Document:

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                                                                    EXHIBIT 4.11

                         PACIFICARE HEALTH SYSTEMS, INC.

                                       and

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

                                  AS DEPOSITARY

                                       and

                         HOLDERS OF DEPOSITARY RECEIPTS

                     =======================================

                                DEPOSIT AGREEMENT

                     =======================================

                                   DATED AS OF

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

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                                TABLE OF CONTENTS

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ARTICLE I   DEFINITIONS........................................................................................     1

ARTICLE II  FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND
            REDEMPTION AND REPURCHASE OF RECEIPTS..............................................................     2

      Section 2.1.   Form and Transfer of Receipts.............................................................     2

      Section 2.2.   Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof...................     4

      Section 2.3.   Redemption and Repurchase of Stock........................................................     4

      Section 2.4.   Register of Transfer of Receipts..........................................................     6

      Section 2.5.   Combination and Split-ups of Receipts.....................................................     6

      Section 2.6.   Surrender of Receipts and Withdrawal of Stock.............................................     7

      Section 2.7.   Limitations on Execution and Delivery, Transfer, Split-up, Combination and
                     Surrender of Receipts and Withdrawal or Deposit of Stock..................................     7

      Section 2.8.   Lost Receipts, etc........................................................................     8

      Section 2.9.   Cancellation and Destruction of Surrendered Receipts......................................     8

      Section 2.10.  Conversion................................................................................     8

ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY.........................................    10

      Section 3.1.   Filing Proofs, Certificates and Other Information.........................................    10

      Section 3.2.   Payment of Taxes or Other Governmental Charges............................................    10

      Section 3.3.   Withholding...............................................................................    10

      Section 3.4.   Representations and Warranties as to Stock................................................    11

ARTICLE IV  THE STOCK, NOTICES.................................................................................    11

      Section 4.1.   Cash Distributions........................................................................    11

      Section 4.2.   Distributions Other Than Cash.............................................................    11

      Section 4.3.   Subscription Rights, Preferences or Privileges............................................    12

      Section 4.4.   Notice of Dividends, Fixing of Record Date for Holders of Receipts........................    12

      Section 4.5.   Voting Rights.............................................................................    13

      Section 4.6.   Changes Affecting Stock and Reclassifications, Recapitalizations, etc.....................    13

      Section 4.7.   Reports...................................................................................    13
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                                       i.

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                                TABLE OF CONTENTS
                                   (CONTINUED)

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      Section 4.8.   Lists of Receipt Holders..................................................................    13

ARTICLE V   THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY.............................    14

      Section 5.1.   Maintenance of Offices, Agencies, Transfer Books by the Depositary; the Registrar.........    14

      Section 5.2.   Prevention or Delay in Performance by the Depositary, the Depositary's
                     Agents, the Registrar or the Company......................................................    14

      Section 5.3.   Obligations of the Depositary, the Depositary's Agents, the Registrar and the Company.....    15

      Section 5.4.   Resignation and Removal of the Depositary, Appointment of Successor Depositary............    16

      Section 5.5.   Corporate Notices and Reports.............................................................    17

      Section 5.6.   Deposit of Stock by the Company...........................................................    17

      Section 5.7.   Indemnification by the Company............................................................    17

      Section 5.8.   Fees, Charges and Expenses................................................................    17

ARTICLE VI  AMENDMENT AND TERMINATION..........................................................................    18

      Section 6.1.   Amendment.................................................................................    18

      Section 6.2.   Termination...............................................................................    18

ARTICLE VII MISCELLANEOUS......................................................................................    18

      Section 7.1.   Counterparts..............................................................................    18

      Section 7.2.   Exclusive Benefits of Parties.............................................................    19

      Section 7.3.   Invalidity of Provisions..................................................................    19

      Section 7.4.   Notices...................................................................................    19

      Section 7.5.   Depositary's Agents.......................................................................    20

      Section 7.6.   Holders of Receipts Are Parties...........................................................    20

      Section 7.7.   Governing Law.............................................................................    20

      Section 7.8.   Headings..................................................................................    20
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                                      ii.

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                                DEPOSIT AGREEMENT

         DEPOSIT AGREEMENT, dated as of _______________ among PACIFICARE HEALTH
SYSTEMS, INC., a Delaware corporation, __________________, a __________________
existing under the laws of the State of __________________, as Depositary, and
all holders from time to time of Receipts issued hereunder.

                              W I T N E S S E T H:

         WHEREAS, the Company desires to provide as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of the Stock with the
Depositary, as agent for the holders of the Receipts evidencing Depositary
Shares representing an interest in the Stock so deposited, for the purposes set
forth in this Deposit Agreement and for the issuance hereunder of such Receipts;
and

         WHEREAS, the Receipts are to be substantially in the form annexed as
Exhibit A to this Deposit Agreement, with appropriate insertions, modifications
and omissions to reflect the terms of any Certificate of Designation and
otherwise, as hereinafter provided in this Deposit Agreement.

         NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:

                                    ARTICLE I

                                   DEFINITIONS

         The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:

         "CERTIFICATE OF DESIGNATION" shall mean the Certificate of Designation
establishing and setting forth the rights, preferences, privileges, limitations
and restrictions of the Stock, as filed with the Secretary of State of the State
of Delaware.

         "CERTIFICATE OF INCORPORATION" shall mean the Amended and Restated
Certificate of Incorporation, as amended or as amended and restated from time to
time, of the Company.

         "COMPANY" shall mean PacifiCare Health Systems, Inc., a Delaware
corporation, and its successors.

         "CORPORATE OFFICE" shall mean the office of the Depositary in
_________, at which at any particular time its business in respect of matters
governed by this Deposit Agreement shall be administered, which at the date of
this Deposit Agreement is located at ____________.

                                       1.
<PAGE>

         "DEPOSIT AGREEMENT" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time to reflect the terms of any
Certificate of Designation or otherwise in accordance with the provisions
hereof.

         "DEPOSITARY" shall mean ______________, as Depositary hereunder, and
any successor as Depositary hereunder.

         "DEPOSITARY SHARE" shall mean the rights evidenced by the Receipts
executed and delivered hereunder, including the interests in Stock granted to
holders of Receipts pursuant to the terms and conditions of the Deposit
Agreement. Each Depositary Share shall represent an interest in ____ of one
share of Stock deposited with the Depositary hereunder and the same
proportionate interest in any and all other property received by the Depositary
in respect of such share of Stock and held under this Deposit Agreement. Subject
to the terms of this Deposit Agreement, each record holder of a Receipt
evidencing a Depositary Share or Shares is entitled, proportionately, to all the
rights, preferences and privileges, and subject to all the qualifications and
restrictions, of the Stock represented by such Depositary Share or Shares,
including any dividend, voting, conversion, redemption, liquidation and sinking
fund rights contained in the Certificate of Designation, and to the benefits of
all obligations and duties of the Company in respect of the Stock under the
Certificate of Designation and the Certificate of Incorporation.

         "DEPOSITARY'S AGENT" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.5.

         "RECEIPT" shall mean a Depositary Receipt executed and delivered
hereunder, in substantially the form of Exhibit A hereto, evidencing a
Depositary Share or Shares, as the same may be amended from time to time to
reflect the terms of any Certificate of Designation or otherwise in accordance
with the provisions hereof.

         "RECORD HOLDER" or "HOLDER" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books maintained by or on
behalf of the Depositary for such purpose.

         "REGISTRAR" shall mean any company appointed to register ownership and
transfers of Receipts as herein provided.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "STOCK" shall mean shares of the Company's ______________ Preferred
Stock, Series ______________, par value $0.01 per share.

                                   ARTICLE II

           FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY,
          TRANSFER, SURRENDER AND REDEMPTION AND REPURCHASE OF RECEIPTS

         SECTION 2.1. FORM AND TRANSFER OF RECEIPTS. Receipts shall be engraved
or printed or lithographed unless they are evidenced by a global receipt held by
a depositary for a clearing system and shall be substantially in the form set
forth in Exhibit A annexed to this Deposit

                                       2.
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Agreement, with appropriate insertions, modifications and omissions to reflect
the terms of any Certificate of Designation or otherwise, as hereinafter
provided. Receipts shall be executed by the Depositary by the manual signature
of a duly authorized officer of the Depositary; provided, however, that such
signature may be a facsimile if a Registrar (other than the Depositary) shall
have countersigned the Receipts by manual signature of a duly authorized officer
of the Registrar. Pending the preparation of definitive Receipts, the
Depositary, upon the written order of the Company delivered in accordance with
Section 2.2, shall execute and deliver temporary Receipts which shall be
printed, lithographed, typewritten, or otherwise reproduced substantially of the
tenor of the definitive Receipts in lieu of which they are issued and with
appropriate insertions, modifications, omissions, substitutions and other
variations as the persons executing such Receipts may determine are necessary
for such temporary Receipts, as evidenced by their execution of such temporary
Receipts. If temporary Receipts are issued, the Company and the Depositary will
cause definitive Receipts to be prepared without unreasonable delay; provided
that if such temporary Receipts are global Receipts held by a depositary for a
clearing system, definitive Receipts need not be prepared until the Receipts
cease to be so held. After the preparation of definitive Receipts, the temporary
Receipts shall be exchangeable for definitive Receipts upon surrender of the
temporary Receipts at the Corporate Office or such other office as the
Depositary may designate, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Receipts, the Depositary shall execute
and deliver in exchange therefor definitive Receipts representing the same
number of Depositary Shares as represented by the surrendered temporary Receipt
or Receipts. Such exchange shall be made at the Company's expense and without
any charge therefor. Until so exchanged, the temporary Receipts shall in all
respects be entitled to the same benefits under this Deposit Agreement, and with
respect to the Stock, as definitive Receipts.

         No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose unless it shall have been
executed as provided in the preceding paragraph. The Depositary shall record on
its books each Receipt executed as provided above and delivered as hereinafter
provided. Receipts bearing the facsimile signature of anyone who was at any time
a duly authorized officer of the Depositary shall bind the Depositary,
notwithstanding that such officer has ceased to hold such office prior to the
delivery of such Receipts.

         Receipts may be issued in denominations of any number of whole
Depositary Shares. All Receipts shall be dated the date of their execution.

         Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Stock or the Depositary Shares may be listed
or to conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Receipts are subject by
reason of the date of issuance of the Stock or otherwise.

         Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect as
in the case of investment securities in general;

                                       3.
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provided, however, that the Depositary may, notwithstanding any notice to the
contrary, treat the record holder thereof at such time as the absolute owner
thereof for the purpose of determining the person entitled to distributions of
dividends or other distributions or to any notice provided for in this Deposit
Agreement and for all other purposes.

         SECTION 2.2. DEPOSIT OF STOCK; EXECUTION AND DELIVERY OF RECEIPTS IN
RESPECT THEREOF. Subject to the terms and conditions of this Deposit Agreement,
the Company or any holder of Stock may deposit such Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a properly executed instrument of transfer in form satisfactory
to the Depositary, together with (i) all such certifications as may be required
by the Depositary in accordance with the provisions of this Deposit Agreement
and (ii) a written order of the Company or such holder, as the case may be,
directing the Depositary to execute and deliver to or upon the written order of
the person or persons stated in such order a Receipt or Receipts for the number
of Depositary Shares representing such deposited Stock.

         Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary shall, as soon as transfer and registration can be
accomplished, present such certificate or certificates to the registrar and
transfer agent of the Stock for transfer and registration in the name of the
Depositary or its nominee of the Stock being deposited. Deposited Stock shall be
held by the Depositary in an account to be established by the Depositary at the
Corporate Office.

         Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.2, a Receipt or Receipts for the number of
whole Depositary Shares representing the Stock so deposited and registered in
such name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipt or Receipts at the Corporate Office,
except that, at the request, risk and expense of any person requesting such
delivery and for such person's account or, upon the order of such person, any
other person's account, such delivery may be made at such other place as may be
designated by such person. In each case, delivery will be made only upon payment
to the Depositary of all taxes and other governmental charges and any fees
payable in connection with such deposit and the transfer of the deposited Stock.

         The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.

         SECTION 2.3. REDEMPTION AND REPURCHASE OF STOCK. Whenever the Company
shall redeem shares of Stock in accordance with a Certificate of Designation, it
shall (unless otherwise agreed in writing with the Depositary) give the
Depositary in its capacity as Depositary not less than 3 business days' prior
notice of the proposed date of the mailing of a notice of redemption of Stock
and the simultaneous redemption of the Depositary Shares representing the Stock
to be redeemed and of the number of such shares of Stock held by the Depositary
to be redeemed.

                                       4.
<PAGE>

Unless the Certificate of Designation for a specific series of Stock provides
for a different notice period with respect to that Stock in the event of its
redemption, the Depositary shall, as directed by the Company in writing, mail,
first class postage prepaid, notice of the redemption of Stock and the proposed
simultaneous redemption of the Depositary Shares representing the Stock to be
redeemed not less than 30 and not more than 60 days prior to the date fixed for
redemption of such Stock and Depositary Shares, to the record holders of the
Receipts evidencing the Depositary Shares to be so redeemed at the addresses of
such holders as the same appear on the records of the Depositary or any
Depositary's Agent or Registrar. Notwithstanding the foregoing, neither failure
to mail or publish any such notice to one or more such holders nor any defect in
any notice shall affect the sufficiency of the proceedings for redemption. The
Company shall provide the Depositary with such notice, and each such notice
shall state the method for determining the amount payable per Depositary Share,
the redemption date, and the number of Depositary Shares to be redeemed, and
such notice shall call upon each holder of Depositary Shares to surrender, on
the redemption date and at the place or places designated by the Company, the
Receipts evidencing Depositary Shares to be redeemed. On the date of any such
redemption the Depositary shall surrender the certificate or certificates held
by the Depositary evidencing the number of shares of Stock to be redeemed in the
manner specified in the notice of redemption of Stock provided by the Company
pursuant to the applicable Certificate of Designation. The Depositary shall,
thereafter, redeem the number of Depositary Shares representing such redeemed
Stock upon the surrender of Receipts evidencing such Depositary Shares in the
manner provided in the notice sent to record holders of Receipts.

         Notice having been mailed by the Depositary as aforesaid, from and
after the redemption date (unless the Company shall have failed to redeem the
shares of Stock to be redeemed by it upon the surrender of the certificate or
certificates therefor by the Depositary as described in the preceding
paragraph), the Depositary Shares called for redemption shall be deemed no
longer to be outstanding and all rights of the holders of Receipts evidencing
such Depositary Shares (except the right to receive the cash, securities or
other property payable upon redemption upon surrender of such Receipts) shall,
to the extent of such Depositary Shares, cease and terminate. The foregoing
shall be subject further to the terms and conditions of the applicable
Certificate of Designation.

         If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or proportionately, as
may be determined by the Depositary. If fewer than all of the Depositary Shares
evidenced by a Receipt are called for redemption, the Depositary will deliver to
the holder of such Receipt upon its surrender to the Depositary, cash,
securities or other property payable upon redemption in respect of the
Depositary Shares called for redemption and a new Receipt evidencing the
Depositary Shares evidenced by such prior Receipt and not called for redemption.

         The Depositary shall not be required to transfer or exchange for
another Receipt any Receipt evidencing Depositary Shares called or being called
for redemption, in whole or in part except as provided in the immediately
preceding paragraph of this Section 2.3.

         Whenever the Company shall be required to make an offer to repurchase
Depositary Shares representing Stock in accordance with a Certificate of
Designation, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as

                                       5.
<PAGE>

Depositary not less than 3 business days' prior notice of the required date of
the mailing of a notice of the repurchase offer. The Depositary shall, as
directed by the Company in writing, mail, first class postage prepaid, notice of
the relevant terms of the repurchase offer, as provided by the Company, to the
record holders of the Receipts at the addresses of such holders as the same
appear on the records of the Depositary or any Depositary's Agent or Registrar,
including: (i) that such notice is being given pursuant to a repurchase offer,
(ii) the number of Depositary Shares and Stock for which the offer is being
made, (iii) the method for determining the amount payable per Depositary Share,
(iv) the last date, which, unless the Certificate of Designation for a specific
series of Stock provides for a different period with respect to that Stock in
the event that the Company is required to make an offer to repurchase it, shall
not be less than 30 nor more than 60 days after the date of such notice, by
which a holder must elect to accept the repurchase offer, (v) the procedures
that such holder must follow to exercise its rights, and (vi) the procedures for
withdrawing an election.

         The Depositary shall, thereafter, receive from each holder electing to
have Depositary Shares repurchased pursuant to the repurchase offer in
accordance with the instructions in the notice, the holder's Receipts, with an
appropriate form duly completed prior to the repurchase date. Holders will be
entitled to withdraw an election by a written notice of withdrawal delivered to
the Depositary prior to the close of business on the repurchase date. The notice
of withdrawal shall state the number of Depositary Shares and the Receipt
numbers to which the notice of withdrawal relates and the number of Depositary
Shares and Receipt numbers, if any, which remain subject to election. In case
the aggregate number of Depositary Shares offered for repurchase by the holders
exceeds the amount of Depositary Shares which the Company has offered to
repurchase pursuant to the repurchase offer, the Depositary Shares to be
repurchased shall be selected by the Depositary by lot or proportionately, as
may be determined by the Depositary. The Depositary shall, at the direction of
the Company, cause payment to be mailed or delivered to each tendering holder as
promptly as reasonably practicable after the repurchase date, in the amount of
the repurchase price for the Depositary Shares tendered, and any unpurchased
Depositary Shares to be returned to the holder thereof. The foregoing is subject
further to the terms and conditions of the applicable Certificate of
Designation.

         SECTION 2.4. REGISTER OF TRANSFER OF RECEIPTS. Subject to the terms and
conditions of this Deposit Agreement, the Depositary shall register on its books
from time to time transfers of Receipts upon any surrender thereof at the
Corporate Office, or such other office as the Depositary may designate for such
purpose, by the record holder in person or by a duly authorized attorney,
properly endorsed or accompanied by a properly executed instrument of transfer,
together with evidence of the payment of any transfer taxes as may be required
by law. Upon such surrender, the Depositary shall execute a new Receipt or
Receipts and deliver the same to or upon the order of the person entitled
thereto evidencing the same aggregate number of Depositary Shares evidenced by
the Receipt or Receipts surrendered.

         SECTION 2.5. COMBINATION AND SPLIT-UPS OF RECEIPTS. Upon surrender of a
Receipt or Receipts at the Corporate Office, or such other office as the
Depositary may designate for the purpose of effecting a split-up or combination
of Receipts, subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested evidencing the same aggregate number of Depositary

                                       6.
<PAGE>

Shares evidenced by the Receipt or Receipts surrendered; provided, however, that
the Depositary shall not issue any Receipt evidencing a fractional Depositary
Share.

         SECTION 2.6. SURRENDER OF RECEIPTS AND WITHDRAWAL OF STOCK. Any holder
of a Receipt, including the Company, shall have the right, upon payment of any
amount due to the Depositary with respect to the Receipt, to withdraw any or all
of the Stock (but only in whole shares of Stock) represented by the Depositary
Shares and all money and other property, if any, represented by such Depositary
Shares by surrendering the Receipt or Receipts evidencing such Depositary Shares
at the Corporate Office, or at such other office as the Depositary may designate
for such withdrawals (and cancellation of the surrendered Receipts as provided
in Section 2.9). After such surrender, without unreasonable delay, the
Depositary shall deliver to the holder the whole number of shares of Stock and
all such money and other property, if any, represented by the Depositary Shares
evidenced by the Receipt or Receipts so surrendered for withdrawal. If the
Receipt or Receipts delivered by the holder to the Depositary in connection with
such withdrawal shall evidence a number of Depositary Shares in excess of the
number of whole Depositary Shares representing the whole number of shares of
Stock to be withdrawn, the Depositary shall at the same time, in addition to
such whole number of shares of Stock and such money and other property, if any,
to be withdrawn, deliver to the holder, or (subject to Section 2.4) upon its
order, a new Receipt or Receipts evidencing such excess number of whole
Depositary Shares.

         Delivery of the Stock and such money and other property being withdrawn
may be made by the delivery of such certificates, documents of title and other
instruments as the Depositary may deem appropriate, which, if required by the
Depositary, shall be properly endorsed or accompanied by proper instruments of
transfer.

         The Depositary shall deliver the Stock and the money and other
property, if any, represented by the Depositary Shares evidenced by Receipts
surrendered for withdrawal, without unreasonable delay, at the office at which
such Receipts were surrendered, except that, at the request, risk and expense of
the Company such delivery may be made, without unreasonable delay, at such other
place as may be designated by the Company.

         For purposes of determining the number of Depositary Shares outstanding
on any dividend payment date, the Receipts representing Depositary Shares
acquired by the Company on or prior to such dividend payment date and not
theretofore delivered to the Depositary for withdrawal and cancellation shall be
deemed to be outstanding.

         SECTION 2.7. LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SPLIT-UP,
COMBINATION AND SURRENDER OF RECEIPTS AND WITHDRAWAL OR DEPOSIT OF STOCK. As a
condition precedent to the execution and delivery, registration of transfer,
split-up, combination, or surrender of any Receipt, the delivery of any
distribution thereon or withdrawal or deposit of Stock, or the exercise of any
conversion right referred to in Section 2.10, the Depositary, any of the
Depositary's Agents, the Registrar or the Company may require any or all of the
following: (i) payment to it of a sum sufficient for the payment (or, in the
event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge or fee with respect
thereto (including any such tax or charge or fee with respect to the Stock being
deposited or the Stock being withdrawn or with respect to property of

                                       7.
<PAGE>

the Company being issued upon redemption or conversion); (ii) production of
proof satisfactory to it as to the identity and genuineness of any signature;
and (iii) compliance with such reasonable regulations, if any, as the Depositary
or the Company may establish not inconsistent with the provisions of this
Deposit Agreement.

         The deposit of Stock may be refused, or the registration of transfer,
split-up, combination or surrender of outstanding Receipts and the withdrawal of
deposited Stock or the exercise of any conversion right referred to in Section
2.10 may be suspended (i) during any period when the register of stockholders of
the Company is closed, (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of this Deposit
Agreement, or (iii) with the approval of the Company, for any other reason.
Without limitation of the foregoing, the Depositary shall not knowingly accept
for deposit under this Deposit Agreement any shares of Stock that are required
to be registered under the Securities Act unless a registration statement under
the Securities Act is in effect as to such shares of Stock.

         SECTION 2.8. LOST RECEIPTS, ETC. In case any Receipt shall be mutilated
or destroyed or lost or stolen, the Depositary shall execute and deliver a
Receipt of like form and tenor in exchange and substitution for such mutilated
Receipt or in lieu of and in substitution for such destroyed, lost or stolen
Receipt unless the Depositary has notice that such Receipt has been acquired by
a bona fide purchaser; provided, however, that the holder thereof provides the
Depositary with (i) evidence satisfactory to the Depositary of such destruction,
loss or theft of such Receipt, of the authenticity thereof and of his ownership
thereof, (ii) reasonable indemnification satisfactory to the Depositary or the
payment of any charges incurred by the Depositary in obtaining insurance in lieu
of such indemnification and (iii) payment of any expense (including fees,
charges and expenses of the Depositary) in connection with such execution and
delivery.

         SECTION 2.9. CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so canceled.

         SECTION 2.10. CONVERSION. In the event that the Stock, in accordance
with its Certificate of Designation, is convertible into the Company's common
stock or other securities, subject to the terms and conditions of this Deposit
Agreement, a holder of a Receipt or Receipts may surrender such Receipt or
Receipts at the Corporate Office or at such other office or to a Depositary's
Agent that the Depositary may designate for such purpose, together with a notice
of conversion duly completed and executed, thereby directing the Depositary or
such Depositary's Agent to instruct the Company to cause the conversion of the
number of shares of Stock specified in such notice of conversion into shares of
the Company's common stock or other securities at the rate specified in the
applicable Certificate of Designation, and an assignment of such Receipt or
Receipts to the Company or in blank, duly completed and executed, along with any
other documents or instruments and any amounts required by the applicable
Certificate of Designation.

                                       8.
<PAGE>

         Upon receipt by the Depositary or a Depositary's Agent of a Receipt or
Receipts, together with a notice of conversion, duly completed and executed,
directing the Depositary or such Depositary's Agent to instruct the Company to
cause the conversion of a specified number of shares of Stock at the rate
specified in the applicable Certificate of Designation, and an assignment of
such Receipt or Receipts to the Company or in blank, duly completed and
executed, along with any other documents or instruments or amounts referred to
in the preceding paragraph, the Depositary or such Depositary's Agent shall
instruct the Company, subject to any adjustment provided for in the applicable
Certificate of Designation, (i) to cause the conversion at the rate specified in
the applicable Certificate of Designation of the number of shares of Stock
represented by the Depositary Shares evidenced by the Receipt or Receipts so
surrendered for conversion as specified in the written notice to the Depositary
or such Depositary's Agent and (ii) to cause the delivery to the holder of such
Receipt or Receipts of (a) a certificate or certificates evidencing the number
of whole shares of the Company's common stock or other securities into which
such Stock has been converted, and (b) the amount of cash or other property, if
any, to which such holder is entitled in lieu of fractional shares of, or
fractional interests in, the Company's common stock or other securities
otherwise deliverable by the Company upon such conversion, calculated in
accordance with the applicable Certificate of Designation. The Company shall as
promptly as practicable after receipt thereof cause the delivery of the
certificate or certificates and cash or other property, if any, referred to in
clauses (a) and (b) above, and such conversion shall be deemed to have been
effected immediately prior to the close of business on the date of such receipt
and shall occur at the rate specified in the Certificate of Designation in
effect at such time and on such date. Upon such conversion, the Depositary or
such Depositary's Agent (i) shall deliver to the holder a Receipt evidencing the
number of Depositary Shares evidenced by the surrendered Receipt or Receipts in
excess of the number of Depositary Shares evidenced by such Receipt or Receipts
that have been so converted, (ii) shall cancel the Receipts surrendered for
conversion and (iii) shall deliver to the Company for cancellation the number of
shares of Stock evidenced by the Receipts so surrendered and so converted. Upon
the delivery of the shares of Stock to be cancelled due to such conversion by
the Depositary or such Depositary's Agent to the Company, the Company shall
deliver to the Depositary or such Depositary's Agent, as applicable, a
certificate or certificates evidencing the number of shares of Stock, if any,
that equals the excess of the number of shares evidenced by the surrendered
certificate over the number of shares evidenced by that certificate that have
been so converted. Depositary Shares converted in connection with conversion of
the Stock represented thereby shall only be converted in whole, and not in part.

         Upon the conversion of any Stock for which a notice of conversion has
been provided to the Depositary or a Depositary's Agent by the holder of the
Receipt or Receipts representing such Stock, the Depositary Shares evidenced by
such Receipt or Receipts shall be deemed no longer outstanding, all rights of
the holder of the Receipt or Receipts evidencing such Depositary Shares (except
the right to receive (i) the Company's common stock or other securities to which
such holder is entitled upon conversion in accordance with the applicable
Certificate of Designation, (ii) any cash or other property payable in
accordance with the applicable Certificate of Designation with respect to any
fractional shares or other fractional interests in the Company's common stock or
other securities otherwise deliverable by the Company upon conversion, (iii) any
Receipts evidencing Depositary Shares representing Stock which was not so
converted and (iv) any other securities, property or cash to which such holder
is entitled under this Deposit

                                       9.
<PAGE>

Agreement) shall cease and terminate, and the Receipt or Receipts evidencing
such Depositary Shares shall be cancelled.

         No fractional shares or other fractional interests in the Company's
common stock or other securities shall be deliverable by the Company upon
conversion of the Stock represented by the Depositary Shares.

                                  ARTICLE III

           CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY

         SECTION 3.1. FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any
person presenting Stock for deposit or any holder of a Receipt may be required
from time to time to file such proof of residence or other information, to
execute such certificates and to make such representations and warranties as the
Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of any Receipt, the
registration of transfer or redemption of any Receipt, the withdrawal of the
Stock represented by the Depositary Shares evidenced by any Receipt, the
distribution of any dividend or other distribution or the exercise of any
conversion right referred to in Section 2.10, or refuse to accept Receipts that
are delivered for surrender, until such proof or other information is filed,
such certificates are executed or such representations and warranties are made.

         SECTION 3.2. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. If any tax
or other governmental charge or fee shall become payable by or on behalf of the
Depositary with respect to (i) any Receipt, (ii) the Depositary Shares evidenced
by such Receipt, (iii) the Stock (or fractional interest therein) or other
property represented by such Depositary Shares, or (iv) any transaction referred
to in Section 4.6, such tax (including transfer, issuance or acquisition taxes,
if any) or governmental charge or fee shall be payable by the holder of such
Receipt, who shall pay the amount thereof to the Depositary. Until such payment
is made, registration or transfer of any Receipt or any split-up or combination
thereof or any withdrawal of the Stock or money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt or Receipts
delivered for surrender or the exercise of any conversion right referred to in
Section 2.10 may be refused, any dividend or other distribution may be withheld
and any part or all of the Stock or other property represented by the Depositary
Shares evidenced by such Receipt may be sold for the account of the holder
thereof (after attempting by reasonable means to notify such holder prior to
such sale). Any dividend or other distribution so withheld and the proceeds of
any such sale may be applied to any payment of such tax or other governmental
charge or fee, the holder of such Receipt remaining liable for any deficiency.

         SECTION 3.3. WITHHOLDING. The Depositary shall act as the tax
withholding agent for any payments, distributions made with respect to the
Depositary Shares and Receipts, and the Stock. The Depositary shall be
responsible with respect to the Depositary Shares, Receipts and Stock for the
timely (i) collection and deposit of any required withholding or backup
withholding tax, and (ii) filing of any information returns or other documents
with federal (and other applicable) taxing authorities.

                                      10.
<PAGE>

         SECTION 3.4. REPRESENTATIONS AND WARRANTIES AS TO STOCK. In the case of
the initial deposit of the Stock, the Company and, in the case of subsequent
deposits thereof, each person so depositing Stock under this Deposit Agreement
shall be deemed thereby to represent and warrant that such Stock and each
certificate therefor are valid and that the person making such deposit is duly
authorized to do so. Such representations and warranties shall survive the
deposit of the Stock and the issuance of Receipts therefor.

                                   ARTICLE IV

                               THE STOCK, NOTICES

         SECTION 4.1. CASH DISTRIBUTIONS. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the Stock (other than cash
dividends or cash distributions paid by the Company in lieu of fractional shares
or other fractional interests in the Company's common stock or other securities
otherwise deliverable by the Company in accordance with the applicable
Certificate of Designation), the Depositary shall, subject to Section 3.2,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.4 such amounts of such sum as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders; provided, however, that in case the Company or
the Depositary shall be required by law to withhold and does withhold from any
cash dividend or other cash distribution in respect of the Stock an amount on
account of taxes, the amount made available for distribution or distributed in
respect of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any holder of
Depositary Shares a fraction of one cent and any balance not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to record holders of Receipts then outstanding.

         SECTION 4.2. DISTRIBUTIONS OTHER THAN CASH. Whenever the Depositary
shall receive any distribution other than cash, rights, preferences or
privileges upon the Stock, the Depositary shall, subject to Section 3.2,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.4 such amounts of the securities or property received by it as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders, in any manner that the
Depositary and the Company may deem equitable and practicable for accomplishing
such distribution. If, in the opinion of the Company after consultation with the
Depositary, such distribution cannot be made proportionately among such record
holders, or if for any other reason (including any tax withholding or securities
law requirement), the Depositary deems, after consultation with the Company,
such distribution not to be feasible, the Depositary may, with the approval of
the Company which approval shall not be unreasonably withheld, adopt such method
as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Section 3.2, be distributed or made available for distribution, as
the case may be, by the Depositary to record holders of Receipts as provided by
Section 4.1 in the case of a distribution received in cash.

                                      11.
<PAGE>

         SECTION 4.3. SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Company shall instruct
(including by the issue to such record holders of warrants representing such
rights, preferences or privileges); provided, however, that (i) if at the time
of issue or offer of any such rights, preferences or privileges the Company
determines and instructs the Depositary that it is not lawful or feasible to
make such rights, preferences or privileges available to some or all holders of
Receipts (by the issue of warrants or otherwise) or (ii) if and to the extent
instructed by holders of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, in each case, and if
applicable laws or the terms of such rights, preferences or privileges so
permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.1 in the
case of a distribution received in cash.

         If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly file
a registration statement pursuant to the Securities Act with respect to such
rights, preferences or privileges and securities and use its reasonable best
efforts and take all steps reasonably available to it to cause such registration
statement to become effective sufficiently in advance of the expiration of such
rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges. In no event shall the Depositary make
available to the holders of Receipts any right, preference or privilege to
subscribe for or to purchase any securities unless and until such registration
statement shall have become effective or unless the offering and sale of such
securities to such holders are exempt from registration under the provisions of
the Securities Act.

         If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its reasonable best efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges.

         SECTION 4.4. NOTICE OF DIVIDENDS, FIXING OF RECORD DATE FOR HOLDERS OF
RECEIPTS. Whenever (i) any cash dividend or other cash distribution shall become
payable, or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or (ii) the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice, or (iii) of any mandatory conversion of, or any election on the part
of the Company to call for the redemption or exchange of, any shares of Stock,
in accordance with the provisions of the applicable Certificate of Designation
or otherwise, the Depositary shall in each such instance fix a record date
(which shall be the same date as the record date fixed by the Company with
respect to the Stock) for the determination of the holders of Receipts (x) who
shall be entitled to receive

                                      12.
<PAGE>

such dividend, distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or (y) who shall be entitled to give instructions
for the exercise of voting rights at any such meeting or to receive notice of
such meeting or of such conversion, exchange or redemption.

         SECTION 4.5. VOTING RIGHTS. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice,
which shall be provided by the Company and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders of Receipts at the close of business on a specified record date fixed
pursuant to Section 4.4 will be entitled, subject to any applicable provision of
law, the Certificate of Incorporation or the applicable Certificate of
Designation, to instruct the Depositary as to the exercise of the voting rights
pertaining to the Stock represented by their respective Depositary Shares and
(iii) a brief statement as to the manner in which such instructions may be
given. Upon the written request of a holder of a Receipt on such record date,
the Depositary shall endeavor insofar as practicable to vote or cause to be
voted the Stock represented by the Depositary Shares evidenced by such Receipt
in accordance with the instructions set forth in such request. The Company
hereby agrees to take all reasonable action that may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Stock or cause such
Stock to be voted. In the absence of specific instructions from the holder of a
Receipt, the Depositary will abstain from voting to the extent of the Stock
represented by the Depositary Shares evidenced by such Receipt.

         SECTION 4.6. CHANGES AFFECTING STOCK AND RECLASSIFICATIONS,
RECAPITALIZATIONS, ETC. Upon any split-up, consolidation or any other
reclassification of Stock, or upon any recapitalization, reorganization, merger,
amalgamation or consolidation affecting the Company or to which it is a party or
sale of all or substantially all of the Company's assets, the Depositary shall
treat any shares of Stock or other securities or property (including cash) that
shall be received by the Depositary in exchange for or in conversion of or in
respect of the Stock as new deposited property under this Deposit Agreement, and
Receipts then outstanding shall thenceforth represent the proportionate
interests of holders thereof in the new deposited property so received in
exchange for or in respect of such Stock. In any such case the Depositary may,
in its discretion, with the approval of the Company, execute and deliver
additional Receipts, or may call for the surrender of all outstanding Receipts
to be exchanged for new Receipts specifically describing such new deposited
property.

         SECTION 4.7. REPORTS. The Company or, at the option of the Company, the
Depositary shall forward to the holders of Receipts any reports and
communications received from the Company that are received by the Depositary as
the holder of Stock.

         SECTION 4.8. LISTS OF RECEIPT HOLDERS. Promptly upon request from time
to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary,
any Depositary's Agent or the Registrar. At the expense of the Company, the
Company shall have the right to inspect transfer and registration records of the
Depositary, any Depositary's Agent or the Registrar, take copies thereof and
require the

                                      13.
<PAGE>

Depositary, any Depositary's Agent or the Registrar to supply copies of such
portions of such records as the Company may request.

                                   ARTICLE V

     THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY

         SECTION 5.1. MAINTENANCE OF OFFICES, AGENCIES, TRANSFER BOOKS BY THE
DEPOSITARY; THE REGISTRAR. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain (i) at the Corporate
Office facilities for the execution and delivery, registration, registration of
transfer, surrender, split-up, combination, redemption and conversion of
Receipts and deposit and withdrawal of Stock, and (ii) at the offices of the
Depositary's Agents, if any, facilities for the delivery, registration,
registration of transfer, surrender, split-up, combination, redemption and
conversion of Receipts and deposit and withdrawal of Stock, all in accordance
with the provisions of this Deposit Agreement.

         The Depositary, acting as transfer agent and Registrar, shall keep
books at the Corporate Office for the registration and transfer of Receipts,
which books at all reasonable times shall be open for inspection by the record
holders of Receipts; provided that any such holder requesting to exercise such
right shall certify to the Depositary that such inspection shall be for a proper
purpose reasonably related to such person's interest as an owner of Depositary
Shares. The Depositary shall consult with the Company upon receipt of any
request for inspection. The Depositary may close such books, at any time or from
time to time, when deemed expedient by it in connection with the performance of
its duties hereunder.

         If the Receipts or the Depositary Shares evidenced thereby or the Stock
represented by such Depositary Shares shall be listed on one or more securities
exchanges, the Depositary shall, with the approval of the Company, appoint a
Registrar for registry of such Receipts or Depositary Shares in accordance with
the requirements of such exchange or exchanges. Such Registrar (which may be the
Depositary if so permitted by the requirements of such exchange or exchanges)
may be removed and a substitute Registrar appointed by the Depositary upon the
request or with the approval of the Company. In addition, if the Receipts, such
Depositary Shares or such Stock are listed on one or more securities exchanges,
the Depositary will, at the request of the Company, arrange such facilities for
the delivery, registration, registration of transfer, surrender, split-up,
combination, redemption and conversion of such Receipts, such Depositary Shares
or such Stock as may be required by law or applicable security exchange
regulations.

         SECTION 5.2. PREVENTION OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE
DEPOSITARY'S AGENTS, THE REGISTRAR OR THE COMPANY. Neither the Depositary nor
any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt, if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or of any provision, present or future,
of the Certificate of Incorporation or the applicable Certificate of Designation
or by reason of any act of god or war or other circumstances beyond the control
of the relevant party, the Depositary, any Depositary's Agent, the Registrar or
the Company shall be prevented

                                      14.
<PAGE>

or forbidden from doing or performing any act or thing that the terms of this
Deposit Agreement provide shall be done or performed; nor shall the Depositary,
any Depositary's Agent, the Registrar or the Company incur any liability to any
holder of a Receipt (i) by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of this Deposit
Agreement provide shall or may be done or performed, or (ii) by reason of any
exercise of, or failure to exercise, any discretion provided for in this Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or the
Registrar, if any such exercise or failure to exercise discretion is caused by
its negligence or willful misconduct.

         SECTION 5.3. OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY. The Company assumes no obligation and shall be
subject to no liability under this Deposit Agreement or the Receipts to holders
or other persons, except to perform its obligations as are specifically set
forth and undertaken by it to perform in this Deposit Agreement without
negligence or bad faith. Each of the Depositary, the Depositary's Agents and the
Registrar assumes no obligation and shall be subject to no liability under this
Deposit Agreement or the Receipts to holders or other persons, except to perform
such obligations as are specifically set forth and undertaken by it to perform
in this Deposit Agreement without negligence or willful misconduct.

         Neither the Depositary nor any Depositary's Agent nor the Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
The Depositary, any Depositary's Agent, the Registrar and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.

         The Depositary, the Registrar and any Depositary's Agent may own and
deal in any class of securities of the Company and its affiliates and in
Receipts or Depositary Shares. The Depositary may also act as transfer agent or
Registrar of any of the securities of the Company and its affiliates.

         It is intended that neither the Depositary nor any Depositary's Agent
nor the Registrar shall be deemed to be an "issuer" of the Stock, the Depositary
Shares, or the Receipts or other securities issued upon conversion, exchange or
redemption of the Stock under the federal securities laws or applicable state
securities laws, it being expressly understood and agreed that the Depositary
and any Depositary's Agent and the Registrar are acting only in a ministerial
capacity; provided, however, that the Depositary and any Depositary's Agent
agree to comply with all information reporting and withholding requirements
applicable to each of them under law or this Deposit Agreement in their capacity
as such.

         Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent nor the Registrar makes any representation or
has any responsibility as to the validity of the registration statement pursuant
to which the Depositary Shares are registered under the Securities Act, the
Stock, the Depositary Shares or any instruments referred to therein or herein,
or as to the correctness of any statement made therein

                                      15.
<PAGE>

or herein; provided, however, that the Depositary is responsible for its
representations in this Deposit Agreement.

         The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the Depositary hereunder or
of the Depositary Shares, as to the validity or sufficiency of this Deposit
Agreement, as to the value of the Depositary Shares or as to any right, title or
interest of the record holders of Receipts in and to the Depositary Shares
except that the Depositary hereby represents and warrants as follows: (i) the
Depositary has been duly organized and is validly existing and in good standing
under the laws of the State of ______________, with full power, authority and
legal right under such law to execute, deliver and carry out the terms of this
Deposit Agreement; (ii) this Deposit Agreement has been duly authorized,
executed and delivered by the Depositary; and (iii) this Deposit Agreement
constitutes, and when executed and delivered, each Receipt will constitute, a
valid and binding obligation of the Depositary, enforceable against the
Depositary in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law). The Depositary
shall not be accountable for the use or application by the Company of its
proceeds from the Depositary Shares or the Receipts.

         SECTION 5.4. RESIGNATION AND REMOVAL OF THE DEPOSITARY, APPOINTMENT OF
SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary
hereunder by written notice to the Company of its election to do so, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.

         The Depositary may at any time be removed by the Company by written
notice to the Depositary of such removal, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.

         In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company, having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in 60 days, the resigning or removed
Depositary may petition a court of competent jurisdiction to appoint a successor
depositary. Every successor depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all rights, title and

                                      16.
<PAGE>

interest in the Stock and any moneys or property held hereunder to such
successor and shall deliver to such successor a list of the record holders of
all outstanding Receipts. Any successor Depositary shall promptly mail notice of
its appointment to the record holders of Receipts.

         Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
Depositary may execute the Receipts either in the name of the predecessor
Depositary or in the name of the successor Depositary.

         SECTION 5.5. CORPORATE NOTICES AND REPORTS. The Company agrees that it
will deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, transmit to the record holders of Receipts, in each case at the address
recorded in the Depositary's books or the books of any Depositary's Agent or the
Registrar, copies of all notices and reports (including financial statements)
required by law, by the rules of any national securities exchange upon which the
Stock, the Depositary Shares or the Receipts are listed or by the Certificate of
Incorporation or the applicable Certificate of Designation to be furnished by
the Company to holders of Stock. Such transmission will be at the Company's
expense and the Company will provide the Depositary with such number of copies
of such documents as the Depositary may reasonably request. In addition, the
Depositary will transmit to the record holders of Receipts at the Company's
expense such other documents as may be requested by the Company.

         SECTION 5.6. DEPOSIT OF STOCK BY THE COMPANY. The Company agrees with
the Depositary that neither the Company nor any Company controlled by the
Company will at any time deposit any Stock if such Stock is required to be
registered under the provisions of the Securities Act and no registration
statement is at such time in effect as to such Stock.

         SECTION 5.7. INDEMNIFICATION BY THE COMPANY. The Company shall
indemnify the Depositary for, and hold it harmless against, any loss, liability,
claim or expense ("Loss") arising out of or in connection with its duties under
this Deposit Agreement, including the reasonable costs and expenses of defending
itself against Loss, unless such Loss shall have been determined by a court of
competent jurisdiction to be a result of the Depositary's negligence or willful
misconduct.

         SECTION 5.8. FEES, CHARGES AND EXPENSES. No fees, charges and expenses
of the Depositary or any Depositary's Agent hereunder or of any Registrar shall
be payable by any person other than the Company, except for any taxes and other
governmental charges and except as provided in this Deposit Agreement. If, at
the request of a holder of a Receipt, the Depositary incurs fees, charges or
expenses for which it is not otherwise liable hereunder, such holder or other
person will be liable for such fees, charges and expenses. All other fees,
charges and expenses of the Depositary and any Depositary's Agent hereunder and
of any Registrar (including, in each case, reasonable fees and expenses of
counsel) incident to the performance of their respective obligations hereunder
will be paid from time to time upon consultation and agreement between the
Depositary and the Company as to the amount and nature of such fees, charges and
expenses.

                                      17.
<PAGE>

                                   ARTICLE VI

                            AMENDMENT AND TERMINATION

         SECTION 6.1. AMENDMENT. The form of the Receipts and any provision of
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable, including to reflect the terms of any Certificate
of Designation; provided, however, that no such amendment that shall materially
and adversely alter the rights of the holders of Receipts shall be effective as
to outstanding Receipts until the expiration of 90 days after notice of such
amendment shall have been given to the record holders of outstanding Receipts.
Each holder of an outstanding Receipt at the time any such amendment becomes
effective shall be deemed, by continuing to hold such Receipt, to consent and
agree to such amendment and to be bound by this Deposit Agreement as amended
thereby. In no event shall any amendment impair the right, subject to the
provisions of this Deposit Agreement, of any holder of any Depositary Shares to
surrender the Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Stock or to cause the conversion of such
Stock into the Company's common stock or other securities in accordance with the
applicable Certificate of Designation and to deliver all securities, money and
other property, if any, represented thereby, except in order to comply with
mandatory provisions of applicable law.

         SECTION 6.2. TERMINATION. This Deposit Agreement may be terminated by
either the Company or the Depositary, upon notice to the other, only if (i) all
of the outstanding Depositary Shares have been redeemed or converted for any
other securities into which the Stock is convertible, or (ii) there has been a
final distribution of the Stock to the holders of Receipts in connection with
the Company's liquidation, dissolution or winding up. The Depositary will mail
notice of such termination to the record holders of all Receipts then
outstanding at least 30 days prior to the date fixed in such notice for such
termination. If any Receipts shall remain outstanding after the date of
termination of this Deposit Agreement, the Depositary thereafter shall
discontinue the transfer of Receipts, and shall not give any further notices or
perform any further acts under this Deposit Agreement, except that the
Depositary shall continue to deliver the Stock and any money and other property
represented by Receipts, without liability for interest thereon, upon surrender
thereof by the holders thereof, and the Depositary shall be discharged from all
obligations under this Deposit Agreement except to account for such Stock, money
and other property. Upon the termination of this Deposit Agreement, the Company
shall be discharged from all obligations under this Deposit Agreement except for
its obligations to the Depositary, any Depositary's Agent and any Registrar
under Sections 5.7 and 5.8.

                                  ARTICLE VII

                                  MISCELLANEOUS

         SECTION 7.1. COUNTERPARTS. This Deposit Agreement may be executed by
the Company and the Depositary in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by telecopier shall be effective as delivery of a manually
executed

                                      18.
<PAGE>

counterpart of this Deposit Agreement. Copies of this Deposit Agreement shall be
filed with the Depositary and the Depositary's Agents and shall be open to
inspection during business hours at the Corporate Office and the respective
offices of the Depositary's Agents, if any, by any holder of a Receipt.

         SECTION 7.2. EXCLUSIVE BENEFITS OF PARTIES. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.

         SECTION 7.3. INVALIDITY OF PROVISIONS. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.

         SECTION 7.4. NOTICES. Any notices to be given to the Company hereunder
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail (first class postage prepaid), by
a nationally recognized overnight courier service, or by telecopier confirmed by
letter, addressed to the Company at 5995 Plaza Drive, Cypress, California 90630,
Attention: General Counsel, or at any other place to which the Company may have
transferred its principal executive office.

         Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail (first class postage), by a nationally
recognized overnight courier service, or by telecopier confirmed by letter,
addressed to the Depositary at the Corporate Office.

         Except as provided in the next paragraph, any notices given to any
record holder of a Receipt hereunder or under the Receipts shall be in writing
and shall be deemed to have been duly given if personally delivered or sent by
mail (first class postage), by a nationally recognized overnight courier service
or by telecopier confirmed by letter, addressed to such record holder at the
address of such record holder as it appears on the books of the Depositary or,
if such holder shall have filed with the Depositary a written request that
notices intended for such holder be mailed to some other address, at the address
designated in such request.

         In addition, whenever the Certificate of Designation requires any
notice to be published, the Depositary will, if requested by the Company, cause
such notice to be published in the manner directed by the Company.

         Delivery of a notice sent by mail, by overnight courier or by
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telecopier message) is deposited, postage prepaid, in a
post office letter box or with the overnight courier service. The Depositary or
the Company may, however, act upon any telecopier message received by it from
the other or from any holder of a Receipt, notwithstanding that such telecopier
message shall not subsequently be confirmed by letter as aforesaid.

         SECTION 7.5. DEPOSITARY'S AGENTS. The Depositary may, with the approval
of the Company which approval shall not be unreasonably withheld, from time to
time appoint one or

                                      19.
<PAGE>

more Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit Agreement and may vary or terminate the appointment of
such Depositary's Agents.

         SECTION 7.6. HOLDERS OF RECEIPTS ARE PARTIES. Notwithstanding that
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions, and be entitled to all of the benefits, hereof and of the
Receipts by acceptance of delivery of Receipts.

         SECTION 7.7. GOVERNING LAW. This Deposit Agreement and the Receipts and
all rights hereunder and thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the law of the State of New York
without giving effect to principles of conflict of laws.

         SECTION 7.8. HEADINGS. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or to have any bearing upon the meaning or interpretation
of any provision contained herein or in the Receipts.

                                      20.
<PAGE>

         IN WITNESS WHEREOF, PacifiCare Health Systems, Inc. and ___________
have duly executed this Deposit Agreement as of the day and year first above set
forth and all holders of Receipts shall become parties hereto by and upon
acceptance by them of delivery of Receipts issued in accordance with the terms
hereof.

                                     PACIFICARE HEALTH SYSTEMS, INC.

                                     By:________________________________________
                                                  Authorized Officer

                                     ____________________________, AS DEPOSITARY

                                     By:________________________________________
                                                  Authorized Officer

                      [SIGNATURE PAGE TO DEPOSIT AGREEMENT]

<PAGE>

Exhibit A to Deposit Agreement

                          [FORM OF DEPOSITARY RECEIPT]

         [Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, conversion, exchange or payment, and
any certificate 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 in as much as the registered owner
hereof, Cede & Co., has an interest herein.]

                               DEPOSITARY RECEIPT
                                       FOR
                                DEPOSITARY SHARES
                      EACH REPRESENTING _____ OF A SHARE OF
                   _______________ PREFERRED STOCK, SERIES __

                                       OF

                         PACIFICARE HEALTH SYSTEMS, INC.

No.  __  CUSIP:  _______________

         _______________ (the "Depositary") hereby certifies that [Cede & Co.]
_______________ is the registered holder of ____________ Depositary Shares (the
"Depositary Shares"), each Depositary Share representing _____________ of a
share of _____________ Preferred Stock, Series __, $0.01 par value (the
"Stock"), of PacifiCare Health Systems, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), deposited with
the Depositary and the same proportionate interest in any and all other property
received by the Depositary in respect of such shares of Stock and held by the
Depositary under the Deposit Agreement (as defined below). Subject to the terms
of the Deposit Agreement, each owner of a Depositary Share is entitled,
proportionately, to all the rights, preferences and privileges, and subject to
all the limitations and restrictions, of the Stock represented thereby,
including any dividend, voting, conversion, redemption, liquidation and sinking
fund rights contained in the Certificate of Designation establishing the rights,
preferences, privileges, limitations and restrictions of the Stock (the
"Certificate of Designation"), copies of which are on file at the office of the
Depositary in [the City of New York, Borough of Manhattan] ___________________
at which at any particular time its business in respect of matters governed by
the Deposit Agreement shall be administered, which at the time of the execution
of the Deposit Agreement is located at ______________ (the "Corporate Office").

         This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been executed manually or, if a Registrar for the
Receipts (other than the Depositary) shall have been

                                      A-1.
<PAGE>

appointed, by facsimile by the Depositary by the signature of a duly authorized
officer and, if executed by facsimile signature of the Depositary, shall have
been countersigned manually by such Registrar by the signature of a duly
authorized officer.

         THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED
STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE
COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES
OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK
AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE
DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT,
AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST
OF THE RECORD HOLDERS OF THE RECEIPTS IN AND TO THE DEPOSITARY SHARES.

         The Company will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences, privileges, limitations and
restrictions of the shares of each authorized class, and of each class of
preferred stock authorized to be issued, so far as the same may have been fixed,
and a statement of the authority of the board of directors of the Company to
designate and fix the relative rights, preferences, privileges, limitations and
restrictions of other classes.

         This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.

Dated:_________________________

_______________________________,
as Depositary and Registrar

By:____________________________
      Authorized Officer

Further Conditions and Agreements Forming Part of this Receipt Appear on the
Reverse Side.

                                      A-2.
<PAGE>

                         [REVERSE OF DEPOSITARY RECEIPT]

         1.       THE DEPOSIT AGREEMENT. Receipts, of which this Receipt is one,
are made available upon the terms and conditions set forth in the Deposit
Agreement, dated as of ____________ (the "Deposit Agreement"), among the
Company, the Depositary and all holders from time to time of Receipts. The
Deposit Agreement (copies of which are on file at the Corporate Office and at
the office of any agent of the Depositary) sets forth the rights of holders of
Receipts and the rights and duties of the Depositary. The statements made on the
face and the reverse of this Receipt are summaries of certain provisions of the
Deposit Agreement and are subject to the detailed provisions thereof, to which
reference is hereby made. In the event of any conflict between the provisions of
this Receipt and the provisions of the Deposit Agreement, the provisions of the
Deposit Agreement will govern.

         2.       DEFINITIONS. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.

         3.       REDEMPTION BY THE COMPANY; REPURCHASE BY THE COMPANY. Whenever
the Company shall redeem shares of Stock in accordance with a Certificate of
Designation, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary not less than 3 business days'
prior notice of the proposed date of the mailing of a notice of redemption of
Stock and the simultaneous redemption of the Depositary Shares representing the
Stock to be redeemed and of the number of such shares of Stock held by the
Depositary to be redeemed. Unless the Certificate of Designation for a specific
series of Stock provides for a different notice period with respect to that
Stock in the event of its redemption, the Depositary shall, as directed by the
Company in writing, mail, first class postage prepaid, notice of the redemption
not less than 30 and not more than 60 days prior to the date fixed for
redemption of such Stock and Depositary Shares, to the record holders of the
Receipts evidencing the Depositary Shares to be so redeemed, at the addresses of
such holders as the same appear on the records of the Depositary or any
Depositary's Agent or Registrar. Notwithstanding the foregoing, neither failure
to mail or publish any such notice to one or more such holders nor any defect in
any notice shall affect the sufficiency of the proceedings for redemption. On
the date of any such redemption, the Depositary shall surrender the certificate
or certificates held by the Depositary evidencing the number of shares of Stock
to be redeemed in the manner specified in the notice of redemption. The
Depositary shall, thereafter, redeem the number of Depositary Shares
representing such redeemed Stock upon the surrender of Receipts evidencing such
Depositary Shares in the manner provided in the notice sent to record holders of
Receipts. Notice having been mailed as aforesaid, from and after the redemption
date (unless the Company shall have failed to redeem the shares of Stock to be
redeemed by it upon the surrender of the certificate or certificates therefor by
the Depositary as described above), the Depositary Shares called for redemption
shall be deemed no longer to be outstanding and all rights of the holders of
Receipts evidencing such Depositary Shares (except the right to receive the
cash, securities or other property payable upon redemption upon surrender of
such Receipts) shall, to the extent of such Depositary Shares, cease and
terminate. The foregoing shall be subject further to the terms and conditions of
the applicable Certificate of Designation.

         Whenever the Company shall be required to make an offer to repurchase
Depositary Shares in accordance with a Certificate of Designation, it shall
(unless otherwise agreed in

                                      A-3.
<PAGE>

writing with the Depositary) give the Depositary in its capacity as Depositary
not less than 3 business days' prior notice of the required date of the mailing
of a notice of the repurchase offer. The Depositary shall, as directed by the
Company in writing, mail, first class postage prepaid, notice of the relevant
terms of the repurchase offer, as provided by the Company, to the record holders
of the Receipts at the addresses of such holders as the same appear on the
records of the Depositary or any Depositary's Agent or Registrar. The Depositary
shall, thereafter, receive from each holder electing to have Depositary Shares
repurchased pursuant to the repurchase offer in accordance with the instructions
in the notice, the holder's Receipts, with an appropriate form duly completed
prior to the repurchase date. In case the aggregate number of Depositary Shares
offered for repurchase by the holders exceeds the amount of Depositary Shares
which the Company has offered to repurchase pursuant to the repurchase offer,
the Depositary Shares to be repurchased shall be selected by the Depositary by
lot or proportionately, as may be determined by the Depositary. The foregoing is
subject further to the terms and conditions of the applicable Certificate of
Designation.

         4.       CONVERSION. In the event that the Stock, in accordance with
its Certificate of Designation, is convertible into the Company's common stock
or other securities, subject to the terms and conditions of the Deposit
Agreement, a holder of a Receipt or Receipts may surrender such Receipt or
Receipts at the Corporate Office or at such other office or to a Depositary's
Agent that the Depositary may designate for such purpose, together with a notice
of conversion duly completed and executed, thereby directing the Depositary or
such Depositary's Agent to instruct the Company to cause the conversion of the
number of shares of Stock specified in such notice of conversion into shares of
the Company's common stock or other securities at the rate specified in the
applicable Certificate of Designation, and an assignment of such Receipt or
Receipts to the Company or in blank, duly completed and executed, along with any
other documents or instruments and any amounts required by the applicable
Certificate of Designation.

         Upon receipt by the Depositary or a Depositary's Agent of a Receipt or
Receipts of such notice, assignment and other documents, instruments or amounts,
the Depositary or such Depositary's Agent shall instruct the Company, subject to
any adjustment provided for in the applicable Certificate of Designation, (i) to
cause the conversion at the rate specified in the applicable Certificate of
Designation of the number of shares of Stock evidenced by the Receipt or
Receipts so surrendered for conversion as specified in the written notice to the
Depositary or such Depositary's Agent and (ii) to cause the delivery to the
holder of such Receipt or Receipts of (a) a certificate or certificates
evidencing the number of whole shares of the Company's common stock or other
securities into which such Stock has been converted, and (b) the amount of cash
or other property, if any, to which such holder is entitled in lieu of
fractional shares of, or fractional interests in, the Company's common stock or
other securities otherwise deliverable by the Company upon such conversion,
calculated in accordance with the applicable Certificate of Designation. Upon
such conversion, the Depositary or such Depositary's Agent (i) shall deliver to
the holder a Receipt evidencing the number of Depositary Shares evidenced by the
surrendered Receipt or Receipts in excess of the number of Depositary Shares
evidenced by such Receipt or Receipts that have been so converted, (ii) shall
cancel the Receipts surrendered for conversion and (iii) shall deliver to the
Company for cancellation the number of shares of Stock evidenced by the Receipts
so surrendered and so converted.

                                      A-4.
<PAGE>

         Upon the conversion of any Stock for which a notice of conversion has
been provided to the Depositary or a Depositary's Agent by the holder of the
Receipt or Receipts representing such Stock, the Depositary Shares evidenced by
such Receipt or Receipts shall be deemed no longer outstanding, all rights of
the holder of the Receipt or Receipts evidencing such Depositary Shares (except
the right to receive (i) the Company's common stock or other securities to which
such holder is entitled upon conversion in accordance with the applicable
Certificate of Designation, (ii) any cash or other property payable in
accordance with the applicable Certificate of Designation with respect to any
fractional shares or other fractional interests in the Company's common stock or
other securities otherwise deliverable by the Company upon conversion, (iii) any
Receipts evidencing Depositary Shares representing Stock which was not so
converted and (iv) any other securities, property or cash to which such holder
is entitled under this Deposit Agreement) shall cease and terminate, and the
Receipt or Receipts evidencing such Depositary Shares shall be cancelled.

         No fractional shares or other fractional interests in the Company's
common stock or other securities shall be deliverable by the Company upon
conversion of the Stock represented by the Depositary Shares.

         5.       WITHDRAWAL OF STOCK. Holders of Receipts shall have the right,
upon payment of any amount due to the Depositary with respect to the Receipts,
to withdraw any or all of the Stock (but only in whole shares of Stock)
represented by the Depositary Shares and all money and other property, if any,
represented by such Depositary Shares by surrendering the Receipt or Receipts
evidencing such Depositary Shares at the Corporate Office, or at such other
offices as the Depositary may designate for such withdrawal (and cancellation of
the surrendered Receipts as provided in the Deposit Agreement).

         6.       TRANSFERS, SPLIT-UPS, COMBINATIONS. Subject to Paragraphs 7, 8
and 9 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or at such
other offices as the Depositary may designate for such purchase, properly
endorsed or accompanied by a properly executed instrument of transfer, together
with evidence of the payment of any transfer taxes as may be required by law,
and upon such transfer the Depositary shall execute and deliver a Receipt or
Receipts to or upon the order of the person entitled thereto, all as provided in
and subject to the Deposit Agreement. Subject to the Deposit Agreement, this
Receipt may be split into other Receipts or combined with other Receipts into
one Receipt evidencing the same aggregate number of Depositary Shares evidenced
by the Receipt or Receipts surrendered; provided, however, that the Depositary
shall not issue any Receipt evidencing a fractional Depositary Share.

         7.       CONDITIONS TO SIGNING AND DELIVERY, TRANSFER, ETC., OF
RECEIPTS. Prior to the execution and delivery, registration of transfer,
split-up, combination, or surrender of this Receipt, the delivery of any
distribution hereon or withdrawal or deposit of the Stock evidenced hereby, or
the exercise of any applicable conversion right, the Depositary, any of the
Depositary's Agents, the Registrar or the Company may require any or all of the
following: (i) payment to it of a sum sufficient for the payment (or, in the
event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge or fee with respect
thereto (including any such tax or charge or fee with respect to Stock being
deposited or withdrawn or with respect to other property of the Company

                                      A-5.
<PAGE>

being issued upon redemption or conversion); (ii) production of proof
satisfactory to it as to the identity and genuineness of any signature; and
(iii) compliance with such reasonable regulations, if any, as the Depositary or
the Company may establish not inconsistent with the Deposit Agreement. Any
person presenting Stock for deposit, or any holder of this Receipt, may be
required to file such proof of residence or other information, to execute such
certificates and to make such representations and warranties as the Depositary
or the Company may reasonably deem necessary or proper. The Depositary or the
Company may withhold or delay the delivery of this Receipt, the registration of
transfer or redemption of this Receipt, the withdrawal of the Stock represented
by the Depositary Shares evidenced by this Receipt, the distribution of any
dividend or other distribution or the exercise of any applicable conversion
right, until such proof or other information is filed, such certificates are
executed or such representations and warranties are made.

         8.       SUSPENSION OF DELIVERY, TRANSFER, ETC. The registration of
transfer, split-up, combination or surrender of this Receipt and the withdrawal
of deposited Stock or the exercise of any applicable conversion right may be
suspended (i) during any period when the register of stockholders of the Company
is closed, (ii) if any such action is deemed necessary or advisable by the
Depositary, any of the Depositary's Agents or the Company at any time or from
time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of the Deposit
Agreement, or (iii) with the approval of the Company, for any other reason.

         9.       PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. If any tax or
other governmental charge or fee shall become payable by or on behalf of the
Depositary with respect to (i) this Receipt, (ii) the Depositary Shares
evidenced by this Receipt, (iii) the Stock (or fractional interest therein) or
other property represented by such Depositary Shares, or (iv) any transaction
referred to in Section 4.6 of the Deposit Agreement, such tax (including
transfer, issuance or acquisition taxes, if any) or governmental charge or fee
shall be payable by the holder of this Receipt, who shall pay the amount thereof
to the Depositary. Until such payment is made, registration or transfer of this
Receipt or any split-up or combination of this Receipt or any withdrawal of the
Stock or money or other property, if any, represented by the Depositary Shares
evidenced by this Receipt upon its surrender or the exercise of any applicable
conversion right may be refused, any dividend or other distribution may be
withheld and any part or all of the Stock or other property represented by the
Depositary Shares evidenced by this Receipt may be sold for the account of the
holder hereof (after attempting by reasonable means to notify such holder prior
to such sale). Any dividend or other distribution so withheld and the proceeds
of any such sale may be applied to any payment of such tax or other governmental
charge or fee, the holder of this Receipt remaining liable for any deficiency.

         10.      AMENDMENT. The form of the Receipts and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that they may deem
necessary or desirable, including to reflect the terms of any Certificate of
Designation; provided, however, that no such amendment that shall materially and
adversely alter the rights of the holders of Receipts shall be effective as to
outstanding Receipts until the expiration of 90 days after notice of such
amendment shall have been given to the record holders of outstanding Receipts.
Each holder of an outstanding Receipt at the time any such amendment becomes
effective shall be deemed, by

                                      A-6.
<PAGE>

continuing to hold such Receipt, to consent and agree to such amendment and to
be bound by the Deposit Agreement as amended thereby. In no event shall any
amendment impair the right, subject to the provisions of the Deposit Agreement,
of the holder of the Depositary Shares evidenced by this Receipt to surrender
this Receipt with instructions to the Depositary to deliver to the holder the
Stock or to cause the conversion of such Stock into the Company's common stock
or other securities in accordance with the applicable Certificate of Designation
and to deliver all securities, money and other property, if any, represented
thereby, except in order to comply with mandatory provisions of applicable law.

         11.      FEES, CHARGES AND EXPENSES. The Company will pay all fees,
charges and expenses of the Depositary, except for taxes and other governmental
charges and such charges as are otherwise expressly provided for in the Deposit
Agreement.

         12.      TITLE TO RECEIPTS. It is a condition of this Receipt, and
every successive holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt (and to the Depositary Shares evidenced
hereby), when properly endorsed or accompanied by a properly executed instrument
of transfer, is transferable by delivery with the same effect as in the case of
investment securities in general; provided, however, that the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice
provided for in the Deposit Agreement and for all other purposes.

         13.      DIVIDENDS AND DISTRIBUTIONS. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock (other than
cash dividends or cash distributions paid by the Company in lieu of fractional
shares or other fractional interests in the Company's common stock or other
securities otherwise deliverable by the Company in accordance with the
applicable Certificate of Designation), the Depositary shall, subject to the
provisions of the Deposit Agreement, distribute to record holders of Receipts on
the record date fixed pursuant to paragraph 15 such amounts of such sums as are,
as nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders; provided, however, that
in case the Company or the Depositary shall be required by law to withhold and
does withhold from any cash dividend or other cash distribution in respect of
the Stock an amount on account of taxes, the amount made available for
distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for distribution,
as the case may be, only such amount, however, as can be distributed without
attributing to any holder of Depositary Shares a fraction of one cent and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and be treated as part of the next
sum received by the Depositary for distribution to record holders of Receipts
then outstanding.

         14.      SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the Company
shall at any time offer or cause to be offered to the persons in whose name
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the Deposit
Agreement, be made available by the Depositary to the record holders of Receipts
in such manner as the Company shall instruct.

                                      A-7.
<PAGE>

         15.      NOTICE OF DIVIDENDS, FIXING OF RECORD DATE. Whenever (i) any
cash dividend or other cash distribution shall become payable, or any
distribution other than cash shall be made, or any rights, preferences or
privileges shall at any time be offered, with respect to the Stock, or (ii) the
Depositary shall receive notice of any meeting at which holders of Stock are
entitled to vote or of which holders of Stock are entitled to notice, or (iii)
of any mandatory conversion of, or any election on the part of the Company to
call for redemption or exchange of, any shares of Stock, in accordance with the
applicable Certificate of Designation or otherwise, the Depositary shall in each
such instance fix a record date (which shall be the same date as the record date
fixed by the Company with respect to the Stock) for the determination of the
holders of Receipts (x) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or (y) who shall be entitled to give instructions for the exercise of
voting rights at any such meeting or to receive notice of such meeting or of
such conversion, exchange or redemption.

         16.      VOTING RIGHTS. Upon receipt of notice of any meeting at which
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice, which
shall contain (i) such information as is contained in such notice of meeting,
(ii) a statement that the holders of Receipts at the close of business on a
specified record date determined as provided in paragraph 15 will be entitled,
subject to any applicable provision of law, the Certificate of Incorporation or
the applicable Certificate of Designation, to instruct the Depositary as to the
exercise of the voting rights pertaining to the Stock represented by their
respective Depositary Shares, and (iii) a brief statement as to the manner in
which such instructions may be given. Upon the written request of a holder of
this Receipt on such record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted the Stock represented by the Depositary
Shares evidenced by this Receipt in accordance with the instructions set forth
in such request. The Company hereby agrees to take all reasonable action that
may be deemed necessary by the Depositary in order to enable the Depositary to
vote such Stock or cause such Stock to be voted. In the absence of specific
instructions from the holder of this Receipt, the Depositary will abstain from
voting to the extent of the Stock represented by the Depositary Shares evidenced
by this Receipt.

         17.      REPORTS, INSPECTION OF TRANSFER BOOKS. The Company agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
address recorded in the Depositary's books or the books of any Depositary's
Agent or the Registrar, copies of all notices and reports (including financial
statements) required by law, by the rules of any national securities exchange
upon which the Stock, the Depositary Shares or the Receipts are listed or by the
Certificate of Incorporation or the applicable Certificate of Designation to be
furnished by the Company to holders of Stock. The Depositary, acting as transfer
agent and Registrar, shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times shall
be open for inspection by the record holders of Receipts; provided that any such
holder requesting to exercise such right shall certify to the Depositary that
such inspection shall be for a proper purpose reasonably related to such
person's interest as an owner of Depositary Shares.

         18.      LIABILITY OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE
REGISTRAR AND THE COMPANY. Neither the Depositary nor any Depositary's Agent nor
the Registrar nor the Company shall incur any liability to any holder of this
Receipt, if by reason of any provision of

                                      A-8.
<PAGE>

any present or future law or regulation thereunder of any governmental authority
or of any provision, present or future, of the Certificate of Incorporation or
the applicable Certificate of Designation or by reason of any act of god or war
or other circumstances beyond the control of the relevant party, the Depositary,
any Depositary's Agent, the Registrar or the Company shall be prevented or
forbidden from doing or performing any act or thing that the terms of the
Deposit Agreement provide shall be done or performed; nor shall the Depositary,
any Depositary's Agent, the Registrar or the Company incur any liability to any
holder of this Receipt (i) by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the Deposit
Agreement provide shall or may be done or performed or (ii) by reason of any
exercise of, or failure to exercise, any discretion provided for in the Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or the
Registrar, if such exercise or failure to exercise discretion is caused by its
negligence or willful misconduct.

         19.      OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENT, THE
REGISTRAR AND THE COMPANY. The Company assumes no obligation and shall be
subject to no liability under the Deposit Agreement or this Receipt to the
holder hereof or other persons, except to perform its obligations as are
specifically set forth and undertaken by it to perform in the Deposit Agreement
without negligence or bad faith. Each of the Depositary, the Depositary's Agents
and the Registrar assumes no obligation and shall be subject to no liability
under the Deposit Agreement or this Receipt to the holder hereof or other
persons, except to perform such obligations as are specifically set forth and
undertaken by it to perform in the Deposit Agreement without negligence or
willful misconduct.

         Neither the Depositary nor any Depositary's Agent nor the Registrar nor
the Company shall be liable for any action or failure to act by it in reliance
upon the advice of or information from legal counsel, accountants, any person
presenting Stock for deposit, any holder of this Receipt or any other person
believed by it in good faith to be competent to give such advice or information.

         20.      TERMINATION OF DEPOSIT AGREEMENT. The Deposit Agreement may be
terminated only if (i) all of the outstanding Depositary Shares have been
redeemed or converted for any other securities into which the Stock is
convertible or (ii) there has been a final distribution of the Stock to the
holders of Receipts in connection with the Company's liquidation, dissolution or
winding up. The Depositary will mail notice of such termination to the record
holders of all Receipts then outstanding at least 30 days prior to the date
fixed in such notice for such termination. Upon the termination of the Deposit
Agreement, the Company shall be discharged from all obligations thereunder
except for its obligations to the Depositary, any Depositary's Agent and any
Registrar under Sections 5.7 and 5.8 of the Deposit Agreement.

         If any Receipts remain outstanding after the date of termination of the
Deposit Agreement, the Depositary thereafter shall discontinue all functions and
be discharged from all obligations as provided in the Deposit Agreement, except
as specifically provided therein.

         21.      GOVERNING LAW. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed

                                      A-9.
<PAGE>

in accordance with, the law of the State of New York without giving effect to
principles of conflict of laws.

                                     A-10.
<PAGE>

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________ the within Receipt and all rights and interests represented
by the Depositary Shares evidenced thereby, and hereby irrevocably constitutes
and appoints ______________ attorney, to transfer the same on the books of the
within-named Depositary, with full power of substitution in the premises.

Dated: ______________                   Signature:______________________________

                                        NOTE: The signature to this assignment
                                        must correspond with the name as written
                                        upon the face of the Receipt in every
                                        particular, without alteration or
                                        enlargement, or any change whatever.<PAGE>

                                                                    EXHIBIT 4.12
                         PACIFICARE HEALTH SYSTEMS, INC.
                                     ISSUER

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION
                                     TRUSTEE

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

                                    INDENTURE

                           DATED AS OF AUGUST 12, 2003

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

                             SENIOR DEBT SECURITIES

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   PAGE
<S>                                                                                                                <C>
ARTICLE 1             DEFINITIONS...............................................................................     1

         Section 1.01          Definitions of Terms.............................................................     1

ARTICLE 2             ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES.............     5

         Section 2.01          Designation and Terms of Securities..............................................     5
         Section 2.02          Form of Securities and Trustee's Certificate.....................................     7
         Section 2.03          Denominations: Provisions for Payment............................................     7
         Section 2.04          Execution and Authentications....................................................     9
         Section 2.05          Registration of Transfer and Exchange............................................    10
         Section 2.06          Temporary Securities.............................................................    11
         Section 2.07          Mutilated, Destroyed, Lost or Stolen Securities..................................    11
         Section 2.08          Cancellation.....................................................................    12
         Section 2.09          Benefits of Indenture............................................................    12
         Section 2.10          Authenticating Agent.............................................................    12
         Section 2.11          Global Securities................................................................    13

ARTICLE 3             REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS......................................    14

         Section 3.01          Redemption.......................................................................    14
         Section 3.02          Notice of Redemption.............................................................    14
         Section 3.03          Payment Upon Redemption..........................................................    15
         Section 3.04          Sinking Fund.....................................................................    16
         Section 3.05          Satisfaction of Sinking Fund Payments with Securities............................    16
         Section 3.06          Redemption of Securities for Sinking Fund........................................    16

ARTICLE 4             COVENANTS.................................................................................    17

         Section 4.01          Payment of Principal, Premium and Interest.......................................    17
         Section 4.02          Maintenance of Office or Agency..................................................    17
         Section 4.03          Paying Agents....................................................................    18
         Section 4.04          Appointment to Fill Vacancy in Office of Trustee.................................    19
         Section 4.05          Compliance with Consolidation Provisions.........................................    19

ARTICLE 5             SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.........................    19
</TABLE>

                                       i.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                   PAGE
<S>                                                                                                                <C>
         Section 5.01          Company to Furnish Trustee Names and Addresses of Securityholders................    19
         Section 5.02          Preservation Of Information; Communications With Securityholders.................    19
         Section 5.03          Reports by the Company...........................................................    20
         Section 5.04          Reports by the Trustee...........................................................    20

ARTICLE 6             REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT...........................    20

         Section 6.01          Events of Default................................................................    20
         Section 6.02          Collection of Indebtedness and Suits for Enforcement by Trustee..................    22
         Section 6.03          Application of Moneys Collected..................................................    23
         Section 6.04          Limitation on Suits..............................................................    24
         Section 6.05          Rights and Remedies Cumulative; Delay or Omission Not Waiver.....................    25
         Section 6.06          Control by Securityholders.......................................................    25
         Section 6.07          Undertaking to Pay Costs.........................................................    26

ARTICLE 7             CONCERNING THE TRUSTEE....................................................................    26

         Section 7.01          Certain Duties and Responsibilities of Trustee...................................    26
         Section 7.02          Certain Rights of Trustee........................................................    27
         Section 7.03          Trustee Not Responsible for Recitals or Issuance or Securities...................    28
         Section 7.04          May Hold Securities..............................................................    29
         Section 7.05          Moneys Held in Trust.............................................................    29
         Section 7.06          Compensation and Reimbursement...................................................    29
         Section 7.07          Reliance on Officers' Certificate................................................    29
         Section 7.08          Disqualification; Conflicting Interests..........................................    30
         Section 7.09          Corporate Trustee Required; Eligibility..........................................    30
         Section 7.10          Resignation and Removal; Appointment of Successor................................    30
         Section 7.11          Acceptance of Appointment By Successor...........................................    31
         Section 7.12          Merger, Conversion, Consolidation or Succession to Business......................    33
         Section 7.13          Preferential Collection of Claims Against the Company............................    33
</TABLE>

                                       ii.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                   PAGE
<S>                                                                                                                <C>
         Section 7.14          Notice of Default................................................................    33

ARTICLE 8             CONCERNING THE SECURITYHOLDERS............................................................    34

         Section 8.01          Evidence of Action by Securityholders............................................    34
         Section 8.02          Proof of Execution by Securityholders............................................    34
         Section 8.03          Who May be Deemed Owners.........................................................    35
         Section 8.04          Certain Securities Owned by Company Disregarded..................................    35
         Section 8.05          Actions Binding on Future Securityholders........................................    35

ARTICLE 9             SUPPLEMENTAL INDENTURES...................................................................    36

         Section 9.01          Supplemental Indentures Without the Consent of Securityholders...................    36
         Section 9.02          Supplemental Indentures With Consent of Securityholders..........................    37
         Section 9.03          Effect of Supplemental Indentures................................................    37
         Section 9.04          Securities Affected by Supplemental Indentures...................................    37
         Section 9.05          Execution of Supplemental Indentures.............................................    38

ARTICLE 10            SUCCESSOR ENTITY..........................................................................    38

         Section 10.01         Company May Consolidate, Etc.....................................................    38
         Section 10.02         Successor Entity Substituted.....................................................    39
         Section 10.03         Evidence of Consolidation, Etc. to Trustee.......................................    39

ARTICLE 11            SATISFACTION AND DISCHARGE................................................................    40

         Section 11.01         Satisfaction and Discharge of Indenture..........................................    40
         Section 11.02         Discharge of Obligations.........................................................    40
         Section 11.03         Deposited Moneys to be Held in Trust.............................................    41
         Section 11.04         Payment of Moneys Held by Paying Agents..........................................    41
         Section 11.05         Repayment to Company.............................................................    41

ARTICLE 12            IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................    41

         Section 12.01         No Recourse......................................................................    41

ARTICLE 13            MISCELLANEOUS PROVISIONS..................................................................    42

         Section 13.01         Effect on Successors and Assigns.................................................    42
         Section 13.02         Actions by Successor.............................................................    42
         Section 13.03         Surrender of Company Powers......................................................    42
</TABLE>

                                      iii.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                   PAGE
<S>                                                                                                                <C>
         Section 13.04         Notices..........................................................................    42
         Section 13.05         Governing Law....................................................................    43
         Section 13.06         Treatment of Securities as Debt..................................................    43
         Section 13.07         Compliance Certificates and Opinions.............................................    43
         Section 13.08         Payments on Business Days........................................................    43
         Section 13.09         Conflict with Trust Indenture Act................................................    44
         Section 13.10         Counterparts.....................................................................    44
         Section 13.11         Separability.....................................................................    44
         Section 13.12         Compliance Certificates..........................................................    44
</TABLE>

(1)      This Table of Contents does not constitute part of the Indenture and
         shall not have any bearing on the interpretation of any of its terms or
         provisions.

                                       iv.
<PAGE>

                                   INDENTURE

         INDENTURE, dated as of August 12, 2003, among PACIFICARE HEALTH
SYSTEMS, INC., a Delaware corporation (the "Company"), and U.S. BANK NATIONAL
ASSOCIATION, as trustee (the "Trustee"):

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of debt securities (hereinafter referred to as the "Securities"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided, as registered Securities without
coupons, to be authenticated by the certificate of the Trustee;

         WHEREAS, to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and

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

         NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of Securities:

                                   ARTICLE 1

                                   DEFINITIONS

         SECTION 1.01 DEFINITIONS OF TERMS.

         The terms defined in this Section (except as in this Indenture or any
indenture supplemental hereto 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
and shall include the plural as well as the singular. All other terms used in
this Indenture that are defined in the Trust Indenture Act of 1939, as amended,
or that are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein or any indenture supplemental hereto otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.

         "Authenticating Agent" means an authenticating agent with respect to
all or any of the series of Securities appointed by the Trustee pursuant to
Section 2.10.

         "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 of the Company or any
duly authorized committee of such Board.

                                       1.
<PAGE>

         "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.

         "Business Day" means, with respect to any series of Securities, any day
other than a day on which federal or state banking institutions in the Borough
of Manhattan, the City of New York, are authorized or obligated by law,
executive order or regulation to close.

         "Certificate" means a certificate signed by the chairman of the Board
of Directors, any principal executive officer, any chief executive officer, any
president, any senior vice president, any vice president, any principal
financial officer or any principal accounting officer, any treasurer or any
assistant treasurer, any controller or any assistant controller, any secretary
or any assistant secretary of the Company. The Certificate need not comply with
the provisions of Section 13.07.

         "Company" means PACIFICARE HEALTH SYSTEMS, INC., a corporation duly
organized and existing under the laws of the State of Delaware, and, subject to
the provisions of Article Ten, shall also include its successors and assigns.

         "Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at U.S. Bank National
Association, 633 West 5th Street, 24th Floor, LM-CA-T24T, Los Angeles,
California 90071; Attention: Corporate Trust Services, except that whenever a
provision herein refers to an office or agency of the Trustee in the Borough of
Manhattan, the City of New York, such office is located, at the date hereof, at
U.S. Bank Trust National Association, 100 Wall Street, Suite 1600, New York, NY
10005, Attn: Corporate Trust Services.

         "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

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

         "Depositary" means, with respect to Securities of any series for which
the Company shall determine that such Securities will be issued as a Global
Security, The Depository Trust Company, New York, New York, another clearing
agency, or any successor registered as a clearing agency under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or other applicable
statute or regulation, which, in each case, shall be designated by the Company
pursuant to either Section 2.01 or 2.11.

         "Event of Default" means, with respect to Securities of a particular
series, any event specified in Section 6.01, continued for the period of time,
if any, therein designated.

         "Global Security" means, with respect to any series of Securities, a
Security executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.

                                       2.
<PAGE>

         "Governmental Obligations" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.

         "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.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.

         "Interest Payment Date", when used with respect to any installment of
interest on a Security of a particular series, means the date specified in such
Security or in a Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment of interest
with respect to Securities of that series is due and payable.

         "Officers' Certificate" means a certificate signed by a chief executive
officer, a president, a senior vice president or a vice president and by the
chief financial officer or the treasurer or an assistant treasurer or the
controller or an assistant controller or the secretary or an assistant secretary
of the Company that is delivered to the Trustee in accordance with the terms
hereof. Each such certificate shall include the statements provided for in
Section 13.07, if and to the extent required by the provisions thereof.

         "Opinion of Counsel" means an opinion in writing subject to customary
exceptions of legal counsel, who may be an employee of or counsel for the
Company, that is delivered to the Trustee in accordance with the terms hereof.
Each such opinion shall include the statements provided for in Section 13.07, if
and to the extent required by the provisions thereof.

         "Outstanding", when used with reference to Securities of any series,
means, subject to the provisions of Section 8.04, as of any particular time, all
Securities of that series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Securities theretofore canceled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations 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

                                       3.
<PAGE>

shall act as its own paying agent); provided, however, that if such Securities
or portions of such Securities are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for giving such
notice; and (c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms of
Section 2.07.

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

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.

         "Responsible Officer" when used with respect to the Trustee means any
officer in the Corporate Trust Office of the Trustee, or to whom any corporate
trust matter is referred because of his or her knowledge of and familiarity with
the particular subject.

         "Securities" means the debt Securities authenticated and delivered
under this Indenture.

         "Securityholder", "holder of Securities", "registered holder", or other
similar term, means the Person or Persons in whose name or names a particular
Security shall be registered on the books of the Company kept for that purpose
in accordance with the terms of this Indenture.

         "Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by 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 whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by 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.

         "Trustee" means U.S. Bank National Association, and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and,
if at any time there is more than one Person acting in such capacity hereunder,
"Trustee" shall mean each such Person. The term "Trustee" as used with respect
to a particular series of the Securities shall mean the trustee with respect to
that series.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.

         "Voting Stock", as applied to stock of any Person, 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.

                                       4.
<PAGE>

                                   ARTICLE 2

             ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND
                             EXCHANGE OF SECURITIES

         SECTION 2.01 DESIGNATION AND TERMS OF SECURITIES.

                  (a)      The aggregate principal amount of Securities that may
be authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series up to the aggregate principal amount of
Securities of that series from time to time authorized by or pursuant to a Board
Resolution or pursuant to one or more indentures supplemental hereto. Prior to
the initial issuance of Securities of any series, there shall be established in
or pursuant to a Board Resolution, and set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto:

                           (1)      the title of the Securities of the series
(which shall distinguish the Securities of that series from all other
Securities);

                           (2)      any limit upon the aggregate principal
amount of the Securities of that series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
of that series);

                           (3)      the date or dates on which the principal of
the Securities of the series is payable, any original issue discount that may
apply to the Securities of that series upon their issuance, the principal amount
due at maturity, and the place(s) of payment;

                           (4)      the rate or rates at which the Securities of
the series shall bear interest or the manner of calculation of such rate or
rates, if any;

                           (5)      the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest will be payable
or the manner of determination of such Interest Payment Dates, the place(s) of
payment, and the record date for the determination of holders to whom interest
is payable on any such Interest Payment Dates or the manner of determination of
such record dates;

                           (6)      the right, if any, to extend the interest
payment periods and the duration of such extension;

                           (7)      the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option of the Company;

                           (8)      the obligation, if any, of the Company to
redeem or purchase Securities of the series pursuant to any sinking fund,
mandatory redemption, or analogous provisions (including payments made in cash
in satisfaction of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at

                                       5.
<PAGE>

which, and the terms and conditions upon which, Securities of the series shall
be redeemed or purchased, in whole or in part, pursuant to such obligation;

                           (9)      the form of the Securities of the series
including the form of the Certificate of Authentication for such series;

                           (10)     if other than denominations of one thousand
U.S. dollars ($1,000) or any integral multiple thereof, the denominations in
which the Securities of the series shall be issuable;

                           (11)     any and all other terms (including terms, to
the extent applicable, relating to any auction or remarketing of the Securities
of that series and any security for the obligations of the Company with respect
to such Securities) with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental
indenture) including any terms which may be required by or advisable under
United States laws or regulations or advisable in connection with the marketing
of Securities of that series;

                           (12)     whether the Securities are issuable as a
Global Security and, in such case, the terms and the identity of the Depositary
for such series;

                           (13)     whether the Securities will be convertible
into or exchangeable for shares of common stock or other securities of the
Company or any other Person and, if so, the terms and conditions upon which such
Securities will be so convertible or exchangeable, including the conversion or
exchange price, as applicable, or how it will be calculated and may be adjusted,
any mandatory or optional (at the Company's option or the holders' option)
conversion or exchange features, and the applicable conversion or exchange
period;

                           (14)     if other than the principal amount thereof,
the portion of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 6.01;

                           (15)     any additional or different Events of
Default or restrictive covenants (which may include, among other restrictions,
restrictions on the Company's ability or the ability of the Company's
Subsidiaries to: incur additional indebtedness; issue additional securities;
create liens; pay dividends or make distributions in respect of their capital
stock; redeem capital stock; place restrictions on such Subsidiaries placing
restrictions on their ability to pay dividends, make distributions or transfer
assets; make investments or other restricted payments; sell or otherwise dispose
of assets; enter into sale-leaseback transactions; engage in transactions with
stockholders and affiliates; issue or sell stock of their Subsidiaries; or
effect a consolidation or merger) or financial covenants (which may include,
among other financial covenants, financial covenants that require the Company
and its Subsidiaries to maintain specified interest coverage, fixed charge, cash
flow-based or asset-based ratios) provided for with respect to the Securities of
the series;

                           (16)     if other than dollars, the coin or currency
in which the Securities of the series are denominated (including, but not
limited to, foreign currency);

                                       6.
<PAGE>

                           (17)     the terms and conditions, if any, upon which
the Company shall pay amounts in addition to the stated interest, premium, if
any and principal amounts of the Securities of the series to any Securityholder
that is not a "United States person" for federal tax purposes; and

                           (18)     any restrictions on transfer, sale or
assignment of the Securities of the series.

         All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indentures supplemental hereto.

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

         Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is
payable, with different rates of interest, if any, or different methods by which
rates of interest may be determined, with different dates on which such interest
may be payable and with different redemption dates.

         SECTION 2.02 FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE.

         The Securities of any series and the Trustee's certificate of
authentication to be borne by such Securities shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution, and set forth in an Officers' Certificate,
and they may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any securities exchange on which Securities of that series may be listed, or
to conform to usage.

         SECTION 2.03 DENOMINATIONS: PROVISIONS FOR PAYMENT.

         The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple
thereof, subject to Section 2.01(10). The Securities of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United States of
America that at the time is legal tender for public and private debt, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Security shall be dated the date
of its authentication. Interest on the Securities shall be computed on the basis
of a 360-day year composed of twelve 30-day months.

                                       7.
<PAGE>

         The interest installment on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the Person in whose name said
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on such Security will be paid upon presentation and surrender of such
Security as provided in Section 3.03.

         Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:

                           (1)      The Company may make payment of any
Defaulted Interest on Securities to the Persons in whose names such 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 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 satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall not be more than 15 nor less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the 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 Security Register (as hereinafter defined), not
less than 10 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 Securities (or their respective Predecessor Securities) are
registered on such special record date.

                           (2)      The Company may make payment of any
Defaulted Interest on any Securities in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Trustee.

         Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Securities pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Securities and any Interest
Payment Date for such series shall mean either the fifteenth day of the month
immediately

                                       8.
<PAGE>

preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the first day of a month, or the last day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the fifteenth day of a month, whether or not such date is a Business
Day.

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

         SECTION 2.04 EXECUTION AND AUTHENTICATIONS.

         The Securities shall be signed on behalf of the Company by its chief
executive officer, or one of its presidents, or one of its senior vice
presidents, or one of its vice presidents, or its chief financial officer, or
its chief legal officer, or its treasurer, or one of its assistant treasurers,
or its controller or one of its assistant controllers, or its secretary, or one
of its assistant secretaries, under its corporate seal attested by its secretary
or one of its assistant secretaries. Signatures may be in the form of a manual
or facsimile signature.

         The Company may use the facsimile signature of any Person who shall
have been a chief executive officer, president, senior vice president or vice
president thereof, chief financial officer, chief legal officer, treasurer or
assistant treasurer, controller or assistant controller, secretary or assistant
secretary thereof, notwithstanding the fact that at the time the Securities
shall be authenticated and delivered or disposed of such Person shall have
ceased to be such an officer of the Company. The seal of the Company may be in
the form of a facsimile of such seal and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. The Securities may contain such
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication by the
Trustee.

         A Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture. At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for authentication, together
with a written order of the Company for the authentication and delivery of such
Securities, signed by a chief executive officer, president, senior vice
president or any vice president, chief financial officer, chief legal officer,
treasurer or assistant treasurer, controller or assistant controller, and its
secretary or any assistant secretary, and the Trustee in accordance with such
written order shall authenticate and deliver such Securities.

         In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.

                                       9.
<PAGE>

         The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.

         SECTION 2.05 REGISTRATION OF TRANSFER AND EXCHANGE.

                  (a)      Securities of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for such
purpose in the Borough of Manhattan, the City and State of New York, for other
Securities of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section. In
respect of any Securities so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in exchange therefor the Security or Securities of the same series that the
Securityholder making the exchange shall be entitled to receive, bearing numbers
not contemporaneously outstanding.

                  (b)      The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose in the Borough of Manhattan, the
City and State of New York, or such other location designated by the Company, a
register or registers (herein referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
register the Securities and the transfers of Securities as in this Article
provided and which at all reasonable times shall be open for inspection by the
Trustee. The registrar for the purpose of registering Securities and transfer of
Securities as herein provided shall be appointed as authorized by Board
Resolution (the "Security Registrar").

         Upon surrender for transfer of any Security at the office or agency of
the Company designated for such purpose, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Security or Securities of the same series as the
Security presented for a like aggregate principal amount.

         All Securities presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Security Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by such holder's duly authorized attorney
in writing.

                  (c)      Except as provided pursuant to Section 2.01 pursuant
to a Board Resolution, and set forth in an Officers' Certificate, or established
in one or more indentures supplemental to this Indenture, no service charge
shall be made for any exchange or registration of transfer of Securities, or
issue of new Securities in case of partial redemption of any series, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, other than exchanges pursuant to
Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

                  (d)      The Company shall not be required (i) to issue,
exchange or register the transfer of any Securities during a period beginning at
the opening of business 15 days before the

                                      10.
<PAGE>

day of the mailing of a notice of redemption of less than all the Outstanding
Securities of the same series and ending at the close of business on the day of
such mailing, nor (ii) to register the transfer of or exchange any Securities of
any series or portions thereof called for redemption, other than the unredeemed
portion of any such Securities being redeemed in part. The provisions of this
Section 2.05 are, with respect to any Global Security, subject to Section 2.11
hereof.

         SECTION 2.06 TEMPORARY SECURITIES.

         Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary
Securities (printed, lithographed or typewritten) of any authorized
denomination. Such temporary Securities shall be substantially in the form of
the definitive Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every temporary Security of
any series shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities of such series. Without unnecessary delay
the Company will execute and will furnish definitive Securities of such series
and thereupon any or all temporary Securities of such series may be surrendered
in exchange therefor (without charge to the holders), at the office or agency of
the Company designated for the purpose in the Borough of Manhattan, the City and
State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate
principal amount of definitive Securities of such series, unless the Company
advises the Trustee to the effect that definitive Securities need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Securities of such series shall be entitled to the same
benefits under this Indenture as definitive Securities of such series
authenticated and delivered hereunder.

         SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.

         In case any temporary or definitive Security shall become mutilated or
be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon the Company's request the Trustee (subject as
aforesaid) shall authenticate and deliver, a new Security of the same series,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Security, or in lieu of and in substitution for the Security
so destroyed, lost or stolen. In every case the applicant for a substituted
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
the applicant's Security and of the ownership thereof. The Trustee may
authenticate any such substituted Security and deliver the same upon the written
request or authorization of any officer of the Company. Upon the issuance of any
substituted 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 (including the fees and expenses of the Trustee)
connected therewith.

         In case any Security that has matured or is about to mature shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Security, pay or

                                      11.
<PAGE>

authorize the payment of the same (without surrender thereof except in the case
of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save
them harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Security and of the ownership thereof.

         Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company
whether or not the mutilated, destroyed, lost or stolen Security shall be found
at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder. All Securities shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) 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 2.08 CANCELLATION.

         All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be cancelled by it, and no Securities shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the
Trustee shall deliver to the Company canceled Securities held by the Trustee. In
the absence of such request the Trustee may dispose of canceled Securities in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.

         SECTION 2.09 BENEFITS OF INDENTURE.

         Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto
and the holders of the Securities any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; all such covenants, conditions and provisions being
for the sole benefit of the parties hereto and of the holders of the Securities.

         SECTION 2.10 AUTHENTICATING AGENT.

         So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which
the Trustee shall have the right to appoint. Said Authenticating Agent shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, transfer or partial redemption thereof, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. All

                                      12.
<PAGE>

references in this Indenture to the authentication of Securities by the Trustee
shall be deemed to include authentication by an Authenticating Agent for such
series. Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation that has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and that is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by federal or state
authorities. If at any time any Authenticating Agent shall cease to be eligible
in accordance with these provisions, it shall resign immediately.

         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 (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.

         SECTION 2.11 GLOBAL SECURITIES.

                  (a)      If the Company shall establish pursuant to Section
2.01 that the Securities of a particular series are to be issued as a Global
Security, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and deliver, a Global Security that (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series, (ii)
shall be registered in the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Except as otherwise provided in Section 2.11 of the Indenture, this Security
may be transferred, in whole but not in part, only to another nominee of the
Depositary or to a successor Depositary or to a nominee of such successor
Depositary."

                  (b)      Notwithstanding the provisions of Section 2.05, the
Global Security of a series may be transferred, in whole but not in part and in
the manner provided in Section 2.05, only to another nominee of the Depositary
for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.

                  (c)      If at any time the Depositary for a series of the
Securities notifies the Company that it is unwilling or unable to continue as
Depositary for such series or if at any time the Depositary for such series
shall no longer be registered or in good standing under the Exchange Act, or
other applicable statute or regulation, and a successor Depositary for such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be, or if an
Event of Default has occurred and is continuing and the Company has received a
request from the Depositary, this Section 2.11 shall no longer be applicable to
the Securities of such series and the Company will execute, and subject to
Section 2.04, the Trustee will authenticate and deliver the Securities of such
series in

                                      13.
<PAGE>

definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security. In addition, the
Company may at any time determine that the Securities of any series shall no
longer be represented by a Global Security and that the provisions of this
Section 2.11 shall no longer apply to the Securities of such series. In such
event the Company will execute and, subject to Section 2.04, the Trustee, upon
receipt of an Officers' Certificate evidencing such determination by the
Company, will authenticate and deliver the Securities of such series in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security. Upon the exchange
of the Global Security for such Securities in definitive registered form without
coupons, in authorized denominations, the Global Security shall be canceled by
the Trustee. Such Securities in definitive registered form issued in exchange
for the Global Security pursuant to this Section 2.11(c) shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.

                                   ARTICLE 3

              REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

         SECTION 3.01 REDEMPTION.

         The Company may redeem the Securities of any series issued hereunder on
and after the dates and in accordance with the terms established for such series
pursuant to Section 2.01 hereof.

         SECTION 3.02 NOTICE OF REDEMPTION.

                  (a)      In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Securities of any
series in accordance with any right the Company reserved for itself to do so
pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee
to, give notice of such redemption to holders of the Securities of such series
to be redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 90 days before the date fixed
for redemption of that series to such holders at their last addresses as they
shall appear upon the Security Register, unless a shorter period is specified in
the Securities to be redeemed. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the registered holder receives the notice. In any case, failure duly to give
such notice to the holder of any Security of any series designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Securities of
such series or any other series. In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with any
such restriction.

                                      14.
<PAGE>

         Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Securities of that series are to be
redeemed, and shall state that payment of the redemption price of such
Securities to be redeemed will be made at the office or agency of the Company in
the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, that from and after said
date interest will cease to accrue and that the redemption is for a sinking
fund, if such is the case. If less than all the Securities of a series are to be
redeemed, the notice to the holders of Securities of that series to be redeemed
in part shall specify the particular Securities to be so redeemed.

         In case any Security is to be redeemed in part only, the notice that
relates to such Security shall state the portion of the principal amount thereof
to be redeemed, and shall state that on and after the redemption date, upon
surrender of such Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.

                  (b)      If less than all the Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days' notice in advance
of the date fixed for redemption as to the aggregate principal amount of
Securities of the series to be redeemed, and thereupon the Trustee shall select,
by lot or in such other manner as it shall deem appropriate and fair in its
discretion and that may provide for the selection of a portion or portions
(equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Securities of a denomination larger than $1,000,
the Securities to be redeemed and shall thereafter promptly notify the Company
in writing of the numbers of the Securities to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of instructions
signed on its behalf by its chief executive officer, president or any senior
vice president or vice president, instruct the Trustee or any paying agent to
call all or any part of the Securities of a particular series for redemption and
to give notice of redemption in the manner set forth in this Section, such
notice to be in the name of the Company or its own name as the Trustee or such
paying agent may deem advisable. In any case in which notice of redemption is to
be given by the Trustee or any such paying agent, the Company shall deliver or
cause to be delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Security Register, transfer books or other
records, or suitable copies or extracts therefrom, sufficient to enable the
Trustee or such paying agent to give any notice by mail that may be required
under the provisions of this Section.

         SECTION 3.03 PAYMENT UPON REDEMPTION.

                  (a)      If the giving of notice of redemption shall have been
completed as above provided, the Securities or portions of Securities of the
series to be redeemed specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption and
interest on such Securities or portions of Securities shall cease to accrue on
and after the date fixed for redemption, unless the Company shall default in the
payment of such redemption price and accrued interest with respect to any such
Security or portion thereof. On presentation and surrender of such Securities on
or after the date fixed for redemption at the place of payment specified in the
notice, said Securities shall be paid and redeemed at the applicable redemption
price for such series, together with interest accrued thereon to the date fixed
for redemption (but

                                      15.
<PAGE>

if the date fixed for redemption is an interest payment date, the interest
installment payable on such date shall be payable to the registered holder at
the close of business on the applicable record date pursuant to Section 2.03).

                  (b)      Upon presentation of any Security of such series that
is to be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall
deliver to the holder thereof, at the expense of the Company, a new Security of
the same series of authorized denominations in principal amount equal to the
unredeemed portion of the Security so presented.

         SECTION 3.04 SINKING FUND.

         The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to
any sinking fund for the retirement of Securities of a series, except as
otherwise specified as contemplated by Section 2.01 for Securities of such
series.

         The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

         SECTION 3.05 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

         The Company (i) may deliver Outstanding Securities of a series and (ii)
may apply as a credit Securities of a series that have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of
such series, provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the redemption price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

         SECTION 3.06 REDEMPTION OF SECURITIES FOR SINKING FUND.

         Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of the series, the portion thereof, if any,
that is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 3.05 and the basis for such credit and will, together with
such Officers' Certificate, deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.02 and cause notice of the

                                      16.
<PAGE>

redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.02. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.

                                   ARTICLE 4

                                    COVENANTS

         SECTION 4.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

         The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Securities of that series
at the time and place and in the manner provided herein and established with
respect to such Securities. Payments of principal on the Securities may be made
at the time provided herein and established with respect to such Securities by
U.S. dollar check drawn on and mailed to the address of the Securityholder
entitled thereto as such address shall appear in the Security Register, or U.S.
dollar wire transfer to, a U.S. dollar account (such a wire transfer to be made
only to a Securityholder of an aggregate principal amount of Securities of the
applicable series in excess of U.S. $2,000,000 and only if such Securityholder
shall have furnished wire instructions to the Trustee no later than 15 days
prior to the relevant payment date). Payments of interest on the Securities may
be made at the time provided herein and established with respect to such
Securities by U.S. dollar check mailed to the address of the Securityholder
entitled thereto as such address shall appear in the Security Register, or U.S.
dollar wire transfer to, a U.S. dollar account (such a wire transfer to be made
only to a Securityholder of an aggregate principal amount of Securities of the
applicable series in excess of U.S. $2,000,000 and only if such Securityholder
shall have furnished wire instructions in writing to the Security Registrar and
the Trustee no later than 15 days prior to the relevant payment date).

         SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.

         So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and
State of New York, with respect to each such series and at such other location
or locations as may be designated as provided in this Section 4.02, where (i)
Securities of that series may be presented for payment, (ii) Securities of that
series may be presented as herein above authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by any officer authorized to sign an Officers'
Certificate and delivered to the Trustee, designate some other office or agency
for such purposes or any of them. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, notices and
demands. The Company initially appoints the corporate trust office of U.S. Bank
Trust National Association, an affiliate of the Trustee, located in the Borough
of Manhattan, the City of New York as its paying agent with respect to the
Securities.

                                      17.
<PAGE>

         SECTION 4.03 PAYING AGENTS.

                  (a)      If the Company shall appoint one or more paying
agents for all or any series of the Securities, other than the Trustee, the
Company will cause each such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section:

                           (1)      that it will hold all sums held by it as
such agent for the payment of the principal of (and premium, if any) or interest
on the Securities of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;

                           (2)      that it will give the Trustee notice of any
failure by the Company (or by any other obligor of such Securities) to make any
payment of the principal of (and premium, if any) or interest on the Securities
of that series when the same shall be due and payable;

                           (3)      that it will, at any time during the
continuance of any failure referred to in the preceding paragraph (a)(2) above,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such paying agent; and

                           (4)      that it will perform all other duties of
paying agent as set forth in this Indenture.

                  (b)      If the Company shall act as its own paying agent with
respect to any series of the Securities, it will on or before each due date of
the principal of (and premium, if any) or interest on Securities of that series,
set aside, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Securities of that series until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Securities) to take such action. Whenever the Company shall have one or
more paying agents for any series of Securities, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Securities of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of this action or failure so to act.

                  (c)      Notwithstanding anything in this Section to the
contrary, (i) the agreement to hold sums in trust as provided in this Section is
subject to the provisions of Section 11.05, and (ii) the Company may at any
time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or direct any paying agent to pay, to
the Trustee all sums held in trust by the Company or such paying agent, such
sums to be held by the Trustee upon the same terms and conditions as those upon
which such sums were held by the Company or such paying agent; and, upon such
payment by the Company or any paying agent to the Trustee, the Company or such
paying agent shall be released from all further liability with respect to such
money.

                                      18.
<PAGE>

         SECTION 4.04 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.

         The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.

         SECTION 4.05 COMPLIANCE WITH CONSOLIDATION PROVISIONS.

         The Company will not, while any of the Securities remain Outstanding,
consolidate with or merge into any other Person, in either case where the
Company is not the survivor of such transaction, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article Ten hereof are complied with.

                                   ARTICLE 5

              SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND
                                  THE TRUSTEE

         SECTION 5.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS.

         The Company will furnish or cause to be furnished to the Trustee (a) on
each regular record date (as defined in Section 2.03) a list, in such form as
the Trustee may reasonably require, of the names and addresses of the holders of
each series of Securities as of such regular record date, provided that the
Company shall not be obligated to furnish or cause to furnish such list at any
time that the list shall not differ in any respect from the most recent list
furnished to the Trustee by the Company 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; provided, however, that,
in either case, no such list need be furnished for any series for which the
Trustee shall be the Security Registrar.

         SECTION 5.02 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.

                  (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 Securities contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if
acting in such capacity).

                  (b)      The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.

                  (c)      Securityholders may communicate as provided in
Section 312(b) of the Trust Indenture Act with other Securityholders with
respect to their rights under this Indenture or under the Securities, and, in
connection with any such communications, the Trustee shall satisfy

                                      19.
<PAGE>

its obligations under Section 312(b) of the Trust Indenture Act in accordance
with the provisions of Section 312(b) of the Trust Indenture Act.

         SECTION 5.03 REPORTS BY THE COMPANY.

         The Company covenants and agrees to provide a copy to the Trustee,
within 15 days after the Company is required to file the same with the
Securities and Exchange Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Securities and Exchange Commission may from time to time by
rules and regulations prescribe) that the Company may be required to file with
the Securities and Exchange Commission pursuant to Section 13 or Section 15(d)
of the Exchange Act.

         SECTION 5.04 REPORTS BY THE TRUSTEE.

                  (a)      On or before May 1 in each year in which any of the
Securities are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear
upon the Security Register, a brief report dated as of the preceding May 1, if
and to the extent required under Section 313(a) of the Trust Indenture Act.

                  (b)      The Trustee shall comply with Section 313(b) and
313(c) of the Trust Indenture Act.

                  (c)      A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the Company, with
each securities exchange upon which any Securities are listed (if so listed) and
also with the Securities and Exchange Commission. The Company agrees to notify
the Trustee when any Securities become listed on any securities exchange.

                                   ARTICLE 6

         REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

         SECTION 6.01 EVENTS OF DEFAULT.

                  (a)      Whenever used herein with respect to Securities of a
particular series, "Event of Default" means any one or more of the following
events that has occurred and is continuing:

                           (1)      the Company defaults in the payment of any
installment of interest upon any of the Securities of that series, as and when
the same shall become due and payable, and such default continues for a period
of 90 days; provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of interest for this
purpose;

                                      20.
<PAGE>

                           (2)      the Company defaults in the payment of the
principal of (or premium, if any, on) any of the Securities of that series as
and when the same shall become due and payable whether at maturity, upon
redemption, by declaration or otherwise, or in any payment required by any
sinking or analogous fund established with respect to that series; provided,
however, that a valid extension of the maturity of such Securities in accordance
with the terms of any indenture supplemental hereto shall not constitute a
default in the payment of principal or premium, if any;

                           (3)      the Company fails to observe or perform any
other of its covenants or agreements with respect to that series contained in
this Indenture or otherwise established with respect to that series of
Securities pursuant to Section 2.01 hereof (other than a covenant or agreement
that has been expressly included in this Indenture solely for the benefit of one
or more series of Securities other than such series) for a period of 90 days
after the date on which written notice of such failure, requiring the same to be
remedied and stating that such notice is a "Notice of Default" hereunder, shall
have been given to the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by the holders of at least 25% in principal
amount of the Securities of that series at the time Outstanding;

                           (4)      the Company pursuant to or within the
meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case, (iii)
consents to the appointment of a Custodian of it or for all or substantially all
of its property or (iv) makes a general assignment for the benefit of its
creditors; or

                           (5)      a court of competent jurisdiction enters an
order under any Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company for all or
substantially all of its property or (iii) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for 90 days.

                  (b)      In each and every such case (other than an Event of
Default specified in clause (4) or clause (5) above), unless the principal of
all the Securities of that series shall have already become due and payable,
either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Securities of that series then Outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by such Securityholders),
may declare the principal of (and premium, if any, on) and accrued and unpaid
interest on all the Securities of that series to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately due
and payable. If an Event of Default specified in clause (4) or clause (5) above
occurs, the principal of and accrued and unpaid interest on all the Securities
of that series shall automatically be immediately due and payable without any
declaration or other act on the part of the Trustee or the holders of the
Securities.

                  (c)      At any time after the principal of (and premium, if
any, on) and accrued and unpaid interest on the Securities of that series shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the holders of a majority in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has

                                      21.
<PAGE>

paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of that series and the
principal of (and premium, if any, on) any and all Securities of that series
that shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Securities of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and (ii) any and all Events of Default under the Indenture with respect to such
series, other than the nonpayment of principal on (and premium, if any, on) and
accrued and unpaid interest on Securities of that series that shall not have
become due by their terms, shall have been remedied or waived as provided in
Section 6.06.

         No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.

                  (d)      In case the Trustee shall have proceeded to enforce
any right with respect to Securities of that series 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, subject to any
determination in such proceedings, the Company and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the Trustee shall continue as though no
such proceedings had been taken.

         SECTION 6.02 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.

                  (a)      The Company covenants that (i) in case it shall
default in the payment of any installment of interest on any of the Securities
of a series, and such default shall have continued for a period of 90 Business
Days, or (ii) in case it shall default in the payment of the principal of (or
premium, if any, on) any of the Securities of a series when the same shall have
become due and payable, whether upon maturity of the Securities of a series or
upon redemption or upon declaration or otherwise, or in any payment required by
any sinking or analogous fund established with respect to that series as and
when the same shall have become due and payable, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Securities of that series, the whole amount that then shall have been become
due and payable on all such Securities for principal (and premium, if any) or
interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law) upon overdue installments of interest at the
rate per annum expressed in the Securities of that series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, and the amount payable to the Trustee under Section
7.06.

                  (b)      If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action 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
other obligor upon the Securities of that series and collect the moneys adjudged
or decreed to be payable in the

                                      22.
<PAGE>

manner provided by law or equity out of the property of the Company or other
obligor upon the Securities of that series, wherever situated.

                  (c)      In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company, or its creditors or property, the Trustee
shall have power to intervene in such proceedings and take any action therein
that may be permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of Securities of such series allowed for the entire
amount due and payable by the Company under the Indenture at the date of
institution of such proceedings and for any additional amount that may become
due and payable by the Company after such date, and to collect and receive any
moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Securityholders,
to pay to the Trustee any amount due it under Section 7.06.

                  (d)      All rights of action and of asserting claims under
this Indenture, or under any of the terms established with respect to Securities
of that series, may be enforced by the Trustee without the possession of any of
such 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, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of the
Securities of such series.

         In case of an Event of Default hereunder, 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 at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the 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.

         Nothing contained herein shall be deemed 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
Securities of that series 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.

         SECTION 6.03 APPLICATION OF MONEYS COLLECTED.

         Any moneys collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if

                                      23.
<PAGE>

any) or interest, upon presentation of the Securities of that series, and
notation thereon of the payment, if only partially paid, and upon surrender
thereof if fully paid:

         FIRST: To the payment of reasonable costs and expenses of collection
and of all amounts payable to the Trustee under Section 7.06;

         SECOND: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively; and

         THIRD: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.

         SECTION 6.04 LIMITATION ON SUITS.

         No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action
or proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless (i) such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to the Securities of such series specifying such Event of Default,
as hereinbefore provided; (ii) the holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder; (iii) such holder or holders
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby;
(iv) the Trustee for 90 days after its receipt of such notice, request and offer
of indemnity, shall have failed to institute any such action, suit or proceeding
and (v) during such 90 day period, the holders of a majority in principal amount
of the Securities of that series do not give the Trustee a direction
inconsistent with the request.

         Notwithstanding anything contained herein to the contrary or any other
provisions of this Indenture, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security,
as therein provided, on or after the respective due dates expressed in such
Security (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series
with every other such taker and holder and the Trustee, that no one or more
holders of Securities of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities of such series. For the protection and enforcement of the
provisions of this

                                      24.
<PAGE>

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 6.05 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.

                  (a)      Except as otherwise provided in Section 2.07, all
powers and remedies given by this Article 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 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 such Securities.

                  (b)      No delay or omission of the Trustee or of any holder
of any of the 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 6.04, every
power and remedy given by this Article or by law to the Trustee or 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 6.06 CONTROL BY SECURITYHOLDERS.

         The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding, determined in accordance with
Section 8.04, 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 series;
provided, however, that such direction shall not be in conflict with any rule of
law or with this Indenture. Subject to the provisions of Section 7.01, the
Trustee shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or officers of the
Trustee, determine that the proceeding so directed, subject to the Trustee's
duties under the Trust Indenture Act, would involve the Trustee in personal
liability or might be unduly prejudicial to the Securityholders not involved in
the proceeding. The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding affected thereby, determined in
accordance with Section 8.04, may on behalf of the holders of all of the
Securities of such series waive any past default in the performance of any of
the covenants contained herein or established pursuant to Section 2.01 with
respect to such series and its consequences, except a default in the payment of
the principal of, or premium, if any, or interest on, any of the Securities of
that series as and when the same shall become due by the terms of such
Securities otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal
and any premium has been deposited with the Trustee (in accordance with Section
6.01(c)). Upon any such waiver, the 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 Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.

                                      25.
<PAGE>

         SECTION 6.07 UNDERTAKING TO PAY COSTS.

         All parties to this Indenture agree, and each holder of any Securities
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, 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 more than 10% in aggregate principal amount of the
Outstanding Securities of any series, or 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 Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.

                                   ARTICLE 7

                             CONCERNING THE TRUSTEE

         SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.

                  (a)      The Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a series and after the curing of all
Events of Default with respect to the Securities of that series that may have
occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to the Securities of a
series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Securities of that series such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.

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

                  (i)      prior to the occurrence of an Event of Default with
respect to the Securities of a series and after the curing or waiving of all
such Events of Default with respect to that series that may have occurred:

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

                                      26.
<PAGE>

                           (B)      in the absence of bad faith on the part of
the Trustee, the Trustee may with respect to the Securities of such series
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 that 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 to the requirement of
this Indenture;

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

                  (iii)    the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the
Securities of any series at the time Outstanding 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
with respect to the Securities of that series; and

                  (iv)     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 if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity against
such risk is not reasonably assured to it.

         SECTION 7.02 CERTAIN RIGHTS OF TRUSTEE.

         Except as otherwise provided in Section 7.01:

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

                  (b)      Any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by a Board Resolution
or an instrument signed in the name of the Company by any authorized officer of
the Company (unless other evidence in respect thereof is specifically prescribed
herein);

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

                  (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

                                      27.
<PAGE>

have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the Securities
(that has not been cured or waived), to exercise with respect to Securities of
that series 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 man would
exercise or use under the circumstances in the conduct of his own affairs;

                  (e)      The Trustee shall not be liable for any action taken
or omitted to be taken by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture;

                  (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, security, or other papers or documents, unless requested in
writing so to do by the holders of not less than a majority in principal amount
of the Outstanding Securities of the particular series affected thereby
(determined as provided in Section 8.04); 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 costs, expenses or liabilities as a condition
to so proceeding. The reasonable expense of every such examination shall be paid
by the Company or, if paid by the Trustee, shall be repaid by the Company upon
demand; and

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

         SECTION 7.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR
SECURITIES.

                  (a)      The recitals contained herein and in the Securities
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.

                  (b)      The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.

                  (C)      The Trustee shall not be accountable for the use or
application by the Company of any of the Securities or of the proceeds of such
Securities, or for the use or application of any moneys paid over by the Trustee
in accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any paying
agent other than the Trustee.

                                      28.
<PAGE>

         SECTION 7.04 MAY HOLD SECURITIES.

         The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Trustee, paying agent or
Security Registrar.

         SECTION 7.05 MONEYS HELD IN TRUST.

         Subject to the provisions of Section 11.05, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.

         SECTION 7.06 COMPENSATION AND REIMBURSEMENT.

                  (a)      The Company covenants and agrees to pay to the
Trustee, and the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as the Company and the Trustee
may from time to time agree in writing, for all services rendered by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company will pay or reimburse the Trustee upon
its request for all 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 expenses and disbursements of its
counsel and of all Persons not regularly in its employ), except any such
expense, disbursement or advance as may arise from its negligence or bad faith
and except as the Company and Trustee may from time to time agree in writing.
The Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of
defending itself against any claim of liability in the premises.

                  (b)      The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
reasonable expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a lien
prior to that of the 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 Securities.

         SECTION 7.07 RELIANCE ON OFFICERS' CERTIFICATE.

         Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
reasonably necessary or desirable that a matter be proved or established prior
to taking or suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Trustee, be
deemed

                                      29.
<PAGE>

to be conclusively proved and established by an Officers' Certificate delivered
to the Trustee and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.

         SECTION 7.08 DISQUALIFICATION; CONFLICTING INTERESTS.

         If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.

         SECTION 7.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

         There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Securities and Exchange Commission,
authorized under such laws to exercise corporate trust powers, having (or, in
the case of a subsidiary of a bank holding company, its bank holding company
parent shall have) 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, territorial, or District of Columbia authority.

         If such corporation or other Person 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 other Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report 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. 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 7.10.

         SECTION 7.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

                  (a)      The Trustee or any successor hereafter appointed may
at any time resign with respect to the Securities of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first class postage prepaid, to the Securityholders of such
series, as their names and addresses appear upon the Security Register. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee with respect to Securities of such series by written
instrument, in duplicate, executed by order of the 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, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Securities of such series, or any Securityholder of that series who has been a
bona fide holder of a Security or Securities for at least six months may on
behalf of himself and all others similarly situated, petition any such court for
the

                                      30.
<PAGE>

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 one of the following shall
occur:

                           (i)      the Trustee shall fail to comply with the
provisions of Section 7.08 after written request therefor by the Company or by
any Securityholder who has been a bona fide holder of a Security or Securities
for at least six months; or

                           (ii)     the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.09 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 a bankrupt or insolvent, or commence a voluntary
bankruptcy proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, 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 with respect
to all Securities 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 any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months may, on behalf of that holder and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a 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)      The holders of a majority in aggregate principal
amount of the Securities of any series at the time Outstanding may at any time
remove the Trustee with respect to such series by so notifying the Trustee and
the Company and may appoint a successor Trustee for such series with the consent
of the Company.

                  (d)      Any resignation or removal of the Trustee and
appointment of a successor trustee with respect to the Securities of a series
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 7.11.

                  (e)      Any successor trustee appointed pursuant to this
Section may be appointed with respect to the Securities of one or more series or
all of such series, and at any time there shall be only one Trustee with respect
to the Securities of any particular series.

         SECTION 7.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

                  (a)      In case of the appointment hereunder of a successor
trustee with respect to all Securities, every such successor trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and

                                      31.
<PAGE>

thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor trustee all the rights,
powers, and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor trustee all property and money held by such retiring
Trustee hereunder.

                  (b)      In case of the appointment hereunder of a successor
trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
trustee relates, (ii) shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (iii) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Securities of that or
those series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor trustee relates.

                  (c)      Upon request of any such successor trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

                  (d)      No successor trustee shall accept its appointment
unless at the time of such acceptance such successor trustee shall be qualified
and eligible under this Article.

                                      32.
<PAGE>

                  (e)      Upon acceptance of appointment by a successor trustee
as provided in this Section, the Company shall transmit notice of the succession
of such trustee hereunder by mail, first class postage prepaid, to the
Securityholders, as their names and addresses appear upon the Security Register.
If the Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be transmitted at the expense of the Company.

         SECTION 7.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the administration of the trust created by
this Indenture), shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. In case any Securities shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.

         SECTION 7.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.

         The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.

         SECTION 7.14 NOTICE OF DEFAULT

         If any Default or any Event of Default occurs and is continuing and if
such Default or Event of Default is known to a Responsible Officer of the
Trustee, the Trustee shall mail to each Securityholder in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act notice of the
Default or Event of Default within 45 days after it occurs, unless such Default
or Event of Default has been cured; provided, however, that, except in the case
of a default in the payment of the principal of (or premium, if any) or interest
on any Security, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
Securityholders.

                                      33.
<PAGE>

                                   ARTICLE 8

                         CONCERNING THE SECURITYHOLDERS

         SECTION 8.01 EVIDENCE OF ACTION BY SECURITYHOLDERS.

         Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Securities
of a particular series 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 majority or specified percentage of that series have joined therein may
be evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Securities of that series in person or by agent or
proxy appointed in writing.

         If the Company shall solicit from the Securityholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, 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 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 Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Securities of that series
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 8.02 PROOF OF EXECUTION BY SECURITYHOLDERS.

         Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Securities shall be sufficient if made in the following manner:

                  (a)      The fact and date of the execution by any such Person
of any instrument may be proved in any reasonable manner acceptable to the
Trustee.

                  (b)      The ownership of Securities shall be proved by the
Security Register of such Securities or by a certificate of the Security
Registrar thereof.

The Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.

                                      34.
<PAGE>

         SECTION 8.03 WHO MAY BE DEEMED OWNERS.

         Prior to the due presentment for registration of transfer of any
Security, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the Person in whose name such Security shall be registered
upon the books of the Company as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and (subject to Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.

         SECTION 8.04 CERTAIN SECURITIES OWNED BY COMPANY DISREGARDED.

         In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction,
consent or waiver under this Indenture, the Securities of that series that are
owned by the Company or any other obligor on the Securities of that series or by
any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that 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
so to act with respect to such Securities and that the pledgee is not a Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In 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 8.05 ACTIONS BINDING ON FUTURE SECURITYHOLDERS.

         At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Securities of a
particular series specified in this Indenture in connection with such action,
any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Securities of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Securities of that series.

                                      35.
<PAGE>

                                   ARTICLE 9

                             SUPPLEMENTAL INDENTURES

         SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS.

         In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company 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 as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:

                  (a)      to cure any ambiguity, defect, or inconsistency
herein or in the Securities of any series;

                  (b)      to comply with Article Ten;

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

                  (d)      to add to the covenants, restrictions, conditions or
provisions relating to the Company for the benefit of the holders of all or any
series of Securities (and if such covenants, restrictions, conditions or
provisions are to be for the benefit of less than all series of Securities,
stating that such covenants, restrictions, conditions or provisions are
expressly being included solely for the benefit of such series), to make the
occurrence, or the occurrence and the continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of
Default, or to surrender any right or power herein conferred upon the Company;

                  (e)      to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or purposes of
issue, authentication, and delivery of Securities, as herein set forth;

                  (f)      to make any change that does not adversely affect the
rights of any Securityholder in any material respect;

                  (g)      to provide for the issuance of and establish the form
and terms and conditions of the Securities of any series as provided in Section
2.01, to establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or any series of Securities, or to add
to the rights of the holders of any series of Securities;

                  (h)      to evidence and provide for the acceptance of
appointment hereunder by a successor trustee; or

                  (i)      to comply with any requirements of the Securities and
Exchange Commission or any successor in connection with the qualification of
this Indenture under the Trust Indenture Act.

                                      36.
<PAGE>

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

         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 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 8.01) of the holders
of not less than a majority in aggregate principal amount of the Securities of
each series affected by such supplemental indenture or indentures at the time
Outstanding, 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 as then in effect) 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 not covered by
Section 9.01 the rights of the holders of the Securities of such series under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and
affected thereby, (a) extend the fixed maturity of any Securities of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof or (b) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture.

         It shall not be necessary for the consent of the Securityholders of any
series affected thereby 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 or of Section 10.01, this Indenture shall, with
respect to such series, 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 Securities of the series affected thereby 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 SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.

         Securities of any series affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets

                                      37.
<PAGE>

the requirements of any securities exchange upon which such series may be
listed, as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of that series so modified as to
conform, in the opinion of the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of that series then Outstanding.

         SECTION 9.05 EXECUTION OF SUPPLEMENTAL INDENTURES.

         Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto 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. The Trustee, subject to the
provisions of Section 7.01, may receive an Officers' Certificate or an Opinion
of Counsel as conclusive evidence that any supplemental indenture executed
pursuant to this Article is authorized or permitted by, and conforms to, the
terms of this Article and that it is proper for the Trustee under the provisions
of this Article to join in the execution thereof; provided, however, that such
Officers' Certificate or Opinion of Counsel need not be provided in connection
with the execution of a supplemental indenture that establishes the terms of a
series of Securities pursuant to Section 2.01 hereof.

         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, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

                                   ARTICLE 10

                                SUCCESSOR ENTITY

         SECTION 10.01 COMPANY MAY CONSOLIDATE, ETC.

         Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and set forth in an Officers' Certificate, or established in one or
more indentures supplemental to this Indenture, nothing contained in this
Indenture shall prevent any consolidation or merger of the Company with or into
any other Person (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 the property of the Company or its successor or successors
as an entirety, or substantially as an entirety, 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, the Company
hereby covenants and agrees that, upon any such consolidation or merger (in each
case, if the Company

                                      38.
<PAGE>

is not the survivor of such transaction), sale, conveyance, transfer or other
disposition, (a) the due and punctual payment of the principal of (premium, if
any) and interest on all of the Securities of all series in accordance with the
terms of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
with respect to each series or established with respect to such series pursuant
to Section 2.01 to be kept or performed by the Company shall be expressly
assumed, by supplemental indenture (which shall conform to the provisions of the
Trust Indenture Act, as then in effect) reasonably satisfactory in form to the
Trustee executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the
entity which shall have acquired such property and (b) in the event that the
Securities of any series then Outstanding are convertible into or exchangeable
for shares of common stock or other securities of the Company, such entity
shall, by such supplemental indenture, make provision so that the
Securityholders of Securities of that series shall thereafter be entitled to
receive upon conversion or exchange of such Securities the number of securities
or property to which a holder of the number of shares of common stock or other
securities of the Company deliverable upon conversion or exchange of those
Securities would have been entitled had such conversion or exchange occurred
immediately prior to such consolidation, merger, sale, conveyance, transfer or
other disposition.

         SECTION 10.02 SUCCESSOR ENTITY SUBSTITUTED.

                  (a)      In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by the
successor entity by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the obligations set forth
under Section 10.01 on all of the Securities of all series Outstanding, such
successor entity shall succeed to and be substituted for the Company with the
same effect as if it had been named as the Company herein, and thereupon the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Securities.

                  (b)      In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition, such changes in phraseology and form
(but not in substance) may be made in the Securities thereafter to be issued as
may be appropriate.

                  (c)      Nothing contained in this Article shall require any
action by the Company in the case of a consolidation or merger of any Person
into the Company where the Company is the survivor of such transaction, or the
acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).

         SECTION 10.03 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.

         The Trustee, subject to the provisions of Section 7.01, may receive an
Officers' Certificate or an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article.

                                      39.
<PAGE>

                                   ARTICLE 11

                           SATISFACTION AND DISCHARGE

         SECTION 11.01 SATISFACTION AND DISCHARGE OF INDENTURE.

         If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Securities of a series theretofore authenticated and not
delivered to the Trustee for cancellation (other than any Securities that shall
have been destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.07 and Securities for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated and held in
trust by the Company and thereupon repaid to the Company or discharged from such
trust, as provided in Section 11.05); or (b) all such Securities of a particular
series not theretofore 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 or cause to be deposited with the Trustee as trust funds
the entire amount in moneys or Governmental Obligations or a combination
thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption all Securities
of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
with respect to such series by the Company then this Indenture shall thereupon
cease to be of further effect with respect to such series except for the
provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall
survive until the date of maturity or redemption date, as the case may be, and
Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the
Trustee, on demand of the Company and at the cost and expense of the Company
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture with respect to such series.

         SECTION 11.02 DISCHARGE OF OBLIGATIONS.

         If at any time all such Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become due
and payable as described in Section 11.01 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient to pay at maturity or upon redemption all
such Securities of that series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company with respect to such series, then after the
date such moneys or Governmental Obligations, as the case may be, are deposited
with the Trustee the obligations of the Company under this Indenture with
respect to such series shall cease to be of further effect except for the
provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05
hereof that shall survive until such Securities shall mature and be paid.

                                      40.
<PAGE>

         Thereafter, Sections 7.06 and 11.05 shall survive.

         SECTION 11.03 DEPOSITED MONEYS TO BE HELD IN TRUST.

         All moneys or Governmental Obligations deposited with the Trustee
pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be
available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular series of Securities for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.

         SECTION 11.04 PAYMENT OF MONEYS HELD BY PAYING AGENTS.

         In connection with the satisfaction and discharge of this Indenture all
moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.

         SECTION 11.05 REPAYMENT TO COMPANY.

         Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal
of or premium, if any, or interest on the Securities of a particular series that
are not applied but remain unclaimed by the holders of such Securities for at
least two years after the date upon which the principal of (and premium, if any)
or interest on such Securities shall have respectively become due and payable,
or such other shorter period set forth in applicable escheat or abandoned or
unclaimed property law, shall be repaid to the Company on May 31 of each year or
upon the Company's request or (if then held by the Company) shall be discharged
from such trust; and thereupon the paying agent and the Trustee shall be
released from all further liability with respect to such moneys or Governmental
Obligations, and the holder of any of the Securities entitled to receive such
payment shall thereafter, as a general creditor, look only to the Company for
the payment thereof.

                                   ARTICLE 12

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

         SECTION 12.01 NO RECOURSE.

         No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, 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 this Indenture and the obligations
issued hereunder are solely corporate

                                      41.
<PAGE>

obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or directors
as such, of the Company or of any predecessor or successor corporation, or any
of them, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all
such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of such Securities.

                                   ARTICLE 13

                            MISCELLANEOUS PROVISIONS

         SECTION 13.01 EFFECT ON SUCCESSORS AND ASSIGNS.

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

         SECTION 13.02 ACTIONS BY SUCCESSOR.

         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
corresponding board, committee or officer of any corporation that shall at the
time be the lawful successor of the Company.

         SECTION 13.03 SURRENDER OF COMPANY POWERS.

         The Company by instrument in writing executed by authority 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 successor corporation.

         SECTION 13.04 NOTICES.

         Except as otherwise expressly provided herein, any notice, request or
demand that by any provision of this Indenture is required or permitted to be
given, made or served by the Trustee or by the holders of Securities or by any
other Person pursuant to this Indenture to or on the Company may be given or
served by being deposited in first class mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Trustee), as
follows: PACIFICARE HEALTH SYSTEMS, INC., 5995 Plaza Drive, Cypress, CA 90630.
Any notice, election, request or demand by the Company or any Securityholder or
by any other Person pursuant to this Indenture to or upon the Trustee shall be
deemed to have been sufficiently given

                                      42.
<PAGE>

or made, for all purposes, if given or made in writing at the Corporate Trust
Office of the Trustee.

         SECTION 13.05 GOVERNING LAW.

         This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said State, except to the extent that
the Trust Indenture Act is applicable.

         SECTION 13.06 TREATMENT OF SECURITIES AS DEBT.

         It is intended that the Securities will be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.

         SECTION 13.07 COMPLIANCE CERTIFICATES AND OPINIONS.

                  (a)      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 all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

                  (b)      Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (i) a statement that the
Person making such certificate or opinion has read such covenant or condition;
(ii) 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; (iii) a statement that, in the opinion of such
Person, he has made such examination or investigation as is reasonably necessary
to enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (iv) a statement as to whether or not,
in the opinion of such Person, such condition or covenant has been complied
with.

         SECTION 13.08 PAYMENTS ON BUSINESS DAYS.

         Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and set forth in an Officers' Certificate, or established in one or
more indentures supplemental to this Indenture, in any case where the date of
maturity of interest or principal of any Security or the date of redemption of
any Security shall not be a Business Day, then payment of interest or principal
(and premium, if any) may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of maturity or redemption,
and no interest shall accrue for the period after such nominal date.

                                      43.
<PAGE>

         SECTION 13.09 CONFLICT WITH TRUST INDENTURE ACT.

         If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

         SECTION 13.10 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 13.11 SEPARABILITY.

         In case any one or more of the provisions contained in this Indenture
or in the Securities of any series 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 Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.

         SECTION 13.12 COMPLIANCE CERTIFICATES.

         The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year during which any Securities of any series were outstanding,
an Officers' Certificate stating whether or not the signers know of any Default
or Event of Default that occurred during such fiscal year. Such certificate
shall contain a certification from the principal executive officer, principal
financial officer or principal accounting officer of the Company that a review
has been conducted of the activities of the Company and the Company's
performance under this Indenture and that the Company has complied with all
conditions and covenants under this Indenture. For purposes of this Section
13.12, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. If any of the officers
of the Company signing such certificate has knowledge of such a Default or Event
of Default, the certificate shall describe any such Default or Event of Default
and its status.

                                      44.
<PAGE>

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

                                     PACIFICARE HEALTH SYSTEMS, INC.

                                     By: /s/ Coy F. Baugh
                                        ----------------------------------------

                                     Name: Coy F. Baugh
                                          --------------------------------------

                                     Title: Vice President, Treasurer
                                           -------------------------------------

                                     U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                     By: /s/ Paula M. Oswald
                                        ----------------------------------------

                                     Name: Paula M. Oswald
                                          --------------------------------------

                                     Title: Vice President
                                           -------------------------------------

                                      45.
<PAGE>

CROSS-REFERENCE TABLE (1)

<TABLE>
<CAPTION>
SECTION OF TRUST INDENTURE ACT OF 1939, AS AMENDED                                SECTION OF INDENTURE
--------------------------------------------------                                --------------------
<S>                                                                               <C>
310(a)                                                                                7.09
310(b)                                                                                7.08
                                                                                      7.10
310(c)                                                                                Inapplicable
311(a)                                                                                7.13
311(b)                                                                                7.13
311(c)                                                                                Inapplicable
312(a)                                                                                5.01
                                                                                      5.02(a)
312(b)                                                                                5.02(c)
312(c)                                                                                5.02(c)
313(a)                                                                                5.04(a)
313(b)                                                                                5.04(b)
313(c)                                                                                5.04(a)
                                                                                      5.04(b)
313(d)                                                                                5.04(c)
314(a)                                                                                5.03
                                                                                      13.12
314(b)                                                                                Inapplicable
314(c)                                                                                13.07(a)
314(d)                                                                                Inapplicable
314(e)                                                                                13.07(b)
314(f)                                                                                Inapplicable
315(a)                                                                                7.01(a)
                                                                                      7.01(b)
315(b)                                                                                7.14
315(c)                                                                                7.01
315(d)                                                                                7.01(b)
315(e)                                                                                6.07
316(a)                                                                                6.06
                                                                                      8.04
316(b)                                                                                6.04
316(c)                                                                                8.01
317(a)                                                                                6.02
317(b)                                                                                4.03
318(a)                                                                                13.09
</TABLE>

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

(1)  This Cross-Reference Table does not constitute part of the Indenture and
     shall not have any bearing on the interpretation of any of its terms or
     provisions.

                                      46.

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