Document:

<Page>

                                                                  Exhibit 10.3.1

Amendments dated August 30, 2002 and September 16, 2002 to Revolving Credit
Agreement by and among TRC Companies, Inc. and its subsidiaries and Wachovia
Bank, N.A.

                                       41

<Page>

                  AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT

     This AMENDMENT NO. 1 ("Amendment") dated as of August 30, 2002 is by and
between WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union
National Bank), as an individual Lender and as Sole Lead Arranger and
Administrative Agent ("Wachovia"), Wachovia in its capacity as the Lead Arranger
and Administrative Agent is hereinafter the "Agent", and TRC COMPANIES, INC., a
Delaware corporation ("TRC") and the subsidiaries of TRC listed therein, (each a
"Borrower" and collectively the "Borrowers").

                              W I T N E S S E T H:
                               - - - - - - - - - -

     WHEREAS, the Borrowers, Agent and Wachovia, as the then sole Lender (the
"Existing Lender") are parties to a certain Revolving Credit Agreement dated as
of March 25, 2002 (said agreement, as amended and modified from time to time,
the "Credit Agreement") and certain other Credit Documents executed and
delivered in connection therewith; and

     WHEREAS, the Borrowers, the Agent and the Existing Lender desire to amend
the Credit Agreement for the purpose of (i) increasing the Commitments to an
aggregate amount not to exceed $38,000,000 and admitting Merrill Lynch Business
Financial Services Inc. as an additional Lender with a Commitment not to exceed
$8,000,000 (the "New Lender") and (ii) modifying the Consolidated Net Worth
requirement set forth in the Credit Agreement;

     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto hereby agree as follows:

     1. DEFINED TERMS; EFFECT OF AMENDMENT.

     (a) Unless otherwise modified hereby, all capitalized terms used herein
which are defined in the Credit Agreement, and not otherwise defined herein, are
used herein as defined in the Credit Agreement. All capitalized terms used
herein which are defined in the Credit Agreement and modified herein shall have
the meaning assigned to such terms in the Credit Agreement as so modified.

     (b) This Amendment is an amendment to the Credit Agreement. Unless the
context of this Amendment otherwise requires, the Credit Agreement and this
Amendment shall be read together and shall have effect as if the provisions of
the Credit Agreement and this Amendment were contained in one agreement. After
the effective date of this Amendment, all references in the Credit Agreement to
the "Credit Agreement", "this Agreement", "hereto", "hereof", "hereunder" or
words of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended by this Amendment, and all references in the Notes and the
other Credit Documents to the Credit Agreement shall mean the Credit Agreement
as amended by this Amendment.

     2. AMENDMENTS TO CREDIT AGREEMENT.

     (a) The defined terms "Commitment", "Commitments" and "Lender" set forth in
Section 1.01 of the Credit Agreement are hereby amended and restated in their
entirety to read as follows:

                                       42

<Page>

          ""COMMITMENT" shall mean, with respect to each Lender, the amount set
          forth on SCHEDULE "A" attached hereto, which is such Lender's Pro Rata
          Share of the Maximum Available Revolving Credit Amount that such
          Lender has agreed to advance hereunder, as the same may be (i) reduced
          from time to time pursuant to Section 2.04 hereof or (ii) adjusted
          from time to time as a result of assignments to and from the Lenders
          pursuant to Section 11.08 hereof and increases in the Commitments
          pursuant to Section 2.17 hereof. "COMMITMENTS" shall mean the
          aggregate of each Commitment of each Lender hereunder, and shall
          include (without duplication) the Swingline Commitment of the
          Swingline Lender."

     ""LENDER" shall mean each Lender listed on SCHEDULE "A" attached hereto,
each assignee which becomes a Lender pursuant to Section 11.08 hereof, and their
respective successors and assigns."

     (b) The following new defined terms are hereby inserted into Section 1.01
in their respective appropriate alphabetical order:

     ""CONSOLIDATED CURRENT ASSETS" shall mean all assets of the Borrowers, on a
consolidated basis, which may properly be classified as current assets in
accordance with GAAP."

     ""CONSOLIDATED NET WORTH" shall mean the excess of Consolidated Total
Assets over Consolidated Total Liabilities, determined in accordance with GAAP.
For the avoidance of doubt, Consolidated Net Worth shall be determined without
consideration of the Specified Preferred Stock."

     ""CONSOLIDATED TOTAL ASSETS" shall mean all assets of the Borrowers, on a
consolidated basis, determined in accordance with GAAP."

     ""CONSOLIDATED TOTAL LIABILITIES" shall mean all liabilities of the
Borrowers, on a consolidated basis, determined in accordance with GAAP."

     (c) Section 8.10 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:

     "8.10 NET WORTH. The Borrowers will not permit Consolidated Net Worth at
any time to be less than (a) $105,000,000 PLUS (b) the sum of (i) 75% of
quarterly positive net income on a cumulative basis commencing with results
reported with respect to the fiscal quarter ending March 31, 2002 and (ii) 100%
of the value of all property received by the Borrowers in exchange for the
issuance of new equity securities (or the sale of treasury shares) of any of the
Borrowers issued subsequent to December 31, 2001, measured quarterly."

     (d) SCHEDULE "A" attached hereto is hereby incorporated into, and made a
part of, the Credit Agreement.

     4. JOINDER OF NEW LENDER; NEW NOTES. (a) By its signature below and upon
satisfaction of the condition precedent set forth in Section 9 hereof, as of the
Effective Date (as defined in said Section 9), the New Lender shall become a
Lender party to, shall be bound as a Lender by, and shall be entitled to all the
benefits of a Lender pursuant to, the provisions of the Credit Agreement and the
other Credit Documents. As of the Effective Date, the New Lender shall be deemed
to have taken by assignment and purchased from the Existing Lender, without
recourse to, or representation or warranty, by the Existing

                                       43

<Page>

Lender of any kind or description, an interest in the Revolving Credit
Loans and L/C Participations owing to the Existing Lender as of the Effective
Date (but excluding accrued interest and fees to and including the Effective
Date) equal to its Pro Rata Share of said outstanding obligations. In connection
with said assignment and purchase, the New Lender shall pay to the Existing
Lender such amounts as may be necessary such that after given effect to such
payment, each of the Existing Lenders and the New Lender shall be owed from the
Borrowers outstanding Revolving Credit Obligation equal to their respective Pro
Rata Shares therein as of the Effective Date.

     (b) To evidence the obligations of the Borrowers owing to the Existing
Lender and the New Lender, respectively, as of the Effective Date, the Borrowers
shall issue to each Lender new Revolving Credit Notes substantially in the form
of EXHIBIT A to the Credit Agreement. Each such note shall be dated the
Effective Date and shall be in an original principal amount of up to the
Commitment of the Lender to which such note is being issued.

     5. FULL FORCE AND EFFECT. Except as expressly modified by this Amendment,
all of the terms and conditions of the Credit Agreement shall continue in full
force and effect, and all parties hereto shall be entitled to the benefits
thereof. This Amendment is limited as written and shall not be deemed (i) to be
an amendment of or a consent under or waiver of any other term or condition of
the Credit Agreement or (ii) to prejudice any right or rights which the Lenders
now have or may have in the future under or in connection with the Credit
Agreement or such other agreements.

     6. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to enter
into this Amendment, the Borrower makes the following representations and
warranties to the Lenders, which shall survive the execution and delivery
hereof:

          (i)   The execution and delivery of this Amendment has been
                authorized by all necessary corporate action on its part,
                this Amendment has been duly executed and delivered by it,
                and this Amendment and the Credit Agreement, as amended
                hereby, constitutes the legal, valid and binding obligations
                of it enforceable against it in accordance with its terms
                subject to applicable bankruptcy, insolvency, reorganization
                and other laws affecting creditors' rights generally,
                moratorium laws from time to time in effect and general
                principles of equity (regardless of whether such
                enforceability is considered in a proceeding in equity or at
                law);

          (ii)  No Event of Default has occurred and is continuing under the
                Credit Agreement, and no event has occurred which, with
                notice, lapse of time or both, would constitute such an Event
                of Default; and

          (iii) The representations and warranties set forth in the Credit
                Agreement and the other Credit Documents are true and correct
                as of the date hereof in all material respects.

     7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all which when taken together shall constitute one and the same agreement.

     8. GOVERNING LAW. This Amendment, including the validity thereof and the
rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the State of New Jersey.

                                       44

<Page>

     9. CONDITIONS PRECEDENT. This Amendment shall not be effective until (i)
the Agent shall have received counterparts of this Amendment, duly executed by
each of the parties hereto, (ii) each Lender shall have received a Revolving
Credit Note reflecting its Commitment as of the Effective Date duly executed and
delivered by the Borrowers, (iii) the New Lender shall have duly completed and
submitted to the Agent an Administrative Reply Form, (iv) the Existing Lender
shall have received from the New Lender the payments required pursuant to
Section 4(a) hereof, (v) the New Lender shall have received from the Borrowers
all of the fees and expenses owing to the New Lender pursuant to its Commitment
dated August 5, 2002, and (vi) Borrowers shall have paid all reasonable fees and
expenses of the Agent's counsel incurred in connection with the preparation,
negotiation, execution and delivery and review of this Amendment. The date on
which all of the foregoing conditions are satisfied as determined by the Lenders
is referred to herein as the "EFFECTIVE DATE".

     10. EXECUTION CERTIFICATION. The parties hereto certified that this
Amendment was executed and delivered in the State of New Jersey.

                           [SIGNATURE PAGES TO FOLLOW]

                                       45

<Page>

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
day and year first above written.

THE BORROWERS:

TRC COMPANIES, INC.                    TRC ENVIRONMENTAL CORPORATION

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  -----------------------------          ---------------------------
  Harold C. Elston, Jr., Senior          Harold C. Elston, Jr., Vice
  Vice President                         President & Treasurer

TRC ENGINEERS, INC.                    TRC ENVIRONMENTAL SOLUTIONS, INC.

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  ---------------------------            ---------------------------
  Harold C. Elston, Jr., Vice            Harold C. Elston, Jr.,
  President & Treasurer                  Assistant Treasurer

TRC MARIAH ASSOCIATES INC.             TRC GARROW ASSOCIATES, INC.

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  ---------------------------            --------------------------------
  Harold C. Elston, Jr., Vice            Harold C. Elston, Jr., Treasurer
  President & Treasurer

TRC ALTON GEOSCIENCE, INC.             VECTRE CORP.

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  ---------------------------            --------------------------------
  Harold C. Elston, Jr.,                 Harold C. Elston, Jr., Treasurer
  Assistant Treasurer

HUNTER ASSOCIATES TEXAS, LTD.           LOWNEY ASSOCIATES
By Hunter Associates, Inc.,
its General Partner

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

OMNI ENVIRONMENTAL                     IMBSEN & ASSOCIATES
CORPORATION

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Assistant
                                         Treasurer

                                       46

<Page>

ENGINEERED AUTOMATION                  ECON CAPITAL, LP
 SYSTEMS, INCORPORATED                 By TRC Companies, Inc.,
                                       its General Partner

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

TRC ENERGYSOLVE LLC                    GBF HOLDINGS LLC
By TRC Companies, Inc.,                By TRC Companies, Inc.,
its Managing Member                    its Managing Member

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

PBWO HOLDINGS, LLC                          CO-ENERGY GROUP LLC
By TRC Companies, Inc.,
its Managing Member

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Assistant
                                         Treasurer

HUNTER ASSOCIATES, INC.                METUCHEN REALTY ACQUISITION, LLC
                                       By TRC Companies, Inc.,
                                       its Managing Member

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

E/PRO ENGINEERING AND                  CARSON-SALCEDO-MCWILLIAMS, INC.
ENVIRONMENTAL CONSULTING LLC

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

NEW CENTURY ENGINEERING                SITE-BLAUVELT ENGINEERS, INC.
SUPPORT SERVICES, LLC                       (New Jersey)

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

                                       47

<Page>

SITE CONSTRUCTION SERVICES INC.        SITE-BLAUVELT ENGINEERS, INC.
                                       (New York)

By: /S/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

SITE-BLAUVELT ENGINEERS, INC.
(Virginia)

By: /S/ HAROLD C. ELSTON, JR.
  --------------------------------
  Harold C. Elston, Jr., Treasurer

                                       WACHOVIA BANK, NATIONAL ASSOCIATION,
                                       (formerly known as First Union National
                                       Bank), AS AGENT

                                       BY: /s/ PAUL J. BAKEY
                                         -----------------------------
                                         Paul J. Bakey, Vice President

                                       THE EXISTING LENDERS:
                                       WACHOVIA BANK,  NATIONAL  ASSOCIATION,
                                       (formerly  known as First Union National
                                       Bank), INDIVIDUALLY

                                       BY: /s/ PAUL J. BAKEY
                                         -----------------------------
                                         Paul J. Bakey, Vice President

JOINDER OF NEW LENDER
ACCEPTED AND AGREED AS THE NEW LENDER:

MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

BY: /s/ CHRISTOPHER M. MCLAUGHLIN
   -----------------------------------------
   Christopher M. McLaughlin, Vice President

                                       48

<Page>

                                  SCHEDULE "A"

LENDERS AND COMMITMENTS

<Table>
<Caption>

LENDER                                               COMMITMENT
------                                               -----------
<S>                                                  <C>
Wachovia Bank, National Association                  $30,000,000
                                                     (includes $5,000,000 Swingline Commitment)

Merrill Lynch Business Financial Services Inc.       $8,000,000
</Table>

                                       49

<Page>

                               AMENDMENT NO. 2 TO
                           REVOLVING CREDIT AGREEMENT

     This AMENDMENT NO. 2 ("Amendment") dated as of September 16, 2002 is by and
between WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union
National Bank), as an individual Lender and as Sole Lead Arranger and
Administrative Agent ("Wachovia"), Wachovia in its capacity as the Lead Arranger
and Administrative Agent is hereinafter the "Agent", MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC., as an individual Lender ("Merrill"), Merrill and
Wachovia in their respective capacities as Lenders are hereinafter the "Existing
Lenders" and TRC COMPANIES, INC., a Delaware corporation ("TRC") and the
subsidiaries of TRC listed herein, (each a "Borrower" and collectively the
"Borrowers").

                              W I T N E S S E T H:
                               - - - - - - - - - -

     WHEREAS, the Borrowers, Agent and Existing Lenders are parties to a certain
Revolving Credit Agreement dated as of March 25, 2002, as amended by an
Amendment No. 1 thereto dated as of August 30, 2002 (said agreement, as so
amended, and as further as amended and modified from time to time, the "Credit
Agreement") and certain other Credit Documents executed and delivered in
connection therewith; and

     WHEREAS, the Borrowers, the Agent and the Existing Lenders desire to amend
the Credit Agreement for the purpose of increasing the Commitments to an
aggregate amount not to exceed $40,000,000 and admitting Banknorth, N.A. as an
additional Lender with a Commitment not to exceed $12,000,000 (the "New
Lender");

     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto hereby agree as follows:

     1. DEFINED TERMS; EFFECT OF AMENDMENT.

     (a) Unless otherwise modified hereby, all capitalized terms used herein
which are defined in the Credit Agreement, and not otherwise defined herein, are
used herein as defined in the Credit Agreement. All capitalized terms used
herein which are defined in the Credit Agreement and modified herein shall have
the meaning assigned to such terms in the Credit Agreement as so modified.

     (b) This Amendment is an amendment to the Credit Agreement. Unless the
context of this Amendment otherwise requires, the Credit Agreement and this
Amendment shall be read together and shall have effect as if the provisions of
the Credit Agreement and this Amendment were contained in one agreement. After
the effective date of this Amendment, all references in the Credit Agreement to
the "Credit Agreement", "this Agreement", "hereto", "hereof", "hereunder" or
words of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended by this Amendment, and all references in the Notes and the
other Credit Documents to the Credit Agreement shall mean the Credit Agreement
as amended by this Amendment.

     2. AMENDMENT TO CREDIT AGREEMENT.

     (a) For the purpose of establishing the New Lender as a Lender under the
Credit Agreement,

                                       50

<Page>

increasing the aggregate Commitments of all of the Lenders to $40,000,000 and
adjusting the Commitment of Wachovia accordingly, SCHEDULE "A" to the Credit
Agreement is hereby deleted in its entirety and SCHEDULE "A" attached hereto is
hereby substituted into, and made a part of, the Credit Agreement, in its place.

     (b) Clause (c) of Section 7.02 of the Credit Agreement shall be amended and
restated to read as follows:

          "(c) Contemporaneously with the quarterly financial statements
          delivered pursuant to clause (b) of this Section 7.02, an accounts
          receivable aging summary report in a form reasonably acceptable to the
          Agent;"

     (c) For the avoidance of doubt, the bracketed dollar figure appearing in
clause (ii) of Section 8.06 of the Credit Agreement is deleted and replaced with
the following dollar figure (without brackets):

              "$1,000,000"

     4. JOINDER OF NEW LENDER; NEW NOTES. (a) By its signature below and upon
satisfaction of the condition precedent set forth in Section 9 hereof, as of the
Effective Date (as defined in said Section 9), the New Lender shall become a
Lender party to, shall be bound as a Lender by, and shall be entitled to all the
benefits of a Lender pursuant to, the provisions of the Credit Agreement and the
other Credit Documents. As of the Effective Date, the New Lender shall be deemed
to have taken by assignment and purchased from the Existing Lenders, without
recourse to, or representation or warranty, by any of the Existing Lenders of
any kind or description, an interest in the Revolving Credit Loans and L/C
Participations owing to the Existing Lenders as of the Effective Date (but
excluding accrued interest and fees to and including the Effective Date) equal
to its Pro Rata Share of said outstanding obligations. In connection with said
assignment and purchase, the New Lender shall pay to the Existing Lenders such
amounts as may be necessary such that after given effect to such payment, each
of the Existing Lenders and the New Lender shall be owed from the Borrowers
outstanding Revolving Credit Obligation equal to their respective Pro Rata
Shares therein as of the Effective Date.

     (b) To evidence the obligations of the Borrowers owing to the Existing
Lenders and the New Lender, respectively, as of the Effective Date, the
Borrowers shall issue to each Lender new Revolving Credit Notes substantially in
the form of EXHIBIT A to the Credit Agreement. Each such note shall be dated the
Effective Date and shall be in an original principal amount of up to the
Commitment of the Lender to which such note is being issued.

     5. FULL FORCE AND EFFECT. Except as expressly modified by this Amendment,
all of the terms and conditions of the Credit Agreement shall continue in full
force and effect, and all parties hereto shall be entitled to the benefits
thereof. This Amendment is limited as written and shall not be deemed (i) to be
an amendment of or a consent under or waiver of any other term or condition of
the Credit Agreement or (ii) to prejudice any right or rights which the Lenders
now have or may have in the future under or in connection with the Credit
Agreement or such other agreements.

     6. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to enter
into this Amendment, the Borrower makes the following representations and
warranties to the Lenders, which shall survive the execution and delivery
hereof:

                                       51

<Page>

          (i)   The execution and delivery of this Amendment has been
                authorized by all necessary corporate action on its part,
                this Amendment has been duly executed and delivered by it,
                and this Amendment and the Credit Agreement, as amended
                hereby, constitutes the legal, valid and binding obligations
                of it enforceable against it in accordance with its terms
                subject to applicable bankruptcy, insolvency, reorganization
                and other laws affecting creditors' rights generally,
                moratorium laws from time to time in effect and general
                principles of equity (regardless of whether such
                enforceability is considered in a proceeding in equity or at
                law);

          (ii)  No Event of Default has occurred and is continuing under the
                Credit Agreement, and no event has occurred which, with
                notice, lapse of time or both, would constitute such an Event
                of Default; and

          (iii) The representations and warranties set forth in the Credit
                Agreement and the other Credit Documents are true and correct
                as of the date hereof in all material respects.

     7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all which when taken together shall constitute one and the same agreement.

     8. GOVERNING LAW. This Amendment, including the validity thereof and the
rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the State of New Jersey.

     9. CONDITIONS PRECEDENT. This Amendment shall not be effective until (i)
the Agent shall have received counterparts of this Amendment, duly executed by
each of the parties hereto, (ii) each Lender shall have received a Revolving
Credit Note reflecting its Commitment as of the Effective Date duly executed and
delivered by the Borrowers, (iii) the New Lender shall have duly completed and
submitted to the Agent an Administrative Reply Form, (iv) the Existing Lenders
shall have received from the New Lender the payments required pursuant to
Section 4(a) hereof, and (v) Borrowers shall have paid all reasonable fees and
expenses of the Agent's counsel incurred in connection with the preparation,
negotiation, execution and delivery and review of this Amendment. The date on
which all of the foregoing conditions are satisfied as determined by the Lenders
is referred to herein as the "EFFECTIVE DATE".

     10. EXECUTION CERTIFICATION. The parties hereto certified that this
Amendment was executed and delivered in the State of New Jersey.

                           [SIGNATURE PAGES TO FOLLOW]

                                       52

<Page>

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
day and year first above written.

THE BORROWERS:

TRC COMPANIES, INC.                    TRC ENVIRONMENTAL CORPORATION

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  -----------------------------          --------------------------------
  Harold C. Elston, Jr., Senior          Harold C. Elston, Jr., Vice
  Vice President                         President & Treasurer

TRC ENGINEERS, INC.                    TRC ENVIRONMENTAL SOLUTIONS, INC.

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  ---------------------------            --------------------------------
  Harold C. Elston, Jr., Vice            Harold C. Elston, Jr., Assistant
  President & Treasurer                  Treasurer

TRC MARIAH ASSOCIATES INC.             TRC GARROW ASSOCIATES, INC.

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  ---------------------------            --------------------------------
  Harold C. Elston, Jr., Vice            Harold C. Elston, Jr., Treasurer
  President & Treasurer

TRC ALTON GEOSCIENCE, INC.             VECTRE CORP.

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------             --------------------------------
  Harold C. Elston, Jr., Assistant       Harold C. Elston, Jr., Treasurer
  Treasurer

HUNTER ASSOCIATES TEXAS, LTD.          LOWNEY ASSOCIATES
By Hunter Associates, Inc.,
its General Partner

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

OMNI ENVIRONMENTAL                     IMBSEN & ASSOCIATES
CORPORATION

By: /S/ HAROLD C. ELSTON, JR.          By: /S/ HAROLD C. ELSTON, JR.
  --------------------------             --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Assistant
                                         Treasurer

                                       53

<Page>

ENGINEERED AUTOMATION                  ECON CAPITAL, LP
 SYSTEMS, INCORPORATED                 By TRC Companies, Inc.,
                                       its General Partner

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  -------------------------------        --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

TRC ENERGYSOLVE LLC                    GBF HOLDINGS LLC
By TRC Companies, Inc.,                By TRC Companies, Inc.,
its Managing Member                    its Managing Member

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

PBWO HOLDINGS, LLC                          CO-ENERGY GROUP LLC
By TRC Companies, Inc.,
its Managing Member

By: /s/ HAROLD C. ELSTON, JR.          By: /S/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Assistant
                                         Treasurer

HUNTER ASSOCIATES, INC.                METUCHEN REALTY ACQUISITION, LLC
                                       By TRC Companies, Inc.,
                                       its Managing Member

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

E/PRO ENGINEERING AND                  CARSON-SALCEDO-MCWILLIAMS, INC.
ENVIRONMENTAL CONSULTING LLC

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  ---------------------------------      --------------------------------
   Harold C. Elston, Jr., Treasurer      Harold C. Elston, Jr., Treasurer

NEW CENTURY ENGINEERING                SITE-BLAUVELT ENGINEERS, INC.
SUPPORT SERVICES, LLC                  New Jersey)

By: /s/ HAROLD C. ELSTON, JR.          By: /S/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

                                       54

<Page>

SITE CONSTRUCTION SERVICES INC.        SITE-BLAUVELT ENGINEERS, INC.
                                       (New York)

By: /s/ HAROLD C. ELSTON, JR.          By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------       --------------------------------
  Harold C. Elston, Jr., Treasurer       Harold C. Elston, Jr., Treasurer

SITE-BLAUVELT ENGINEERS, INC.
(Virginia)

By: /s/ HAROLD C. ELSTON, JR.
  --------------------------------
  Harold C. Elston, Jr., Treasurer

                                       THE AGENT:
                                       WACHOVIA BANK, NATIONAL ASSOCIATION,
                                       (formerly known as First Union National
                                       Bank), AS AGENT

                                       BY: /s/ PAUL J. BAKEY
                                         -----------------------------
                                         Paul J. Bakey, Vice President

                                       THE EXISTING LENDERS:
                                       WACHOVIA BANK, NATIONAL ASSOCIATION,
                                       (formerly  known as First Union National
                                       Bank), INDIVIDUALLY

                                       BY: /s/ PAUL J. BAKEY
                                         -----------------------------
                                         Paul J. Bakey, Vice President

                                       MERRILL LYNCH BUSINESS FINANCIAL
                                       SERVICES INC.

                                       BY: /s/ CHRISTOPHER M. MCLAUGHLIN
                                         --------------------------------
                                         Christopher M. McLaughlin,
                                         Vice President

JOINDER OF NEW LENDER
ACCEPTED AND AGREED AS THE NEW LENDER:

BANKNORTH, N.A.

BY: /S/ JEFFREY R. WESTLING
  ---------------------------------------
  Jeffrey R. Westling, Sr. Vice President

                                       55

<Page>

                                  SCHEDULE "A"

LENDERS AND COMMITMENTS

<Table>
<Caption>

LENDER                                               COMMITMENT
------                                               ----------
<S>                                                  <C>
Wachovia Bank, National Association                  $20,000,000
                                                     (includes $5,000,000 Swingline Commitment)

Merrill Lynch Business Financial Services Inc.       $8,000,000

Banknorth, N.A.                                      $12,000,000
                                                     -----------

         AGGREGATE COMMITMENTS:                      $40,000,000
                                                     ===========
</Table>

                                       56QuickLinks
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Exhibit 4(c)  

EXECUTION COPY 

AQUILA, INC.
  as Issuer 

and 

BANK ONE TRUST COMPANY, N.A.
  as Trustee 

117/8%
Senior Notes Due July 1, 2012 

SECOND SUPPLEMENTAL INDENTURE  

Dated as of July 3, 2002 

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	Page

	ARTICLE ONE DEFINITIONS	1
	

ARTICLE TWO TERMS AND ISSUANCE OF THE SENIOR NOTES	

2
	Section 201.	 	Issue of Senior Notes	2
	Section 202.	 	Form of Senior Notes; Incorporation of Terms	3
	Section 203.	 	Execution and Authentication	3
	Section 204.	 	Place of Payment	3
	Section 205.	 	Limitation on Issuance of Mortgage Bonds	3
	Section 206.	 	Reinstatement of Cross Default	3
	Section 207.	 	Legend.	3
	

ARTICLE THREE MISCELLANEOUS	

5
	Section 301.	 	Execution of Supplemental Indenture	5
	Section 302.	 	Conflict With Trust Indenture Act	5
	Section 303.	 	Effect of Headings	5
	Section 304.	 	Successors and Assigns	5
	Section 305.	 	Separability Clause	5
	Section 306.	 	Benefits of Second Supplemental Indenture	5
	Section 307.	 	Governing Law	5
	Section 308.	 	Execution and Counterparts	5
	

EXHIBIT A	

A-1
	EXHIBIT B	B-1

        SECOND SUPPLEMENTAL INDENTURE, dated as of July 3, 2002 (herein called the "Second Supplemental Indenture"), between AQUILA, INC. (formerly known as UtiliCorp
United Inc.), a corporation duly organized and existing under the laws of the State of Delaware (the "Issuer"), and BANK ONE TRUST COMPANY, N.A., a national banking association duly organized
and existing under the laws of the United States, as Trustee under the Original Indenture referred to below (the "Trustee"). 

WITNESSETH:  

        WHEREAS, the Issuer has executed and delivered to the Trustee an Indenture, dated as of August 24, 2001 (the "Original Indenture," as supplemented and
amended by a First Supplemental Indenture, dated as of February 28, 2002 (the "First Supplemental Indenture") and, together with this Second Supplemental Indenture and the Original Indenture,
the "Indenture"), to provide for the issuance from time to time of certain unsecured senior notes of the Issuer (the "Securities"), the form and terms
of which are to be established as set forth in Sections 201 and 301 of the Original Indenture; and 

        WHEREAS,
Section 901 of the Original Indenture provides, among other things, that the Issuer and the Trustee may enter into indentures supplemental to the Original Indenture for,
among other things, the purpose of establishing the form or terms of the Securities of any series as permitted in Sections 201 and 301 of the Original Indenture; and 

        WHEREAS,
the Issuer desires to create a series of the Securities in an initial aggregate principal amount of $500,000,000 to be designated the "117/8% Senior Notes Due
July 1, 2012", and all action on the part of the Issuer necessary to authorize the issuance of the Senior Notes (as defined below) under the Original Indenture and this Second Supplemental
Indenture has been duly taken; and 

        WHEREAS,
all acts and things necessary to make the Senior Notes when executed by the Issuer and completed, authenticated and delivered by the Trustee as provided in the Original
Indenture and this Second Supplemental Indenture, the valid and binding obligation of the Issuer and to constitute these presents a valid and binding supplemental indenture and agreement according to
its terms, have been done and performed; and 

        WHEREAS,
Section 901 of the Original Indenture provides, among other things, that the Issuer and the Trustee may enter into indentures supplemental to the Original Indenture to,
among other things, add to the covenants of the Issuer for the benefit of the Holders of all or any series of Securities and add additional Events of Default; and 

        WHEREAS,
the Issuer desires to (a) limit the issuance of mortgage bonds by the Issuer and (b) reinstate and amend paragraph (5) of Section 501 of the Original
Indenture which was deleted by the First Supplemental Indenture to the Original Indenture as set forth in Sections 205 and 206 of this Second Supplemental Indenture; 

        NOW,
THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: 

        That
in consideration of the premises, the Issuer covenants and agrees with the Trustee, for the equal benefit of Holders of the Senior Notes, as follows: 

ARTICLE ONE  

 DEFINITIONS  

        Except to the extent such terms are otherwise defined in this Second Supplemental Indenture or the context clearly requires otherwise, all terms used in this
Second Supplemental Indenture which are defined in the Original Indenture or the form of Initial Note or Exchange Note attached as Exhibits A and  B,
respectively have the meanings assigned to them therein. 

 

        As
used in this Second Supplemental Indenture, the following terms have the following meanings: 

        "Exchange Notes" means the 117/8% Senior Notes Due July 1, 2012 to be issued pursuant to the Indenture in connection
with a Registered Exchange Offer pursuant to the Registration Rights Agreement. 

        "Initial Notes" means the 117/8% Senior Notes Due July 1, 2012 to be issued under this Second Supplemental Indenture
on or about the date of this Second Supplemental Indenture. 

        "Issue Date" means the date on which the Initial Notes are originally issued. 

        "Private Exchange" means the offer by the Issuer, pursuant to the Registration Rights Agreement, to the Purchasers to issue and deliver to
the Purchasers, in exchange for the Initial Notes held by the Purchasers as part of their initial distribution, a like aggregate principal amount of Private Exchange Notes. 

        "Private Exchange Notes" means the 117/8% Senior Notes Due July 1, 2012 to be issued pursuant to the Indenture in
connection with a Private Exchange effected pursuant to the Registration Rights Agreement. 

        "Purchasers" means (i) Credit Suisse First Boston Corporation, UBS Warburg LLC, Banc One Capital Markets, Inc., BMO Nesbitt
Burns Corp., RBC Dominion Securities Corporation and TD Securities (USA) Inc., in respect of the Initial Notes, or (ii) the purchasers of additional notes, as the case may be. 

        "Registered Exchange Offer" means an offer by the Issuer, pursuant to the Registration Rights Agreement, to certain Holders of Initial
Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act. 

        "Registration Rights Agreement" means the Registration Rights Agreement dated as of June 28, 2002 between the Issuer and the
Purchasers or (ii) any registration rights agreement entered into in connection with the issuance of additional notes following the Issue Date. 

        "Senior Notes" means the Initial Notes, the Exchange Notes, the Private Exchange Notes, and any other 117/8% Senior Notes
Due July 1, 2012 issued after the Issue Date in accordance with clause (iii) of Section 203 herein treated as a single class of securities for all purposes, including voting, as
amended or supplemented from time to time in accordance with the terms of the Indenture, that are issued pursuant to the Indenture. 

        "Shelf Registration Statement" means the registration statement filed by the Issuer in connection with the offer and sale of Senior Notes
(other than Exchange Notes), pursuant to the Registration Rights Agreement. 

        "Transfer Restricted Notes" means Senior Notes that bear or are required to bear the legend set forth in Section 207 hereof. 

ARTICLE TWO  

 TERMS AND ISSUANCE OF THE SENIOR NOTES  

        Section 201. Issue of Senior Notes. A series of Securities which shall be designated the
"117/8% Senior Notes Due July 1, 2012" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms,
conditions and covenants of the Indenture (including the form of Initial Note and Exchange Note set forth hereto as Exhibits A and B, respectively). The aggregate principal amount of Senior Notes of
the series created hereby which may be authenticated and delivered under the Original Indenture shall initially be limited to $500,000,000, subject to reopening as provided in the last paragraph of
Section 301 of the Original Indenture. 

2

 

        Section 202.
Form of Senior Notes; Incorporation of Terms. The Initial Notes, the Private Exchange Notes and any additional notes
issued in transactions exempt from registration under the Securities Act shall be substantially in the form of Exhibit A. The Exchange Notes
shall be substantially in the form of Exhibit B. The Senior Notes may have such notations, legends or endorsements approved as to form by the
Issuer and required, as applicable, by law, stock exchange rule, agreements to which the Issuer is subject and/or usage. The terms of the Senior Notes set forth in  Exhibit A and Exhibit B are part of the terms of the Indenture. 

        Section 203.
Execution and Authentication. The Trustee, upon a Company Order and pursuant to the terms of the Indenture, shall
authenticate and deliver (i) Initial Notes for original issue in an initial aggregate principal amount of $500,000,000, (ii) Exchange Notes or Private Exchange Notes for issue only in a
Registered Exchange Offer or a Private Exchange, respectively, pursuant to the Registration Rights Agreement, for a like principal amount of Initial Notes, and (iii) additional Senior Notes for
original issue after the Issue Date in the amounts specified by the Issuer in a Company Order (and if in the form of Exhibit A or  B, as the case may
be, the same principal amount of Exchange Notes or Private Exchange Notes exchanged therefor upon consummation of the Registered
Exchange Offer) in each case upon a Company Order. Such order shall specify the amount of the Senior Notes to be authenticated, the date on which the original issue of Senior Notes is to be
authenticated, whether the Senior Notes are to be Initial Notes, Exchange Notes, Private Exchange Notes or Senior Notes issued pursuant to clause (iii) above, and the aggregate principal amount
of Senior Notes outstanding on the date of authentication. All of the Senior Notes issued under the Indenture shall be treated as a single class for all purposes under the Indenture, including,
without limitation, waivers, amendments, and offers to purchase. 

        Section 204.
Place of Payment. The Place of Payment will be initially the corporate trust offices of the Trustee which, at the date
hereof, are located at Bank One Trust Company, N.A., One Bank One Plaza, Suite 0126, Chicago, Illinois 60670-0126. 

        Section 205.
Limitation on Issuance of Mortgage Bonds. The Issuer will not (a) issue any mortgage bonds under its General
Mortgage Indenture and Deed of Trust, dated September 15, 1988, between the Issuer and Commerce Bank of Kansas City, N.A., as Trustee (the "General Mortgage"); or (b) issue any debenture
or other obligation or instrument under the St. Joseph Power & Light Company Indenture of Mortgage and Deed of Trust, dated as of April 1, 1946, as amended and supplemented;  provided, however, that any such issuance of any debenture or other obligation or instrument under any indenture referenced in (a) or
(b) shall be permitted where the Issuer directly secures the Senior Notes issued pursuant to this Second Supplemental Indenture equally and ratably with such debenture or other obligation or
instrument issued under such indenture. 

        Section 206.  Reinstatement of Cross Default. Paragraph (5) of Section 501 of the Original Indenture applies to the
Senior Notes only, except that (i) the term "$10,000,000" is replaced with the term "$40,000,000" and the term "30 days" is replaced with the term "10 days". 

        Section 207.
Legend. 

        (a)  Except
as permitted by the following paragraphs (b) and (c) each Senior Note certificate evidencing a Global Security (and all Senior Notes issued in
exchange therefor or substitution thereof) shall bear a legend in substantially the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF
AQUILA, INC. 

3

 

THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO AQUILA, INC., (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (2) THROUGH
(4) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE." 

        (b)  Upon
any sale or transfer of a Transfer Restricted Note pursuant to Rule 144 under the Securities Act, the Depositary shall, subject to approval by the Issuer and
the provisions of Section 305 of the Original Indenture, permit the Holder thereof to request the issuance of a global Senior Note that does not bear the legend set forth above and rescind any
restrictions on the transfer of such Transfer Restricted Note, if the sale or exchange was made in reliance on Rule 144 and the Holder certifies to that effect in writing to the Depositary. The
Depository Trust Company, a New York corporation, is the Depositary for the Senior Notes. 

        (c)  After
a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to
such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note shall cease to apply, and a global Initial
Note or Private Exchange Note without legends shall be available (subject to Section 305 of the Original Indenture) to the transferee of the Holder of such Initial Notes or Private Exchange
Notes or upon receipt of directions to transfer such Holder's interest in a Global Security, as applicable. 

        (d)  Upon
the consummation of a Registered Exchange Offer with respect to the Initial Notes pursuant to which Holders of such Initial Notes are offered Exchange Notes in
exchange for their Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply and Initial Notes in global
form with the restricted securities legend set forth in Exhibit A shall be available to Holders of such Initial Notes that do not exchange their
Initial Notes, and Exchange Notes in global form shall be available (subject to Section 305 of the Original Indenture) to Holders that exchange such Initial Notes in such Registered Exchange
Offer. 

        (e)  Upon
the consummation of a Private Exchange with respect to the Initial Notes pursuant to which Holders of such Initial Notes are offered Private Exchange Notes in
exchange for their Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain holders be issued in global form shall still apply, and Private Exchange Notes
in global form with the restricted securities legend set forth in Exhibit A shall be available to Holders that exchange such Initial Notes in
such Private Exchange. 

4

 

ARTICLE THREE  

 MISCELLANEOUS  

        Section 301. Execution of Supplemental Indenture. This Second Supplemental Indenture is executed and shall
be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Second Supplemental Indenture forms a part thereof. 

        Section 302.  Conflict With Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Second Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. 

        Section 303.
Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the
construction hereof. 

        Section 304.  Successors and Assigns. All covenants and agreements in this Second Supplemental Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not. 

        Section 305.
Separability Clause. In case any provision in this Second Supplemental Indenture or in the Senior Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

        Section 306.
Benefits of Second Supplemental Indenture. Nothing in this Second Supplemental Indenture or in the Senior Notes,
express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this
Second Supplemental Indenture. 

        Section 307.
Governing Law. This Second Supplemental Indenture and each Senior Note shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said State. 

        Section 308.
Execution and Counterparts. This Second Supplemental Indenture may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 

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

	 	 	AQUILA, INC., as Issuer
	

 	
 	

By:	
 	

/s/  RANDAL P. MILLER      
 Name: Randal P. Miller

Title: Vice President, Finance and Treasurer
	

 	
 	

BANK ONE TRUST COMPANY, N.A., as Trustee
	

 	
 	

By:	
 	

/s/  J. MORAND      
 Name: J. Morand

Title: Vice President

5

  

 
 

EXHIBIT A    
  

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.  

[FORM OF FACE OF INITIAL NOTE]

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF AQUILA, INC.
THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO AQUILA, INC., (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (2) THROUGH (4) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO ABOVE." 

	

RESTRICTED	
 	

RESTRICTED

A-1

 
AQUILA, INC.  

        117/8% SENIOR NOTE DUE JULY 1, 2012 

	

Number       	
 	

 
	

 	
 	

$

CUSIP       

        Aquila, Inc., a Delaware corporation (herein called the "Issuer,"), for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of                        
($                        ) on July 1, 2012, and to pay interest thereon from the date of the issuance of this Security or
from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually in arrears on January 1 and July 1 in each year, commencing January 1, 2003, at the rates as determined on the
reverse hereof until the principal hereof is paid or made available for payment, and, subject to the terms of the Indenture, at the rates as determined on the reverse hereof on any overdue principal
and premium, if any, and (to the extent that the payment of such interest shall be legally enforceable) on any overdue installment of interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest payment, which shall be the June 15 next preceding such July 1 Interest Payment Date and the December 15 next preceding such
January 1 Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may either be
paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, in which event notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture. 

        Payment
of the principal of and premium, if any, and interest on this Security will be made at the office or agency of the Trustee maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The Issuer may pay
principal by check payable in such money or by wire transfer to a dollar account maintained by the Holder (if the Holder of the Security holds an aggregate principal amount of Securities in excess of
$5,000,000). The Issuer may pay interest by mailing a dollar check to a Holder's registered address or, upon application by the Holder hereof to the Security Registrar, not later than the applicable
record date, by wire transfer to a dollar account maintained by the Holder (if the Holder of the Security holds an aggregate principal amount of Securities in excess of $5,000,000). 

        Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth
in full at this place. 

        Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, or an Authenticating Agent, by manual signature of one of its
authorized officers, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose. 

A-2

 

        IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

	

 	

 	
 	

AQUILA, INC.
	

Dated:               , 2002	
 	

By:	

  
 Name:

Title:
	

TRUSTEE'S CERTIFICATE OF

AUTHENTICATION	
 	

 	

 
	

This is one of the Senior Notes

of the Series referred to in the

within-mentioned Indenture	
 	

 	

 
	

BANK ONE TRUST COMPANY, N.A.,

        as Trustee	
 	

 	

 
	

By:	

  
	
 	

 	

 

A-3

 
[FORM OF REVERSE OF INITIAL NOTE]  

        AQUILA, INC. 

117/8%
SENIOR NOTE DUE JULY 1, 2012 

This
Senior Note is one of a duly authorized series of Securities of the Issuer, issued and to be issued in one or more series under an Indenture dated as of August 24, 2001 (the "Indenture")
between the Issuer and Bank One Trust Company, N.A., as Trustee (herein called the "Trustee"), to which Indenture and all indentures supplemental thereto (including the Second Supplemental
Indenture dated as of July 3, 2002, which authorizes the Senior Notes) reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee and the Holders of the Securities and the terms upon which the Securities are, and are to be, authenticated and delivered. 

        This
Security will bear interest for each Interest Period (as defined below) at a rate per annum (the "Interest Rate") determined by Bank One Trust Company, N.A., or its successor
appointed by the Company acting as Calculation Agent (the "Calculation Agent"). The Interest Rate shall be calculated by determining any Total Adjustment Amount(s) (as defined below) applicable during
the relevant Interest Period, and the days for which such Total Adjustment Amount(s) will apply in the calculation of the Interest Rate. Such Interest Rate shall be equal to 117/8%  plus any applicable Total Adjustment Amount; provided that such Interest Rate shall be calculated at a
rate per annum equal to the weighted average of the Interest Rate in effect on each day of the relevant Interest Period. Such weighted average shall be calculated by multiplying each such rate by the
number of days such rate is in effect during such Interest Period, determining the sum of such products and dividing such sum by the number of days in such Interest Period. 

        The
period commencing on an Interest Payment Date and ending on the day preceding the next succeeding Interest Payment Date shall be an "Interest Period,"  provided, however, that the first Interest Period
shall begin on the date of the issuance of this Security and extend through December 31, 2002,
the day preceding the first Interest Payment Date. 

        Interest
payments for this Security will be computed and paid on the basis of a 360-day year of twelve 30-day months. If an Interest Payment Date falls on a day that is not a Business
Day, such Interest Payment Date will be the following day that is a Business Day. All dollar amounts resulting from such calculation will be rounded, if necessary, to the nearest cent with one-half
cent rounded upward. 

        In
the event Moody's Investors Service, Inc. ("Moody's"), on the one hand, or Standard & Poor's Rating Service ("S&P") or Fitch, Inc. ("Fitch"), on the other hand,
have assigned a rating to the Company's long-term unsecured debt (a "Rating") listed under their respective names in the table immediately below as of any date within an Interest Period, the
Calculation Agent shall use the adjustment amount opposite such Rating (an "Adjustment Amount") to determine the Total Adjustment Amount. The "Total Adjustment Amount" shall be the sum of
(i) the applicable Moody's Adjustment Amount (as defined in the table below), if any, plus (ii) the higher of (A) the applicable
S&P Adjustment Amount (as defined in the table below), if any, and (B) the applicable Fitch Adjustment Amount (as defined in the table below), if any. Adjustment Amounts, if any, shall be
determined by the Calculation Agent based on the table immediately below and the respective Ratings of Moody's, S&P and Fitch. 

A-4

 

Interest Rate Adjustments  

	Moody's Rating
 
	 	"Moody Adjustment

Amount"
	 
	Bal	 	1.000	%
	Ba2	 	1.250	%
	Ba3 or lower	 	1.500	%

	
S&P Rating
 
	
 	

"S&P Adjustment

Amount"
	
 
	BB+	 	1.000	%
	BB	 	1.250	%
	BB- or lower	 	1.500	%

	
Fitch Rating
 
	
 	

"Fitch Adjustment

Amount"
	
 
	BB+	 	1.000	%
	BB	 	1.250	%
	BB- or lower	 	1.500	%

        During
each Interest Period, promptly upon a determination that the Interest Rate will be greater than 117/8% per annum for a given Interest Period, the Calculation Agent
shall notify the Trustee of the applicable interest rate adjustments, the days to which each applicable interest rate applies within the Interest Period, and the Interest Rate expected for the period
if there is no further change to the Company's Rating during such Interest Period. Upon the request of a Holder of a Security, the Calculation Agent shall provide to such Holder information to date
for the then-current Interest Period regarding the calculation of the Interest Rate for such Interest Period. 

        1.    Sinking Fund.    This Security is not subject to any sinking fund. 

        2.    Redemption.    This Security may be redeemed at the option of the Issuer at any time, in whole or in part, at a
Redemption Price equal to the greater of (1) the principal amount redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the
portion of the notes being redeemed, discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield (as defined below),
plus 50 basis points, plus accrued interest to the Redemption Date. 

        "Treasury
Yield" means, for any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Redemption Date. 

        "Comparable
Treasury Issue" means the United States Treasury Security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the notes that
would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the
notes. 

        "Comparable
Treasury Price" means, for any redemption date, (1) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) on the third business day preceding the redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New
York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if that release (or any successor release) is not published or does not contain those prices on
that business day, (A) the average of the Reference Treasury Dealer Quotations for the redemption date, after excluding the 

A-5

 

highest and lowest Reference Treasury Dealer Quotations for the redemption date, or (B) if the trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all of the
Quotations. 

        "Independent
Investment Banker" means Credit Suisse First Boston Corporation or its successor or, if Credit Suisse First Boston Corporation or its successor is unwilling or unable to
select the Comparable Treasury Issue, one of the remaining Reference Treasury Dealers appointed by the trustee after consultation with the Issuer. 

        "Reference
Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by the Reference Treasury Dealer at 5:00 p.m. on the third business
day preceding the redemption date. 

        "Reference
Treasury Dealer" means (1) Credit Suisse First Boston Corporation and any other primary U.S. Government Securities dealer in New York City (a "Primary Treasury Dealer")
designated by, and not affiliated with Credit Suisse First Boston Corporation and its successors, provided, however, that if Credit Suisse First Boston Corporation or any of its designees ceases to be
a Primary Treasury Dealer, the Issuer will appoint another Primary Treasury Dealer as a substitute and (2) any other Primary Treasury Dealer selected by the Issuer. 

        3.    Defeasance.    The Indenture contains provisions for defeasance of (a) the entire indebtedness of this
Security and (b) certain restrictive covenants upon compliance by the Issuer with certain conditions set forth therein. 

        4.    Events of Default.    If an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. 

        5.    Amendment, Supplement and Waiver.    The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the Issuer and
the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security. 

        6.    Obligation of the Issuer.    No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and premium, if any, and interest, if any, on this Security at the times,
place and rate, and in the coin or currency, herein prescribed. 

        7.    Exchange of Security.    This Security shall be exchangeable for Securities registered in the names of Persons
other than the Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (x) the Depositary notifies the Issuer that it
is unwilling or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the Securities Exchange Act of 1934, (y) the Issuer
executes and delivers to the Trustee an Officers' Certificate providing that this Security shall be so exchangeable or (z) there shall have occurred and be continuing an Event of Default with
respect to the Securities of 

A-6

 

such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in
authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct. 

        8.    Transfers of Security.    As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of a Security of the series of which this Security is a part is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of
the Issuer in any place where the principal of and premium, if any, and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of
authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 

        9.    Registration Rights.    The Holders of any Security are entitled to the benefits of the Registration Rights
Agreement dated as of June 28, 2002, between the Issuer and Credit Suisse First Boston Corporation, as representative of the several Initial Purchasers. 

        10.    Denominations of Security.    The Securities of the series of which this Security is a part are issuable only
in registered form without coupons in denominations of $1,000 and in integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 

        11.    No Service Charge.    No service charge shall be made for any such registration of transfer or exchange, but
the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 

        12.    Persons Deemed Owners.    Prior to due presentment of this Security for registration of transfer, the Issuer,
the Trustee and any agent of the Issuer or the Trustee may treat the Holder in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and
none of the Issuer, the Trustee or any such agent shall be affected by notice to the contrary. 

        13.    Governing Law.    This Security shall be governed by and construed in accordance with the laws of the State of
New York without regard to the conflict of law principles thereof. 

        14    Terms.    All terms used in this Security which are defined in the Indenture or in any indenture supplemental
thereto, but are not defined in this Security, shall have the meanings assigned to them therein. 

        15.    CUSIP Number.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Administration
Procedures, the Issuer has caused a CUSIP number to be printed on this Security and the Trustee may use such CUSIP number in notices as a convenience to Holders. No representation is made as to the
accuracy of the CUSIP number either printed on this Security or as contained in any notice and reliance may be placed only on other identification numbers placed thereon. 

A-7

  

 
 

EXHIBIT B    
  

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.  

[FORM OF FACE OF INITIAL NOTE]

	REGISTERED	 	 	 	REGISTERED
	
AQUILA, INC.

117/8% SENIOR NOTE DUE JULY 1, 2012
	Number         	 	 	 	$
	 	 	 	 	CUSIP                         

        Aquila, Inc., a Delaware corporation (herein called the "Issuer,"), for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of                        
($                        ) on July 1, 2012, and to pay interest thereon from the date of the issuance of this Security or
from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually in arrears on January 1 and July 1 in each year,
commencing                        , at the rates as determined on
the reverse hereof until the principal hereof is paid or made available for payment, and, subject to the terms of the Indenture, at the rates determined on the reverse hereof on any overdue principal
and premium, if any, and (to the extent that the payment of such interest shall be legally enforceable) on any overdue installment of interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest payment, which shall be the June 15 preceding any July 1 Interest Payment Date and the December 15 next preceding such
January 1 Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may either be
paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, in which event notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. 

        Payment
of the principal of and premium, if any, and interest on this Security will be made at the office or agency of the Trustee maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The Issuer may pay
principal by check payable in such money or by wire transfer to a dollar account maintained by the Holder (if the Holder of the Security holds an aggregate principal amount of Securities in excess of
$5,000,000). The Issuer may pay interest by mailing a dollar check to a Holder's registered address or, upon application by the Holder hereof to the Security Registrar, not later than the applicable
record date, by wire transfer to a dollar account 

B-1

 

maintained by the Holder (if the Holder of the Security holds an aggregate principal amount of Securities in excess of $5,000,000). 

        Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth
in full at this place. 

        Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, or an Authenticating Agent, by manual signature of one of its
authorized officers, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

B-2

 

        IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

	 	 	AQUILA, INC.
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

BANK ONE TRUST COMPANY, N.A.,

as Trustee
	

 	
 	

By:	
 	

 Name:

Title:

B-3

 
[FORM OF REVERSE OF INITIAL NOTE]  

AQUILA, INC.

117/8% SENIOR NOTE DUE JULY 1, 2012 

        This
Senior Note is one of a duly authorized series of Securities of the Issuer, issued and to be issued in one or more series under an Indenture dated as of August 24, 2001 (the
"Indenture") between the Issuer, and Bank One Trust Company, N.A., as Trustee (herein called the "Trustee"), to which Indenture and all indentures supplemental thereto (including the Second
Supplemental Indenture dated
as of July 3, 2002, which authorizes the Senior Notes) reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer,
the Trustee and the Holders of the Securities and the terms upon which the Securities are, and are to be, authenticated and delivered. 

        This
Security will bear interest for each Interest Period (as defined below) at a rate per annum (the "Interest Rate") determined by Bank One Trust Company, N.A., or its successor
appointed by the Company acting as Calculation Agent (the "Calculation Agent"). The Interest Rate shall be calculated by determining any Total Adjustment Amount(s) (as defined below) applicable during
the relevant Interest Period, and the days for which such Total Adjustment Amount(s) will apply in the calculation of the Interest Rate. Such Interest Rate shall be equal to 117/8%  plus any applicable Total Adjustment Amount; provided that such Interest Rate shall be calculated at a
rate per annum equal to the weighted average of the Interest Rate in effect on each day of the relevant Interest Period. Such weighted average shall be calculated by multiplying each such rate by the
number of days such rate is in effect during such Interest Period, determining the sum of such products and dividing such sum by the number of days in such Interest Period. 

        The
period commencing on an Interest Payment Date and ending on the day preceding the next succeeding Interest Payment Date shall be an "Interest Period,"  provided, however, that the first Interest Period
shall begin on the date of the issuance of this Security and extend through December 31, 2002,
the day preceding the first Interest Payment Date. 

        Interest
payments for this Security will be computed and paid on the basis of a 360-day year of twelve 30-day months. If an Interest Payment Date falls on a day
that is not a Business Day, such Interest Payment Date will be the following day that is a Business Day. All dollar amounts resulting from such calculation will be rounded, if necessary, to the
nearest cent with one-half cent rounded upward. 

        In
the event Moody's Investors Service, Inc. ("Moody's"), on the one hand, or Standard & Poor's Rating Service ("S&P") or Fitch, Inc. ("Fitch"), on the other hand,
have assigned a rating to the Company's long-term unsecured debt (a "Rating") listed under their respective names in the table immediately below as of any date within an Interest Period,
the Calculation Agent shall use the adjustment amount opposite such Rating (an "Adjustment Amount") to determine the Total Adjustment Amount. The "Total Adjustment Amount" shall be the sum of
(i) the applicable Moody's Adjustment Amount (as defined in the table below), if any, plus (ii) the higher of (A) the applicable
S&P Adjustment Amount (as defined in the table below), if any, and (B) the applicable Fitch Adjustment Amount (as defined in the table below), if any. Adjustment Amounts, if any, shall be
determined by the Calculation Agent based on the table immediately below and the respective Ratings of Moody's, S&P and Fitch. 

B-4

 

Interest Rate Adjustments

	Moody's Rating
	 	"Moody Adjustment

Amount"
	 
	Bal	 	1.000	%
	Ba2	 	1.250	%
	Ba3 or lower	 	1.500	%

	S&P Rating
	 	"S&P Adjustment

Amount"
	 
	BB+	 	1.000	%
	BB	 	1.250	%
	BB- or lower	 	1.500	%

	Fitch Rating
	 	"Fitch Adjustment

Amount"
	 
	BB+	 	1.000	%
	BB	 	1.250	%
	BB- or lower	 	1.500	%

        During
each Interest Period, promptly upon a determination that the Interest Rate will be greater than 117/8% per annum for a given Interest Period, the Calculation Agent
shall notify the Trustee of the applicable interest rate adjustments, the days to which each applicable interest rate applies within the Interest Period, and the Interest Rate expected for the period
if there is no further change to the Company's Rating during such Interest Period. Upon the request of a Holder of a Security, the Calculation Agent shall provide to such Holder information to date
for the then-current Interest Period regarding the calculation of the Interest Rate for such Interest Period. 

        1.    Sinking Fund. This Security is not subject to any sinking fund. 

        2.    Redemption. This Security may be redeemed at the option of the Issuer at any time, in whole or in part, at a Redemption
Price equal to the greater of (1) the par value or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the portion of the notes being
redeemed, discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield (as defined
below), plus 50 basis points, plus accrued interest to the Redemption Date. 

        "Treasury
Yield" means, for any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Redemption Date. 

        "Comparable
Treasury Issue" means the United States Treasury Security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the notes that
would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the
notes. 

        "Comparable
Treasury Price" means, for any redemption date, (1) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) on the third business day preceding the redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New
York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if that release (or any successor release) is not published or does not contain those prices on
that business day, (A) the 

B-5

 

average of the Reference Treasury Dealer Quotations for the redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations for the redemption date, or (B) if the
trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all of the Quotations. 

        "Independent
Investment Banker" means Credit Suisse First Boston Corporation, or its successor or, if Credit Suisse First Boston Corporation or its successor is unwilling or unable to
select the Comparable Treasury Issue, one of the remaining Reference Treasury Dealers appointed by the trustee after consultation with the Issuer. 

        "Reference
Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by the Reference Treasury Dealer at 5:00 p.m. on the third business
day preceding the redemption date. 

        "Reference
Treasury Dealer" means (1) Credit Suisse First Boston Corporation and any other primary U.S. Government Securities dealer in New York City (a "Primary Treasury Dealer")
designated by, and not affiliated with Credit Suisse First Boston Corporation and its successors, provided, however, that if Credit Suisse First Boston Corporation or any of its designees ceases to be
a Primary Treasury Dealer, the Issuer will appoint another Primary Treasury Dealer as a substitute and (2) any other Primary Treasury Dealer selected by the Issuer. 

        3.    Defeasance. The Indenture contains provisions for defeasance of (a) the entire indebtedness of this Security and
(b) certain restrictive covenants upon compliance by the Issuer with certain conditions set forth therein. 

        4.    Events of Default. If an Event of Default with respect to Securities of this series shall occur and be continuing, the
principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. 

        5.    Amendment, Supplement and Waiver. The Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time
by the Issuer, and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 

        6.    Obligation of the Issuer. No reference herein to the Indenture and no provision of this Security or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and premium, if any, and interest, if any, on this Security at the times, place and rate, and
in the coin or currency, herein prescribed. 

        7.    Exchange of Security. This Security shall be exchangeable for Securities registered in the names of Persons other than the
Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (x) the Depositary notifies the Issuer that it is unwilling
or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the Securities Exchange Act of 1934, (y) the Issuer executes and
delivers to the Trustee an Officers' Certificate providing that this Security shall be so exchangeable or (z) there shall have occurred and be continuing an Event of Default with respect to the
Securities of 

B-6

 

such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in
authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct. 

        8.    Transfers of Security. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of
a Security of the series of which this Security is a part is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in
any place where the principal of and premium, if any, and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to
the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 

        9.    Registration Rights. The Holders of any Security are entitled to the benefits of the Registration Rights Agreement dated
as of June 28, 2002, between the Issuer and Credit Suisse First Boston Corporation, as representative of the several Initial Purchasers. 

        10.  Denominations of Security. The Securities of the series of which this Security is a part are issuable only in registered
form without coupons in denominations of $1,000 and in integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 

        11.  No Service Charge. No service charge shall be made for any such registration of transfer or exchange, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 

        12.  Persons Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Issuer, the Trustee
and any agent of the Issuer or the Trustee may treat the Holder in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the
Issuer, the Trustee or any such agent shall be affected by notice to the contrary. 

        13.  Governing Law. This Security shall be governed by and construed in accordance with the laws of the State of New York
without regard to the conflict of law principles thereof. 

        14    Terms. All terms used in this Security which are defined in the Indenture or in any indenture supplemental thereto, but
are not defined in this Security, shall have the meanings assigned to them therein. 

        15.  CUSIP Number. Pursuant to a recommendation promulgated by the Committee on Uniform Security Administration Procedures,
the Issuer has caused a CUSIP number to be printed on this Security and the Trustee may use such CUSIP number in notices as a convenience to Holders. No representation is made as to the accuracy of
the CUSIP number either printed on this Security or as contained in any notice and reliance may be placed only on other identification numbers placed thereon. 

B-7

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EXHIBIT A

EXHIBIT B

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