect to Bonds accruing interest at a
Flexible Rate or two Business Days prior to the Interest Payment Date with
respect to Bonds accruing interest at Daily or Weekly Rates; provided further
that interest accrued during any Flexible Rate Period and at the maturity of
this Bond shall be paid only upon delivery of this Bond.  The regular record
date for any Interest Payment Date shall be the close of business on the day
immediately preceding the Interest Payment Date, except that, while this Bond
accrues interest at the Term Rates (as described herein), the regular record
date shall be the close of business on the 15th day of the calendar month
immediately preceding such Interest Payment Date.  If sufficient funds for the
payment of interest becoming due on any Interest Payment Date are not on
deposit with the Trustee on such date, the Trustee may establish a special
interest payment date on which such overdue interest shall be paid and a
special record date relating thereto.  This Bond is registered as to both
principal and interest on the registration books kept with the Trustee and may
be transferred or exchanged, subject to the further conditions specified in the
Indenture, only upon surrender hereof at the principal office of the Trustee.
This Bond is payable solely from the sources hereinafter mentioned.

     This Bond shall be purchased on demand of the registered owner hereof, as
hereinafter described.

     The Bonds are special, limited obligations of the Issuer, payable by the
Issuer solely out of the revenues derived from or in connection with the
Agreement (hereinafter defined), including all sums deposited from time to time
pursuant to the Agreement in the Debt Service Fund established under the
Indenture, and in certain events out of amounts secured through the exercise of
the remedies provided in the Agreement and the Indenture upon occurrence of an
event of default under the Agreement and the Indenture. NEITHER THE
COMMONWEALTH OF VIRGINIA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE
ISSUER, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR


                                     A-2
<PAGE>   70

INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES,
RECEIPTS AND PAYMENTS PLEDGED THEREFOR BY THE ISSUER.  NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL
SUBDIVISION THEREOF, INCLUDING THE ISSUER, IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER COSTS
INCIDENT THERETO.

     NO RECOURSE UNDER THIS BOND SHALL BE HAD AGAINST ANY PAST, PRESENT OR
FUTURE OFFICER OR COMMISSIONER OF THE ISSUER.  THE BONDS SHALL NEVER BE PAID IN
WHOLE OR IN PART OUT OF ANY FUNDS RAISED OR TO BE RAISED BY TAXATION OR OUT OF
ANY OTHER REVENUES OR ASSETS OF THE ISSUER, THE COMMONWEALTH OF VIRGINIA OR ANY
POLITICAL SUBDIVISION THEREOF, EXCEPT THOSE REVENUES ASSIGNED BY THE INDENTURE.

     Except as otherwise provided in the Indenture, this Bond shall not be
entitled to any right or benefit under the Indenture, or be valid or become
obligatory for any purpose, until this Bond shall have been authenticated by
execution by the Trustee of the certificate of authentication inscribed hereon.

     THE TERMS AND PROVISIONS OF THIS BOND ARE CONTINUED ON THE REVERSE SIDE
HEREOF AND FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT
THIS PLACE.

     IT IS HEREBY CERTIFIED, RECITED AND REPRESENTED that the issuance of this
Bond and the Bonds is duly authorized by law; that all acts, conditions and
things required to exist and necessary to be done or performed precedent to and
in the issuance of this Bond and the Bonds to render the same lawful, valid and
binding have been properly done and performed and have happened in regular and
due time, form and manner as required by law; that all acts, conditions and
things necessary to be done or performed by the Issuer or to have happened
precedent to and in the execution and delivery of the Indenture and the
Agreement have been done and performed and have happened in regular and due
form as required by law; that due provision has been made for the payment of
the principal of and premium, if any, and interest on this Bond and the Bonds
by irrevocably assigning the described revenues as provided in the Indenture;
that payment in full for the Bonds has been received; and that the issuance of
the Bonds does not contravene or violate any constitutional or statutory
limitation.




                                     A-3
<PAGE>   71





     IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed with
the manual or facsimile signature of its Chairman and its official seal to be
impressed, lithographed or imprinted hereon, and attested with the manual or
facsimile signature of its Secretary-Treasurer.

     Dated:


                                   PENINSULA PORTS AUTHORITY OF VIRGINIA

(SEAL)                             By:__________________________________
                                      Chairman

ATTEST:

_____________________________
Secretary-Treasurer






                                     A-4
<PAGE>   72






                       FORM OF AUTHENTICATION CERTIFICATE

                           AUTHENTICATION CERTIFICATE

     This Bond is one of the Port Facility Refunding Revenue Bonds (Zeigler
Coal Project) Series 1997 of the Peninsula Ports Authority of Virginia
described in the within-mentioned Indenture.

                                     PNC BANK, N.A.



                                     By:______________________________________
                                             Authorized Signatory
Date of Authentication:__________________


                         (TEXT OF REVERSE SIDE OF BOND)

     This Bond is one of an authorized series of Bonds of the Issuer in the
aggregate principal amount of $115,000,000, designated as Peninsula Ports
Authority of Virginia Port Facility Refunding Revenue Bonds (Zeigler Coal
Project) Series 1997 (the "Bonds") authorized by duly adopted resolutions of
the Issuer, and issued under and secured by the Indenture in full conformity
with the Constitution and laws of the Commonwealth of Virginia.  The Bonds are
issued for the purpose of providing funds for refinancing the costs of
acquisition, construction and improvement of certain port facilities (the
"Project") for the  transshipment of coal located at Pier 9, Harbor Access
Road, Newport News, Virginia (the "Plant") of Zeigler Coal Holding Company (the
"Company").  Pursuant to the Financing Agreement (the "Agreement") dated as of
August 1, 1997 between the Issuer and the Company, the Company has agreed to
make Debt Service Payments, to the Trustee, on behalf of the Issuer, in amounts
and at the times sufficient to pay the principal of, premium, if any, and
interest on the Bonds.  The Company has also agreed to pay the Purchase Price
of all Bonds tendered or deemed tendered for purchase pursuant to the terms of
the Indenture.

     The Company has caused to be issued and delivered to the Trustee by Bank
of America National Trust and Savings Association, an irrevocable letter of
credit pursuant to which the Trustee is authorized, subject to the terms and
conditions thereof, to draw up to (a) an amount equal to the principal amount
of the Bonds (i) to enable the Trustee to pay the principal amount of the Bonds
when due at maturity or upon redemption or acceleration and (ii) to enable the
Trustee to pay the portion of the purchase price of Bonds tendered to it and
not remarketed corresponding to the principal amount of such Bonds, plus (b) an
amount equal to 45 days accrued interest on the outstanding Bonds at a maximum
rate of 10%,  (i) to enable the Trustee to pay interest on the Bonds when due
and (ii) to enable the Trustee to pay the portion of the purchase price of
Bonds tendered to it and not remarketed corresponding to the accrued interest
on such Bonds.  Such irrevocable letter of credit or any alternate letter of
credit delivered to the Trustee in accordance with the terms of the Indenture
is herein called the "Letter of Credit".  As used herein, the term "Bank" shall
mean Bank of America National Trust and Savings Association as issuer of the
Letter of Credit or the bank issuing any Alternate Letter of Credit.  The
Letter of Credit expires on October 19, 1997, unless terminated earlier
pursuant to its terms or extended.  Subject to the provisions of the Indenture,
the Company may, but is not required to, cause the Letter of Credit to be
extended or replaced with an Alternate Letter of Credit having substantially the
same terms.  The Bank is under no obligation to extend the Letter of Credit.
Unless the Letter of Credit is extended or



                                     A-5
<PAGE>   73

replaced in accordance with the terms of the Indenture, this Bond will become
subject to mandatory tender for purchase, as described below.  The Letter of
Credit is being issued pursuant to a Reimbursement Agreement (as the same may be
amended or replaced, the "Reimbursement Agreement") between the Bank and the
Company.  The Company is obligated, among other things, to reimburse the Bank
for all drawings under the Letter of Credit.

     Reference is made to:  (a) the Indenture, the Agreement and the Letter of
Credit for provisions concerning the rights of the registered owners and the
rights and obligations of the Issuer, the Company, the Bank and the Trustee;
and (b) the Remarketing Agreement pursuant to which Goldman, Sachs & Co. is
serving as remarketing agent for the purposes set forth in the Indenture (such
agent or its successors being herein referred to as the "Remarketing Agent").
The acceptance of the terms and conditions of the foregoing documents
(including amplifications and qualifications of the provisions hereof), each of
which is on file at the principal corporate trust office of the Trustee, is an
explicit and material part of the consideration of the Issuer's issuance
hereof, and each registered owner hereof by acceptance of this Bond accepts and
assents to all such terms and conditions as if fully set forth herein.

     Capitalized terms used in this Bond which are not defined herein but which
are defined in the Indenture shall have the respective meanings set forth in
the Indenture.

                               INTEREST ON BONDS

     The Bonds shall initially accrue interest at the Daily Rate herein
described, and will be subject to conversion as herein provided.  The rate of
interest applicable to any Rate Period shall be determined in accordance with
the applicable provisions of the Indenture.  All computations of interest shall
be based on 365- or 366-day years for the actual number of days elapsed; except
for interest at Term Rates, which shall be computed on the basis of 360-day
years of twelve 30-day months, and interest at Flexible and Weekly Rates, which
shall be computed on the basis of a 365- or 366-day year, as appropriate, for
the actual number of days elapsed, based on the year in which such rate period
commences.  Notwithstanding any provision of this Bond or the Indenture to the
contrary, in no event shall the cumulative amount of interest paid or payable
on this Bond (including interest calculated as provided herein, together with
all other amounts that constitute interest on this Bond under the laws of the
State which are contracted for, charged, reserved, taken or received pursuant
to the Bond Documents) through any date of payment of interest or through the
date of payment of this Bond (whether at maturity, by acceleration or upon
earlier redemption) exceed the "net interest cost" which will produce a "net
effective interest rate" equal to the maximum rate permitted by Virginia law.

     "Rate Period" shall mean, when used with respect to any particular rate of
interest determined as hereinafter provided, the period from and including the
effective date of such rate to (but not including) the effective date of the
rate of interest next determined as hereinafter provided.

     The Bonds may accrue interest at Interest Rates effective for periods
(each an "Interest Rate Period") selected by the Company, or, under the
circumstances set out in the Indenture, by the Remarketing Agent from time to
time.  The Interest Rates for the Bonds, which will be determined by the
Remarketing Agent, are as follows:



                                     A-6
<PAGE>   74

Flexible Rate.

     While the Bonds accrue interest at Flexible Rates, the interest rate for
each particular Bond will be determined by the Remarketing Agent and will
remain in effect from and including the commencement date of the Flexible Rate
Period selected for that Bond by the Remarketing Agent to, but not including,
the last date thereof.  While the Bonds are in the Flexible Rate mode, Bonds
may have successive Flexible Rate Periods of any duration up to 270 days each
(or such lower maximum number as is then permitted under the Indenture) and any
Bond may accrue interest at a rate and for a period different from any other
Bond.

Daily Rate.

     While the Bonds accrue interest at a Daily Rate, the interest rate
established for the Bonds will be effective from day to day until changed by
the Remarketing Agent.

Weekly Rate.

     While the Bonds accrue interest at a Weekly Rate, the rate of interest on
the Bonds will be determined weekly by the Remarketing Agent to be effective
for a seven day period commencing on Wednesday of the week of such
determination.  (The length of the period, the day of commencement and the last
day of the period may vary in the event of a conversion to or from a Weekly
Rate.)

Term Rate.

     While the Bonds accrue interest at a Term Rate, the interest rate will be
determined by the Remarketing Agent to remain in effect for a term of one year
or any whole multiple of one year selected by the Company.

     The interest rate mode established will remain in effect until changed by
the Issuer and the Company, in accordance with the Indenture.  During each
Interest Rate Period, the rate of interest on the Bonds shall be that rate
which, in the judgment of the Remarketing Agent, would cause the Bonds to have
a market value as of the date of determination equal to the principal amount
thereof, taking into account prevailing market conditions, and with respect to
Flexible Rates, the Remarketing Agent shall determine the Flexible Rate and the
Flexible Rate Period for each Bond at such rate and for such period as it deems
advisable in order to minimize the net interest cost on the Bonds, taking into
account prevailing market conditions.

     Bonds which accrue interest at Flexible Rates will be issued in the
denominations of $100,000 and any integral multiples of $1,000 in excess
thereof.  Bonds which accrue interest at a Daily or  Weekly Rate will be issued
in denominations of $100,000 and whole multiples thereof.  Bonds which accrue
interest at a Term Rate will be issued in the denomination of $5,000 and whole
multiples thereof.


                                OPTIONAL TENDERS

     While this Bond accrues interest at a Daily, Weekly or Term Rate, the
registered owner of this Bond has the right to tender this Bond for purchase at
the principal amount hereof plus accrued interest as follows:  (i) during a
Daily Rate Period on any Business Day upon personal, electronic or telephone
notice to the Trustee prior to 11:00 a.m., New York City time, on such Business
Day, (ii) during a Weekly Rate Period on any



                                     A-7
<PAGE>   75

Business Day upon written or electronic notice to the Trustee on or prior to
5:00 p.m., New York City time, on any Business Day at least seven days prior to
the Business Day on which this Bond is tendered for purchase or (iii) during a
Term Rate Period on the first day of the next succeeding Rate Period upon
written or electronic notice to the Trustee on or prior to 5:00 p.m., New York
City time, on any Business Day at least seven days prior to such day.


                               MANDATORY TENDERS

     While this Bond accrues interest at a Flexible Rate, this Bond is subject
to mandatory tender on the day after the last day of each Flexible Rate Period
applicable to this Bond.  While this Bond accrues interest at Daily, Weekly or
Term Rates, this Bond is subject to mandatory tender on the effective date of a
change from one interest rate mode to a different interest rate mode (except
for changes between a Daily Rate and Weekly Rate) or of a change from a Term
Rate Period to a Term Rate Period of different duration.  This Bond is subject
to mandatory tender on the Interest Payment Date next preceding the Expiration
Date of the Letter of Credit unless the Trustee has received notice that the
Letter of Credit has been or will be extended or replaced with an Alternate
Letter of Credit as provided in the Indenture.

     Interest on any Bond which is not tendered on the mandatory tender date,
but for which there has been irrevocably deposited with the Trustee an amount
sufficient to pay the purchase price thereof, shall cease to accrue interest on
the mandatory tender date, and the registered owner of such Bond shall not be
entitled to any payment other than the purchase price for such Bond, and such
Bond shall no longer be outstanding and entitled to the benefits of the
Indenture, except for the payment of the purchase price of such Bond from
monies held by the Trustee for such payment.  On the mandatory tender date the
Trustee shall authenticate and deliver substitute Bonds in lieu of such
untendered Bonds.


                       WRITTEN NOTICE OF RATE MODE CHANGE

     The Trustee shall give notice, by first class mail, to the registered
owners of all Bonds of the proposed conversion from one interest rate mode to
another interest rate mode at least 15 days before the proposed conversion date
while the Bonds accrue interest at Flexible, Daily or Weekly Rates at least 30
days before the proposed conversion date while the Bonds accrue interest at a
Term Rate.


                             INTEREST PAYMENT DATES

     While this Bond accrues interest at a Flexible Rate, interest is payable
on the day after the last day of each Flexible Rate Period.  While this Bond
accrues interest at Daily or Weekly Rates, interest is payable on the first
Business Day of each month.  During any Term Rate Period, interest is payable
semiannually on the first day of the sixth month after the commencement of such
Term Rate Period and the first day of each sixth month thereafter provided that
the last Interest Payment Date for any Term Rate Period which is followed by a
Flexible, Daily or Weekly Rate Period shall be the first Business Day of the
sixth month following the preceding Interest Payment Date.




                                     A-8
<PAGE>   76





                              OPTIONAL REDEMPTION

     During any Flexible, Daily or Weekly Rate Period, this Bond is subject to
Optional Redemption on any Interest Payment Date at an Optional Redemption
price equal to 100% of the principal amount hereof, together with accrued
interest.  While this Bond accrues interest at a Term Rate, this Bond is
subject to Optional Redemption (i) at any time on and after the dates and at
the redemption prices as set forth below together with accrued interest, if
any, to the redemption date and (ii) on the day after the end of each Term Rate
Period at the redemption price of 100% of the principal amount thereof,
together with accrued interest, if any, to the redemption date:


<TABLE>
<CAPTION>
                             Commencement of Redemption
Length of Term Rate Period          Period                       Redemption Price
--------------------------  ----------------------------    -------------------------------
<S>                        <C>                             <C>
Greater than or equal to     Tenth anniversary of           102%, declining by 0.5% on
15 years                     commencement of Term           each succeeding anniversary of
                             Rate Period                    the first day of the redemption
                                                            period until reaching 100% and
                                                            thereafter at 100%
Less than 15 years and       Eighth anniversary of the
greater than or equal to     commencement of Term Rate      101.5%, declining by 0.5% on each
10 years                     Period                         succeeding anniversary of the first
                                                            day of the redemption period until
                                                            reaching 100% and thereafter at 100%

Less than 10 years and       Fifth anniversary of the       101%, declining by 0.5% on each
greater than or equal to     commencement of Term Rate      succeeding anniversary of the first
5 years                      Period                         day of the redemption period until
                                                            reaching 100% and thereafter at
                                                            100%

Less than 5 years            Bonds not subject to optional
                             redemption until commencement
                             of next Term Rate Period
</TABLE>

The optional redemption dates and redemption prices set forth above may be
changed, by a supplemental indenture approved by the Company and filed with the
Trustee, provided that any such supplemental indenture shall be accompanied by
a Favorable Opinion of Bond Counsel.


                          SPECIAL MANDATORY REDEMPTION

     This Bond is subject to special mandatory redemption prior to maturity not
later than 180 days after the occurrence of a Determination of Taxability (as
defined in the Indenture) at a redemption price of 100% of the principal amount
hereof, plus accrued interest to the redemption date.  The manner of redeeming
Bonds is described in detail in the Indenture.



                                     A-9
<PAGE>   77

                       EXTRAORDINARY OPTIONAL REDEMPTION

     The Bonds will be subject to extraordinary optional redemption by the
Issuer, at the direction of the Company, in whole or in part at the
commencement date of any Interest Rate Period], as described below, at a
redemption price of 100% of the principal amount thereof, plus accrued interest
to the redemption date, if one or more of the following events shall have
occurred within the preceding year:

           (a) The Project or the Plant shall have been damaged or destroyed to
     such extent that, in the opinion of the Company, (i) normal operations at
     the Project or the Plant are prevented or are likely to be prevented for a
     period of four consecutive months, or (ii) the restoration of the Project
     or the Plant is not economically feasible.

           (b) Title to, or the temporary use of, all or substantially all of
     the Project or the Plant shall have been taken under the exercise of the
     power of eminent domain by any governmental authority, or person, firm or
     corporation acting under governmental authority which, in the opinion of
     the Company, is likely to result in normal operations at the Project or the
     Plant being prevented for a period of four consecutive months.

           (c) Changes, which the Company cannot reasonably control or overcome,
     in the economic availability of materials, supplies, labor, equipment and
     other properties and things necessary for the efficient operation of the
     Project or the Plant shall have occurred, or technological or other changes
     shall have occurred which, in the opinion of the Company, render uneconomic
     the continued design, acquisition, construction, installation or operation
     of the Project or the Plant.

            (d) Any court or administrative body shall enter a judgment, order
     or decree requiring cessation of all or any substantial part of operations
     at the Project or the Plant, to such an extent that, in the opinion of the
     Company, normal operations at the Project or the Plant are likely to be
     prevented for a period of four consecutive months.

             (e) As a result of any changes in the Virginia Constitution or the
     Constitution of the United States of America or as a result of legislation
     or administrative action (whether state or federal) or by final decree,
     judgment or order of any court or administrative body (whether state or
     federal) entered after the contest thereof by the Company in good faith,
     the Agreement shall have become void or unenforceable or impossible of
     performance in accordance with the intent and purposes of the parties, or
     shall have been declared to be unlawful, or unreasonable burdens or
     excessive liabilities shall have been imposed on the Issuer or the Company,
     including without limitation federal, state or other ad valorem, property,
     income or other taxes not being imposed on the date of the Agreement.


                              DEFAULT ACCELERATION

     In case an Event of Default, as defined in the Indenture, shall have
occurred, the principal of all Bonds then outstanding under the Indenture may
become due and payable prior to their scheduled maturity date.




                                     A-10
<PAGE>   78

                               GENERAL PROVISIONS

     The Bonds are and will be equally and ratably secured, to the extent
provided by the Indenture, by the pledge thereunder of the Debt Service
Payments and other amounts payable by the Company to the Issuer under the
Agreement.  The Issuer has also pledged and assigned to the Trustee as security
for the Bonds all other rights and interests of the Issuer under the Agreement
(other than its rights to indemnification and payment of certain administrative
expenses and certain other rights).

     No registered owner shall have any right to pursue any remedy under the
Indenture unless (a) the Trustee shall have been given written notice of an
Event of Default by the Registered Owners of at least 25% in principal amount
of the Bonds then outstanding, (b) the registered owners of at least 25% in
principal amount of the Bonds then outstanding shall have requested the
Trustee, in writing, to exercise the powers granted under the Indenture or to
pursue such remedy in its or their name or names, (c) the Trustee shall have
been offered indemnity satisfactory to it against costs, expenses and
liabilities, and (d) the Trustee shall have failed to comply with such request
within 60 days after receipt of such notice, request and offer of indemnity.

                      * * * * * * * * * * * * * * * * * *

                    (END OF TEXT OF REVERSE SIDE OF BOND)







                                     A-11
<PAGE>   79




                              FORM OF ASSIGNMENT:

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and  transfers unto
________________________________________________________________________________
Please insert Social Security or
Taxpayer Identification Number of Transferee
 ____________________________
/___________________________/

________________________________________________________________________________
(Please print or typewrite name and address, including zip code of Transferee)

________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints
________________________________________________________________________________
attorney to register the transfer of the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.

Dated: ______________

Signature Guaranteed:


_______________________________      ________________________________
NOTICE: Signature(s) must            NOTICE: The signature above
be guaranteed by a member            must correspond with the name
or participant of a                  of the Registered Owner as it
signature guarantee program.         appears upon the front of this
                                     particular, without alteration
                                     or enlargement or any change
                                     whatsoever.





                                     B-1