Document:

<PAGE>

                         STERLING FINANCIAL CORPORATION

                                    as Issuer

                                    INDENTURE

                         Dated as of September 20, 2006

                            WILMINGTON TRUST COMPANY

                                   as Trustee

           FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2036

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                             <C>
                                    ARTICLE I

                                   DEFINITIONS

Section 1.01.  Definitions .... .............................................   1

                                   ARTICLE II

                                 DEBT SECURITIES

Section 2.01.  Authentication and Dating                                         9
Section 2.02.  Form of Trustee's Certificate of Authentication ..............    9
Section 2.03.  Form and Denomination of Debt Securities .....................   10
Section 2.04.  Execution of Debt Securities .................................   10
Section 2.05.  Exchange and Registration of Transfer of Debt Securities .....   11
Section 2.06.  Mutilated, Destroyed, Lost or Stolen Debt Securities .........   13
Section 2.07.  Temporary Debt Securities ....................................   14
Section 2.08.  Payment of Interest ..........................................   15
Section 2.09.  Cancellation of Debt Securities Paid, etc ....................   16
Section 2.10.  Computation of Interest ......................................   16
Section 2.11.  Extension of Interest Payment Period .........................   18
Section 2.12.  CUSIP Numbers ................................................   19
Section 2.13.  Global Debentures ............................................   19

                                   ARTICLE III

                       PARTICULAR COVENANTS OF THE COMPANY

Section 3.01.  Payment of Principal, Premium and Interest; Agreed Treatment
                of the Debt Securities ......................................   21
Section 3.02.  Offices for Notices and Payments, etc ........................   22
Section 3.03.  Appointments to Fill Vacancies in Trustee's Office ...........   23
Section 3.04.  Provision as to Paying Agent .................................   23
Section 3.05.  Certificate to Trustee .......................................   24
Section 3.06.  Additional Amounts ...........................................   24
Section 3.07.  Compliance with Consolidation Provisions .....................   25
Section 3.08.  Limitation on Dividends ......................................   25
Section 3.09.  Covenants as to the Trust ....................................   26

                                   ARTICLE IV

                                      LISTS

Section 4.01.  Securityholders' Lists .......................................   26
Section 4.02.  Preservation and Disclosure of Lists .........................   26
</TABLE>

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<TABLE>
<S>                                                                             <C>
Section 4.03.  Financial and Other Information ..............................   27

                                    ARTICLE V

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

Section 5.01.  Events of Default ............................................   28
Section 5.02.  Payment of Debt Securities on Default; Suit Therefor .........   31
Section 5.03.  Application of Moneys Collected by Trustee ...................   32
Section 5.04.  Proceedings by Securityholders ...............................   32
Section 5.05.  Proceedings by Trustee .......................................   33
Section 5.06.  Remedies Cumulative and Continuing ...........................   33
Section 5.07.  Direction of Proceedings and Waiver of Defaults by Majority of
                Security  holders ...........................................   33
Section 5.08.  Notice of Defaults ...........................................   34
Section 5.09.  Undertaking to Pay Costs .....................................   35

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE

Section 6.01.  Duties and Responsibilities of Trustee .......................   35
Section 6.02.  Reliance on Documents, Opinions, etc .........................   36
Section 6.03.  No Responsibility for Recitals, etc ..........................   37
Section 6.04.  Trustee, Authenticating Agent, Paying Agents, Transfer Agents
                or Registrar May Own Debt Securities ........................   38
Section 6.05.  Moneys to be Held in Trust ...................................   38
Section 6.06.  Compensation and Expenses of Trustee .........................   38
Section 6.07.  Officers' Certificate as Evidence ............................   39
Section 6.08.  Eligibility of Trustee .......................................   39
Section 6.09.  Resignation or Removal of Trustee ............................   40
Section 6.10.  Acceptance by Successor Trustee ..............................   41
Section 6.11.  Succession by Merger, etc ....................................   42
Section 6.12.  Authenticating Agents ........................................   42

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

Section 7.01.  Action by Securityholders ....................................   43
Section 7.02.  Proof of Execution by Securityholders ........................   44
Section 7.03.  Who Are Deemed Absolute Owners ...............................   44
Section 7.04.  Debt Securities Owned by Company Deemed Not Outstanding ......   44
Section 7.05.  Revocation of Consents; Future Holders Bound .................   45
</TABLE>

                                       ii

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<TABLE>
<S>                                                                             <C>
                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

Section 8.01.  Purposes of Meetings .........................................   45
Section 8.02.  Call of Meetings by Trustee ..................................   46
Section 8.03.  Call of Meetings by Company or Securityholders ...............   46
Section 8.04.  Qualifications for Voting ....................................   46
Section 8.05.  Regulations ..................................................   46
Section 8.06.  Voting .......................................................   47
Section 8.07.  Quorum; Actions ..............................................   47

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

Section 9.01.  Supplemental Indentures without Consent of Securityholders ...   48
Section 9.02.  Supplemental Indentures with Consent of Securityholders ......   50
Section 9.03.  Effect of Supplemental Indentures ............................   51
Section 9.04.  Notation on Debt Securities ..................................   51
Section 9.05.  Evidence of Compliance of Supplemental Indenture to be
                Furnished to Trustee. .......................................   51

                                    ARTICLE X

                            REDEMPTION OF SECURITIES

Section 10.01. Optional Redemption ..........................................   51
Section 10.02. Special Event Redemption .....................................   52
Section 10.03. Notice of Redemption; Selection of Debt Securities ...........   52
Section 10.04. Payment of Debt Securities Called for Redemption .............   53

                                   ARTICLE XI

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 11.01. Company May Consolidate, etc., on Certain Terms ..............   53
Section 11.02. Successor Entity to be Substituted ...........................   54
Section 11.03. Opinion of Counsel to be Given to Trustee ....................   55

                                   ARTICLE XII

                     SATISFACTION AND DISCHARGE OF INDENTURE

Section 12.01. Discharge of Indenture .......................................   55
Section 12.02. Deposited Moneys to be Held in Trust by Trustee ..............   56
Section 12.03. Paying Agent to Repay Moneys Held ............................   56
Section 12.04. Return of Unclaimed Moneys ...................................   56
</TABLE>

                                      iii

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<TABLE>
<S>                                                                             <C>
                                  ARTICLE XIII

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 13.01. Indenture and Debt Securities Solely Corporate Obligations ...   56

                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

Section 14.01. Successors ...................................................   57
Section 14.02. Official Acts by Successor Entity ............................   57
Section 14.03. Surrender of Company Powers ..................................   57
Section 14.04. Addresses for Notices, etc ...................................   57
Section 14.05. Governing Law ................................................   57
Section 14.06. Evidence of Compliance with Conditions Precedent .............   57
Section 14.07. Business Day Convention ......................................   58
Section 14.08. Table of Contents, Headings, etc .............................   58
Section 14.09. Execution in Counterparts ....................................   58
Section 14.10. Separability .................................................   58
Section 14.11. Assignment ...................................................   59
Section 14.12. Acknowledgment of Rights .....................................   59

                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

Section 15.01. Agreement to Subordinate .....................................   59
Section 15.02. Default on Senior Indebtedness ...............................   60
Section 15.03. Liquidation; Dissolution; Bankruptcy .........................   60
Section 15.04. Subrogation ..................................................   61
Section 15.05. Trustee to Effectuate Subordination ..........................   62
Section 15.06. Notice by the Company ........................................   62
Section 15.07. Rights of the Trustee; Holders of Senior Indebtedness ........   63
Section 15.08. Subordination May Not Be Impaired ............................   63
</TABLE>

<TABLE>
<S>                                                                             <C>
EXHIBITS

    EXHIBIT A Form of Debt Security                                             A-1

    EXHIBIT B Form of Certificate of Officer of the Company                     B-1
</TABLE>

                                       iv

<PAGE>

            THIS INDENTURE, dated as of September 20, 2006, between Sterling
Financial Corporation, a bank holding company incorporated in the State of
Washington (hereinafter sometimes called the "Company"), and Wilmington Trust
Company, a Delaware banking corporation, as trustee (hereinafter sometimes
called the "Trustee").

                              W I T N E S S E T H :

            WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its Floating Rate Junior Subordinated Debt Securities
due 2036 (the "Debt Securities") under this Indenture and to provide, among
other things, for the execution and authentication, delivery and administration
thereof, the Company has duly authorized the execution of this Indenture.

            NOW, THEREFORE, in consideration of the premises, and the purchase
of the Debt Securities by the holders thereof, the Company covenants and agrees
with the Trustee for the equal and proportionate benefit of the respective
holders from time to time of the Debt Securities as follows:

                                    ARTICLE I

                                   DEFINITIONS

            Section 1.01. Definitions.

            The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01. All accounting terms used
herein and not expressly defined shall have the meanings assigned to such terms
in accordance with generally accepted accounting principles and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted in the United States at the time of any computation. The
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.

            "Additional Amounts" has the meaning set forth in Section 3.06.

            "Additional Provisions" has the meaning set forth in Section 15.01.

            "Administrative Action" has the meaning specified within the
definition of "Tax Event" in this Section 1.01.

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

<PAGE>

            "Authenticating Agent" means any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.12.

            "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.

            "Board of Directors" means the board of directors or the executive
committee or any other duly authorized designated officers of the Company.

            "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.

            "Book-Entry Capital Security" means a Capital Security the ownership
and transfers of which shall be reflected and made, as applicable, through book
entries by the Depositary.

            "Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in Wilmington, Delaware, The City of New
York or Olympia, Washington are permitted or required by law or executive order
to close.

            "Calculation Agent" means the Person identified as "Trustee" in the
first paragraph hereof with respect to the Debt Securities and the Institutional
Trustee with respect to the Trust Securities.

            "Capital Securities" means undivided beneficial interests in the
assets of the Trust which are designated as "MMCapS(SM)" and rank pari passu
with Common Securities issued by the Trust; provided, however, that if an Event
of Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of such Capital Securities.

            "Capital Securities Guarantee" means the guarantee agreement that
the Company will enter into with Wilmington Trust Company or other Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
of the Trust.

            "Capital Treatment Event" means, if the Company is organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, the receipt by the Company and the Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change in, the laws, rules or regulations of the United States
or any political subdivision thereof or therein, or as the result of any
official or administrative pronouncement or action or decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or which pronouncement, action or decision is announced on or after the date of
original issuance of the Debt Securities, there is more than an insubstantial
risk that the Company will not, within 90 days of the date of such opinion, be
entitled to treat Capital Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor regulatory authority with jurisdiction over bank holding
companies), as then in effect and applicable to the

                                       2

<PAGE>

Company; provided, however, that the inability of the Company to treat all or
any portion of the aggregate Liquidation Amount of the Capital Securities as
"Tier 1 Capital" shall not constitute the basis for a Capital Treatment Event if
such inability results from the Company having preferred stock, minority
interests in consolidated subsidiaries and any other class of security or
interest which the Federal Reserve (or any successor regulatory authority with
jurisdiction over bank holding companies) may now or hereafter accord "Tier 1
Capital" treatment that, in the aggregate, exceed the amount which may now or
hereafter qualify for treatment as "Tier 1 Capital" under applicable capital
adequacy guidelines of the Federal Reserve (or any successor regulatory
authority with jurisdiction over bank holding companies); provided, further,
however, that the distribution of the Debt Securities in connection with the
liquidation of the Trust by the Company shall not in and of itself constitute a
Capital Treatment Event unless such liquidation shall have occurred in
connection with a Tax Event or an Investment Company Event. For the avoidance of
doubt, the inability of the Company to treat all or any portion of the aggregate
Liquidation Amount of the Capital Securities as "Tier 1 Capital" as a result of
the changes effected by the final rule adopted by the Federal Reserve on March
1, 2005 shall not constitute the basis for a Capital Treatment Event.

            "Certificate" means a certificate signed by any one of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company.

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

            "Common Securities" means undivided beneficial interests in the
assets of the Trust which are designated as "Common Securities" and rank pari
passu with Capital Securities issued by the Trust; provided, however, that if an
Event of Default (as defined in the Declaration) has occurred and is continuing,
the rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of such Capital Securities.

            "Company" means Sterling Financial Corporation, a bank holding
company incorporated in the State of Washington, and, subject to the provisions
of Article XI, shall include its successors and assigns.

            "Debt Security" or "Debt Securities" has the meaning stated in the
first recital of this Indenture.

            "Debt Security Register" has the meaning specified in Section 2.05.

            "Declaration" means the Amended and Restated Declaration of Trust of
the Trust, dated as of September 20, 2006, as amended or supplemented from time
to time.

            "Default" means any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.

            "Defaulted Interest" has the meaning set forth in Section 2.08.

            "Deferred Interest" has the meaning set forth in Section 2.11.

                                       3
<PAGE>
            "Depositary" means an organization registered as a clearing agency
under the Exchange Act that is designated as Depositary by the Company. DTC will
be the initial Depositary.

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

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

            "Event of Default" means any event specified in Section 5.01, which
has continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.

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

            "Extension Period" has the meaning set forth in Section 2.11.

            "Federal Reserve" means the Board of Governors of the Federal
Reserve System.

            "Global Debenture" means a global certificate that evidences all or
part of the Debt Securities the ownership and transfers of which shall be
reflected and made, as applicable, through book entries by the Depositary and
the Depositary Participants.

            "Indenture" means this Indenture as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented, or
both.

            "Institutional Trustee" has the meaning set forth in the
Declaration.

            "Interest Payment Date" means March 15, June 15, September 15 and
December 15 of each year, commencing on December 15, 2006 subject to Section
14.07.

            "Interest Period" has the meaning set forth in Section 2.08.

            "Interest Rate" means, with respect to any Interest Period, a per
annum rate of interest equal to LIBOR, as determined on the LIBOR Determination
Date for such Interest Period (or, in the case of the first Interest Period,
5.39%) plus 1.63%; provided, however, that the Interest Rate for any Interest
Period may not exceed the highest rate permitted by New York law, as the same
may be modified by United States law of general application.

            "Investment Company Event" means the receipt by the Company and the
Trust of an Opinion of Counsel experienced in such matters to the effect that,
as a result of a change in law or regulation or written change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Trust is or, within 90 days of the date of such opinion will be, considered
an "investment company" that is required to be registered under the Investment
Company Act of 1940, as amended, which change becomes effective on or after the
date of the original issuance of the Debt Securities.

                                       4
<PAGE>

            "LIBOR" means the London Interbank Offered Rate for three-month U.S.
Dollar deposits in Europe as determined by the Calculation Agent according to
Section 2.10(b).

            "LIBOR Banking Day" has the meaning set forth in Section 2.10(b)(i).

            "LIBOR Business Day" has the meaning set forth in Section
2.10(b)(i).

            "LIBOR Determination Date" has the meaning set forth in Section
2.10(b)(i).

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

            "Major Depository Institution Subsidiary" means any subsidiary of
the Company that (i) is a depository institution and (ii) meets the definition
of "significant subsidiary" within the meaning of Rule 405 under the Securities
Act.

            "Maturity Date" means December 15, 2036, subject to Section 14.07.

            "Officers' Certificate" means a certificate signed by the Chairman
of the Board, the Vice Chairman, the President or any Vice President, and by the
Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Comptroller,
an Assistant Comptroller, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 14.06 if and to the extent required by the
provisions of such Section.

            "Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or may be other
counsel reasonably satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 14.06 if and to the extent required by
the provisions of such Section.

            The term "outstanding," when used with reference to Debt Securities,
subject to the provisions of Section 7.04, means, as of any particular time, all
Debt Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except

            (a) Debt Securities theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;

            (b) Debt Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any Paying Agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent); provided, that, if such Debt Securities, or
portions thereof, are to be redeemed prior to maturity thereof, notice of such
redemption shall have been given as provided in Articles X and XIV or provision
satisfactory to the Trustee shall have been made for giving such notice; and

            (c) Debt Securities paid pursuant to Section 2.06 or in lieu of or
in substitution for which other Debt Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to
the Company and the Trustee is presented that any such Debt Securities are held
by bona fide holders in due course.

                                       5
<PAGE>

            "Optional Redemption Date" has the meaning set forth in Section
10.01.

            "Optional Redemption Price" means an amount in cash equal to 100% of
the principal amount of the Debt Securities being redeemed plus unpaid interest
accrued on such Debt Securities to the related Optional Redemption Date.

            "Paying Agent" has the meaning set forth in Section 3.04(e).

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

            "Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 2.06 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.

            "Principal Office of the Trustee" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of the execution of this Indenture shall be Rodney Square North,
1100 North Market Street, Wilmington, DE 19890-0001.

            "Reference Banks" has the meaning set forth in Section 2.10(b)(ii).

            "Responsible Officer" means, with respect to the Trustee, any
officer within the Principal Office of the Trustee with direct responsibility
for the administration of the Indenture, including any vice-president, any
assistant vice-president, any secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or other officer of the Principal
Office of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

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

            "Securityholder," "holder of Debt Securities" or other similar
terms, means any Person in whose name at the time a particular Debt Security is
registered on the Debt Security Register.

            "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed, as well as similar obligations arising from
off-balance sheet guarantees and direct credit substitutes and (B) indebtedness
evidenced by securities, debentures, notes, bonds or other similar instruments
issued by the Company, (ii) all capital lease obligations of the Company, (iii)
all obligations of the Company issued or assumed as the deferred purchase price
of property, all conditional sale obligations of the Company and all obligations
of the Company under any title

                                       6
<PAGE>

retention agreement (but excluding trade accounts payable and other accrued
liabilities arising in the ordinary course of business), (iv) all obligations of
the Company for the reimbursement of any letter of credit, any banker's
acceptance, any security purchase facility, any repurchase agreement or similar
arrangement, all obligations associated with derivative products such as
interest rate and foreign exchange contracts and commodity contracts, any
interest rate swap, any other hedging arrangement, any obligation under options
or any similar credit or other transaction, (v) all obligations of the type
referred to in clauses (i) through (iv) above of other Persons for the payment
of which the Company is responsible or liable as obligor, guarantor or otherwise
and (vi) all obligations of the type referred to in clauses (i) through (v)
above of other Persons secured by any lien on any property or asset of the
Company (whether or not such obligation is assumed by the Company), whether the
obligations of the type referred to in clauses (i) through (vi) above were
incurred on or prior to the date of this Indenture or thereafter incurred,
unless, with the prior approval of the Federal Reserve if not otherwise
generally approved, it is provided in the instrument creating or evidencing the
same or pursuant to which the same is outstanding that such obligations are not
superior or are pari passu in right of payment to the Debt Securities; provided,
however, that Senior Indebtedness shall not include (A) any debt securities
issued to any trust other than the Trust (or a trustee of such trust) that is a
financing vehicle of the Company (a "financing entity"), in connection with the
issuance by such financing entity of equity or other securities in transactions
substantially similar in structure to the transactions contemplated hereunder
and in the Declaration or (B) any guarantees of the Company in respect of the
equity or other securities of any financing entity referred to in clause (A)
above.

            "Special Event" means any of a Tax Event, an Investment Company
Event or a Capital Treatment Event.

            "Special Redemption Date" has the meaning set forth in Section
10.02.

            "Special Redemption Price" means, with respect to the redemption of
any Debt Security following a Special Event, an amount in cash equal to 103.50%
of the principal amount of Debt Securities to be redeemed prior to December 15,
2007 and thereafter equal to the percentage of the principal amount of the Debt
Securities that is specified below for the Special Redemption Date plus unpaid
interest accrued thereon to the Special Redemption Date:

<TABLE>
<CAPTION>
SPECIAL REDEMPTION DURING THE 12-MONTH
           PERIOD BEGINNING
             DECEMBER 15,                 PERCENTAGE OF PRINCIPAL AMOUNT
--------------------------------------    ------------------------------
<S>                                       <C>
           2007                                   102.80%
           2008                                   102.10%
           2009                                   101.40%
           2010                                   100.70%
      2011 and thereafter                         100.00%
</TABLE>

            "Subsidiary" means, with respect to any Person, (i) any corporation,
at least a majority of the outstanding voting stock of which is owned, directly
or indirectly, by such Person

                                       7
<PAGE>

or one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, (ii) any general partnership, joint venture or similar entity, at
least a majority of the outstanding partnership or similar interests of which
shall at the time be owned by such Person or one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general
partner. For the purposes of this definition, "voting stock" means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.

            "Tax Event" means the receipt by the Company and the Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of any amendment to or change (including any announced prospective change) in
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum, regulatory procedure, notice or announcement (an
"Administrative Action")) or judicial decision interpreting or applying such
laws or regulations, regardless of whether such Administrative Action or
judicial decision is issued to or in connection with a proceeding involving the
Company or the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debt Securities, there is more than an insubstantial risk that: (i) the
Trust is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued on
the Debt Securities; (ii) if the Company is organized and existing under the
laws of the United States or any state thereof or the District of Columbia,
interest payable by the Company on the Debt Securities is not, or within 90 days
of the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States federal income tax purposes; or (iii) the Trust is,
or will be within 90 days of the date of such opinion, subject to or otherwise
required to pay, or required to withhold from distributions to holders of Trust
Securities, more than a de minimis amount of other taxes (including withholding
taxes), duties, assessments or other governmental charges.

            "Trust" means Sterling Capital Trust VIII, the Delaware statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debt Securities under this
Indenture, of which the Company is the sponsor.

            "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.

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

            "Trustee" means the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder.

            "United States" means the United States of America and the District
of Columbia.

                                       8
<PAGE>

            "U.S. Person" has the meaning given to United States Person as set
forth in Section 7701(a)(30) of the Code.

                                   ARTICLE II

                                 DEBT SECURITIES

            Section 2.01. Authentication and Dating.

            Upon the execution and delivery of this Indenture, or from time to
time thereafter, Debt Securities in an aggregate principal amount not in excess
of $51,547,000 may be executed and delivered by the Company to the Trustee for
authentication, and the Trustee shall thereupon authenticate and make available
for delivery said Debt Securities to or upon the written order of the Company,
signed by its Chairman of the Board of Directors, Vice Chairman, President or
Chief Financial Officer or one of its Vice Presidents, without any further
action by the Company hereunder. In authenticating such Debt Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Debt Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon a copy of any Board
Resolution or Board Resolutions relating thereto and, if applicable, an
appropriate record of any action taken pursuant to such resolution, in each case
certified by the Secretary or an Assistant Secretary or other officers with
appropriate delegated authority of the Company as the case may be.

            The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if a
Responsible Officer of the Trustee in good faith shall determine that such
action would expose the Trustee to personal liability to existing
Securityholders.

            The definitive Debt Securities shall be typed, printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Debt Securities, as evidenced
by their execution of such Debt Securities.

            Section 2.02. Form of Trustee's Certificate of Authentication.

            The Trustee's certificate of authentication on all Debt Securities
shall be in substantially the following form:

            This certificate represents Debt Securities referred to in the
within-mentioned Indenture.

                                       9
<PAGE>

                              Wilmington Trust Company,
                                not in its individual capacity
                                but solely as trustee

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

            Section 2.03. Form and Denomination of Debt Securities.

            The Debt Securities shall be substantially in the form of Exhibit A
hereto. The Debt Securities shall be in registered form without coupons and in
minimum denominations of $100,000 and any multiple of $1,000 in excess thereof.
The Debt Securities shall be numbered, lettered, or otherwise distinguished in
such manner or in accordance with such plans as the officers executing the same
may determine with the approval of the Trustee as evidenced by the execution and
authentication thereof.

            Section 2.04. Execution of Debt Securities.

            The Debt Securities shall be signed in the name and on behalf of the
Company by the manual or facsimile signature of its Chairman of the Board of
Directors, Vice Chairman, President or Chief Financial Officer or one of its
Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, under its
corporate seal (if legally required) which may be affixed thereto or printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise, and which
need not be attested. Only such Debt Securities as shall bear thereon a
certificate of authentication substantially in the form herein before recited,
executed by the Trustee or the Authenticating Agent by the manual or facsimile
signature of an authorized officer, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee or the Authenticating Agent upon any Debt Security executed by the
Company shall be conclusive evidence that the Debt Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.

            In case any officer of the Company who shall have signed any of the
Debt Securities shall cease to be such officer before the Debt Securities so
signed shall have been authenticated and delivered by the Trustee or the
Authenticating Agent, or disposed of by the Company, such Debt Securities
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debt Securities had not ceased to be such officer of the
Company; and any Debt Security may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debt Security, shall be
the proper officers of the Company, although at the date of the execution of
this Indenture any such person was not such an officer.

            Every Debt Security shall be dated the date of its authentication.

                                       10
<PAGE>

            Section 2.05. Exchange and Registration of Transfer of Debt
Securities.

            The Company shall cause to be kept, at the office or agency
maintained for the purpose of registration of transfer and for exchange as
provided in Section 3.02, a register (the "Debt Security Register") for the Debt
Securities issued hereunder in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration and transfer of
all Debt Securities as provided in this Article II. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.

            Debt Securities to be exchanged may be surrendered at the Principal
Office of the Trustee or at any office or agency to be maintained by the Company
for such purpose as provided in Section 3.02, and the Company shall execute, the
Company or the Trustee shall register and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in exchange therefor,
the Debt Security or Debt Securities which the Securityholder making the
exchange shall be entitled to receive. Upon due presentment for registration of
transfer of any Debt Security at the Principal Office of the Trustee or at any
office or agency of the Company maintained for such purpose as provided in
Section 3.02, the Company shall execute, the Company or the Trustee shall
register and the Trustee or the Authenticating Agent shall authenticate and make
available for delivery in the name of the transferee or transferees, a new Debt
Security for a like aggregate principal amount. Registration or registration of
transfer of any Debt Security by the Trustee or by any agent of the Company
appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be
deemed to complete the registration or registration of transfer of such Debt
Security.

            All Debt Securities presented for registration of transfer or for
exchange or payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by, a written
instrument or instruments of transfer in form satisfactory to the Company and
either the Trustee or the Authenticating Agent duly executed by, the holder or
such holder's attorney duly authorized in writing.

            No service charge shall be made for any exchange or registration of
transfer of Debt Securities, but the Company or the Trustee may require payment
of a sum sufficient to cover any tax, fee or other governmental charge that may
be imposed in connection therewith other than exchanges pursuant to Section
2.07, Section 9.04 or Section 10.04 not involving any transfer.

            The Company or the Trustee shall not be required to exchange or
register a transfer of any Debt Security for a period of 15 days immediately
preceding the date of selection of Debt Securities for redemption.

            Notwithstanding the foregoing, Debt Securities may not be
transferred except in compliance with the legend set forth below, unless
otherwise determined by the Company in accordance with applicable law, which
legend shall be placed on each Debt Security:

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS.

                                       11
<PAGE>

NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF
OR THEREOF, AS THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN ONLY (A) TO THE COMPANY, (B)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE
HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS DEFINED IN
RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT OR TO ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN
SUCH SUBPARAGRAPHS THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (C) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

            THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14

                                       12
<PAGE>

OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER
OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE
CASE MAY BE, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (II) SUCH PURCHASE AND HOLDING
WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

            IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.

            THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

            THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE
CLAIMS OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.

            Section 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities.

            In case any Debt Security shall become mutilated or be destroyed,
lost or stolen, the Company shall execute, and upon its written request the
Trustee shall authenticate and

                                       13
<PAGE>

deliver, a new Debt Security bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debt Security, or in lieu of and
in substitution for the Debt Security so destroyed, lost or stolen. In every
case the applicant for a substituted Debt Security shall furnish to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Debt Security and of the
ownership thereof.

            The Trustee may authenticate any such substituted Debt Security and
deliver the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debt Security, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debt Security which has matured or is about to mature or
has been called for redemption in full shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debt Security,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security) if the applicant for such payment shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless and, in case of destruction, loss
or theft, evidence satisfactory to the Company and to the Trustee of the
destruction, loss or theft of such Security and of the ownership thereof.

            Every substituted Debt Security issued pursuant to the provisions of
this Section 2.06 by virtue of the fact that any such Debt Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Debt Security shall
be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debt Securities
duly issued hereunder. All Debt Securities shall be held and owned upon the
express condition that, to the extent permitted by applicable law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

            Section 2.07. Temporary Debt Securities.

            Pending the preparation of definitive Debt Securities, the Company
may execute and the Trustee shall authenticate and make available for delivery
temporary Debt Securities that are typed, printed or lithographed. Temporary
Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay, the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities
may be surrendered in exchange therefor, at the Principal Office of the Trustee
or at any office or agency maintained by the Company for such purpose as
provided in Section 3.02, and the Trustee or the

                                       14
<PAGE>

Authenticating Agent shall authenticate and make available for delivery in
exchange for such temporary Debt Securities a like aggregate principal amount of
such definitive Debt Securities. Such exchange shall be made by the Company at
its own expense and without any charge therefor except that in case of any such
exchange involving a registration of transfer the Company may require payment of
a sum sufficient to cover any tax, fee or other governmental charge that may be
imposed in relation thereto. Until so exchanged, the temporary Debt Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities authenticated and delivered hereunder.

            Section 2.08. Payment of Interest.

            Each Debt Security will bear interest at the then applicable
Interest Rate (i) in the case of the initial Interest Period, for the period
from, and including, the date of original issuance of such Debt Security to, but
excluding, the initial Interest Payment Date and (ii) thereafter, for the period
from, and including, the first day following the end of the preceding Interest
Period to, but excluding, the applicable Interest Payment Date or, in the case
of the last Interest Period, the related Optional Redemption Date, Special
Redemption Date or Maturity Date, as applicable (each such period, an "Interest
Period"), on the principal thereof, on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on Deferred
Interest and on any overdue installment of interest (including Defaulted
Interest), payable (subject to the provisions of Article XV) on each Interest
Payment Date and on the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be. Interest and any Deferred Interest
on any Debt Security that is payable, and is punctually paid or duly provided
for by the Company, on any Interest Payment Date shall be paid to the Person in
whose name such Debt Security (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such interest
installment, except that interest and any Deferred Interest payable on the
Maturity Date, any Optional Redemption Date or the Special Redemption Date, as
the case may be, other than any Interest Payment Date shall be paid to the
Person to whom principal is paid. In case (i) the Maturity Date of any Debt
Security or (ii) any Debt Security or portion thereof is called for redemption
and the related Optional Redemption Date or the Special Redemption Date, as the
case may be, is subsequent to the regular record date with respect to any
Interest Payment Date and prior to such Interest Payment Date, interest on such
Debt Security will be paid upon presentation and surrender of such Debt
Security.

            Any interest on any Debt Security, other than Deferred Interest,
that is payable, but is not punctually paid or duly provided for by the Company,
on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the holder on the relevant regular record date
by virtue of having been such holder, and such Defaulted Interest shall be paid
by the Company to the Persons in whose names such Debt Securities (or their
respective Predecessor Securities) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Debt
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements reasonably satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted

                                       15
<PAGE>

Interest as provided in this paragraph. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest, which shall not
be more than fifteen nor less than ten days prior to the date of the proposed
payment and not less than ten days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
special record date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Debt Security
Register, not less than ten days prior to such special record date. Notice of
the proposed payment of such Defaulted Interest and the special record date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names such Debt Securities (or their respective
Predecessor Securities) are registered on such special record date and
thereafter the Company shall have no further payment obligation in respect of
the Defaulted Interest.

            Any interest scheduled to become payable on an Interest Payment Date
occurring during an Extension Period shall not be Defaulted Interest and shall
be payable on such other date as may be specified in the terms of such Debt
Securities.

            The term "regular record date", as used in this Section, shall mean
the fifteenth day prior to the applicable Interest Payment Date, whether or not
such day is a Business Day.

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

            Section 2.09. Cancellation of Debt Securities Paid, etc.

            All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if surrendered to the
Company or any Paying Agent, be surrendered to the Trustee and promptly canceled
by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be
promptly canceled by it, and no Debt Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. All
Debt Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debt Securities unless the
Company otherwise directs the Trustee in writing, in which case the Trustee
shall dispose of such Debt Securities as directed by the Company. If the Company
shall acquire any of the Debt Securities, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debt Securities unless and until the same are surrendered to the Trustee for
cancellation.

            Section 2.10. Computation of Interest.

            (a) The amount of interest payable for any Interest Period will be
computed on the basis of a 360-day year and the actual number of days elapsed in
such Interest Period.

            (b) LIBOR shall be determined by the Calculation Agent for each
Interest Period (other than the first Interest Period, in which case LIBOR will
be 5.39% per annum) in accordance with the following provisions:

                                       16
<PAGE>

                  (i) On the second LIBOR Business Day (provided, that on such
            day commercial banks are open for business (including dealings in
            foreign currency deposits) in London (a "LIBOR Banking Day"), and
            otherwise the next preceding LIBOR Business Day that is also a LIBOR
            Banking Day) prior to the Interest Payment Date that commences such
            Interest Period (each such day, a "LIBOR Determination Date"), LIBOR
            shall equal the rate, as obtained by the Calculation Agent, for
            three-month U.S. Dollar deposits in Europe, which appears on
            Telerate (as defined in the International Swaps and Derivatives
            Association, Inc. 2000 Interest Rate and Currency Exchange
            Definitions) page 3750 or such other page as may replace such page
            3750, as of 11:00 a.m. (London time) on such LIBOR Determination
            Date, as reported by Bloomberg Financial Markets Commodities News or
            any successor service ("Telerate Page 3750"). "LIBOR Business Day"
            means any day that is not a Saturday, Sunday or other day on which
            commercial banking institutions in The City of New York or
            Wilmington, Delaware are authorized or obligated by law or executive
            order to be closed. If such rate is superseded on Telerate Page 3750
            by a corrected rate before 12:00 noon (London time) on such LIBOR
            Determination Date, the corrected rate as so substituted will be
            LIBOR for such LIBOR Determination Date.

                  (ii) If, on such LIBOR Determination Date, such rate does not
            appear on Telerate Page 3750, the Calculation Agent shall determine
            the arithmetic mean of the offered quotations of the Reference Banks
            to leading banks in the London interbank market for three-month U.S.
            Dollar deposits in Europe (in an amount determined by the
            Calculation Agent) by reference to requests for quotations as of
            approximately 11:00 a.m. (London time) on such LIBOR Determination
            Date made by the Calculation Agent to the Reference Banks. If, on
            such LIBOR Determination Date, at least two of the Reference Banks
            provide such quotations, LIBOR shall equal the arithmetic mean of
            such quotations. If, on such LIBOR Determination Date, only one or
            none of the Reference Banks provide such a quotation, LIBOR shall be
            deemed to be the arithmetic mean of the offered quotations that at
            least two leading banks in The City of New York (as selected by the
            Calculation Agent) are quoting on such LIBOR Determination Date for
            three-month U.S. Dollar deposits in Europe at approximately 11:00
            a.m. (London time) (in an amount determined by the Calculation
            Agent). As used herein, "Reference Banks" means four major banks in
            the London interbank market selected by the Calculation Agent.

                  (iii)If the Calculation Agent is required but is unable to
            determine a rate in accordance with at least one of the procedures
            provided above, LIBOR for such Interest Period shall be LIBOR in
            effect for the immediately preceding Interest Period.

            (c) All percentages resulting from any calculations on the Debt
Securities will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward).

                                       17

<PAGE>

            (d) On each LIBOR Determination Date, the Calculation Agent shall
notify, in writing, the Company and the Paying Agent of the applicable Interest
Rate that applies to the related Interest Period. The Calculation Agent shall,
upon the request of a holder of any Debt Securities, inform such holder of the
Interest Rate that applies to the related Interest Period. All calculations made
by the Calculation Agent in the absence of manifest error shall be conclusive
for all purposes and binding on the Company and the holders of the Debt
Securities. The Paying Agent shall be entitled to rely on information received
from the Calculation Agent or the Company as to the applicable Interest Rate.
The Company shall, from time to time, provide any necessary information to the
Paying Agent relating to any original issue discount and interest on the Debt
Securities that is included in any payment and reportable for taxable income
calculation purposes.

            Section 2.11. Extension of Interest Payment Period.

            So long as no Event of Default pursuant to Sections 5.01(b), (e),
(f), (g), (h) or (i) of this Indenture has occurred and is continuing, the
Company shall have the right, from time to time and without causing an Event of
Default, to defer payments of interest on the Debt Securities by extending the
interest payment period on the Debt Securities at any time and from time to time
during the term of the Debt Securities, for up to 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and further consecutive extensions thereof, is referred to herein as an
"Extension Period"). No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. During any
Extension Period, interest will continue to accrue on the Debt Securities, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as "Deferred Interest") will accrue at an annual rate equal
to the Interest Rate applicable during such Extension Period, compounded
quarterly from the date such Deferred Interest would have been payable were it
not for the Extension Period, to the extent permitted by applicable law. No
interest or Deferred Interest (except any Additional Amounts that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof. At the end of any Extension Period, the Company shall pay all Deferred
Interest then accrued and unpaid on the Debt Securities; provided, however, that
during any Extension Period, the Company shall be subject to the restrictions
set forth in Section 3.08. Prior to the termination of any Extension Period, the
Company may further extend such Extension Period, provided, that no Extension
Period (including all previous and further consecutive extensions that are part
of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon
the termination of any Extension Period and upon the payment of all Deferred
Interest, the Company may commence a new Extension Period, subject to the
foregoing requirements. The Company must give the Trustee notice of its election
to begin or extend an Extension Period no later than the close of business on
the fifteenth Business Day prior to the applicable Interest Payment Date. The
Trustee shall give notice of the Company's election to begin or extend an
Extension Period to the Securityholders, promptly after receipt of notice from
the Company of its election to begin or extend an Extension Period.

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<PAGE>

            Section 2.12. CUSIP Numbers.

            The Company in issuing the Debt Securities may use a "CUSIP" number
(if then generally in use), and, if so, the Trustee shall use a "CUSIP" number
in notices of redemption as a convenience to Securityholders; provided, that any
such notice may state that no representation is made as to the correctness of
such number either as printed on the Debt Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debt Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee in writing of any change in the CUSIP number.

            Section 2.13. Global Debentures.

            (a) Upon the election of an owner of beneficial interests in
outstanding Debt Securities, the Debt Securities owned by such beneficial owner
shall be issued in the form of one or more Global Debentures. Each Global
Debenture issued under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Debenture or a nominee of
such Depositary and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Debenture shall constitute a single
Debt Security for all purposes of this Indenture.

            (b) Notwithstanding any other provision in this Indenture, no Global
Debenture may be exchanged in whole or in part for Debt Securities in
certificated form, and no transfer of a Global Debenture in whole or in part may
be, registered in the name of any Person other than the Depositary for such
Global Debenture or a nominee thereof unless (i) such Depositary advises the
Trustee and the Company in writing that such Depositary is no longer willing or
able to properly discharge its responsibilities as Depositary with respect to
such Global Debenture, and no qualified successor is appointed by the Company
within ninety (90) days of receipt by the Company of such notice, (ii) such
Depositary ceases to be a clearing agency registered under the Exchange Act and
no successor is appointed by the Company within ninety (90) days after obtaining
knowledge of such event or (iii) an Event of Default shall have occurred and be
continuing. Upon obtaining knowledge of the occurrence of any event specified in
clause (i), (ii) or (iii) above, the Trustee shall notify the Depositary and
instruct the Depositary to notify all owners of beneficial interests in such
Global Debenture of the occurrence of such event and of the availability of Debt
Securities in certificated form to such beneficial owners requesting the same.
Upon the issuance of such Debt Securities in certificated form and the
registration in the Debt Security Register of such Debt Securities in the names
of the holders thereof, the Trustee shall recognize such holders as holders of
Debt Securities for all purposes of this Indenture and the Debt Securities.

            (c) If any Global Debenture is to be exchanged for Debt Securities
in certificated form or canceled in part, or if a Debt Security in certificated
form is to be exchanged in whole or in part for a beneficial interest in any
Global Debenture, then either (i) such Global Debenture shall be so surrendered
for exchange or cancellation as provided herein or (ii) the principal amount
thereof shall be reduced or increased, subject to Section 2.03, by an amount
equal to the portion thereof to be so exchanged or canceled, or equal to the
principal amount of such Debt Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an

                                       19

<PAGE>

appropriate adjustment made on the records of the Debt Security registrar,
whereupon the Trustee, in accordance with the Applicable Depositary Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Debenture by the Depositary, accompanied by registration
instructions, the Company shall execute and the Trustee shall authenticate and
deliver Debt Securities issuable in exchange for such Global Debenture (or any
portion thereof) in accordance with the instructions of the Depositary. The
Trustee may conclusively rely on, and shall be fully protected in relying on,
such instructions.

            (d) Every Debt Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Debenture or any portion thereof shall be authenticated and delivered in the
form of, and shall be, a Global Debenture, unless such Debt Security is
registered in the name of a Person other than the Depositary for such Global
Debenture or a nominee thereof.

            (e) Debt Securities distributed to holders of Book-Entry Capital
Securities (as defined in the Declaration) upon the dissolution of the Trust
shall be distributed in the form of one or more Global Debentures registered in
the name of the Depositary or its nominee, and deposited with the Debt
Securities registrar, as custodian for such Depositary, or with such Depositary,
for credit by the Depositary to the owners of beneficial interests in such
Book-Entry Capital Securities. Debt Securities distributed to holders of Capital
Securities in certificated form upon the dissolution of the Trust shall be
issued in certificated form.

            (f) The Depositary or its nominee, as the registered owner of a
Global Debenture, shall be the holder of such Global Debenture for all purposes
under this Indenture and the Debt Securities, and owners of beneficial interests
in a Global Debenture shall hold such interests pursuant to the Applicable
Depositary Procedures. Accordingly, any such owner's beneficial interest in a
Global Debenture shall be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its Depositary Participants. The Debt Securities registrar and the Trustee shall
be entitled to deal with the Depositary for all purposes of this Indenture
relating to a Global Debenture as the sole holder of the Debt Security and shall
have no obligation to any beneficial owner of a Global Debenture. Neither the
Trustee nor the Debt Securities registrar shall have any liability in respect of
any transfers affected by the Depositary or its Depositary Participants.

            (g) The rights of owners of beneficial interests in a Global
Debenture shall be exercised only through the Depositary and shall be limited to
those established by law and agreements between such owners and the Depositary
and/or its Depositary Participants.

            (h) No owner of any beneficial interest in any Global Debenture
shall have any rights under this Indenture with respect to such Global
Debenture, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the owner and holder of such Global
Debenture for all purposes under the Indenture. None of the Company, the Trustee
nor any agent of the Company or the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Debenture or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, nothing herein

                                       20

<PAGE>

shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and such beneficial owners, the operation of customary practices governing the
exercise of the rights of the Depositary or its nominee as holder of any Debt
Security.

            (i) Global Debentures shall bear the following legend on the face
thereof:

      THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE
      HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
      TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
      FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
      NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND
      NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
      WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
      NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

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

                                   ARTICLE III

                       PARTICULAR COVENANTS OF THE COMPANY

            Section 3.01. Payment of Principal, Premium and Interest; Agreed
Treatment of the Debt Securities.

            (a) The Company covenants and agrees that it will duly and
punctually pay or cause to be paid all payments due in respect of the Debt
Securities at the place, at the respective times and in the manner provided in
this Indenture and the Debt Securities. Payment of the principal of and premium,
if any, and interest on the Debt Securities due on the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
will be made by the Company in immediately available funds against presentation
and surrender of such Debt Securities. At the option of the Company, each
installment of interest on the Debt Securities due on an Interest Payment Date
other than the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be, may be paid (i) by

                                       21

<PAGE>

mailing checks for such interest payable to the order of the holders of Debt
Securities entitled thereto as they appear on the Debt Security Register or (ii)
by wire transfer of immediately available funds to any account with a banking
institution located in the United States designated by such holders to the
Paying Agent no later than the related record date. Notwithstanding anything to
the contrary contained in this Indenture or any Debt Security, if the Trust or
the trustee of the Trust is the holder of any Debt Security, then all payments
in respect of such Debt Security shall be made by the Company in immediately
available funds when due.

            (b) The Company will treat the Debt Securities as indebtedness, and
the interest payable in respect of such Debt Securities (including any
Additional Amounts) as interest, for all U.S. federal income tax purposes. All
payments in respect of such Debt Securities will be made free and clear of U.S.
withholding tax provided, that (i) any beneficial owner thereof that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code (A)
has provided an Internal Revenue Service Form W-9 (or any substitute or
successor form) in the manner required establishing its status as a "United
States person" for U.S. federal income tax purposes, and (B) the Internal
Revenue Service has neither notified the Issuer that the taxpayer identification
number furnished by such beneficial owner is incorrect nor notified the Issuer
that there is underreporting by such beneficial owner, and (ii) any beneficial
owner thereof that is not a "United States person" within the meaning of Section
7701(a)(30) of the Code has provided an Internal Revenue Service Form W-8 BEN,
Internal Revenue Service Form W-8ECI, or Internal Revenue Service Form W-8EXP,
as applicable (or any substitute or successor form) in the manner required
establishing its non-U.S. status for U.S. federal income tax purposes.

            (c) As of the date of this Indenture, the Company represents that it
has no intention to exercise its right under Section 2.11 to defer payments of
interest on the Debt Securities by commencing an Extension Period.

            (d) As of the date of this Indenture, the Company represents that
the likelihood that it would exercise its right under Section 2.11 to defer
payments of interest on the Debt Securities by commencing an Extension Period at
any time during which the Debt Securities are outstanding is remote because of
the restrictions that would be imposed on the Company's ability to declare or
pay dividends or distributions on, or to redeem, purchase or make a liquidation
payment with respect to, any of its outstanding equity and on the Company's
ability to make any payments of principal of or premium, if any, or interest on,
or repurchase or redeem, any of its debt securities that rank pari passu in all
respects with or junior in interest to the Debt Securities.

            Section 3.02. Offices for Notices and Payments, etc.

            So long as any of the Debt Securities remain outstanding, the
Company will maintain in Wilmington, Delaware or in Olympia, Washington an
office or agency where the Debt Securities may be presented for payment, an
office or agency where the Debt Securities may be presented for registration of
transfer and for exchange as provided in this Indenture and an office or agency
where notices and demands to or upon the Company in respect of the Debt
Securities or of this Indenture may be served. The Company will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. Until

                                       22

<PAGE>

otherwise designated from time to time by the Company in a notice to the
Trustee, or specified as contemplated by Section 2.05, such office or agency for
all of the above purposes shall be the Principal Office of the Trustee. In case
the Company shall fail to maintain any such office or agency in Wilmington,
Delaware or in Olympia, Washington, or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands may
be made and notices may be served at the Principal Office of the Trustee.

            In addition to any such office or agency, the Company may from time
to time designate one or more offices or agencies outside Wilmington, Delaware
or Olympia, Washington where the Debt Securities may be presented for
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in Wilmington, Delaware or in
Olympia, Washington for the purposes above mentioned. The Company will give to
the Trustee prompt written notice of any such designation or rescission thereof.

            Section 3.03. Appointments to Fill Vacancies in Trustee's Office.

            The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.09, a
Trustee, so that there shall at all times be a Trustee hereunder.

            Section 3.04. Provision as to Paying Agent.

            (a) If the Company shall appoint a Paying Agent other than the
Trustee, it will cause such Paying Agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provision of this Section 3.04,

                  (i) that it will hold all sums held by it as such agent for
            the payment of all payments due on the Debt Securities (whether such
            sums have been paid to it by the Company or by any other obligor on
            the Debt Securities) in trust for the benefit of the holders of the
            Debt Securities;

                  (ii) that it will give the Trustee prompt written notice of
            any failure by the Company (or by any other obligor on the Debt
            Securities) to make any payment on the Debt Securities when the same
            shall be due and payable; and

                  (iii)that it will, at any time during the continuance of any
            Event of Default, upon the written request of the Trustee, forthwith
            pay to the Trustee all sums so held in trust by such Paying Agent.

            (b) If the Company shall act as its own Paying Agent, it will, on or
before each due date of the payments due on the Debt Securities, set aside,
segregate and hold in trust for the benefit of the holders of the Debt
Securities a sum sufficient to make such payments so becoming due and will
notify the Trustee in writing of any failure to take such action and of any
failure by the Company (or by any other obligor under the Debt Securities) to
make any payment on the Debt Securities when the same shall become due and
payable.

                                       23

<PAGE>

            Whenever the Company shall have one or more Paying Agents for the
Debt Securities, it will, on or prior to each due date of the payments on the
Debt Securities, deposit with a Paying Agent a sum sufficient to pay all
payments so becoming due, such sum to be held in trust for the benefit of the
Persons entitled thereto and (unless such Paying Agent is the Trustee) the
Company shall promptly notify the Trustee in writing of its action or failure to
act.

            (c) Anything in this Section 3.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debt Securities, or for any other reason, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or any such Paying Agent, such sums to be held by the Trustee upon the
same terms and conditions herein contained.

            (d) Anything in this Section 3.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 3.04 is subject
to Sections 12.03 and 12.04.

            (e) The Company hereby initially appoints the Trustee to act as
paying agent for the Debt Securities (the "Paying Agent").

            Section 3.05. Certificate to Trustee.

            The Company will deliver to the Trustee on or before 120 days after
the end of each fiscal year, so long as Debt Securities are outstanding
hereunder, a Certificate, substantially in the form of Exhibit B attached
hereto, stating that in the course of the performance by the signers of their
duties as officers of the Company they would normally have knowledge of any
default by the Company in the performance of any covenants of the Company
contained herein, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.

            Section 3.06. Additional Amounts.

            If and for so long as the Trust is the holder of all Debt Securities
and is subject to or otherwise required to pay (or is required to withhold from
distributions to holders of Trust Securities) any additional taxes (including
withholding taxes), duties, assessments or other governmental charges as a
result of a Tax Event, the Company will pay such additional amounts (the
"Additional Amounts") on the Debt Securities or the Trust Securities, as the
case may be, as shall be required so that the net amounts received and retained
by the holders of Debt Securities or Trust Securities, as the case may be, after
payment of all taxes (including withholding taxes), duties, assessments or other
governmental charges, will be equal to the amounts that such holders would have
received and retained had no such taxes (including withholding taxes), duties,
assessments or other governmental charges been imposed.

            Whenever in this Indenture or the Debt Securities there is a
reference in any context to the payment of principal of or premium, if any, or
interest on the Debt Securities, such mention shall be deemed to include mention
of payments of the Additional Amounts provided for in this Section to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and express mention
of the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not

                                       24

<PAGE>

made, provided, however, that, notwithstanding anything to the contrary
contained in this Indenture or any Debt Security, the deferral of the payment of
interest during an Extension Period pursuant to Section 2.11 shall not defer the
payment of any Additional Amounts that may be due and payable.

            Section 3.07. Compliance with Consolidation Provisions.

            The Company will not, while any of the Debt Securities remain
outstanding, consolidate with, or merge into, any other Person, or merge into
itself, or sell, convey, transfer or otherwise dispose of all or substantially
all of its property and assets to any other Person unless the provisions of
Article XI hereof are complied with.

            Section 3.08. Limitation on Dividends.

            If (i) there shall have occurred and be continuing a Default or an
Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the Capital Securities Guarantee or (iii) the
Company shall have given notice of its election to defer payments of interest on
the Debt Securities by extending the interest payment period as provided herein
and such period, or any extension thereof, shall have commenced and be
continuing, then the Company may not (A) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock, (B) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Debt Securities or (C) make any payment under any
guarantees of the Company that rank pari passu in all respects with or junior in
interest to the Capital Securities Guarantee (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company (I)
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, (II) in connection with a dividend reinvestment or
stockholder stock purchase plan or (III) in connection with the issuance of
capital stock of the Company (or securities convertible into or exercisable for
such capital stock) as consideration in an acquisition transaction entered into
prior to the occurrence of (i), (ii) or (iii) above, (b) as a result of any
exchange or conversion of any class or series of the Company's capital stock (or
any capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock or of any class or series of the Company's indebtedness
for any class or series of the Company's capital stock, (c) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior in interest to such
stock).

                                       25

<PAGE>

            Section 3.09. Covenants as to the Trust.

            For so long as such Trust Securities remain outstanding, the Company
shall maintain 100% ownership of the Common Securities; provided, however, that
any permitted successor of the Company under this Indenture may succeed to the
Company's ownership of such Common Securities. The Company, as owner of the
Common Securities, shall use commercially reasonable efforts to cause the Trust
(a) to remain a statutory trust, except in connection with a distribution of
Debt Securities to the holders of Trust Securities in liquidation of the Trust,
the redemption of all of the Trust Securities or mergers, consolidations or
amalgamations, each as permitted by the Declaration, (b) to otherwise continue
to be classified as a grantor trust for United States federal income tax
purposes and (c) to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Debt Securities.

                                   ARTICLE IV

                                     LISTS

            Section 4.01. Securityholders' Lists.

            The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:

            (a) on each regular record date for an Interest Payment Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Securityholders of the Debt Securities as of such record date;
and

            (b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; except that no such lists need be furnished under this
Section 4.01 so long as the Trustee is in possession thereof by reason of its
acting as Debt Security registrar.

            Section 4.02. Preservation and Disclosure of Lists.

            (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debt Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of Debt
Securities registrar (if so acting) hereunder. The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.

            (b) In case three or more holders of Debt Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Debt Security for
a period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debt Securities with respect to their rights under this Indenture or under
such Debt Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within five Business Days after the receipt of such application, at its
election, either:

                                       26

<PAGE>

                  (i) afford such applicants access to the information preserved
            at the time by the Trustee in accordance with the provisions of
            subsection (a) of this Section 4.02, or

                  (ii) inform such applicants as to the approximate number of
            holders of Debt Securities whose names and addresses appear in the
            information preserved at the time by the Trustee in accordance with
            the provisions of subsection (a) of this Section 4.02, and as to the
            approximate cost of mailing to such Securityholders the form of
            proxy or other communication, if any, specified in such application.

            If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of Debt Securities whose name and
address appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission, if
permitted or required by applicable law, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
all Debt Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If said
Commission, as permitted or required by applicable law, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, said Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

            (c) Each and every holder of Debt Securities, by receiving and
holding the same, agrees with the Company and the Trustee that none of the
Company, the Trustee or any Paying Agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
holders of Debt Securities in accordance with the provisions of subsection (b)
of this Section 4.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).

            Section 4.03. Financial and Other Information.

            (a) The Company shall deliver, by hardcopy or electronic
transmission, to (i) each Securityholder each Report on Form 10-K and Form 10-Q,
if any, prepared by the Company and filed with the Securities and Exchange
Commission in accordance with the Exchange Act within 10 Business Days after the
filing thereof or (ii) if the Company is (a) not then subject to Section 13 or
15(d) of the Exchange Act (a "Private Entity") or (b) exempt from reporting
pursuant to

                                       27

<PAGE>

Rule 12g3-2(b) thereunder, the information required by Rule 144A(d)(4) under the
Securities Act. Notwithstanding the foregoing, so long as a Holder of the Debt
Securities is MMCapS Funding XVIII, Ltd., First Tennessee Bank, National
Association or an entity that holds a pool of trust preferred securities and/or
debt securities as collateral for its securities or a trustee thereof, and the
Company is (i) a Private Entity that, on the date of original issuance of the
Debt Securities, is required to provide audited consolidated financial
statements to its primary regulatory authority, (ii) a Private Entity that, on
the date of original issuance of the Debt Securities, is not required to provide
audited consolidated financial statements to its primary regulatory authority
but subsequently becomes subject to the audited consolidated financial statement
reporting requirements of that regulatory authority or (iii) subject to Section
13 or 15(d) of the Exchange Act on the date of original issuance of the Debt
Securities or becomes so subject after the date hereof but subsequently becomes
a Private Entity, then, within 90 days after the end of each fiscal year,
beginning with the fiscal year in which the Debt Securities were originally
issued if the Company was then subject to (x) Section 13 or 15(d) of the
Exchange Act or (y) audited consolidated financial statement reporting
requirements of its primary regulatory authority or, otherwise, the earliest
fiscal year in which the Company becomes subject to (1) Section 13 or 15(d) of
the Exchange Act or (2) the audited consolidated financial statement reporting
requirements of its primary regulatory authority, the Company shall deliver, by
hardcopy or electronic transmission, to each Securityholder, unless otherwise
provided pursuant to the preceding sentence, (A) a copy of the Company's audited
consolidated financial statements (including balance sheet and income statement)
covering the related annual period and (B) the report of the independent
accountants with respect to such financial statements. In addition to the
foregoing, the Company shall deliver to each Securityholder within 30 days after
the end of the fiscal year of the Company, Form 1099 or such other annual U.S.
federal income tax information statement required by the Code containing such
information with regard to the Debt Securities held by such holder as is
required by the Code and the income tax regulations of the U.S. Treasury
thereunder; and

            (b) If and so long as the Holder of the Debt Securities is MMCapS
Funding XVIII, Ltd., First Tennessee Bank, National Association or an entity
that holds a pool of trust preferred securities and/or debt securities or a
trustee thereof, the Company will cause copies of its reports on Form FR Y-9C,
FR Y-9LP and FR Y-6 to be delivered, by hard copy or electronic transmission, to
such Holder promptly following their filing with the Federal Reserve.

                                    ARTICLE V

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

            Section 5.01. Events of Default.

            The following events shall be "Events of Default" with respect to
Debt Securities:

            (a) the Company defaults in the payment of any interest upon any
Debt Security when it becomes due and payable, and continuance of such default
for a period of 30 days; for the avoidance of doubt, an extension of any
interest payment period by the Company in accordance with Section 2.11 of this
Indenture shall not constitute a default under this clause 5.01(a); or

                                       28

<PAGE>

            (b) the Company defaults in the payment of any interest upon any
Debt Security, including any Additional Amounts in respect thereof, following
the nonpayment of any such interest for twenty (20) or more consecutive Interest
Periods; or

            (c) the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Debt Securities as and when the same
shall become due and payable, whether at maturity, upon redemption, by
acceleration of maturity pursuant to Section 5.01 of this Indenture or
otherwise; or

            (d) the Company defaults in the performance of, or breaches, any of
its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this
Indenture (other than a covenant or agreement a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the holders of not less than 25% in aggregate
principal amount of the outstanding Debt Securities, a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or

            (e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar official of the Company or for any substantial
part of its property, or orders the winding-up or liquidation of its affairs and
such decree, appointment or order shall remain unstayed and in effect for a
period of 90 consecutive days; or

            (f) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or

            (g) a court or administrative or governmental agency or body shall
enter a decree or order for the appointment of a receiver of a Major Depository
Institution Subsidiary or all or substantially all of its property in any
liquidation, insolvency or similar proceeding with respect to such Major
Depository Institution Subsidiary or all or substantially all of its property;
or

            (h) a Major Depository Institution Subsidiary shall consent to the
appointment of a receiver for it or all or substantially all of its property in
any liquidation, insolvency or similar proceeding with respect to it or all or
substantially all of its property; or

            (i) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (1) the distribution of the Debt Securities to holders of the
Trust Securities in liquidation of their

                                       29

<PAGE>

interests in the Trust, (2) the redemption of all of the outstanding Trust
Securities or (3) mergers, consolidations or amalgamations, each as permitted by
the Declaration.

            If an Event of Default specified under clause (b) of this Section
5.01 occurs and is continuing with respect to the Debt Securities, then, in each
and every such case, either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Debt Securities then outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal of the Debt Securities and
any premium and interest accrued, but unpaid, thereon to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. If an Event of Default specified under clause (e), (f), (g), (h) or
(i) of this Section 5.01 occurs, then, in each and every such case, the entire
principal amount of the Debt Securities and any premium and interest accrued,
but unpaid, thereon shall ipso facto become immediately due and payable without
further action.

            The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Debt Securities shall have become due
by acceleration, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debt Securities and all payments on the
Debt Securities which shall have become due otherwise than by acceleration (with
interest upon all such payments and Deferred Interest, to the extent permitted
by law) and such amount as shall be sufficient to cover reasonable compensation
to the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and all other amounts due to the Trustee pursuant to Section 6.06,
if any, and (ii) all Events of Default under this Indenture, other than the
non-payment of the payments in respect of Debt Securities which shall have
become due by acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then, in each and every such case, the holders of a majority
in aggregate principal amount of the Debt Securities then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults and
rescind and annul such acceleration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon; provided, however, that if the
Debt Securities are held by the Trust or a trustee of the Trust, such waiver or
rescission and annulment shall not be effective until the holders of a majority
in aggregate liquidation amount of the outstanding Capital Securities of the
Trust shall have consented to such waiver or rescission and annulment.

            In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Debt Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.

                                       30
<PAGE>

      Section 5.02. Payment of Debt Securities on Default; Suit Therefor.

      The Company covenants that upon the occurrence of an Event of Default
pursuant to clause (b) of Section 5.01 and upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities, the whole amount that then shall have become due and payable on all
Debt Securities, including Deferred Interest accrued on the Debt Securities;
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including a reasonable compensation to the
Trustee, its agents, attorneys and counsel, and any other amounts due to the
Trustee under Section 6.06. In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt Securities and collect in the manner provided by
law out of the property of the Company or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.

      In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Debt Securities under
Bankruptcy Law, or in case a receiver or trustee shall have been appointed for
the property of the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other obligor upon the
Debt Securities, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debt
Securities shall then be due and payable as therein expressed or by acceleration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 5.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the Debt Securities and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all other
amounts due to the Trustee under Section 6.06) and of the Securityholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Debt Securities, or to the creditors or property of the Company
or such other obligor, unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Debt Securities in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or Person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other amounts due to the
Trustee under Section 6.06.

                                       31
<PAGE>

      Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debt Securities or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.

      All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the holders of
the Debt Securities.

      In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Debt Securities, and it shall not be necessary to make any
holders of the Debt Securities parties to any such proceedings.

      Section 5.03. Application of Moneys Collected by Trustee.

      Any moneys collected by the Trustee shall be applied in the following
order, at the date or dates fixed by the Trustee for the distribution of such
moneys, upon presentation of the several Debt Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:

      First: To the payment of costs and expenses incurred by, and reasonable
fees of, the Trustee, its agents, attorneys and counsel, and of all other
amounts due to the Trustee under Section 6.06;

      Second: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XV;

      Third: To the payment of the amounts then due and unpaid upon Debt
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due upon such Debt Securities; and

      Fourth: The balance, if any, to the Company.

      Section 5.04. Proceedings by Securityholders.

      No holder of any Debt Security shall have any right to institute any suit,
action or proceeding for any remedy hereunder, unless such holder previously
shall have given to the Trustee written notice of an Event of Default with
respect to the Debt Securities and unless the holders of not less than 25% in
aggregate principal amount of the Debt Securities then outstanding shall have
given the Trustee a written request to institute such action, suit or proceeding
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred thereby, and
the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such

                                       32
<PAGE>

action, suit or proceeding; provided, that no holder of Debt Securities shall
have any right to prejudice the rights of any other holder of Debt Securities,
obtain priority or preference over any other such holder or enforce any right
under this Indenture except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Debt Securities.

      Notwithstanding any other provisions in this Indenture, the right of any
holder of any Debt Security to receive payment of the principal of and premium,
if any, and interest on such Debt Security when due, or to institute suit for
the enforcement of any such payment, shall not be impaired or affected without
the consent of such holder. For the protection and enforcement of the provisions
of this Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.

      Section 5.05. Proceedings by Trustee.

      In case of an Event of Default, the Trustee may in its discretion proceed
to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.

      Section 5.06. Remedies Cumulative and Continuing.

      Except as otherwise provided in Section 2.06, all powers and remedies
given by this Article V to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any other
powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Debt Securities, and no delay or
omission of the Trustee or of any holder of any of the Debt Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.

      Section 5.07. Direction of Proceedings and Waiver of Defaults by Majority
of Securityholders.

      The holders of a majority in aggregate principal amount of the Debt
Securities affected at the time outstanding and, if the Debt Securities are held
by the Trust or a trustee of the Trust, the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to such Debt Securities; provided, however, that if
the Debt Securities are held by the Trust or a trustee of the Trust, such time,
method and place or such exercise, as

                                       33
<PAGE>

the case may be, may not be so directed until the holders of a majority in
aggregate liquidation amount of the outstanding Capital Securities of the Trust
shall have directed such time, method and place or such exercise, as the case
may be; provided, further, that (subject to the provisions of Section 6.01) the
Trustee shall have the right to decline to follow any such direction if the
Trustee shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or if the Trustee
being advised by counsel determines that the action or proceeding so directed
may not lawfully be taken or if a Responsible Officer of the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability. Prior to any declaration of acceleration, or ipso facto
acceleration, of the maturity of the Debt Securities, the holders of a majority
in aggregate principal amount of the Debt Securities at the time outstanding may
on behalf of the holders of all of the Debt Securities waive (or modify any
previously granted waiver of) any past Default or Event of Default and its
consequences, except a default (a) in the payment of principal of or premium, if
any, or interest on any of the Debt Securities, (b) in respect of covenants or
provisions hereof which cannot be modified or amended without the consent of the
holder of each Debt Security affected, or (c) in respect of the covenants
contained in Section 3.09; provided, however, that if the Debt Securities are
held by the Trust or a trustee of the Trust, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust shall have
consented to such waiver or modification to such waiver; provided, further, that
if the consent of the holder of each outstanding Debt Security is required, such
waiver or modification to such waiver shall not be effective until each holder
of the outstanding Capital Securities of the Trust shall have consented to such
waiver or modification to such waiver. Upon any such waiver or modification to
such waiver, the Default or Event of Default covered thereby shall be deemed to
be cured for all purposes of this Indenture and the Company, the Trustee and the
holders of the Debt Securities shall be restored to their former positions and
rights hereunder, respectively; but no such waiver or modification to such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon. Whenever any Default or Event of Default
hereunder shall have been waived as permitted by this Section, said Default or
Event of Default shall for all purposes of the Debt Securities and this
Indenture be deemed to have been cured and to be not continuing.

      Section 5.08. Notice of Defaults.

      The Trustee shall, within 90 days after a Responsible Officer of the
Trustee shall have actual knowledge or received written notice of the occurrence
of a default with respect to the Debt Securities, mail to all Securityholders,
as the names and addresses of such holders appear upon the Debt Security
Register, notice of all defaults with respect to the Debt Securities known to
the Trustee, unless such defaults shall have been cured before the giving of
such notice (the term "default" for the purpose of this Section is hereby
defined to be any event specified in Section 5.01, not including periods of
grace, if any, provided for therein); provided, that, except in the case of
default in the payment of the principal of or premium, if any, or interest on
any of the Debt Securities, the Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders.

                                       34
<PAGE>

      Section 5.09. Undertaking to Pay Costs.

      All parties to this Indenture agree, and each holder of any Debt Security
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the outstanding Debt Securities (or, if such Debt Securities are held by the
Trust or a trustee of the Trust, more than 10% in liquidation amount of the
outstanding Capital Securities),to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of or premium, if any, or
interest on any Debt Security against the Company on or after the same shall
have become due and payable or to any suit instituted in accordance with Section
14.12.

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE

      Section 6.01. Duties and Responsibilities of Trustee.

      With respect to the holders of Debt Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with respect to the Debt
Securities and after the curing or waiving of all Events of Default which may
have occurred, with respect to the Debt Securities, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In
case an Event of Default with respect to the Debt Securities has occurred (which
has not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

      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 or bad faith, except that:

      (a) prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred:

            (i) the duties and obligations of the Trustee with respect to the
      Debt Securities shall be determined solely by the express provisions of
      this Indenture, and the Trustee shall not be liable except for the
      performance of such duties and obligations with respect to the Debt
      Securities as are specifically set forth in this Indenture, and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and

                                       35
<PAGE>

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

      (b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;

      (c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith, in accordance with the direction of the
Securityholders pursuant to Section 5.07, relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture;
and

      (d) the Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Debt Securities unless either (1) a
Responsible Officer shall have actual knowledge of such Default or Event of
Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or any other obligor on the Debt
Securities or by any holder of the Debt Securities, except that the Trustee
shall be deemed to have knowledge of any Event of Default pursuant to Sections
5.01(a), 5.01(b) or 5.01(c) hereof (other than an Event of Default resulting
from the default in the payment of Additional Amounts if the Trustee does not
have actual knowledge or written notice that such payment is due and payable) .

      None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers.

      Section 6.02. Reliance on Documents, Opinions, etc.

      Except as otherwise provided in Section 6.01:

      (a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture or other paper or document believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties;

      (b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;

                                       36
<PAGE>

      (c) the Trustee may consult with counsel of its selection and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;

      (d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders, pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;

      (e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to the Debt Securities (which has
not been cured or waived) to exercise with respect to the Debt Securities such
of the rights and powers vested in it by this Indenture, and to use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs;

      (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, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of a majority in aggregate principal amount of the outstanding Debt
Securities affected thereby; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; and

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

      Section 6.03. No Responsibility for Recitals, etc.

      The recitals contained herein and in the Debt Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by the Company of any Debt Securities or the proceeds of any Debt Securities
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.

                                       37
<PAGE>

      Section 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities.

      The Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar, in its individual or any other capacity,
may become the owner or pledgee of Debt Securities with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, transfer agent
or Debt Security registrar.

      Section 6.05. Moneys to be Held in Trust.

      Subject to the provisions of Section 12.04, all moneys received by the
Trustee or any Paying Agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any Paying Agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys, if any, shall be paid from time to time to
the Company upon the written order of the Company, signed by the Chairman of the
Board of Directors, the President, the Chief Operating Officer, a Vice
President, the Treasurer or an Assistant Treasurer of the Company.

      Section 6.06. Compensation and Expenses of Trustee.

      The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as shall be agreed to in
writing between the Company and the Trustee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its written
request for all documented reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance that arises from its
negligence, willful misconduct or bad faith. The Company also covenants to
indemnify each of the Trustee (including in its individual capacity) and any
predecessor Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any and all loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee),
except to the extent such loss, damage, claim, liability or expense results from
the negligence, willful misconduct or bad faith of such indemnitee, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in the premises. The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
documented expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a lien
prior to that of the Debt Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Debt Securities.

      Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default

                                       38
<PAGE>

specified in clause (e), (f), (g), (h) or (i) of Section 5.01, the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.

      The provisions of this Section shall survive the resignation or removal of
the Trustee and the defeasance or other termination of this Indenture.

      Notwithstanding anything in this Indenture or any Debt Security to the
contrary, the Trustee shall have no obligation whatsoever to advance funds to
pay any principal of or interest on or other amounts with respect to the Debt
Securities or otherwise advance funds to or on behalf of the Company.

      Section 6.07. Officers' Certificate as Evidence.

      Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence,
willful misconduct or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence, willful misconduct
or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken or omitted by it under the provisions of this Indenture
upon the faith thereof.

      Section 6.08. Eligibility of Trustee.

      The Trustee hereunder shall at all times be a U.S. Person that is a
banking corporation or national association organized and doing business under
the laws of the United States of America or any state thereof or of the District
of Columbia and authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000) and subject to supervision or examination by federal, state, or
District of Columbia authority. If such corporation or national association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
national association shall be deemed to be its combined capital and surplus as
set forth in its most recent records of condition so published.

      The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee, notwithstanding that such corporation or national association shall be
otherwise eligible and qualified under this Article.

      In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.09.

                                       39
<PAGE>

      If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to, this Indenture.

      Section 6.09. Resignation or Removal of Trustee.

      (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice of such resignation to the Company and
by mailing notice thereof, at the Company's expense, to the holders of the Debt
Securities at their addresses as they shall appear on the Debt Security
Register. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee or trustees by written instrument, in duplicate,
executed by order of its Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing of such notice of resignation to the affected
Securityholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Securityholder
who has been a bona fide holder of a Debt Security or Debt Securities for at
least six months may, subject to the provisions of Section 5.09, on behalf of
himself or herself and all others similarly situated, petition any such court
for the appointment of a successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.

      (b) In case at any time any of the following shall occur:

            (i) the Trustee shall fail to comply with the provisions of the last
      paragraph of Section 6.08 after written request therefor by the Company or
      by any Securityholder who has been a bona fide holder of a Debt Security
      or Debt Securities for at least six months;

            (ii) the Trustee shall cease to be eligible in accordance with the
      provisions of Section 6.08 and shall fail to resign after written request
      therefor by the Company or by any such Securityholder; or

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

then, in any such case, the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and have accepted appointment within 30 days of the occurrence of any of (i),
(ii) or (iii) above, any Securityholder who has been a bona fide holder of a
Debt Security or Debt Securities for at least six months may, on behalf of
himself or herself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a

                                       40
<PAGE>

successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
Trustee.

      (c) Upon prior written notice to the Company and the Trustee, the holders
of a majority in aggregate principal amount of the Debt Securities at the time
outstanding may at any time remove the Trustee and nominate a successor Trustee,
which shall be deemed appointed as successor Trustee unless within ten Business
Days after such nomination the Company objects thereto, in which case or in the
case of a failure by such holders to nominate a successor Trustee, the Trustee
so removed or any Securityholder, upon the terms and conditions and otherwise as
in subsection (a) of this Section, may petition any court of competent
jurisdiction for an appointment of a successor.

      (d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 6.10.

      Section 6.10. Acceptance by Successor Trustee.

      Any successor Trustee appointed as provided in Section 6.09 shall execute,
acknowledge and deliver to the Company and to its predecessor Trustee an
indenture supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all of the rights, powers, trusts
and duties of the retiring Trustee shall be vested in the successor Trustee, 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, duties and
obligations with respect to the Debt Securities of its predecessor hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written request of the Company or of the successor Trustee, the Trustee
ceasing to act shall, upon payment of the amounts then due it pursuant to the
provisions of Section 6.06, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers of the Trustee so ceasing to
act 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 Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
6.06.

      No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
and qualified under the provisions of Section 6.08.

      In no event shall a retiring Trustee be liable for the acts or omissions
of any successor Trustee hereunder.

      Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Company shall mail notice of the succession of such Trustee
hereunder to the holders of Debt Securities at their addresses as they shall
appear on the Debt Security Register.

                                       41
<PAGE>

If the Company fails to mail such notice within ten Business Days after the
acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Company.

      Section 6.11. Succession by Merger, etc.

      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 without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided, that such corporation shall be otherwise eligible
and qualified under this Article.

      In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debt Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Debt Securities either in the name of any predecessor hereunder or in the
name of the successor Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Debt Securities or in this
Indenture provided that the certificate of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Debt Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.

      Section 6.12. Authenticating Agents.

      There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Debt Securities issued upon
exchange or registration of transfer thereof as fully to all intents and
purposes as though any such Authenticating Agent had been expressly authorized
to authenticate and deliver Debt Securities; provided, however, that the Trustee
shall have no liability to the Company for any acts or omissions of the
Authenticating Agent with respect to the authentication and delivery of Debt
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
thereof or of the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$50,000,000 and being subject to supervision or examination by federal, state or
District of Columbia authority. If such corporation publishes reports of
condition at least annually pursuant to law or the requirements of such
authority, then for the purposes 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 an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect herein specified in this Section.

                                       42
<PAGE>

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

      Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent with respect to the Debt
Securities by giving written notice of termination to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent eligible under
this Section, shall give written notice of such appointment to the Company and
shall mail notice of such appointment to all holders of Debt Securities as the
names and addresses of such holders appear on the Debt Security Register. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein.

      The Company agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

      Section 7.01. Action by Securityholders.

      Whenever in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Debt Securities or aggregate
liquidation amount of the Capital Securities may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver or
the taking of any other action), the fact that at the time of taking any such
action the holders of such specified percentage have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar tenor
executed by such Securityholders or holders of Capital Securities, as the case
may be, in person or by agent or proxy appointed in writing, or (b) by the
record of such holders of Debt Securities voting in favor thereof at any meeting
of such Securityholders duly called and held in accordance with the provisions
of Article VIII or of such holders of Capital Securities duly called and held in
accordance with the provisions of the Declaration, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of such
Securityholders or holders of Capital Securities, as the case may be, or (d) by
any other method the Trustee deems satisfactory.

      If the Company shall solicit from the Securityholders any request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, the

                                       43
<PAGE>

Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for such Debt Securities for the determination of
Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action or revocation of the same, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same may be given before or after the record date,
but only the Securityholders of record at the close of business on the record
date shall be deemed to be Securityholders for the purposes of determining
whether Securityholders of the requisite proportion of outstanding Debt
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, and for that purpose the outstanding Debt Securities shall be
computed as of the record date; provided, however, that no such authorization,
agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.

      Section 7.02. Proof of Execution by Securityholders.

      Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or such Securityholder's agent
or proxy shall be sufficient if made in accordance with such reasonable rules
and regulations as may be prescribed by the Trustee or in such manner as shall
be satisfactory to the Trustee. The ownership of Debt Securities shall be proved
by the Debt Security Register or by a certificate of the Debt Security
registrar. The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.

      The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.06.

      Section 7.03. Who Are Deemed Absolute Owners.

      Prior to due presentment for registration of transfer of any Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and any Debt Security registrar may deem the Person in whose
name such Debt Security shall be registered upon the Debt Security Register to
be, and may treat such Person as, the absolute owner of such Debt Security
(whether or not such Debt Security shall be overdue) for the purpose of
receiving payment of or on account of the principal of and premium, if any, and
interest on such Debt Security and for all other purposes; and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being or upon
such holder's order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Debt Security.

      Section 7.04. Debt Securities Owned by Company Deemed Not Outstanding.

      In determining whether the holders of the requisite aggregate principal
amount of Debt Securities have concurred in any direction, consent or waiver
under this Indenture, Debt

                                       44

<PAGE>

Securities which are owned by the Company or any other obligor on the Debt
Securities or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company (other than the
Trust) or any other obligor on the Debt Securities shall be disregarded and
deemed not to be outstanding for the purpose of any such determination,
provided, that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only Debt
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Debt Securities so owned which have been pledged
in good faith may be regarded as outstanding for the purposes of this Section if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debt Securities and that the pledgee is not the Company or
any such other obligor or Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
such other obligor. In the case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.

      Section 7.05. Revocation of Consents; Future Holders Bound.

      At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of an
applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which is shown
by the evidence to be included in the Debt Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Debt Security (or so far as
concerns the principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security, and of any Debt Security issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.

                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

      Section 8.01. Purposes of Meetings.

      A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:

      (a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default hereunder
and its consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article V;

                                       45

<PAGE>

      (b) to remove the Trustee and nominate a successor trustee pursuant to the
provisions of Article VI;

      (c) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 9.02; or

      (d) to take any other action authorized to be taken by or on behalf of the
holders of any specified aggregate principal amount of such Debt Securities
under any other provision of this Indenture or under applicable law.

      Section 8.02. Call of Meetings by Trustee.

      The Trustee may at any time call a meeting of Securityholders to take any
action specified in Section 8.01, to be held at such time and at such place in
The City of New York, the Borough of Manhattan, or Wilmington, Delaware, as the
Trustee shall determine. Notice of every meeting of the Securityholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be mailed to holders of Debt
Securities affected at their addresses as they shall appear on the Debt
Securities Register. Such notice shall be mailed not less than 20 nor more than
180 days prior to the date fixed for the meeting.

      Section 8.03. Call of Meetings by Company or Securityholders.

      In case at any time the Company pursuant to a Board Resolution, or the
holders of at least 10% in aggregate principal amount of the Debt Securities, as
the case may be, then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or such Securityholders may determine the time and the
place in Olympia, Washington for such meeting and may call such meeting to take
any action authorized in Section 8.01, by mailing notice thereof as provided in
Section 8.02.

      Section 8.04. Qualifications for Voting.

      To be entitled to vote at any meeting of Securityholders, a Person shall
be (a) a holder of one or more Debt Securities or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more Debt Securities. The
only Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

      Section 8.05. Regulations.

      Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies,

                                       46

<PAGE>

certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate.

      The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.

      Subject to the provisions of Section 7.04, at any meeting each holder of
Debt Securities with respect to which such meeting is being held or proxy
therefor shall be entitled to one vote for each $1,000 principal amount of Debt
Securities held or represented by such holder; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debt Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debt Securities held by such chairman or instruments in writing as
aforesaid duly designating such chairman as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

      Section 8.06. Voting.

      The vote upon any resolution submitted to any meeting of holders of Debt
Securities with respect to which such meeting is being held shall be by written
ballots on which shall be subscribed the signatures of such holders or of their
representatives by proxy and the serial number or numbers of the Debt Securities
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in triplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Securityholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 8.02. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.

      Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

      Section 8.07. Quorum; Actions.

      The Persons entitled to vote a majority in aggregate principal amount of
the Debt Securities then outstanding shall constitute a quorum for a meeting of
Securityholders; provided,

                                       47

<PAGE>

however, that if any action is to be taken at such meeting with respect to a
consent, waiver, request, demand, notice, authorization, direction or other
action which may be given by the holders of not less than a specified percentage
in aggregate principal amount of the Debt Securities then outstanding, the
Persons holding or representing such specified percentage in aggregate principal
amount of the Debt Securities then outstanding will constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Securityholders, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the permanent chairman of the meeting prior
to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the permanent chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 8.02, except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the aggregate principal amount of the Debt Securities then outstanding which
shall constitute a quorum.

      Except as limited by the proviso in the first paragraph of Section 9.02,
any resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote of
the holders of a majority in aggregate principal amount of the Debt Securities
then outstanding; provided, however, that, except as limited by the proviso in
the first paragraph of Section 9.02, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action that
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in outstanding principal amount of the Debt Securities may
be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid only by the affirmative vote of the holders of
not less than such specified percentage in aggregate principal amount of the
Debt Securities then outstanding.

      Any resolution passed or decision taken at any meeting of holders of Debt
Securities duly held in accordance with this Section shall be binding on all the
Securityholders, whether or not present or represented at the meeting.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

      Section 9.01. Supplemental Indentures without Consent of Securityholders.

      The Company, when authorized by a Board Resolution, and the Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto, without the consent of the Securityholders, for one or more
of the following purposes:

      (a) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company, pursuant to Article XI
hereof;

                                       48

<PAGE>

      (b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of Debt Securities
as the Board of Directors shall consider to be for the protection of the holders
of such Debt Securities, and to make the occurrence, or the occurrence and
continuance, of a Default in any of such additional covenants, restrictions or
conditions a Default or an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant, restriction
or condition such supplemental indenture may provide for a particular period of
grace after Default (which period may be shorter or longer than that allowed in
the case of other Defaults) or may provide for an immediate enforcement upon
such Default or may limit the remedies available to the Trustee upon such
default;

      (c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture, provided, that any such action shall not adversely
affect the interests of the holders of the Debt Securities then outstanding;

      (d) to add to, delete from, or revise the terms of Debt Securities,
including, without limitation, any terms relating to the issuance, exchange,
registration or transfer of Debt Securities, including to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities, as required by Section 2.05 (for purposes of assuring that
no registration of Debt Securities is required under the Securities Act),
provided, that any such action shall not adversely affect the interests of the
holders of the Debt Securities then outstanding (it being understood, for
purposes of this proviso, that transfer restrictions on Debt Securities
substantially similar to those applicable to Capital Securities shall not be
deemed to adversely affect the holders of the Debt Securities);

      (e) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Debt Securities and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.10;

      (f) to make any change (other than as elsewhere provided in this Section)
that does not adversely affect the rights of any Securityholder in any material
respect; or

      (g) to provide for the issuance of and establish the form and terms and
conditions of the Debt Securities, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or the Debt
Securities, or to add to the rights of the holders of Debt Securities.

      The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

                                       49

<PAGE>

      Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Debt Securities at the time outstanding, notwithstanding
any of the provisions of Section 9.02.

      Section 9.02. Supplemental Indentures with Consent of Securityholders.

      With the consent (evidenced as provided in Section 7.01) of the holders of
a majority in aggregate principal amount of the Debt Securities at the time
outstanding affected by such supplemental indenture, the Company, when
authorized by a Board Resolution, and the Trustee may from time to time and at
any time enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act, then in effect, applicable
to indentures qualified thereunder) for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner the rights of the
holders of the Debt Securities; provided, however, that no such supplemental
indenture shall, without the consent of the holders of each Debt Security then
outstanding and affected thereby, (i) change the Maturity Date of any Debt
Security, or reduce the principal amount thereof or any premium thereon, or
reduce the rate (or manner of calculation of the rate) or extend the time of
payment of interest thereon, or reduce (other than as a result of the maturity
or earlier redemption of any such Debt Security in accordance with the terms of
this Indenture and such Debt Security) or increase the aggregate principal
amount of Debt Securities then outstanding, or change any of the redemption
provisions, or make the principal thereof or any interest or premium thereon
payable in any coin or currency other than United States Dollars, or impair or
affect the right of any Securityholder to institute suit for payment thereof, or
(ii) reduce the aforesaid percentage of Debt Securities the holders of which are
required to consent to any such supplemental indenture; and provided, further,
that if the Debt Securities are held by the Trust or the trustee of the Trust,
such supplemental indenture shall not be effective until the holders of a
majority in aggregate liquidation amount of the outstanding Capital Securities
shall have consented to such supplemental indenture; provided, further, that if
the consent of the Securityholder of each outstanding Debt Security is required,
such supplemental indenture shall not be effective until each holder of the
outstanding Capital Securities shall have consented to such supplemental
indenture.

      Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders (and
holders of Capital Securities, if required) as aforesaid, the Trustee shall join
with the Company in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.

      Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Debt Security Register. Any failure of the Trustee to mail such

                                       50
<PAGE>

notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

      It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

      Section 9.03. Effect of Supplemental Indentures.

      Upon the execution of any supplemental indenture pursuant to the
provisions of this Article IX, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debt Securities shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

      Section 9.04. Notation on Debt Securities.

      Debt Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debt Securities so modified as to
conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the Trustee or the
Authenticating Agent and delivered in exchange for the Debt Securities then
outstanding.

      Section 9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee.

      The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall,
in addition to the documents required by Section 14.06, receive an Officers'
Certificate as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article IX. The Trustee
shall also receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article IX is authorized or
permitted by, and conforms to, the terms of this Article IX and that it is
proper for the Trustee under the provisions of this Article IX to join in the
execution thereof.

                                   ARTICLE X

                            REDEMPTION OF SECURITIES

      Section 10.01. Optional Redemption.

      The Company shall have the right, subject to the receipt by the Company of
the prior approval from the Federal Reserve, if then required under applicable
capital guidelines or policies of the Federal Reserve, to redeem the Debt
Securities, in whole or (provided that all

                                       51

<PAGE>

accrued and unpaid interest has been paid on all Debt Securities for all
Interest Periods terminating on or prior to such date) from time to time in
part, on any Interest Payment Date on or after December 15, 2011 (each, an
"Optional Redemption Date"), at the Optional Redemption Price.

      Section 10.02. Special Event Redemption.

      If a Special Event shall occur and be continuing, the Company shall have
the right, subject to the receipt by the Company of prior approval from the
Federal Reserve, if then required under applicable capital guidelines or
policies of the Federal Reserve, to redeem the Debt Securities, in whole but not
in part, at any time within 90 days following the occurrence of such Special
Event (the "Special Redemption Date"), at the Special Redemption Price.

      Section 10.03. Notice of Redemption; Selection of Debt Securities.

      In case the Company shall desire to exercise the right to redeem all, or,
as the case may be, any part of the Debt Securities, it shall fix a date for
redemption and shall mail, or cause the Trustee to mail (at the expense of the
Company), a notice of such redemption at least 30 and not more than 60 days
prior to the date fixed for redemption to the holders of Debt Securities so to
be redeemed as a whole or in part at their last addresses as the same appear on
the Debt Security Register. Such mailing shall be by first class mail. The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any Debt Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debt Security.

      Each such notice of redemption shall specify the CUSIP number, if any, of
the Debt Securities to be redeemed, the date fixed for redemption, the price (or
manner of calculation of the price) at which Debt Securities are to be redeemed,
the place or places of payment, that payment will be made upon presentation and
surrender of such Debt Securities, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. If less than all the Debt Securities are to be redeemed, the notice of
redemption shall specify the numbers of the Debt Securities to be redeemed. In
case the Debt Securities are to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Debt Security, a new Debt Security or Debt Securities in
principal amount equal to the unredeemed portion thereof will be issued.

      Prior to 10:00 a.m., New York City time, on the Optional Redemption Date
or the Special Redemption Date specified in the notice of redemption given as
provided in this Section, the Company will deposit with the Trustee or with one
or more Paying Agents an amount of money sufficient to redeem on such date all
the Debt Securities so called for redemption at the applicable price therefor,
together with unpaid interest accrued to such date.

      The Company will give the Trustee notice not less than 45 nor more than 75
days prior to the date fixed for redemption as to the price at which the Debt
Securities are to be

                                       52
<PAGE>

redeemed and the aggregate principal amount of Debt Securities to be redeemed
and the Trustee shall select, in such manner as in its sole discretion it shall
deem appropriate and fair, the Debt Securities or portions thereof (in integral
multiples of $1,000) to be redeemed.

            Section 10.04. Payment of Debt Securities Called for Redemption.

            If notice of redemption has been given as provided in Section 10.03,
the Debt Securities or portions of Debt Securities with respect to which such
notice has been given shall become due and payable on the related Optional
Redemption Date or Special Redemption Date (as the case may be) and at the place
or places stated in such notice at the applicable price therefor, together with
unpaid interest accrued thereon to said Optional Redemption Date or the Special
Redemption Date (as the case may be), and on and after said Optional Redemption
Date or the Special Redemption Date (as the case may be) (unless the Company
shall default in the payment of such Debt Securities at the redemption price,
together with unpaid interest accrued thereon to said date) interest on the Debt
Securities or portions of Debt Securities so called for redemption shall cease
to accrue. On presentation and surrender of such Debt Securities at a place of
payment specified in said notice, such Debt Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable price
therefor, together with unpaid interest, if any, accrued thereon to said
Optional Redemption Date or the Special Redemption Date (as the case may be);
provided, however, that interest payable on any Interest Payment Date on or
prior to said Optional Redemption Date or the Special Redemption Date will be
paid to the holders on the relevant regular record date.

            Upon presentation of any Debt Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of authorized denominations in principal amount
equal to the unredeemed portion of the Debt Security so presented.

                                   ARTICLE XI

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

            Section 11.01. Company May Consolidate, etc., on Certain Terms.

            Nothing contained in this Indenture or in the Debt Securities shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of all or substantially all of the property and
assets of the Company or its successor or successors to any other corporation
(whether or not affiliated with the Company or its successor or successors)
authorized to acquire and operate the same; provided, however, that the Company
hereby covenants and agrees that (i) upon any such consolidation, merger (where
the Company is not the surviving corporation), sale, conveyance, transfer or
other disposition, the successor entity shall be a corporation organized and
existing under the laws of the United States or any state thereof or the
District of Columbia (unless such corporation has (1) agreed to make all
payments due in respect of the Debt Securities or, if

                                       53
<PAGE>

outstanding, the Trust Securities and the Capital Securities Guarantee without
withholding or deduction for, or on account of, any taxes, duties, assessments
or other governmental charges under the laws or regulations of the jurisdiction
of organization or residence (for tax purposes) of such corporation or any
political subdivision or taxing authority thereof or therein unless required by
applicable law, in which case such corporation shall have agreed to pay such
additional amounts as shall be required so that the net amounts received and
retained by the holders of such Debt Securities or Trust Securities, as the case
may be, after payment of all taxes (including withholding taxes), duties,
assessments or other governmental charges, will be equal to the amounts that
such holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed, (2) irrevocably and unconditionally consented and submitted to the
jurisdiction of any United States federal court or New York state court, in each
case located in the Borough of Manhattan, The City of New York, in respect of
any action, suit or proceeding against it arising out of or in connection with
this Indenture, the Debt Securities, the Capital Securities Guarantee or the
Declaration and irrevocably and unconditionally waived, to the fullest extent
permitted by law, any objection to the laying of venue in any such court or that
any such action, suit or proceeding has been brought in an inconvenient forum
and (3) irrevocably appointed an agent in The City of New York for service of
process in any action, suit or proceeding referred to in clause (2) above) and
such corporation expressly assumes all of the obligations of the Company under
the Debt Securities, this Indenture, the Capital Securities Guarantee and the
Declaration and (ii) after giving effect to any such consolidation, merger,
sale, conveyance, transfer or other disposition, no Default or Event of Default
shall have occurred and be continuing.

            Section 11.02. Successor Entity to be Substituted.

            In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition contemplated in Section 11.01 and upon the
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and reasonably satisfactory in form to the Trustee, of
the due and punctual payment of the principal of and premium, if any, and
interest on all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor corporation shall succeed
to and be substituted for the Company, with the same effect as if it had been
named herein as the Company, and thereupon the predecessor entity shall be
relieved of any further liability or obligation hereunder or upon the Debt
Securities. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all of the
Debt Securities issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee or the Authenticating Agent; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and deliver any Debt
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee or the Authenticating Agent for authentication,
and any Debt Securities which such successor corporation thereafter shall cause
to be signed and delivered to the Trustee or the Authenticating Agent for that
purpose. All the Debt Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debt Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Debt Securities had been issued at the date of the execution hereof.

                                       54
<PAGE>

            Section 11.03. Opinion of Counsel to be Given to Trustee.

            The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall receive, in addition to the Opinion of Counsel required by Section 9.05,
an Opinion of Counsel as conclusive evidence that any consolidation, merger,
sale, conveyance, transfer or other disposition, and any assumption, permitted
or required by the terms of this Article XI complies with the provisions of this
Article XI.

                                   ARTICLE XII

                     SATISFACTION AND DISCHARGE OF INDENTURE

            Section 12.01. Discharge of Indenture.

            When (a) the Company shall deliver to the Trustee for cancellation
all Debt Securities theretofore authenticated (other than any Debt Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.06) and not theretofore canceled, or
(b) all the Debt Securities not theretofore canceled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee, in trust, funds,
which shall be immediately due and payable, sufficient to pay at maturity or
upon redemption all of the Debt Securities (other than any Debt Securities which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.06) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, but excluding, however, the amount
of any moneys for the payment of principal of and premium, if any, or interest
on the Debt Securities (1) theretofore repaid to the Company in accordance with
the provisions of Section 12.04, or (2) paid to any state or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in the case
of either clause (a) or (b) above the Company shall also pay or cause to be paid
all other sums payable hereunder by the Company, then this Indenture shall cease
to be of further effect except for the provisions of Sections 2.05, 2.06, 3.01,
3.02, 3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt
Securities shall mature or are redeemed, as the case may be, and are paid in
full. Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and the Trustee,
on demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with, and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debt Securities.

                                       55
<PAGE>

            Section 12.02. Deposited Moneys to be Held in Trust by Trustee.

            Subject to the provisions of Section 12.04, all moneys deposited
with the Trustee pursuant to Section 12.01 shall be held in trust and applied by
it to the payment, either directly or through any Paying Agent (including the
Company if acting as its own Paying Agent), to the holders of the particular
Debt Securities for the payment of which such moneys have been deposited with
the Trustee, of all sums due and to become due thereon for principal, premium,
if any, and interest.

            Section 12.03. Paying Agent to Repay Moneys Held.

            Upon the satisfaction and discharge of this Indenture, all moneys
then held by any Paying Agent of the Debt Securities (other than the Trustee)
shall, upon demand of the Company, be repaid to the Company or paid to the
Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

            Section 12.04. Return of Unclaimed Moneys.

            Any moneys deposited with or paid to the Trustee or any Paying Agent
for payment of the principal of and premium, if any, or interest on Debt
Securities and not applied but remaining unclaimed by the holders of Debt
Securities for two years after the date upon which the principal of and premium,
if any, or interest on such Debt Securities, as the case may be, shall have
become due and payable, shall be repaid to the Company by the Trustee or such
Paying Agent on written demand; and the holder of any of the Debt Securities
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect and all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease.

                                  ARTICLE XIII

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

            Section 13.01. Indenture and Debt Securities Solely Corporate
Obligations.

            No recourse for the payment of the principal of or premium, if any,
or interest on any Debt Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any such Debt Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer, director, employee or agent, as such, past, present or future, of the
Company or of any predecessor or successor corporation of the Company, either
directly or through the Company or any successor corporation of the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debt Securities.

                                       56
<PAGE>

                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

            Section 14.01. Successors.

            All the covenants, stipulations, promises and agreements of the
Company contained in this Indenture shall bind its successors and assigns,
whether so expressed or not.

            Section 14.02. Official Acts by Successor Entity.

            Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee, officer or other authorized Person of any entity that
shall at the time be the lawful successor of the Company.

            Section 14.03. Surrender of Company Powers.

            The Company, by instrument in writing executed by authority of 2/3
(two thirds) of its Board of Directors and delivered to the Trustee, may
surrender any of the powers reserved to the Company and thereupon such power so
surrendered shall terminate both as to the Company and as to any permitted
successor.

            Section 14.04. Addresses for Notices, etc.

            Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the
Securityholders on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee for such purpose) to the Company at 111 North Wall Street, Spokane,
Washington 99201, Attention: Daniel G. Byrne. Any notice, direction, request or
demand by any Securityholder or the Company to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the office of Wilmington Trust Company at Rodney Square
North, 1100 North Market Street, Wilmington, DE 19890-0001, Attention: Corporate
Capital Markets.

            Section 14.05. Governing Law.

            This Indenture and the Debt Securities shall each be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles of said State other than Section 5-1401 of
the New York General Obligations Law.

            Section 14.06. Evidence of Compliance with Conditions Precedent.

            Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion of
the signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an

                                       57
<PAGE>

Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with (except that no such Opinion of
Counsel is required to be furnished to the Trustee in connection with the
authentication and issuance of Debt Securities).

            Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (except certificates delivered pursuant to
Section 3.05) shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition and the definitions
relating thereto; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in the opinion of
such person, he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and (d) a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.

            Section 14.07. Business Day Convention.

            Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and additional interest will
accrue for each day that such payment is delayed as a result thereof. If the
Maturity Date, any Optional Redemption Date or the Special Redemption Date falls
on a day that is not a Business Day, then the principal, premium, if any, and/or
interest payable on such date will be paid on the next succeeding Business Day,
and no additional interest will accrue in respect of such payment made on such
next succeeding Business Day.

            Section 14.08. Table of Contents, Headings, etc.

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

            Section 14.09. Execution in Counterparts.

            This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together constitute
but one and the same instrument.

            Section 14.10. Separability.

            In case any one or more of the provisions contained in this
Indenture or in the Debt Securities shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debt Securities, but this Indenture and such Debt Securities shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein or therein.

                                       58
<PAGE>

            Section 14.11. Assignment.

            Subject to Article XI, the Company will have the right at all times
to assign any of its rights or obligations under this Indenture and the Debt
Securities to a direct or indirect wholly owned Subsidiary of the Company;
provided, however, that, in the event of any such assignment, the Company will
remain liable for all such obligations. Subject to the foregoing, this Indenture
is binding upon and inures to the benefit of the parties hereto and their
respective successors and assigns. This Indenture may not otherwise be assigned
by the parties thereto.

            Section 14.12. Acknowledgment of Rights.

            The Company acknowledges that, with respect to any Debt Securities
held by the Trust or a trustee of the Trust, if such trustee of the Trust fails
to enforce its rights under this Indenture as the holder of Debt Securities held
as the assets of the Trust after the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust have so
directed in writing such trustee, a holder of record of such Capital Securities
may, to the fullest extent permitted by law, institute legal proceedings
directly against the Company to enforce such trustee's rights under this
Indenture without first instituting any legal proceedings against such trustee
or any other Person. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay interest or premium, if any, on or principal of the Debt
Securities on the date such interest, premium, if any, or principal is otherwise
due and payable (or, in the case of redemption, on the related Optional
Redemption Date or the Special Redemption Date (as the case may be)), the
Company acknowledges that a holder of outstanding Capital Securities of the
Trust may directly institute a proceeding against the Company for enforcement of
payment to such holder directly of the principal of or premium, if any, or
interest on the Debt Securities having an aggregate principal amount equal to
the aggregate liquidation amount of the Capital Securities of such holder on or
after the respective due date (or Optional Redemption Date or Special Redemption
Date (as the case may be)) specified in the Debt Securities.

                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

            Section 15.01. Agreement to Subordinate.

            The Company covenants and agrees, and each holder of Debt Securities
issued hereunder and under any supplemental indenture (the "Additional
Provisions") by such holder's acceptance thereof likewise covenants and agrees,
that all Debt Securities shall be issued subject to the provisions of this
Article XV; and each holder of a Debt Security, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.

            The payment by the Company of the payments due on all Debt
Securities issued hereunder and under any Additional Provisions shall, to the
extent and in the manner hereinafter set forth, be subordinated and junior in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
incurred.

                                       59
<PAGE>

            No provision of this Article XV shall prevent the occurrence of any
default or Event of Default hereunder.

            Section 15.02. Default on Senior Indebtedness.

            In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other amount due
on any Senior Indebtedness of the Company following any applicable grace period,
or in the event that the maturity of any Senior Indebtedness of the Company has
been accelerated because of a default, and such acceleration has not been
rescinded or canceled and such Senior Indebtedness has not been paid in full,
then, in either case, no payment shall be made by the Company with respect to
the payments due on the Debt Securities.

            In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Securityholder when such payment is prohibited
by the preceding paragraph of this Section, such payment shall, subject to
Section 15.06, be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or trustee) notify the
Trustee in writing within 90 days of such payment of the amounts then due and
owing on the Senior Indebtedness and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Indebtedness.

            Section 15.03. Liquidation; Dissolution; Bankruptcy.

            Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
the Debt Securities; and upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Securityholders
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders,
as calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.

                                       60
<PAGE>

            In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or any Securityholder before all Senior Indebtedness of the Company is
paid in full, or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of such Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness of the Company remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.

            For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer or other
disposition of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XI of
this Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XI of this Indenture. Nothing in Section 15.02 or
in this Section shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.06 of this Indenture.

            Section 15.04. Subrogation.

            Subject to the payment in full of all Senior Indebtedness of the
Company, the Securityholders shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash, property
or securities of the Company applicable to such Senior Indebtedness until all
payments due on the Debt Securities shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders or
the Trustee would be entitled except for the provisions of this Article XV, and
no payment over pursuant to the provisions of this Article XV to or for the
benefit of the holders of such Senior Indebtedness by Securityholders or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness of the Company, and the holders of the Debt Securities be
deemed to be a payment or distribution by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV
are, and are intended, solely for the purposes of

                                       61
<PAGE>

defining the relative rights of the holders of the Debt Securities, on the one
hand, and the holders of such Senior Indebtedness, on the other hand.

            Nothing contained in this Article XV or elsewhere in this Indenture,
any Additional Provisions or in the Debt Securities is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness of the Company, and the holders of the Debt Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Debt Securities all payments on the Debt Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the Debt
Securities and creditors of the Company other than the holders of Senior
Indebtedness of the Company, nor shall anything herein or therein prevent the
Trustee or the holder of any Debt Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XV of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.

            Upon any payment or distribution of assets of the Company referred
to in this Article XV, the Trustee, subject to the provisions of Article VI of
this Indenture, and the Securityholders shall be entitled to conclusively rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered to
the Trustee or to the Securityholders, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XV.

            Section 15.05. Trustee to Effectuate Subordination.

            Each Securityholder, by such Securityholder's acceptance thereof,
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.

            Section 15.06. Notice by the Company.

            The Company shall give prompt written notice to a Responsible
Officer of the Trustee at the Principal Office of the Trustee of any fact known
to the Company that would prohibit the making of any payment of moneys to or by
the Trustee in respect of the Debt Securities pursuant to the provisions of this
Article XV. Notwithstanding the provisions of this Article XV or any other
provision of this Indenture or any Additional Provisions, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee in respect of the Debt
Securities pursuant to the provisions of this Article XV unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture,

                                       62
<PAGE>

shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of or premium, if any, or interest on
any Debt Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.

            The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Indebtedness of the Company (or a trustee or representative on behalf of
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such holder
or holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

            Section 15.07. Rights of the Trustee; Holders of Senior
Indebtedness.

            The Trustee, in its individual capacity, shall be entitled to all
the rights set forth in this Article XV in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture or any Additional Provisions shall
deprive the Trustee of any of its rights as such holder.

            With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture or any Additional Provisions against the
Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of this Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article XV or otherwise.

            Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.

            Section 15.08. Subordination May Not Be Impaired.

            No right of any present or future holder of any Senior Indebtedness
of the Company to enforce subordination as herein provided shall at any time in
any way be prejudiced

                                       63
<PAGE>

or impaired by any act or failure to act on the part of the Company, or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company, with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.

            Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article XV or
the obligations hereunder of the holders of the Debt Securities to the holders
of such Senior Indebtedness, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (b) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
such Senior Indebtedness; (c) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company or any other Person.

                                       64
<PAGE>

            Wilmington Trust Company, in its capacity as Trustee, hereby accepts
the trusts in this Indenture declared and provided, upon the terms and
conditions herein above set forth.

            IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.

                                 STERLING FINANCIAL CORPORATION

                                 By: ___________________________________________
                                     Harold B. Gilkey
                                     Chief Executive Officer and Chairman of the
                                     Board

                                 WILMINGTON TRUST COMPANY, as Trustee

                                 By: ___________________________________________
                                     Name:
                                     Title:

                                       65
<PAGE>
                                                                       EXHIBIT A

                              FORM OF DEBT SECURITY

                           [FORM OF FACE OF SECURITY]

            [THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC)
MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

            UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER", AS DEFINED IN RULE 144A, THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN

__________

(1) Only applicable if this Debt Security is a Global Debt Security.

                                       1
<PAGE>

RELIANCE ON RULE 144A OR (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT OR TO ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN
SUCH SUBPARAGRAPHS THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (C) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

            THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE

                                       2
<PAGE>

FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

            IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.

            THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

            THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE
CLAIMS OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.

            Floating Rate Junior Subordinated Debt Security due 2036
                                       of
                         Sterling Financial Corporation

            Sterling Financial Corporation, a bank holding company incorporated
in the State of Washington (the "Company", which term includes any successor
permitted under the Indenture (as defined herein)), for value received, promises
to pay to Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for Sterling Capital Trust VIII, a Delaware statutory
trust, or registered assigns, the principal amount of FIFTY-ONE MILLION FIVE
HUNDRED FORTY-SEVEN THOUSAND Dollars ($51,547,000) on December 15, 2036 (the
"Maturity Date") (or any Optional Redemption Date or the Special Redemption
Date, each as defined herein, or any earlier date of acceleration of the
maturity of this Debt Security), and to pay interest on the outstanding
principal amount of this Debt Security from September 20, 2006, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 15, June 15, September 15 and December 15 of each year,
commencing on December 15, 2006 (each, an "Interest Payment Date"), at a rate
per annum,

                                       3
<PAGE>

which, with respect to any Interest Period (as defined in the Indenture), will
be equal to LIBOR (as defined in the Indenture), as determined on the LIBOR
Determination Date (as defined in the Indenture) for such Interest Period (or,
in the case of the first Interest Period, will be 5.39%), plus 1.63 % (the
"Interest Rate") (provided that the Interest Rate for any Interest Period may
not exceed the highest rate permitted by New York law, as the same may be
modified by United States law of general application) until the principal hereof
shall have been paid or duly provided for, and on any overdue principal and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at an
annual rate equal to the then applicable Interest Rate, compounded quarterly.
The amount of interest payable for any Interest Period shall be computed on the
basis of a 360-day year and the actual number of days elapsed in such Interest
Period.

            The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Debt Security (or one or more
Predecessor Securities, as defined in the Indenture) is registered at the close
of business on the "regular record date" for such interest installment, which
shall be the fifteenth day prior to such Interest Payment Date, whether or not
such day is a Business Day (as defined herein). Any such interest installment
(other than Deferred Interest (as defined herein)) not punctually paid or duly
provided for shall forthwith cease to be payable to the holders on such regular
record date and may be paid to the Person in whose name this Debt Security (or
one or more Predecessor Securities) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the holders of the Debt Securities
not less than 10 days prior to such special record date, all as more fully
provided in the Indenture.

            Payment of the principal of and premium, if any, and interest on
this Debt Security due on the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, shall be made in immediately
available funds against presentation and surrender of this Debt Security at the
office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware, or at the office or agency of any other Paying Agent appointed by the
Company maintained for that purpose in Wilmington, Delaware or Olympia,
Washington. Payment of interest on this Debt Security due on any Interest
Payment Date other than the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, shall be made at the option of the
Company by check mailed to the holder thereof at such address as shall appear in
the Debt Security Register or by wire transfer of immediately available funds to
an account appropriately designated by the holder hereof. Notwithstanding the
foregoing, so long as the holder of this Debt Security is the Institutional
Trustee, payment of the principal of and premium, if any, and interest on this
Debt Security shall be made in immediately available funds when due at such
place and to such account as may be designated by the Institutional Trustee. All
payments in respect of this Debt Security shall be payable in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts.

            Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and

                                       4
<PAGE>

additional interest will accrue for each day that such payment is delayed as a
result thereof. If the Maturity Date, any Optional Redemption Date or the
Special Redemption Date falls on a day that is not a Business Day, then the
principal, premium, if any, and/or interest payable on such date will be paid on
the next succeeding Business Day, and no additional interest will accrue in
respect of such payment made on such next succeeding Business Day.

                  So long as no Event of Default pursuant to Sections 5.01(b),
(e), (f), (g), (h) or (i) of the Indenture has occurred and is continuing, the
Company shall have the right, from time to time and without causing an Event of
Default, to defer payments of interest on the Debt Securities by extending the
interest payment period on the Debt Securities at any time and from time to time
during the term of the Debt Securities, for up to 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and further consecutive extensions thereof, is referred to herein as an
"Extension Period"). No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. During any
Extension Period, interest will continue to accrue on the Debt Securities, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as "Deferred Interest") will accrue at an annual rate equal
to the Interest Rate applicable during such Extension Period, compounded
quarterly from the date such Deferred Interest would have been payable were it
not for the Extension Period, to the extent permitted by applicable law. No
interest or Deferred Interest (except any Additional Amounts (as defined in the
Indenture) that may be due and payable) shall be due and payable during an
Extension Period, except at the end thereof. At the end of any Extension Period,
the Company shall pay all Deferred Interest then accrued and unpaid on the Debt
Securities; provided, however, that during any Extension Period, the Company may
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock, (ii) make any payment of principal of or premium, if any, or
interest on or repay, repurchase or redeem any debt securities of the Company
that rank pari passu in all respects with or junior in interest to the Debt
Securities or (iii) make any payment under any guarantees of the Company that
rank in all respects pari passu with or junior in respect to the Capital
Securities Guarantee (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company (A) in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, (B) in
connection with a dividend reinvestment or stockholder stock purchase plan or
(C) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock), as
consideration in an acquisition transaction entered into prior to such Extension
Period, (b) as a result of any exchange or conversion of any class or series of
the Company's capital stock (or any capital stock of a subsidiary of the
Company) for any class or series of the Company's capital stock or of any class
or series of the Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to

                                       5
<PAGE>

such stock). Prior to the termination of any Extension Period, the Company may
further extend such Extension Period, provided, that no Extension Period
(including all previous and further consecutive extensions that are part of such
Extension Period) shall exceed 20 consecutive quarterly periods. Upon the
termination of any Extension Period and upon the payment of all Deferred
Interest, the Company may commence a new Extension Period, subject to the
foregoing requirements. The Company must give the Trustee notice of its election
to begin or extend an Extension Period no later than the close of business on
the fifteenth Business Day prior to the applicable Interest Payment Date.

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

            The Company waives diligence, presentment, demand for payment,
notice of nonpayment, notice of protest, and all other demands and notices.

            This Debt Security shall not be entitled to any benefit under the
Indenture hereinafter referred to and shall not be valid or become obligatory
for any purpose until the certificate of authentication hereon shall have been
signed by or on behalf of the Trustee.

            The provisions of this Debt Security are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.

            This Debt Security may contain more than one counterpart of the
signature page and this Debt Security may be executed and authenticated by the
affixing of the signature of a proper officer of the Company, and the signature
of the Trustee providing authentication, to any of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one, and
they shall have the same force and effect as though the Company had executed,
and the Trustee had authenticated, a single signature page.

            IN WITNESS WHEREOF, the Company has duly executed this certificate.

                                        6
<PAGE>

                                              Sterling Financial Corporation

                                              By: ____________________________
                                                  Name:
                                                  Title:

Dated: _________________, ____

                          CERTIFICATE OF AUTHENTICATION

            This certificate represents Debt Securities referred to in the
within-mentioned Indenture.

                                              WILMINGTON TRUST COMPANY,
                                              not in its individual capacity but
                                              solely as  the Trustee

                                              By: _____________________________
                                                  Authorized Officer

Dated: ________________, ____

                                        7

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

            This Debt Security is one of a duly authorized series of debt
securities of the Company (collectively, the "Debt Securities"), all issued or
to be issued pursuant to an Indenture (the "Indenture"), dated as of September
20, 2006, duly executed and delivered between the Company and Wilmington Trust
Company, as Trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debt Securities of which this Debt
Security is a part.

            Upon the occurrence and continuation of a Tax Event, an Investment
Company Event or a Capital Treatment Event (each, a "Special Event"), the
Company shall have the right to redeem this Debt Security, at its option, in
whole with all other Debt Securities but not in part, at any time, within 90
days following the occurrence of such Special Event (the "Special Redemption
Date") at the Special Redemption Price (as defined herein).

            The Company shall also have the right to redeem this Debt Security
at its option, in whole or (provided that all accrued and unpaid interest has
been paid on all Debt Securities for all Interest Periods terminating on or
prior to such date) from time to time in part, on any Interest Payment Date on
or after December 15, 2011 (each, an "Optional Redemption Date"), at the
Optional Redemption Price (as defined herein).

            Any redemption pursuant to the preceding two paragraphs will be
made, subject to receipt by the Company of prior approval from the Board of
Governors of the Federal Reserve System (the "Federal Reserve") if then required
under applicable capital guidelines or policies of the Federal Reserve, upon not
less than 30 days' nor more than 60 days' prior written notice. If the Debt
Securities are only partially redeemed by the Company, the Debt Securities will
be redeemed pro rata or by any other method utilized by the Trustee. In the
event of redemption of this Debt Security in part only, a new Debt Security or
Debt Securities for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.

            "Optional Redemption Price" means an amount in cash equal to 100% of
the principal amount of this Debt Security being redeemed plus unpaid interest
accrued thereon to the related Optional Redemption Date.

            "Special Redemption Price" means, with respect to the redemption of
this Debt Security following a Special Event, an amount in cash equal to 103.50%
of the principal amount of this Debt Security to be redeemed prior to December
15, 2007 and thereafter equal to the percentage of the principal amount of this
Debt Security that is specified below for the Special Redemption Date plus, in
each case, unpaid interest accrued thereon to the Special Redemption Date:

                                        8
<PAGE>

<TABLE>
<CAPTION>
SPECIAL REDEMPTION DURING THE
  12-MONTH PERIOD BEGINNING
        DECEMBER 15,               PERCENTAGE OF PRINCIPAL AMOUNT
------------------------------     ------------------------------
<S>                                <C>
     2007                                        102.80%
     2008                                        102.10%
     2009                                        101.40%
     2010                                        100.70%
2011 and thereafter                              100.00%
</TABLE>

            In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and, in certain cases, shall ipso facto become, due and payable, and
upon any such declaration of acceleration shall become due and payable, in each
case, in the manner, with the effect and subject to the conditions provided in
the Indenture.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Debt Securities at the time outstanding affected thereby, as
specified in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Debt Securities; provided, however,
that no such supplemental indenture shall, among other things, without the
consent of the holders of each Debt Security then outstanding and affected
thereby (i) change the Maturity Date of any Debt Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate (or manner
of calculation of the rate) or extend the time of payment of interest thereon,
or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of the Indenture and such Debt
Security) or increase the aggregate principal amount of Debt Securities then
outstanding, or change any of the redemption provisions, or make the principal
thereof or any interest or premium thereon payable in any coin or currency other
than United States Dollars, or impair or affect the right of any holder to
institute suit for payment thereof, or (ii) reduce the aforesaid percentage of
Debt Securities the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding, on behalf of the holders of all the Debt Securities, to
waive any past default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture, and its consequences,
except (a) a default in payments due in respect of any of the Debt Securities,
(b) in respect of covenants or provisions of the Indenture which cannot be
modified or amended without the consent of the holder of each Debt Security
affected, or (c) in respect of the covenants of the Company relating to its
ownership of Common Securities of the Trust. Any such consent or waiver by the
holder of this Debt Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Debt Security and of any Debt Security issued in exchange herefor
or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debt Security.

                                        9
<PAGE>

            No reference herein to the Indenture and no provision of this Debt
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to make all payments due on this
Debt Security at the time and place and at the rate and in the money herein
prescribed.

            As provided in the Indenture and subject to certain limitations
herein and therein set forth, this Debt Security is transferable by the holder
hereof on the Debt Security Register (as defined in the Indenture) of the
Company, upon surrender of this Debt Security for registration of transfer at
the office or agency of the Trustee in Wilmington, Delaware, or at any other
office or agency of the Company in Wilmington, Delaware or Olympia, Washington,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Debt Securities of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such registration of transfer, but the Company or
the Trustee may require payment of a sum sufficient to cover any tax, fee or
other governmental charge payable in relation thereto as specified in the
Indenture.

            Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Debt Security shall be
overdue and notwithstanding any notice of ownership or writing hereon) for the
purpose of receiving payment of the principal of and premium, if any, and
interest on this Debt Security and for all other purposes, and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary.

            As provided in the Indenture and subject to certain limitations
herein and therein set forth, Debt Securities are exchangeable for a like
aggregate principal amount of Debt Securities of different authorized
denominations, as requested by the holder surrendering the same.

            The Debt Securities are issuable only in registered certificated
form without coupons.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Debt Security, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer, director, employee or
agent, past, present or future, as such, of the Company or of any predecessor or
successor corporation of the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.

            All terms used but not defined in this Debt Security shall have the
meanings assigned to them in the Indenture.

                                       10

<PAGE>

            THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

                                       11

<PAGE>

                                                                       EXHIBIT B

                  FORM OF CERTIFICATE OF OFFICER OF THE COMPANY

      Pursuant to Section 3.05 of the Indenture, dated as of September 20, 2006
(as amended or supplemented from time to time, the "Indenture"), between
Sterling Financial Corporation, as issuer (the "Company"), and Wilmington Trust
Company, as trustee, the undersigned certifies that he/she is a [principal
executive officer, principal financial officer or principal accounting officer]
of the Company and in the course of the performance by the undersigned of
his/her duties as an officer of the Company, the undersigned would normally have
knowledge of any default by the Company in the performance of any covenants
contained in the Indenture, and the undersigned hereby further certifies that
he/she has no knowledge of any default for the fiscal year ending on __________,
20___ [, except as follows: specify each such default and the nature thereof].

      Capitalized terms used herein, and not otherwise defined herein, have the
respective meanings assigned thereto in the Indenture.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
____________, 20____.

                                       __________________________________
                                       Name:
                                       Title:

                                       B-1<PAGE>
                      AIG SUNAMERICA LIFE ASSURANCE COMPANY
                    A STOCK COMPANY   LOS ANGELES, CALIFORNIA

CONTRACT NUMBER   P9999999999

OWNER       JOHN DOE

                              STATUTORY HOME OFFICE
                         2999 NORTH 44TH ST., SUITE 250
                                PHOENIX, AZ 85018

                                EXECUTIVE OFFICE
                               1 SUNAMERICA CENTER
                           LOS ANGELES, CA 90067-6022

                             ANNUITY SERVICE CENTER
                                  PO BOX 54299
                           LOS ANGELES, CA 90054-0299

AIG SUNAMERICA LIFE ASSURANCE COMPANY ("We", "Us", the "Company", or "AIG
SunAmerica Life") agrees to provide benefits to the Owner in accordance with the
provisions set forth in this Contract and in consideration of the Application or
confirmation thereof and Purchase Payments We receive.

THE VALUE OF AMOUNTS ALLOCATED TO THE SEPARATE ACCOUNT DURING THE ACCUMULATION
AND ANNUITY PERIODS IS NOT GUARANTEED, AND WILL INCREASE OR DECREASE BASED UPON
THE INVESTMENT EXPERIENCE OF THE VARIABLE PORTFOLIOS YOU CHOOSE.

RIGHT TO EXAMINE - YOU MAY RETURN THIS CONTRACT TO OUR ANNUITY SERVICE CENTER OR
TO THE AGENT THROUGH WHOM THE CONTRACT WAS PURCHASED WITHIN 10 DAYS OR LONGER AS
MAY BE REQUIRED BY STATE LAW AFTER YOU RECEIVE IT, IF YOU ARE NOT SATISFIED WITH
IT. THE COMPANY WILL REFUND THE CONTRACT VALUE ON THE BUSINESS DAY DURING WHICH
THE CONTRACT IS RECEIVED. UPON SUCH REFUND, THE CONTRACT SHALL BE VOID.

For Individual Retirement Annuities, or if a refund of the Purchase Payment(s)
is otherwise required We reserve the right to allocate Your Purchase Payment(s)
to the Cash Management Portfolio until the end of the Right To Examine period.

                  THIS IS A LEGAL DOCUMENT. READ IT CAREFULLY.

      /s/ Christine A. Nixon                             /s/ Jana W. Greer
      ----------------------                             -----------------
        Christine A. Nixon                                  Jana W. Greer
            Secretary                                        President

                              INDIVIDUAL FIXED AND
                            VARIABLE ANNUITY CONTRACT
                                Nonparticipating

AS-981 (5/06)

                                       1
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                      <C>
CONTRACT DATA PAGE .........................................             PAGE 3

DEFINITIONS ................................................             PAGE 4

PURCHASE PAYMENT PROVISIONS ................................             PAGE 7

ACCUMULATION PROVISIONS ....................................             PAGE 8

CHARGES AND DEDUCTIONS .....................................             PAGE 10

TRANSFER PROVISION .........................................             PAGE 10

WITHDRAWAL PROVISIONS ......................................             PAGE 11

DEATH PROVISIONS ...........................................             PAGE 13

ANNUITY PROVISIONS .........................................             PAGE 15

GENERAL PROVISIONS .........................................             PAGE 17

ANNUITY PAYMENT OPTIONS ....................................             PAGE 20

FIXED ANNUITY PAYMENT OPTIONS TABLE ........................             PAGE 21

VARIABLE ANNUITY PAYMENT OPTIONS TABLE .....................             PAGE 24
</TABLE>

AS-981 (5/06)

                                       2
<PAGE>
                               CONTRACT DATA PAGE

CONTRACT NUMBER:                                ANNUITY SERVICE CENTER:
          P9999999999                           P. O. BOX 54299
                                                LOS ANGELES, CA 90054-0299

OWNER:                                          AGE AT ISSUE:
          JOHN DOE                                     35

ANNUITANT:                                      INITIAL PURCHASE PAYMENT:
          JOHN DOE                                     $10,000.00

SPECIFIED ANNUITY DATE:                         CONTRACT DATE:
          May 1, 2034                                  May 1, 2004

LATEST ANNUITY DATE:                            FIXED ACCOUNT OPTIONS
          May 1, 2064                           MINIMUM GUARANTEE RATE:
                                                       [1.0% - 3.0%]

BENEFICIARY:

          As named by You

SEPARATE ACCOUNT CHARGE:                        ANNUAL CONTRACT MAINTENANCE FEE:
          [1.52%]                                      $35.00
Of the above percentage, the charge for
guaranteed death benefit risk is [0%-0.35%]

SEPARATE ACCOUNT:

          [Variable Annuity Account Five]

( OPTIONAL ELECTIONS                    OPTIONAL ELECTION CHARGES:             )
( OPTIONAL DEATH BENEFIT ELECTED:                                              )
(        Purchase Payment Accumulation  See endorsement for applicable charge. )

WITHDRAWAL CHARGE SCHEDULE:

<TABLE>
<CAPTION>
    Number of Full Years Elapsed                Withdrawal Charge as a
Between Purchase Payment Contribution           Percentage of Withdrawn
       And Date of Withdrawal                      Purchase Payment
       ----------------------                      ----------------
<S>                                             <C>
                  0                                       7%

                  1                                       6%

                  2                                       6%

                  3                                       5%

                 4+                                       0%
</TABLE>

See Page 11 for Withdrawal Charge Provisions.

                                  FOR INQUIRIES
                              [CALL 1-800-445-7862]

AS-981 (5/06)

                                       3
<PAGE>
                                   DEFINITIONS

Defined in this section are some of the words and phrases used in this Contract.
These terms are capitalized when used in the Contract with the meaning set forth
below.

ACCUMULATION UNIT

A unit of measurement used to compute the Contract Value in a Variable Portfolio
before the Annuity Date.

AGE

Age as of last birthday.

ANNUITANT

The natural person or persons (collectively, Joint Annuitants) whose life or
lives is/are used to determine the annuity benefits under the Contract. If the
Contract is in force and the Annuitant(s) is/are alive on the Annuity Date, We
will begin payments to the Payee. This Contract cannot have Joint Annuitants if
it is issued in connection with a tax-qualified retirement plan.

ANNUITY DATE

The date on which annuity payments ("income payments") to the Payee begin. This
date cannot be later than the Latest Annuity Date.

ANNUITY SERVICE CENTER

The address as specified on the Contract Data Page.

ANNUITY UNIT

A unit of measurement determined on or after the Annuity Date used to compute
annuity payments from the Variable Portfolio(s).

BENEFICIARY

The Beneficiary You name at issue to receive the death benefit under this
Contract upon Your death. You may later change Your Beneficiary in a written
request to Us at Our Annuity Service Center.

CONTINUATION DATE

The date on which We receive, at Our Annuity Service Center: (a) the Spousal
Beneficiary's written request to continue the Contract, and (b) Due Proof of
Death of the Owner. If We receive (a) and (b) on different dates, the
Continuation Date will be the later date.

CONTRACT DATE

The date Your Contract is issued, as shown on the Contract Data Page. It is the
date from which Contract Years and Contract anniversaries are measured.

CONTRACT VALUE

The sum of: (1) Your share of the Variable Portfolios' Accumulation Unit Values,
and (2) the value of amounts if any, allocated to any available Fixed Account
Options.

CONTRACT YEAR

AS-981 (5/06)

                                       4
<PAGE>
The one year period starting from the Contract Date in one calendar year and
ending on the day preceding the anniversary of such date in the following
calendar year.

DEATH BENEFIT ADJUSTMENT

Any increase or reduction to the amount of the Death Benefit payable to account
for Purchase Payment and/or Withdrawal activity after a specified point in time
which will equal (a), (b), or (c), which ever is applicable, as follows:

      (a)   Where only Purchase Payments are received after the specified point
            in time, the dollar value of the Purchase Payments will be added to
            the Death Benefit payable; or

      (b)   Where only Withdrawals are made after the specified point in time,
            the Withdrawal will reduce the Death Benefit payable in the same
            proportion that the Contract Value was reduced at the time of the
            Withdrawal; or

      (c)   Where Purchase Payments have been received and Withdrawals made
            after the specified point in time, the Death Benefit amount payable
            will be increased by Purchase Payment(s) received after at specified
            point in time and reduced by any Withdrawal made after that
            specified point in time in the same proportion that the Contract
            Value was reduced at the time of the Withdrawal.

DOLLAR COST AVERAGING (DCA)

An optional program under which You authorize the systematic transfer of
specified amounts or percentages from any [Variable Portfolio(s)] or any
available Fixed Account into any [Variable Portfolio(s)] other than the source
account.

FIXED ACCOUNT OPTIONS

The investment options, if available under this Contract, that become part of
the Company's general asset account and are credited with a fixed rate of
interest declared by the Company. The general asset account contains all the
assets of the Company except for the Separate Account and other segregated asset
accounts. The amount You have in any Fixed Account Option at a given time is a
result of Purchase Payment(s) You have allocated to it or any part of Your
Contract Value You have transferred to it.

FIXED ANNUITIZATION

A series of periodic income payments of predetermined amounts that do not vary
with investment experience. Such payments are made from the Company's general
asset account. This Contract provides several fixed annuity payment options.

GUARANTEE PERIOD

The period for which interest is credited to amounts allocated to any available
Fixed Account Options. We determine in Our sole discretion the periods, if any,
that will be offered.

IRC

The Internal Revenue Code of 1986,as it may be amended or superseded.

JOINT OWNER

Any person named as Joint Owner on the Application or confirmation thereof and
listed on the Contract Data Page, unless subsequently changed. The Joint Owner,
if any, possesses an undivided interest in this Contract in conjunction with the
Owner. All references within this Contract to Owner will also apply to the Joint
Owner. We reserve Our right to require that Joint Owners be each others' spouse.

AS-981 (5/06)

                                       5
<PAGE>
LATEST ANNUITY DATE

The later of the Owner's [95th birthday or ten years after the Contract Date].
If the Owner is a non-natural person, the Latest Annuity Date is the later of
the Annuitant's [95th birthday or ten years after the Contract Date].

MULTI-YEAR FIXED ACCOUNT OPTIONS

If available, Fixed Accounts for a Guarantee Period of at least two (2) years.

NET PURCHASE PAYMENT

The sum of all Purchase Payment(s), reduced for each Withdrawal in the same
proportion that the Contract Value is reduced by each such Withdrawal.

NYSE

New York Stock Exchange.

OWNER

The person or entity named in the Contract who is entitled to exercise all
rights and privileges of ownership under the Contract. Owner means both Joint
Owners, if applicable

PAYEE

The person receiving payment of annuity benefits under this Contract.

PURCHASE PAYMENTS

Payments in U.S. currency made by or on behalf of the Owner to the Company to
fund the Contract.

REQUIRED DOCUMENTATION

Is: (a) Due Proof of Death that the Owner or the Spousal Beneficiary died before
the Annuity Date; and, (b) an election form specifying the payment options; and
(c) any other documentation We may require.

SEPARATE ACCOUNT

A segregated asset account named on the Contract Data Page. The Separate Account
consists of several Variable Portfolios, each investing in shares of the
Underlying Fund(s) of the trust(s). The assets of the Separate Account are not
commingled with the general assets and liabilities of the Company. The value of
amounts allocated to the Variable Portfolios of the Separate Account is not
guaranteed.

SPECIFIED ANNUITY DATE

The anticipated Annuity Date specified by You on the Application and as shown on
the Contract Data Page. You may change this date in writing before the Annuity
Date, but in no event can the date be later than the Latest Annuity Date. If
this date is not specified, it will be the Latest Annuity Date.

SPOUSAL BENEFICIARY

AS-981 (5/06)

                                       6
<PAGE>
The original deceased Owner's surviving spouse who is designated as the primary
Beneficiary at the time of the Owner's death and may continue the Contract as
the Owner on the Continuation Date.

SUBSEQUENT PURCHASE PAYMENTS

Purchase Payments made after the initial Purchase Payment.

TOTAL INVESTED AMOUNT

The sum of all Purchase Payments less amounts previously withdrawn that incurred
a Withdrawal Charge, less Purchase Payments withdrawn that are no longer subject
to a Withdrawal Charge.

UNDERLYING FUND

The variable investment options in which the corresponding Variable Portfolio(s)
invest.

VARIABLE ANNUITIZATION

A series of periodic income payments which vary in amount according to the
investment experience of one or more Variable Portfolios, as selected by You.
This Contract provides several variable annuity payment options.

VARIABLE PORTFOLIO

One or more divisions of the Separate Account which provides for the variable
investment options available under this Contract. Each Variable Portfolio has
its own investment objective and is invested in the Underlying Fund(s) of the
trusts. A Variable Portfolio is not chargeable with liabilities arising out of
any other Variable Portfolio. The available Variable Portfolios are shown on the
Application or confirmation thereof. Additional Variable Portfolios may become
available in the future.

WE, OUR, US, THE COMPANY

AIG SunAmerica Life Assurance Company.

WITHDRAWAL(S)

Amount(s) withdrawn from the Contract Value including any charges and fees
applicable to each such withdrawal.

YOU, YOUR

The Owner.

                           PURCHASE PAYMENT PROVISIONS

PURCHASE PAYMENTS

Purchase Payments are flexible. This means that, subject to Company disclosed
restrictions, You may change the amounts, frequency and/or timing of Purchase
Payments. Purchase Payments can be made at any time after the Contract Date, but
before the older Owner's [86th] birthday. With instructions from You, Purchase
Payments will be allocated to the Variable Portfolio(s) and/or Fixed Account
Option(s), if available. We reserve the right to specify the minimum or maximum
Purchase Payment that may be allocated to a Variable Portfolio or available
Fixed Account Option under the Contract.

AS-981 (5/06)

                                       7
<PAGE>
DCA FIXED ACCOUNT

Any portion of a Purchase Payment allocated to the DCA Fixed Account Option(s)
must be transferred out to the Variable Portfolio(s) within the specified DCA
Fixed Account Option Period. Upon termination of the DCA program any amounts
remaining in the DCA Fixed Account Option(s) will be transferred to the DCA
target allocation(s) for the program being terminated. Upon annuitization, any
amounts remaining in the DCA Fixed Account Option(s) will be applied to a Fixed
Annuitization. The unit values credited and applied to Your Contract are
determined on each date of transfer. We reserve the right to impose a minimum or
maximum contribution level on Purchase Payments allocated to a DCA Fixed Account
Option(s) and/or change the terms and conditions of the DCA program at any time.

CHANGES TO VARIABLE PORTFOLIO OFFERINGS

If the shares of an Underlying Fund should no longer be available for investment
by the Separate Account, then We may substitute shares of another Underlying
Fund, for shares already purchased, or to be purchased in the future. At any
given time, some Variable Portfolios may not be available for receipt of
Purchase Payment(s) or transfer(s). Substitutions of securities will be carried
out in accordance with any applicable state and/or federal laws or regulations.

                             ACCUMULATION PROVISIONS

Before the Annuity Date, the Contract Value is the sum of the Separate Account
Accumulation Value and the Fixed Account Accumulation Value. If Your Contract
Value falls below [$2,500,] subject to applicable state and federal laws, rules
and regulations, we may terminate your Contract and send you the remaining
dollar amount.

SEPARATE ACCOUNT ACCUMULATION VALUE

The Separate Account Accumulation Value under the Contract is the sum of the
Accumulation Unit Values held in the Variable Portfolios for You.

NUMBER OF ACCUMULATION UNITS

Your Contract is credited with Accumulation Units of the Separate Account when
amounts are allocated to the Variable Portfolio(s). For that portion of each
Purchase Payment and/or transfer amount allocated to a Variable Portfolio, the
number of Accumulation Units credited is equal to:

The sum of each Purchase Payment and/or transfer amount allocated to the
Variable Portfolio reduced by premium taxes, if any:

Divided by

The Accumulation Unit Value for that Variable Portfolio for the NYSE business
day in which the Purchase Payment or transfer amount is received.

The number of Accumulation Units will be reduced for Withdrawals of Contract
Value, annuitizations, amounts transferred out of a Variable Portfolio, the
Contract Maintenance Fee and applicable charges for elected features as set
forth in endorsements to this Contract. Any reduction to the Contract Value will
be made as of the NYSE business day in which We receive all requirements for the
transaction, as appropriate.

ACCUMULATION UNIT VALUE (AUV)

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The AUV of a Variable Portfolio for any NYSE business day is calculated by
subtracting (2) from (1) and dividing the result by (3) where:

(1)   is the total value at the end of the given NYSE business day of the assets
      attributable to the the Variable Portfolio minus any applicable
      liabilities other than those owed to the Contractholders;

(2)   is the amount equal to the daily Separate Account Charge plus the daily
      charge for any optional features that impose a daily charge;

(3)   is the number of Accumulation Units outstanding at the end of the given
      NYSE business day.

FIXED ACCOUNT ACCUMULATION VALUE

The Fixed Account Accumulation Value, if any, is the sum of all monies allocated
or transferred to the Fixed Account Option(s), if available, reduced by any
applicable premium taxes, plus all interest credited on the Fixed Account
Option(s) during the period that You have Contract Value allocated to the Fixed
Account Option(s). This amount will be adjusted for Withdrawals, annuitizations,
transfers, and the deduction of the Contract Maintenance Fee and applicable
charges for elected features as set forth in endorsements to this Contract. The
Fixed Account Accumulation Value will not be less than the minimum values
required by law in the state where this Contract is issued.

FIXED ACCOUNT GUARANTEE PERIOD OPTIONS AND INTEREST CREDITING

The portion of Your Contract Value within the Fixed Account, if any, is credited
with interest at rates guaranteed by Us for the Guarantee Period(s) selected.
Interest is credited on a daily basis at the then applicable effective interest
rate for the applicable Guarantee Period. You may select from one or more
Guarantee Periods which We may offer at any particular time. We reserve the
right at any time to add or delete Guarantee Periods. If You have allocated any
part of Your initial Purchase Payment to a Guarantee Period, the amount
allocated, as well as the duration of the Guarantee Period, is shown on the
Application or confirmation thereof as completed by You. The interest rate
applicable to an allocation of Purchase Payment or transfer of Contract Value to
a Guarantee Period is the rate in effect for that Guarantee Period at the time
of the allocation or transfer. If You have allocated or transferred amounts at
different times to the Fixed Account, each allocation or transfer may have a
unique effective interest rate associated with that amount. We guarantee that
the effective annual rate of interest for the Fixed Account, including any of
the available Guaranteed Periods, will not be less than the Minimum Guarantee
Rate as mandated by Your state, and shown on Contract Data Page. The minimum
guarantee rate under Your Contract as referenced on the Contract Data Page is at
least equal to the lesser of: (a) 3% per annum; or (b) the three-month average
value of the five-year Constant Maturity Treasury Rate reported by the Federal
Reserve, rounded up to the nearest 1/4th of 1%, for the second, third and fourth
month preceding the first day of the calendar quarter during which the Contract
is issued, reduced by 1.25% and where the resulting interest rate is not less
than 1%.

                             CHARGES AND DEDUCTIONS

We will deduct the following charges from the Contract:

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CONTRACT MAINTENANCE FEE

The charge, as shown on the Contract Data Page, will be deducted on each
Contract anniversary before the Annuity Date. It will also be deducted when the
Contract Value is withdrawn in full if the Withdrawal is not on the Contract
anniversary. We also reserve the right to waive the fee for certain Contract
Values of [$50,000.00 and up].

WITHDRAWAL CHARGE

The charge, as shown on the Contract Data Page, if any, may be deducted upon
Withdrawal of any portion of the Contract Value. See WITHDRAWAL PROVISIONS.

SEPARATE ACCOUNT CHARGE

This charge, as shown on the Contract Data Page, on an annualized basis equals a
percentage of the average daily ending value of the assets attributable to the
Accumulation Units of the Variable Portfolio(s) to which the Contract is
allocated. This charge compensates Us for mortality and expense risks,
distribution expenses and guaranteed death benefit risk associated with the
Contract. We subtract this charge daily. We reserve the right to assess a charge
on a class basis which differs from the charge specified on the Contract Data
Page.

                               TRANSFER PROVISIONS

Subject to applicable restrictions, You may transfer all of part of Your
Contract Value amongst the Variable Portfolios and/or available Fixed Account
Options (unless otherwise noted). The minimum amount that can be transferred and
the amount that can remain in a Variable Portfolio and/or available Fixed
Account Option are subject to Company limits. We further reserve the right to
restrict Your transfer privileges, including but not limited to possible
termination of those privileges in our sole discretion.

Furthermore, the Underlying Funds, may have their own transfer policies that are
applicable to this Contract as a result of investment in the Variable
Portfolios. These policies, likewise may include termination of Your transfer
privileges and/or penalty fees resulting from transfer activity that is defined
as excessive according to the Underlying Funds' policies.

TRANSFERS OF ACCUMULATION UNITS BETWEEN VARIABLE PORTFOLIOS AND FIXED ACCOUNTS

Before the Annuity Date, transfers are subject to certain restrictions. You may
transfer all or a portion of Your Contract Value from one Variable Portfolio to
another Variable Portfolio(s) or any available Fixed Account Option(s) other
than the DCA Fixed Account Options. You may also transfer from any available
Fixed Account Option(s) to the Variable Portfolio(s) and/or any available Fixed
Account Option(s) of the Contract. A transfer will result in the redemption of
Accumulation Units in a Variable Portfolio and the purchase of Accumulation
Units in the other Variable Portfolio. Transfers will be effected at the end of
the NYSE business day in which We receive Your completed request for the
transfer.

TRANSFERS OF ANNUITY UNITS BETWEEN VARIABLE PORTFOLIOS

On and after the Annuity Date, transfers into and out of any available Fixed
Account Option(s) are not allowed. You may transfer all or a portion of Your
Contract Value from one Variable Portfolio

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to another Variable Portfolio(s). A transfer will result in the redemption of
Annuity Units in a Variable Portfolio and the purchase of Annuity Units in the
other Variable Portfolio. Transfers will be effected for the last NYSE business
day of the month in which We receive Your request for the transfer.

                              WITHDRAWAL PROVISIONS

On or before the Annuity Date and while You are living, You may withdraw all or
part of Your Contract Value under this Contract by informing Us at Our Annuity
Service Center. For a full Withdrawal, this Contract must be returned to Our
Annuity Service Center. The minimum amount that can be withdrawn and the amount
remaining after Withdrawal are subject to Company limits.

Unless You tell Us otherwise in writing, Withdrawals will be deducted from the
Contract Value in proportion to their allocation among any available Fixed
Account Options and the Variable Portfolios. Withdrawals will be based on values
for the NYSE business day in which the request for withdrawal and the Contract
(in the case of a full withdrawal), are received at Our Annuity Service Center.
Unless the SUSPENSION OF PAYMENTS or DEFERMENT OF PAYMENTS sections are in
effect, payment of withdrawals will be made within seven calendar days.

WITHDRAWAL CHARGE

Withdrawals of all or a portion of the Contract Value may be subject to a
Withdrawal Charge as shown on the Contract Data Page. The Withdrawal Charge
percentage applied to any withdrawal will depend on how long the Purchase
Payment to which the Withdrawal is attributed has been in the Contract. No
Withdrawal Charge is deducted on an amount which is considered a Penalty-Free
Withdrawal or a Purchase Payment no longer subject to a Withdrawal Charge.

For the purpose of determining the Withdrawal Charge, a Withdrawal will be
attributed to amounts in the following order: (1) penalty-free earnings in the
Contract; (2) Purchase Payments no longer subject to the Withdrawal Charge and
not yet withdrawn; (3) any remaining Penalty-Free Withdrawal amount (except in
the case of a full Withdrawal); and (4) Purchase Payments subject to a
Withdrawal Charge. Purchase Payments, when withdrawn, are assumed to be
withdrawn on a first-in-first-out (FIFO) basis. You will not receive the benefit
of a Penalty-Free Withdrawal in case of a full Withdrawal.

The Withdrawal Charge will be assessed against the Variable Portfolio(s) and the
available Fixed Account Option(s) in the same proportion as the remaining
Contract Value is allocated unless You request that the Withdrawal come from a
particular Variable Portfolio or available Fixed Account Option. After a
Withdrawal is taken, the remaining Contract Value must be sufficient to cover
any Withdrawal Charge remaining upon full Withdrawal of the Contract.

PENALTY-FREE WITHDRAWALS

On any day before the Annuity Date, You may make a Withdrawal of up to the
Penalty-Free Withdrawal amount as of that day without incurring a Withdrawal
Charge. Any portion of the Penalty-Free Withdrawal made in excess of the
penalty-free earnings in the Contract is considered to be a Withdrawal of future
Penalty-Free earnings and is therefore not a Withdrawal of the Total

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Invested Amount. On any day, penalty-free earnings in the Contract are
calculated as the Contract Value at the end of that day less the Total Invested
Amount.

During the first Contract Year, the Penalty-Free Withdrawal amount is equal to
the penalty-free earnings in the Contract as of the date of Withdrawal.

Alternatively, during the first Contract Year, You may make Withdrawals of the
Penalty-Free Withdrawal amount through the Systematic Withdrawal Program. The
Penalty-Free Withdrawal amount as of any systematic withdrawal date is 10% of
the Total Invested Amount less any Withdrawals already made during the Contract
Year.

After the first Contract Year, the maximum Penalty-Free Withdrawal amount as of
the date of the Withdrawal is the greater of:

(a)   penalty-free earnings in the Contract; or

(b)   10% of the Total Invested Amount on deposit for at least one year, less
      any Withdrawals already made during the year.

Although amounts withdrawn free of a Withdrawal Charge reduce Contract Value,
they do not reduce the Total Invested Amount for purposes of calculating the
Withdrawal Charge or for the purposes of calculating penalty-free earnings in
the Contract. As a result, You will not receive the benefit of a Penalty-Free
Withdrawal in a full Withdrawal.

SYSTEMATIC WITHDRAWAL PROGRAM

Prior to the Annuity Date, You may elect to participate in a Systematic
Withdrawal Program by informing Us at Our Annuity Service Center. The Systematic
Withdrawal Program allows You to make automatic withdrawals from Your Contract
monthly, quarterly, semiannually or annually. The minimum systematic withdrawal
amount is subject to Company limits. Any amount withdrawn through the Systematic
Withdrawal Program may be subject to a Withdrawal Charge as discussed in the
WITHDRAWAL CHARGE and PENALTY-FREE WITHDRAWALS provisions. You may terminate
Your participation in the Systematic Withdrawal Program at any time by sending
Us a written request. We reserve the right to modify, suspend or terminate the
Systematic Withdrawal Program at any time.

Systematic withdrawals will be deducted from the Penalty-Free Withdrawal amount
available each Contract Year.

                                DEATH PROVISIONS

Notwithstanding any provision of this Contract to the contrary, all payments of
benefits under this Contract will be made in a manner that satisfies the
requirements of IRC Section 72(s), as amended from time to time. If the Contract
is owned by a trust or other non-natural person, We will treat the death of any
Annuitant as the death of the "Primary Annuitant" and as the death of any Owner.

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DUE PROOF OF DEATH

Due Proof of Death means:

      1.    a certified copy of a death certificate; or

      2.    a certified copy of a decree of a court of competent jurisdiction as
            to the finding of death; or

      3.    a written statement by a medical doctor who attended the deceased
            Owner at the time of death; or

      4.    any other proof satisfactory to Us.

DEATH OF OWNER BEFORE THE ANNUITY DATE

We will pay a death benefit to the Beneficiary upon Our receiving all Required
Documentation at Our Annuity Service Center. Unless You have previously
designated a payment option on behalf of the Beneficiary, the Beneficiary must
select one of the following options:

      1.    Immediately collect the death benefit in a lump sum payment. If a
            lump sum payment is elected, payment will be in accordance with any
            applicable laws and regulations governing payments on death; or

      2.    Collect the death benefit in the form of one of the Annuity Payment
            Options. If an Annuity Payment Option is desired, an option must be
            elected within 60 days of Our receipt of all Required Documentation.
            The payments must be over the life of the Beneficiary or over a
            period not extending beyond the life expectancy of the Beneficiary.
            Payments under this option must begin within one year after the
            Owner's death, otherwise, the death benefit will be paid in
            accordance with option 1 above; or

      3.    If eligible, continue the Contract as the Spousal Beneficiary. On
            the Continuation Date, We will contribute to the Contract any amount
            by which the Death Benefit exceeds the Contract Value, calculated as
            of the Owner's date of death. This amount is not considered a
            Purchase Payment except in the calculation of certain death benefits
            upon the death of the Spousal Beneficiary. If this option is
            elected, no death benefit is paid.

You cannot change any elected death benefit option specified on the Contract
Data Page.

In any event, the entire interest in the Contract will be distributed within
five years from the date of death of the Owner unless payment option 2 or 3 was
selected under DEATH OF OWNER BEFORE THE ANNUITY DATE.

Your Spousal Beneficiary may discontinue any optional death benefit option on
the Continuation Date. Your Spousal Beneficiary cannot change the death benefit
option elected by you on the Application. Upon the Spousal Beneficiary's death,
the entire interest of the Contract must be distributed immediately under option
1 or 2 as provided under DEATH OF OWNER BEFORE THE ANNUITY DATE.

AMOUNT OF DEATH BENEFIT

If the Owner was Age [82 or younger] on the Contract Date, [and death occurs
before the [90th] birthday,] upon Our receipt of all Required Documentation at
Our Annuity Service Center, We will calculate the Death Benefit as the greater
of:

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      (1)   [100% of] the Contract Value for the NYSE business day during which
            We receive all Required Documentation at Our Annuity Service Center;
            or

      (2)   [100% of] Net Purchase Payment(s) received prior to the Owner's
            [86th] birthday.

If the Owner was at least Age [83 but younger than age 86] on the Contract Date,
[and death occurs before the Owner's [90th] birthday,] upon Our receipt of all
Required Documentation at Our Annuity Service Center, We will calculate the
Death Benefit as the greater of:

      (1)   [100% of] the Contract Value for the NYSE business day during which
            We receive all Required Documentation at Our Annuity Service Center;
            or

      (2)   The lesser of:

            a)    [100% of] Net Purchase Payment(s) received before the Owner's
                  [86th] birthday; or

            b)    [125% of] Contract Value for the NYSE business day during
                  which We receive all Required Documentation at Our Annuity
                  Service Center.

[If the Owner was Age [90] or older at the time of death, the Death Benefit will
be the Contract Value for the NYSE business day during which We receive all
Required Documentation at Our Annuity Service Center.]

SPOUSAL BENEFICIARY CONTINUATION

If the Spousal Beneficiary was Age [82 or younger] on the Continuation Date and
was younger than Age [86] at the time of death, upon Our receipt of all Required
Documentation at Our Annuity Service Center, We will calculate the Death Benefit
as the greater of:

      (1)   [100% of] the Contract Value for the NYSE business day during which
            We receive all Required Documentation at Our Annuity Service Center;
            or

      (2)   [100% of] the Contract Value on the Continuation Date, and a Death
            Benefit Adjustment for Purchase Payment(s) transacted on or after
            the Continuation Date but before the Spousal Beneficiary's [86th]
            birthday and/or Withdrawals transacted after the Continuation Date.

If the Spousal Beneficiary was at least Age [83 but younger than age 86] on the
Continuation Date and was younger than Age [86] at the time of death, upon Our
receipt of the all Required Documentation at Our Annuity Service Center, We will
calculate the Death Benefit as the greater of:

      (1)   [100% of] the Contract Value for the NYSE business day during which
            We receive all Required Documentation at Our Annuity Service Center;
            or

      (2)   The lesser of:

            a)    [100% of] the Contract Value on the Continuation Date, and a
                  Death Benefit Adjustment for Purchase Payment(s) transacted on
                  or after the Continuation Date but before the Spousal
                  Beneficiary's [86th] birthday and/or Withdrawals transacted
                  after the Continuation Date; or

            b)    [125% of] the Contract Value for the NYSE business day during
                  which We receive all Required Documentation at Our Annuity
                  Service Center.

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If the Spousal Beneficiary was age [86] or older on the Continuation Date, the
Death Benefit will be [100% of] the Contract Value for the NYSE business day
during which We receive all Required Documentation at Our Annuity Service
Center.

DEATH OF OWNER OR ANNUITANT ON OR AFTER THE ANNUITY DATE

If any Owner or Annuitant dies on or after the Annuity Date and before the
entire interest in the Contract has been distributed, We will pay the remaining
portion of the annuity payout to the Beneficiary upon Our receipt of Required
Documentation. For further information pertaining to death of the Annuitant, see
ANNUITY PAYMENT OPTIONS.

BENEFICIARY

The Beneficiary is selected by the Owner. While the Owner is living and before
the Annuity Date, the Owner may change the Beneficiary by written notice in a
form satisfactory to Us. A change in Beneficiary will take effect on the date We
receive the written notice at Our Annuity Service Center. If two or more persons
are named as Beneficiaries under the Contract, those surviving the Owner will
share equally unless otherwise stated and each must elect to receive their
respective portions of the death benefit according to the options listed under
DEATH OF OWNER BEFORE THE ANNUITY DATE. If the Annuitant survives the Owner, and
there are no surviving Beneficiaries, the Annuitant will be deemed the
Beneficiary.

Joint Owners, if applicable, shall be each other's primary Beneficiary. Joint
Annuitants, if any, when the Owner is a non-natural person, shall be each
other's primary Beneficiary. Any other Beneficiary designation will be treated
as a contingent Beneficiary.

If the Owner is also the Annuitant and there are no surviving Beneficiaries upon
Our receipt of all Required Documentation We will pay the Death Benefit to the
estate of the Owner in accordance with option 1 under DEATH OF OWNER BEFORE THE
ANNUITY DATE.

                               ANNUITY PROVISIONS

ANNUITY DATE

You specify an anticipated Annuity Date on the Application as shown on the
Contract Data Page. You may change the Annuity Date at any time at least seven
days before the Annuity Date, by written notice to the Us at Our Annuity Service
Center. The Annuity Date must always be the first day of the calendar month and
must be at least two years after the Contract Date, but not beyond the Latest
Annuity Date If no Annuity Date is specified on the Application, the Annuity
Date will be the Latest Annuity Date.

PAYMENTS TO OWNER

Unless You request otherwise, We will make annuity payments to You. If You want
the annuity payments to be made to some other Payee, We will make such payments
subject to receipt of a written request filed at the Annuity Service Center no
later than thirty (30) days before the due date of the first annuity payment.

Any such request is subject to the rights of any assignee. No payments available
to or being paid to the Payee while the Annuitant is alive can be transferred,
commuted, anticipated or encumbered.

AMOUNT OF FIXED ANNUITY PAYMENTS

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The amount of each fixed annuity payment will be determined by applying the
portion of the Contract Value allocated by You for Fixed Annuitization, less any
applicable premium taxes, to the annuity table applicable to the fixed annuity
payment option chosen. In no event will the Fixed Annuitization be changed once
it begins.

AMOUNT OF VARIABLE ANNUITY PAYMENTS

(a)   FIRST VARIABLE ANNUITY PAYMENT: The dollar amount of the first Variable
      Annuitization payment will be determined by applying the portion of the
      Contract Value allocated to the Variable Portfolio(s), less any applicable
      premium taxes, to rates which are at least equal to the annuity rates
      based upon the annuity table applicable to the variable annuity payment
      option chosen. If the Contract Value is allocated to more than one
      Variable Portfolio, the value of Your interest in each Variable Portfolio
      is applied separately to the variable annuity payment option table to
      determine the amount of the first annuity payment attributable to each
      Variable Portfolio.

(b)   NUMBER OF VARIABLE ANNUITY UNITS: The number of Annuity Units for each
      applicable Variable Portfolio is the amount of the first annuity payment
      attributable to that Variable Portfolio divided by the value of the
      applicable Annuity Unit for that Variable Portfolio as of the Annuity
      Date. The number will not change as a result of investment experience.

(c)   VALUE OF EACH VARIABLE ANNUITY UNIT: The value of an Annuity Unit may
      increase or decrease from one month to the next. For any month, the value
      of an Annuity Unit of a particular Variable Portfolio is the value of that
      Annuity Unit as of the last NYSE business day of the preceding month,
      multiplied by the Net Investment Factor for that Variable Portfolio for
      the last NYSE business day of the current month.

      The Net Investment Factor for any Variable Portfolio for a certain month
      is determined by dividing (1) by (2) and multiplying by (3) where:

            (1)   is the Accumulation Unit Value of the Variable Portfolio
                  determined as of the last business day at the end of that
                  month, and

            (2)   is the Accumulation Unit Value of the Variable Portfolio
                  determined as of the last business day at the end of the
                  preceding month, and

            (3)   is a factor that neutralizes the assumed investment rate of
                  3.5%.

(d)   SUBSEQUENT VARIABLE ANNUITY PAYMENTS: After the first Variable
      Annuitization payment future payments will vary in amount according to the
      investment performance of the applicable Variable Portfolio(s) to which
      Your Purchase Payments are allocated. The amount may change from month to
      month. The amount of each subsequent payment for each Variable Portfolio
      is :

      The number of Annuity Units for each Variable Portfolio as determined for
      the first annuity payment

      Multiplied by

      The value of an Annuity Unit for that Variable Portfolio at the end of the
      month immediately preceding the month in which payment is due.

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      We guarantee that the amount of each Variable Annuitization payment will
      not be affected by variations in expenses or mortality experience.

                               GENERAL PROVISIONS

ENTIRE CONTRACT

The Entire Contract between You and Us consists of this Contract, the
Application or confirmation thereof and any attached endorsement(s) or rider(s).
An agent cannot change the terms or conditions of this Contract. Any change must
be in writing and approved by Us. Only Our President, Secretary, or one of Our
Vice-Presidents can give Our approval.

CHANGE OF ANNUITANT

If the Owner is an individual, the Owner may change the Annuitant(s) at any time
before the Annuity Date. To make a change, the Owner must send a written notice
to Us at least 30 days before the Annuity Date. If the Owner is a non-natural
person, the Owner may not change the Annuitant.

DEATH OF ANNUITANT

If the Owner is a natural person, the Owner and Annuitant are different, and the
Annuitant dies before the Annuity Date, the Owner becomes the Annuitant until
the Owner elects a new Annuitant. If there are Joint Annuitants, upon the death
of any Annuitant before the Annuity Date, the Owner may elect a new Joint
Annuitant. However, if the Owner is a non-natural person, We will treat the
death of any Annuitant as the death of the "Primary Annuitant" and as the death
of the Owner, as explained in the DEATH PROVISIONS.

MISSTATEMENT OF AGE OR SEX

If the Age or sex of any Annuitant has been misstated, future annuity payments
will be adjusted using the correct Age and sex, according to Our rates in effect
on the date that annuity payments were determined. Any overpayment from the
fixed annuity payment options, plus interest at the rate of [4%] per year, will
be deducted from the next payment(s) due. Any underpayment from the fixed
annuity payment options, plus interest at the rate of [4%] per year, will be
paid in full with the next payment due. Any overpayment from the Variable
Portfolios will be deducted from the next payment(s) due. Any underpayment from
the Variable Portfolios will be paid in full with the next payment due.

With respect to Contract issue Age and other age driven features in the
Contract, should We discover a misstatement of Age, We reserve the right to
fully pursue Our remedies including possible termination of the Contract and/or
revocation of any Age driven benefits.

PROOF OF AGE, SEX, OR SURVIVAL

We may require satisfactory proof of correct Age or sex at any time. If any
payment under this Contract depends on the Annuitant being alive, We may require
satisfactory proof of survival.

DEFERMENT OF PAYMENTS

We may defer making payments from the available Fixed Account Options for up to
six (6) months. Interest, subject to state requirements, will be credited during
the deferral period.

SUSPENSION OF PAYMENTS

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We may suspend or postpone any payments from the Variable Portfolios if any of
the following occur:

(a)   the NYSE is closed;

(b)   trading on the NYSE is restricted;

(c)   an emergency exists such that it is not reasonably practical to dispose of
      securities in the Variable Portfolios or to determine the value of its
      assets; or

(d)   the Securities and Exchange Commission, by order, so permits for the
      protection of Owners.

Conditions in (b) and (c) will be decided by or in accordance with rules of the
Securities and Exchange Commission.

CONFORMITY WITH STATE LAWS

The provisions of this Contract will be interpreted by the laws of the state in
which the Application or confirmation thereof was signed or such other state as
is required by law. Any provision which, on the Contract Date, is in conflict
with the law of such state is amended to conform to the minimum requirements of
such law.

CHANGES IN LAW

If the laws governing this Contract or the taxation of benefits under the
Contract change, We reserve the right to amend this Contract to comply with
these changes.

ASSIGNMENT

You may assign this Contract before the Annuity Date, but We will not be bound
by an assignment unless the request for assignment is signed by You and received
by Us. Your rights and those of any other person referred to in this Contract
will be subject to the assignment. Certain assignments may be taxable. We do not
assume any responsibility for the validity or tax consequences of any
assignment. We reserve the right to not recognize assignments if it changes the
risk profile of the Owner of the Contract as determined in Our sole discretion.

CLAIMS OF CREDITORS

To the extent permitted by law, no right or proceeds payable under this Contract
will be subject to claims of creditors or legal process.

PREMIUM TAXES OR OTHER TAXES

We may deduct from Your Contract Value any premium tax or other taxes payable to
a state or other government entity, if applicable. Should We advance any amount
so due, We are not waiving any right to collect such amount at a later date. We
will deduct any withholding taxes required by applicable law.

WRITTEN NOTICE

Any notice We send to You will be sent to Your address shown in the Application
or confirmation thereof unless You request otherwise. Any written request or
notice to Us must be sent to Our Annuity Service Center, as specified on the
Contract Data Page.

PERIODIC REPORTS

At least once during each Contract Year, We will send You a statement of the
account activity of the Contract. The statement will include all transactions
which have occurred during the accounting period shown on the statement.

INCONTESTABILITY

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This Contract will be incontestable after it has been in force for a period of
two years from the Contract Date during the lifetime of any Owner who is
required to provide Us with information concerning their age, sex and identity.
Accurate statements as to any Owner's age, sex and identity are required as a
condition of issuing this Contract. The Incontestability of this Contract
applies to statements any Owner makes, except as otherwise stated in the
Misstatement of Age or Sex provision.

NONPARTICIPATING

This Contract does not share in Our surplus.

WAIVER

Our waiver of any of the terms and conditions under this Contract will not be
deemed to constitute waiver of the right to enforce strict compliance.

                             ANNUITY PAYMENT OPTIONS

During the Annuitant's life, upon written election and the return of this
Contract to Us at Our Annuity Service Center, the Contract Value may be applied
to provide one of the following options or any annuity payment option that is
mutually agreeable. After two years from the Contract Date, and before the
Annuity Date, You can choose one of the options described below. If no option
has
AS-981 (5/06)

                                       19
<PAGE>
been selected by the Annuity Date, You will automatically receive option 4
below, with 120 monthly payments guaranteed.

OPTIONS 1 & 1V - LIFE ANNUITY, LIFETIME MONTHLY PAYMENTS GUARANTEED

Payments payable to the Payee during the lifetime of the Annuitant. No further
payments are payable after the death of the Annuitant.

OPTIONS 2 & 2V - JOINT AND SURVIVOR LIFE ANNUITY

Payments payable to the Payee during the lifetime of the Annuitant and during
the lifetime of a designated second person. No further payments are payable
after the deaths of both the Annuitant and the designated second person.

OPTIONS 3 & 3V - JOINT AND SURVIVOR LIFE ANNUITY - 120 OR 240 MONTHLY PAYMENTS
GUARANTEED

Payments payable to the Payee during the lifetime of the Annuitant and during
the lifetime of a designated second person. If, at the death of the survivor,
payments have been made for less than 120 or 240 monthly periods, the remaining
guaranteed annuity payments will be continued to the Beneficiary. If, at the
death of the survivor, payments have been made for at least 120 or 240 monthly
periods, as selected at the time of annuitization, no further payments will be
made.

OPTIONS 4 & 4V - LIFE ANNUITY WITH 120 OR 240 MONTHLY PAYMENTS GUARANTEED

Payments payable to the Payee during the lifetime of the Annuitant. If, at the
death of the Annuitant, payments have been made for less than the 120 or 240
monthly periods, as selected at the time of annuitization, the remaining
guaranteed annuity payments will be continued to the Beneficiary. If, at the
death of the Annuitant, payments have been made for at least 120 or 240 monthly
periods, no further payments will be made.

OPTIONS 5 & 5V - FIXED PAYMENTS FOR A SPECIFIED PERIOD CERTAIN

Payments payable to the Payee for any specified period of time of five (5) years
or more, but not exceeding thirty (30) years, as selected at the time of
annuitization. The selection must be made for full twelve-month periods. In the
event of death of the Annuitant during the specified period of time, any
remaining annuity payments will be continued to the Beneficiary. If the
Annuitant dies after the end of the specified period of time, no further
payments will be made. If Variable Annuity Payments are elected under this
Annuity Payment Option, any remaining guaranteed Variable Annuity payments may
be redeemed for a discounted value determined by Us. Any applicable Withdrawal
Charges will be deducted from the discounted value as if Your Contract was fully
withdrawn.

AS-981 (5/06)

                                       20
<PAGE>
                       FIXED ANNUITY PAYMENT OPTIONS TABLE

( BASIS OF COMPUTATION                                                         )
(                                                                              )
( The actuarial basis for the Table of Annuity Rates is the Annuity 2000       )
( Mortality Table with a guaranteed interest rate of [1.50%], with             )
( quinquennial age setbacks. For every five years that the Contract has been   )
( in effect at the time of annuitization, the Annuitant's age will be set back )
( by one year to determine the applicable factors. The Fixed Annuity Payment   )
( Options Table does not include any applicable premium tax.                   )

            OPTIONS 1 & 4 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.

    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)

<TABLE>
<CAPTION>
                        OPTION 1                       OPTION 4                              OPTION 4
                                                     LIFE ANNUITY                          LIFE ANNUITY
    AGE OF                                   (W/120 PAYMENTS GUARANTEED)           (W/240 PAYMENTS GUARANTEED)
   ANNUITANT          LIFE ANNUITY

                    MALE      FEMALE           MALE              FEMALE              MALE               FEMALE
<S>                 <C>       <C>            <C>                 <C>               <C>                  <C>
      55            3.68       3.38            3.64               3.35               3.48                3.27
      56            3.77       3.46            3.73               3.43               3.55                3.34
      57            3.87       3.54            3.82               3.51               3.62                3.40
      58            3.98       3.63            3.92               3.60               3.69                3.47
      59            4.09       3.73            4.02               3.69               3.76                3.54
      60            4.21       3.83            4.13               3.78               3.83                3.62
      61            4.34       3.93            4.24               3.89               3.90                3.69
      62            4.47       4.05            4.36               3.99               3.97                3.77
      63            4.62       4.17            4.49               4.10               4.04                3.84
      64            4.77       4.30            4.62               4.22               4.10                3.92
      65            4.93       4.44            4.76               4.35               4.17                4.00
      66            5.11       4.58            4.90               4.48               4.24                4.07
      67            5.30       4.74            5.05               4.62               4.30                4.15
      68            5.49       4.91            5.20               4.76               4.36                4.22
      69            5.71       5.09            5.36               4.92               4.41                4.29
      70            5.93       5.29            5.53               5.08               4.47                4.36
      71            6.17       5.50            5.70               5.25               4.51                4.42
      72            6.43       5.73            5.87               5.43               4.56                4.48
      73            6.70       5.98            6.05               5.62               4.60                4.53
      74            6.99       6.24            6.23               5.81               4.63                4.58
      75            7.31       6.53            6.41               6.01               4.67                4.62
      76            7.64       6.84            6.59               6.21               4.69                4.65
      77            8.00       7.18            6.78               6.41               4.72                4.69
      78            8.38       7.55            6.96               6.62               4.74                4.71
      79            8.79       7.94            7.13               6.83               4.75                4.74
      80            9.23       8.37            7.31               7.03               4.77                4.75
      81            9.70       8.84            7.47               7.23               4.78                4.77
      82            10.20      9.34            7.63               7.42               4.79                4.78
      83            10.73      9.88            7.78               7.60               4.80                4.79
      84            11.30      10.47           7.93               7.77               4.80                4.80
      85            11.90      11.10           8.06               7.93               4.81                4.80
</TABLE>

AS-981 (5/06)

                                       21
<PAGE>
              OPTION 2 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)
                       JOINT & 100% SURVIVOR LIFE ANNUITY

<TABLE>
<CAPTION>
      AGE OF
       MALE
    ANNUITANT                                            AGE OF FEMALE ANNUITANT
    ---------                                            -----------------------

                           55            60            65            70           75           80            85
<S>                       <C>           <C>           <C>           <C>          <C>          <C>           <C>
        55                3.01          3.18          3.33          3.45         3.54         3.60          3.64
        60                3.12          3.36          3.59          3.78         3.94         4.05          4.12
        65                3.21          3.51          3.83          4.13         4.40         4.61          4.75
        70                3.27          3.63          4.03          4.46         4.89         5.26          5.53
        75                3.32          3.70          4.18          4.74         5.35         5.95          6.45
        80                3.34          3.76          4.29          4.95         5.75         6.62          7.45
        85                3.36          3.79          4.35          5.09         6.05         7.20          8.44
</TABLE>

              OPTION 3 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST)
         JOINT & 100% SURVIVOR LIFE ANNUITY (W/120 PAYMENTS GUARANTEED)

<TABLE>
<CAPTION>
      AGE OF
       MALE
    ANNUITANT                                             AGE OF FEMALE ANNUITANT
    ---------                                             -----------------------

                           55            60            65            70           75           80            85
<S>                       <C>           <C>           <C>           <C>          <C>          <C>           <C>
        55                3.01          3.18          3.33          3.45         3.53         3.59          3.62
        60                3.12          3.36          3.58          3.78         3.93         4.03          4.09
        65                3.21          3.51          3.82          4.12         4.38         4.56          4.67
        70                3.27          3.62          4.02          4.44         4.84         5.16          5.36
        75                3.31          3.70          4.16          4.70         5.26         5.76          6.11
        80                3.33          3.74          4.25          4.88         5.59         6.28          6.80
        85                3.35          3.77          4.31          4.99         5.81         6.66          7.35
</TABLE>

              OPTION 3 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST)
         JOINT & 100% SURVIVOR LIFE ANNUITY (W/240 PAYMENTS GUARANTEED)

<TABLE>
<CAPTION>
      AGE OF
       MALE
    ANNUITANT                                             AGE OF FEMALE ANNUITANT
    ---------                                             -----------------------

                           55            60            65            70           75           80            85
<S>                       <C>           <C>           <C>           <C>          <C>          <C>           <C>
        55                3.00          3.16          3.30          3.39         3.45         3.47          3.48
        60                3.11          3.33          3.53          3.68         3.77         3.81          3.82
        65                3.18          3.46          3.72          3.94         4.08         4.15          4.17
        70                3.23          3.54          3.86          4.14         4.33         4.43          4.46
        75                3.26          3.59          3.94          4.27         4.50         4.62          4.66
        80                3.27          3.61          3.98          4.33         4.58         4.71          4.76
        85                3.27          3.62          3.99          4.35         4.61         4.75          4.80
</TABLE>

AS-981 (5/06)

                                       22
<PAGE>
              OPTION 5 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
                       FIXED PAYMENT FOR SPECIFIED PERIOD

<TABLE>
<CAPTION>
      NUMBER            MONTHLY        NUMBER        MONTHLY       NUMBER       MONTHLY      NUMBER       MONTHLY
     OF YEARS           PAYMENT       OF YEARS       PAYMENT      OF YEARS      PAYMENT     OF YEARS      PAYMENT
     --------           -------       --------       -------      --------      -------     --------      -------
<S>                     <C>           <C>            <C>          <C>           <C>         <C>           <C>
                                         10           8.96           17          5.55          24           4.13
                                         11           8.21           18          5.27          25           3.99
        5                17.28           12           7.58           19          5.03          26           3.86
        6                14.51           13           7.05           20          4.81          27           3.75
        7                12.53           14           6.59           21          4.62          28           3.64
        8                11.04           15           6.20           22          4.44          29           3.54
        9                 9.89           16           5.85           23          4.28          30           3.44
</TABLE>

AS-981 (5/06)

                                       23
<PAGE>
                     VARIABLE ANNUITY PAYMENT OPTIONS TABLE

( BASIS OF COMPUTATION                                                         )
(                                                                              )
( The actuarial basis for the Table of Annuity Rates is the Annuity 2000       )
( Mortality Table with an effective annual Assumed Investment Rate of 3.50%,   )
( with quinquennial age setbacks. For every five years that the Contract has   )
( been in effect at the time of annuitization, the Annuitant's age will be set )
( back by one year to determine the applicable factors. The Variable Annuity   )
( Payment Options Table does not include any applicable premium tax.           )

            OPTIONS 1V& 4V - TABLE OF MONTHLY INSTALLMENTS PER $1,000

    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)

<TABLE>
<CAPTION>
                      OPTION 1V                      OPTION 4V                              OPTION 4V
                                                   LIFE ANNUITY                           LIFE ANNUITY
    AGE OF                                        (W/120 PAYMENTS                        (W/240 PAYMENTS
  ANNUITANT          LIFE ANNUITY                   GUARANTEED)                            GUARANTEED)

                  MALE       FEMALE          MALE               FEMALE              MALE               FEMALE
<S>               <C>        <C>             <C>                <C>                 <C>                <C>
      55          4.80        4.48           4.74                4.45               4.54                4.34
      56          4.89        4.56           4.82                4.52               4.60                4.40
      57          4.99        4.64           4.91                4.60               4.67                4.46
      58          5.09        4.73           5.01                4.68               4.73                4.53
      59          5.21        4.82           5.11                4.77               4.79                4.59
      60          5.33        4.92           5.21                4.86               4.86                4.66
      61          5.45        5.03           5.32                4.96               4.92                4.73
      62          5.59        5.14           5.44                5.06               4.98                4.80
      63          5.73        5.26           5.56                5.17               5.05                4.87
      64          5.89        5.39           5.69                5.29               5.11                4.94
      65          6.06        5.53           5.83                5.41               5.17                5.01
      66          6.24        5.68           5.97                5.54               5.23                5.08
      67          6.43        5.84           6.11                5.67               5.29                5.14
      68          6.63        6.01           6.26                5.82               5.34                5.21
      69          6.84        6.19           6.42                5.97               5.39                5.28
      70          7.07        6.39           6.57                6.12               5.44                5.34
      71          7.32        6.60           6.74                6.29               5.48                5.39
      72          7.58        6.84           6.91                6.46               5.52                5.45
      73          7.86        7.09           7.08                6.64               5.56                5.49
      74          8.16        7.36           7.25                6.83               5.59                5.54
      75          8.47        7.65           7.42                7.02               5.62                5.57
      76          8.82        7.97           7.59                7.22               5.64                5.61
      77          9.18        8.31           7.77                7.41               5.67                5.64
      78          9.57        8.69           7.94                7.61               5.68                5.66
      79          9.99        9.09           8.11                7.81               5.70                5.68
      80          10.43       9.53           8.27                8.00               5.71                5.70
      81          10.91      10.00           8.43                8.19               5.72                5.71
      82          11.42      10.51           8.58                8.38               5.73                5.72
      83          11.96      11.07           8.72                8.55               5.74                5.73
      84          12.53      11.67           8.85                8.71               5.74                5.74
      85          13.15      12.31           8.98                8.86               5.75                5.74
</TABLE>

AS-981 (5/06)

                                       24
<PAGE>
              OPTION 2V - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
   (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)
                       JOINT & 100% SURVIVOR LIFE ANNUITY

<TABLE>
<CAPTION>
    AGE OF
     MALE
   ANNUITANT                                           AGE OF FEMALE ANNUITANT
   ---------                                           -----------------------
                       55             60             65           70            75            80            85
<S>                   <C>            <C>            <C>          <C>           <C>           <C>           <C>
      55              4.09           4.25           4.40         4.52          4.62          4.69          4.74
      60              4.20           4.42           4.64         4.84          5.00          5.13          5.21
      65              4.29           4.56           4.87         5.17          5.45          5.67          5.83
      70              4.35           4.68           5.07         5.49          5.92          6.30          6.60
      75              4.40           4.77           5.23         5.78          6.38          6.99          7.50
      80              4.43           4.83           5.34         6.00          6.79          7.66          8.50
      85              4.45           4.87           5.42         6.15          7.10          8.25          9.49
</TABLE>

              OPTION 3V - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST)
        JOINT AND 100% SURVIVOR LIFE ANNUITY (W/120 PAYMENTS GUARANTEED)

<TABLE>
<CAPTION>
    AGE OF
     MALE
   ANNUITANT                                            AGE OF FEMALE ANNUITANT
   ---------                                            -----------------------
                       55             60             65           70            75            80            85
<S>                   <C>            <C>            <C>          <C>           <C>           <C>           <C>
      55              4.08           4.25           4.40         4.52          4.61          4.68          4.71
      60              4.19           4.41           4.63         4.83          4.99          5.10          5.16
      65              4.28           4.56           4.86         5.15          5.41          5.61          5.73
      70              4.35           4.68           5.05         5.46          5.86          6.18          6.40
      75              4.39           4.76           5.20         5.72          6.27          6.76          7.11
      80              4.42           4.81           5.30         5.91          6.60          7.26          7.77
      85              4.44           4.84           5.36         6.03          6.82          7.63          8.29
</TABLE>

              OPTION 3V - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
    (MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST)
        JOINT AND 100% SURVIVOR LIFE ANNUITY (W/240 PAYMENTS GUARANTEED)

<TABLE>
<CAPTION>
    AGE OF
     MALE
   ANNUITANT                                            AGE OF FEMALE ANNUITANT
   ---------                                            -----------------------
                       55             60             65           70            75            80            85
<S>                   <C>            <C>            <C>          <C>           <C>           <C>           <C>
      55              4.07           4.22           4.36         4.45          4.51          4.53          4.54
      60              4.17           4.38           4.56         4.71          4.80          4.84          4.85
      65              4.25           4.50           4.74         4.95          5.08          5.14          5.17
      70              4.30           4.58           4.88         5.14          5.31          5.40          5.43
      75              4.32           4.63           4.96         5.25          5.46          5.57          5.61
      80              4.34           4.65           4.99         5.31          5.54          5.66          5.70
      85              4.34           4.66           5.00         5.33          5.57          5.69          5.74
</TABLE>

AS-981 (5/06)

                                       25
<PAGE>
              OPTION 5V - TABLE OF MONTHLY INSTALLMENTS PER $1,000.

                         PAYMENTS FOR A SPECIFIED PERIOD

<TABLE>
<CAPTION>
    NUMBER           MONTHLY        NUMBER        MONTHLY       NUMBER        MONTHLY       NUMBER        MONTHLY
   OF YEARS          PAYMENT       OF YEARS       PAYMENT      OF YEARS       PAYMENT      OF YEARS       PAYMENT
   --------          -------       --------       -------      --------       -------      --------       -------
<S>                  <C>           <C>            <C>          <C>            <C>          <C>            <C>
                                      10            8.96          17           5.55           24           4.13
                                      11            8.21          18           5.27           25           3.99
       5              17.28           12            7.58          19           5.03           26           3.86
       6              14.51           13            7.05          20           4.81           27           3.75
       7              12.53           14            6.59          21           4.62           28           3.64
       8              11.04           15            6.20          22           4.44           29           3.54
       9              9.89            16            5.85          23           4.28           30           3.44
</TABLE>

AS-981 (5/06)

                                       26
<PAGE>
                      AIG SUNAMERICA LIFE ASSURANCE COMPANY
                     A STOCK COMPANY LOS ANGELES, CALIFORNIA

                              INDIVIDUAL FIXED AND
                            VARIABLE ANNUITY CONTRACT

                                Nonparticipating

AS-981 (5/06)

                                       27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]