Document:

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                                                                     Exhibit 4.3
                         VERIZON GLOBAL FUNDING CORP.

                  $2,000,000,000 Floating Rate Notes due 2002

                  EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
                  ------------------------------------------

                                                                    May 2, 2001

 Lehman Brothers Inc.
 3 World Financial Center
 200 Vesey Street
 New York, NY  10285

 Ladies and Gentlemen:

     Verizon Global Funding Corp., a Delaware corporation (the "Company"),
 proposes to issue and sell to Lehman Brothers Inc. (the "Initial Purchaser"),
 upon the terms and subject to the conditions set forth in a purchase agreement,
 dated April 27, 2001 (the "Purchase Agreement"), $2,000,000,000 aggregate
 principal amount of its Floating Rate Notes due 2002 (the "Securities") to be
 supported by Verizon Communications Inc. (the "Support Provider") pursuant to a
 support agreement, dated as of October 31, 2000 (the "Support Agreement"),
 between the Company and the Support Provider. Capitalized terms used but not
 defined herein shall have the meanings given to such terms in the Purchase
 Agreement.

     As an inducement to the Initial Purchaser to enter into the Purchase
 Agreement and in satisfaction of a condition to the obligations of the Initial
 Purchaser thereunder, the Company and the Support Provider agree with the
 Initial Purchaser, for the benefit of the holders (including the Initial
 Purchaser) of the Securities, the Exchange Securities (as defined herein) and
 the Private Exchange Securities (as defined herein) (collectively, the
 "Holders"), as follows:

     1. Registered Exchange Offer. The Company and the Support Provider shall
 (i) prepare and, not later than 210 days following the date of original
 issuance of the Securities (the "Issue Date"), file with the Securities and
 Exchange Commission (the "Commission") a registration statement (the "Exchange
 Offer Registration Statement") on an appropriate form under the Securities Act
 with respect to a proposed offer to the Holders of the Securities (the
 "Registered Exchange Offer") to issue and deliver to the Holders of the
 Securities, in exchange for their Securities, a like aggregate principal amount
 of debt securities of the Company (the "Exchange Securities") that are
 identical in all material respects to the Securities and similarly entitled to
 the benefits of the Support Agreement, except for the transfer restrictions
 relating to the Securities, (ii) use their reasonable best efforts to cause the
 Exchange Offer Registration Statement to become effective under the Securities
 Act no later than 285 days after the Issue Date and the Registered Exchange
 Offer to be consummated no later than 315 days after the Issue Date and (iii)
 keep the Exchange Offer Registration Statement effective for not less than 20
 business days (or longer, if required by applicable law) after the date on
 which notice of the

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 Registered Exchange Offer is mailed to the Holders (such period being called
 the "Exchange Offer Registration Period"). The Exchange Securities will be
 issued under the Indenture or an indenture (the "Exchange Securities
 Indenture") between the Company, the Support Provider and the Trustee or such
 other bank or trust company that is reasonably satisfactory to the Initial
 Purchaser, as Trustee (the "Exchange Securities Trustee"), such indenture to be
 identical in all material respects to the Indenture, except for the transfer
 restrictions relating to the Securities (as described above).

     Upon the effectiveness of the Exchange Offer Registration Statement, the
 Company and the Support Provider shall promptly commence the Registered
 Exchange Offer, it being the objective of such Registered Exchange Offer to
 enable each Holder electing to exchange Securities for the applicable Exchange
 Securities (assuming that such Holder (a) is not an affiliate of the Company or
 an Exchanging Dealer (as defined herein) not complying with the requirements of
 the next sentence, (b) is not the Initial Purchaser holding Securities that
 have, or that are reasonably likely to have, the status of an unsold allotment
 in an initial distribution, (c) acquires the Exchange Securities in the
 ordinary course of such Holder's business and (d) has no arrangements or
 understandings with any person to participate in the distribution of the
 Exchange Securities) and to trade such Exchange Securities from and after their
 receipt without any limitations or restrictions under the Securities Act and
 without material restrictions under the securities laws of the several states
 of the United States. The Company, the Support Provider, the Initial Purchaser
 and each Exchanging Dealer acknowledge that, pursuant to current
 interpretations by the Commission's staff of Section 5 of the Securities Act,
 each Holder that is a broker-dealer electing to exchange Securities, acquired
 for its own account as a result of market-making activities or other trading
 activities, for the applicable Exchange Securities (an "Exchanging Dealer"), is
 required to deliver a prospectus containing substantially the information set
 forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
 Procedures" section and the "Purpose of the Exchange Offer" section and in
 Annex C hereto in the "Plan of Distribution" section of such prospectus in
 connection with a sale of any such Exchange Securities received by such
 Exchanging Dealer pursuant to the Registered Exchange Offer.

     If, prior to the consummation of the Registered Exchange Offer, any Holder
 holds any Securities acquired by it that have, or that are reasonably likely to
 be determined to have, the status of an unsold allotment in an initial
 distribution, or any Holder is not entitled to participate in the Registered
 Exchange Offer, the Company shall, upon the request of any such Holder,
 simultaneously with the delivery of the Exchange Securities in the Registered
 Exchange Offer, issue and deliver to any such Holder, in exchange for the
 Securities held by such Holder, a like aggregate principal amount of debt
 securities of the Company (the "Private Exchange Securities") that are
 identical in all material respects to the Exchange Securities and similarly
 entitled to the benefits of the Support Agreement, except for the transfer
 restrictions relating to such Private Exchange Securities (the "Private
 Exchange"). The Private Exchange Securities will be issued under the same
 indenture as the Exchange Securities, and the Company shall use its reasonable
 best efforts to cause the Private Exchange Securities to bear the same CUSIP
 number as the applicable Exchange Securities.

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     In connection with the Registered Exchange Offer, the Company and the
 Support Provider shall:

     (a) mail to each Holder a copy of the prospectus forming part of the
 Exchange Offer Registration Statement, together with an appropriate letter of
 transmittal and related documents;

     (b) keep the Registered Exchange Offer open for not less than 20 business
 days (or longer, if required by applicable law) after the date on which notice
 of the Registered Exchange Offer is mailed to the Holders;

     (c) utilize the services of a depositary for the Registered Exchange Offer
 with an address in the Borough of Manhattan, The City of New York;

     (d) permit Holders to withdraw tendered Securities at any time prior to the
 close of business, New York City time, on the last business day on which the
 Registered Exchange Offer shall remain open; and

     (e) otherwise comply in all respects with all laws that are applicable to
 the Registered Exchange Offer.

     As soon as practicable after the close of the Registered Exchange Offer and
 any Private Exchange, the Company and the Support Provider shall:

     (a) accept for exchange all Securities tendered and not validly withdrawn
 pursuant to the Registered Exchange Offer and the Private Exchange;

     (b) deliver to the Trustee for cancellation all Securities so accepted
 for exchange; and

     (c) cause the Trustee or the Exchange Securities Trustee, as the case may
 be, promptly to authenticate and deliver to each Holder, the applicable
 Exchange Securities or Private Exchange Securities, as the case may be, equal
 in principal amount and maturity to the Securities of such Holder so accepted
 for exchange.

     The Company and the Support Provider shall use its reasonable best efforts
 to keep the Exchange Offer Registration Statement effective and to amend and
 supplement the prospectus contained therein in order to permit such prospectus
 to be used by all persons subject to the prospectus delivery requirements of
 the Securities Act for such period of time as such persons must comply with
 such requirements in order to resell the Exchange Securities; provided, that
 (i) in the case where such prospectus and any amendment or supplement thereto
 must be delivered by an Exchanging Dealer, such period shall be the lesser of
 90 days and the date on which all Exchanging Dealers have sold all Exchange
 Securities held by them and (ii) the Company and the Support Provider shall
 make such prospectus and any amendment or supplement thereto available to any
 broker-dealer for use in connection with any resale of any Exchange Securities
 for a period of not less than 90 days after the consummation of the Registered
 Exchange Offer.

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     The Indenture or the Exchange Securities Indenture, as the case may be,
 shall also provide that the Securities, the Exchange Securities and the Private
 Exchange Securities shall vote and consent together on all matters as one class
 and that none of the Securities, the Exchange Securities or the Private
 Exchange Securities will have the right to vote or consent as a separate class
 on any matter.

     Interest on each Exchange Security and Private Exchange Security issued
 pursuant to the Registered Exchange Offer and in the Private Exchange will
 accrue from the last interest payment date on which interest was paid on the
 Securities surrendered in exchange therefor or, if no interest has been paid on
 the Securities, from the Issue Date.

     Each Holder participating in the Registered Exchange Offer shall be
 required to represent to the Company that at the time of the consummation of
 the Registered Exchange Offer (i) any Exchange Securities received by such
 Holder will be acquired in the ordinary course of business, (ii) such Holder
 will have no arrangements or understanding with any person to participate in
 the distribution of the Securities or the Exchange Securities within the
 meaning of the Securities Act and (iii) such Holder is not an affiliate of the
 Company or, if it is such an affiliate, such Holder will comply with the
 registration and prospectus delivery requirements of the Securities Act to the
 extent applicable.

     Notwithstanding any other provisions hereof, the Company and the Support
 Provider will ensure that (i) any Exchange Offer Registration Statement and any
 amendment thereto and any prospectus forming part thereof and any supplement
 thereto complies in all material respects with the Securities Act and the rules
 and regulations of the Commission thereunder, (ii) any Exchange Offer
 Registration Statement and any amendment thereto does not, when it becomes
 effective, contain an untrue statement of a material fact or omit to state a
 material fact required to be stated therein or necessary to make the statements
 therein not misleading and (iii) any prospectus forming part of any Exchange
 Offer Registration Statement, and any supplement to such prospectus, does not,
 as of the consummation of the Registered Exchange Offer, include an untrue
 statement of a material fact or omit to state a material fact necessary in
 order to make the statements therein, in the light of the circumstances under
 which they were made, not misleading.

     2. Shelf Registration. If (i) because of any change in law or applicable
 interpretations thereof by the Commission's staff the Company and the Support
 Provider are not permitted to effect the Registered Exchange Offer as
 contemplated by Section 1 hereof, or (ii) for any other reason the Registered
 Exchange Offer is not consummated within 315 days after the Issue Date, or
 (iii) the Initial Purchaser so requests with respect to the Securities or
 Private Exchange Securities not eligible to be exchanged for the applicable
 Exchange Securities in the Registered Exchange Offer and held by it following
 the consummation of the Registered Exchange Offer, or (iv) any applicable law
 or interpretations do not permit any Holder to participate in the Registered
 Exchange Offer, or (v) any Holder that participates in the Registered Exchange
 Offer does not receive freely transferable Exchange Securities in exchange for
 tendered Securities, or (vi) any Securities validly tendered pursuant to the
 Registered Exchange Offer are not exchanged for the applicable Exchange
 Securities within 10 days of being accepted for exchange:

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     (a) The Company and the Support Provider shall use their reasonable best
 efforts to file as promptly as practicable (but in no event more than 45 days
 after so required or requested pursuant to this Section 2) with the Commission
 (the "Shelf Filing Date"), and thereafter shall use their reasonable best
 efforts to cause to be declared effective, a shelf registration statement on an
 appropriate form under the Securities Act relating to the offer and sale of the
 Transfer Restricted Securities (as defined below) by the Holders thereof from
 time to time in accordance with the methods of distribution set forth in such
 registration statement (hereafter, a "Shelf Registration Statement" and,
 together with any Exchange Offer Registration Statement, a "Registration
 Statement").

     (b) The Company and the Support Provider shall use their reasonable best
 efforts to keep the Shelf Registration Statement continuously effective in
 order to permit the prospectus forming part thereof to be used by Holders of
 Transfer Restricted Securities for a period of two years from the Issue Date or
 such shorter period that will terminate when all the Transfer Restricted
 Securities become eligible for resale without volume restrictions pursuant to
 Rule 144 under the Securities Act (in any such case, such period being called
 the "Shelf Registration Period"). The Company and the Support Provider shall be
 deemed not to have used their reasonable best efforts to keep the Shelf
 Registration Statement effective during the requisite period if either of them
 voluntarily takes any action that would result in Holders of Transfer
 Restricted Securities covered thereby not being able to offer and sell such
 Transfer Restricted Securities during that period, unless such action is
 required by applicable law.

     (c) Notwithstanding any other provisions hereof, the Company and the
 Support Provider will ensure that (i) any Shelf Registration Statement and any
 amendment thereto and any prospectus forming part thereof and any supplement
 thereto complies in all material respects with the Securities Act and the rules
 and regulations of the Commission thereunder, (ii) any Shelf Registration
 Statement and any amendment thereto (in either case, other than with respect to
 information included therein in reliance upon or in conformity with written
 information furnished to the Company by or on behalf of any Holder specifically
 for use therein (the "Holders' Information")) does not contain an untrue
 statement of a material fact or omit to state a material fact required to be
 stated therein or necessary to make the statements therein not misleading and
 (iii) any prospectus forming part of any Shelf Registration Statement, and any
 supplement to such prospectus (in either case, other than with respect to
 Holders' Information), does not include an untrue statement of a material fact
 or omit to state a material fact necessary in order to make the statements
 therein, in the light of the circumstances under which they were made, not
 misleading.

     (d) In the absence of events described in clauses (i) through (vi) of the
 first paragraph of this Section 2, the Company and the Support Provider shall
 not be permitted to discharge their obligations hereunder by means of the
 filing of a Shelf Registration Statement.

     3. Additional Interest.

     (a) The parties hereto agree that the Holders of Transfer Restricted
 Securities will suffer damages if the Company and the Support Provider fail to
 fulfill their obligations under Section 1 or Section 2, as applicable, and that
 it would not be feasible to ascertain the extent of

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 such damages. Accordingly, if (i) the Exchange Offer Registration Statement is
 not filed with the Commission on or prior to 210 days after the Issue Date or
 the Shelf Registration Statement is not filed with the Commission prior to the
 Shelf Filing Date, (ii) the Exchange Offer Registration Statement is not
 declared effective within 285 days after the Issue Date or the Shelf
 Registration Statement is not declared effective within 240 days after the
 Shelf Filing Date, (iii) the Registered Exchange Offer is not consummated on or
 prior to 315 days after the Issue Date, or (iv) the Shelf Registration
 Statement is filed and declared effective within 240 days after the Shelf
 Filing Date but shall thereafter cease to be effective (at any time that the
 Company and the Support Provider are obligated to maintain the effectiveness
 thereof) without being succeeded within 45 days by an additional Registration
 Statement filed and declared effective (each such event referred to in clauses
 (i) through (iv), a "Registration Default"), the Company and the Support
 Provider will be jointly and severally obligated to pay additional interest to
 each Holder of Transfer Restricted Securities, during the period of one or more
 such Registration Defaults, in an amount equal to .25% per annum on the
 principal amount of Transfer Restricted Securities held by such Holder until
 (i) the applicable Registration Statement is filed, (ii) the Exchange Offer
 Registration Statement is declared effective and the Registered Exchange Offer
 is consummated, (iii) the Shelf Registration Statement is declared effective or
 (iv) the Shelf Registration Statement again becomes effective, as the case may
 be. The rate for additional interest will not exceed .25% per annum. Additional
 interest shall only accrue while there exists one or more Registration
 Defaults. As used herein, the term "Transfer Restricted Securities" means (i)
 each Security until the date on which such Security has been exchanged for a
 freely transferable applicable Exchange Security in the Registered Exchange
 Offer, (ii) each Security or Private Exchange Security until the date on which
 it has been effectively registered under the Securities Act and disposed of in
 accordance with the Shelf Registration Statement or (iii) each Security or
 Private Exchange Security until the date on which it is distributed to the
 public pursuant to Rule 144 under the Securities Act or is saleable pursuant to
 Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary
 in this Section 3(a), neither the Company nor the Support Provider shall be
 required to pay additional interest to a Holder of Transfer Restricted
 Securities if such Holder failed to comply with its obligations to make the
 representations set forth in the second to last paragraph of Section 1 or
 failed to provide the information required to be provided by it, if any,
 pursuant to Section 4(n).

     (b) The Company shall notify the Trustee and the Paying Agent under the
 Indenture immediately upon the happening of each and every Registration
 Default. The Company and the Support Provider shall pay the additional interest
 due on the Transfer Restricted Securities by depositing with the Paying Agent
 (which may not be the Company for these purposes), in trust, for the benefit of
 the Holders thereof, prior to 10:00 a.m., New York City time, on the next
 interest payment date specified by the Indenture and the Securities, sums
 sufficient to pay the additional interest then due. The additional interest due
 shall be payable on each interest payment date specified by the Indenture and
 the Securities to the record holder entitled to receive the interest payment to
 be made on such date. Each obligation to pay additional interest shall be
 deemed to accrue from and including the date of the applicable Registration
 Default.

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(c) The parties hereto agree that the additional interest provided for in this
Section 3 constitutes a reasonable estimate of and is intended to constitute the
sole damages that will be suffered by Holders of Transfer Restricted Securities
by reason of the failure of (i) the Shelf Registration Statement or the Exchange
Offer Registration Statement to be filed, (ii) the Shelf Registration Statement
to remain effective or (iii) the Exchange Offer Registration Statement to be
declared effective and the Registered Exchange Offer to be consummated, in each
case to the extent required by this Agreement.

     4. Registration Procedures. In connection with any Registration
 Statement, the following provisions shall apply:

     (a) The Company shall (i) furnish to counsel for the Initial Purchaser,
 prior to the filing thereof with the Commission, a copy of the Registration
 Statement and each amendment thereof and each supplement, if any, to the
 prospectus included therein and shall use its reasonable best efforts to
 reflect in each such document, when so filed with the Commission, such comments
 as such counsel may reasonably propose; (ii) include the information set forth
 in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
 Procedures" section and the "Purpose of the Exchange Offer" section and in
 Annex C hereto in the "Plan of Distribution" section of the prospectus forming
 a part of the Exchange Offer Registration Statement, and include the
 information set forth in Annex D hereto in the Letter of Transmittal delivered
 pursuant to the Registered Exchange Offer; and (iii) if requested by the
 Initial Purchaser, include the information required by Items 507 or 508 of
 Regulation S-K, as applicable, in the prospectus forming a part of the Exchange
 Offer Registration Statement.

     (b) The Company shall advise counsel for the Initial Purchaser, each
 Exchanging Dealer and the Holders (if applicable) and, if requested by any such
 person, confirm such advice in writing (which advice pursuant to clauses
 (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of
 the prospectus until the requisite changes have been made):

          (i) when any Registration Statement and any amendment thereto has been
 filed with the Commission and when such Registration Statement or any
 post-effective amendment thereto has become effective;

          (ii) of any request by the Commission for amendments or supplements
 to any Registration Statement or the prospectus included therein or for
 additional information;

          (iii) of the issuance by the Commission of any stop order suspending
 the effectiveness of any Registration Statement or the initiation of any
 proceedings for that purpose;

          (iv) of the receipt by the Company of any notification with respect to
 the suspension of the qualification of the Securities, the Exchange Securities
 or the Private Exchange Securities for sale in any jurisdiction or the
 initiation or threatening of any proceeding for such purpose; and

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          (v) of the happening of any event that requires the making of any
 changes in any Registration Statement or the prospectus included therein in
 order that the statements therein are not misleading and do not omit to state a
 material fact required to be stated therein or necessary to make the statements
 therein not misleading.

     (c) The Company and the Support Provider will make every reasonable effort
 to obtain the withdrawal at the earliest possible time of any order suspending
 the effectiveness of any Registration Statement.

     (d) The Company will furnish to each Holder of Transfer Restricted
 Securities included within the coverage of any Shelf Registration Statement,
 without charge, at least one conformed copy of such Shelf Registration
 Statement and any post-effective amendment thereto, including financial
 statements and schedules and, if any such Holder so requests in writing, all
 exhibits thereto (including those, if any, incorporated by reference).

     (e) The Company will, during the Shelf Registration Period, promptly
 deliver to each Holder of Transfer Restricted Securities included within the
 coverage of any Shelf Registration Statement, without charge, as many copies of
 the prospectus (including each preliminary prospectus) included in such Shelf
 Registration Statement and any amendment or supplement thereto as such Holder
 may reasonably request; and the Company consents to the use of such prospectus
 or any amendment or supplement thereto by each of the selling Holders of
 Transfer Restricted Securities in connection with the offer and sale of the
 Transfer Restricted Securities covered by such prospectus or any amendment or
 supplement thereto.

     (f) The Company will furnish to the Initial Purchaser and each Exchanging
 Dealer, and to any other Holder who so requests, without charge, at least one
 conformed copy of the Exchange Offer Registration Statement and any
 post-effective amendment thereto, including financial statements and schedules
 and, if the Initial Purchaser or any Exchanging Dealer or any such Holder so
 requests in writing, all exhibits thereto (including those, if any,
 incorporated by reference).

     (g) The Company will, during the Exchange Offer Registration Period or the
 Shelf Registration Period, as applicable, promptly deliver to the Initial
 Purchaser, each Exchanging Dealer and such other persons that are required to
 deliver a prospectus following the Registered Exchange Offer, without charge,
 as many copies of the final prospectus included in the Exchange Offer
 Registration Statement or the Shelf Registration Statement and any amendment or
 supplement thereto as the Initial Purchaser, or such Exchanging Dealer or other
 persons may reasonably request; and the Company and the Support Provider
 consent to the use of such prospectus or any amendment or supplement thereto by
 the Initial Purchaser, or any such Exchanging Dealer or other persons, as
 applicable, as aforesaid.

     (h) Prior to the effective date of any Registration Statement, the Company
 and the Support Provider will use their reasonable best efforts to register or
 qualify, or cooperate with the Holders of Securities, Exchange Securities or
 Private Exchange Securities included therein and their respective counsel in
 connection with the registration or qualification of, such Securities,

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 Exchange Securities or Private Exchange Securities for offer and sale under the
 securities or blue sky laws of such jurisdictions as any such Holder reasonably
 requests in writing and do any and all other acts or things necessary or
 advisable to enable the offer and sale in such jurisdictions of the Securities,
 Exchange Securities or Private Exchange Securities covered by such Registration
 Statement; provided that neither the Company nor the Support Provider will be
 required to qualify generally to do business in any jurisdiction where it is
 not then so qualified or to take any action which would subject it to general
 service of process or to taxation in any such jurisdiction where it is not then
 so subject.

     (i) The Company and the Support Provider will cooperate with the Holders of
 Securities, Exchange Securities or Private Exchange Securities to facilitate
 the timely preparation and delivery of certificates representing Securities,
 Exchange Securities or Private Exchange Securities to be sold pursuant to any
 Registration Statement free of any restrictive legends and in such
 denominations and registered in such names as the Holders thereof may request
 in writing prior to sales of Securities, Exchange Securities or Private
 Exchange Securities pursuant to such Registration Statement.

     (j) If any event contemplated by Section 4(b)(ii) through (v) occurs during
 the period for which the Company and the Support Provider are required to
 maintain an effective Registration Statement, the Company will promptly prepare
 and file with the Commission a post-effective amendment to the Registration
 Statement or a supplement to the related prospectus or file any other required
 document so that, as thereafter delivered to purchasers of the Securities,
 Exchange Securities or Private Exchange Securities from a Holder, the
 prospectus will not include an untrue statement of a material fact or omit to
 state a material fact necessary in order to make the statements therein, in the
 light of the circumstances under which they were made, not misleading.

     (k) Not later than the effective date of the applicable Registration
 Statement, the Company will provide a CUSIP number for each series of the
 Securities, each series of the Exchange Securities and each series of the
 Private Exchange Securities, as the case may be, and provide the applicable
 trustee with printed certificates for the each series of Securities, each
 series of the Exchange Securities or each series of the Private Exchange
 Securities, as the case may be, in a form eligible for deposit with The
 Depository Trust Company.

     (l) The Company and the Support Provider will comply with all applicable
 rules and regulations of the Commission and will make generally available to
 its security holders as soon as practicable after the effective date of the
 applicable Registration Statement an earning statement satisfying the
 provisions of Section 11(a) of the Securities Act; provided that in no event
 shall such earning statement be delivered later than 45 days after the end of a
 12-month period (or 90 days, if such period is a fiscal year) beginning with
 the first month of the Company's first fiscal quarter commencing after the
 effective date of the applicable Registration Statement, which statement shall
 cover such 12-month period.

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<PAGE>

     (m) The Company and the Support Provider will cause the Indenture or the
 Exchange Securities Indenture, as the case may be, to be qualified under the
 Trust Indenture Act as required by applicable law in a timely manner.

     (n) The Company may require each Holder of Transfer Restricted Securities
 to be registered pursuant to any Shelf Registration Statement to furnish to the
 Company such information concerning the Holder and the distribution of such
 Transfer Restricted Securities as the Company may from time to time reasonably
 require for inclusion in such Shelf Registration Statement, and the Company may
 exclude from such registration the Transfer Restricted Securities of any Holder
 that fails to furnish such information within a reasonable time after receiving
 such request.

     (o) In the case of a Shelf Registration Statement, each Holder of Transfer
 Restricted Securities to be registered pursuant thereto agrees by acquisition
 of such Transfer Restricted Securities that, upon receipt of any notice from
 the Company pursuant to Section 4(b)(ii) through (v), such Holder will
 discontinue disposition of such Transfer Restricted Securities until such
 Holder's receipt of copies of the supplemental or amended prospectus
 contemplated by Section 4(j) or until advised in writing (the "Advice") by the
 Company that the use of the applicable prospectus may be resumed. If the
 Company shall give any notice under Section 4(b)(ii) through (v) during the
 period that the Company is required to maintain an effective Registration
 Statement (the "Effectiveness Period"), such Effectiveness Period shall be
 extended by the number of days during such period from and including the date
 of the giving of such notice to and including the date when each seller of
 Transfer Restricted Securities covered by such Registration Statement shall
 have received (x) the copies of the supplemental or amended prospectus
 contemplated by Section 4(j) (if an amended or supplemental prospectus is
 required) or (y) the Advice (if no amended or supplemental prospectus is
 required).

     (p) In the case of a Shelf Registration Statement, the Company and the
 Support Provider shall enter into such customary agreements (including, if
 requested, an underwriting agreement in customary form) and take all such other
 action, if any, as Holders of a majority in aggregate principal amount of the
 Securities, Exchange Securities and Private Exchange Securities being sold or
 the managing underwriters (if any) shall reasonably request in order to
 facilitate any disposition of Securities, Exchange Securities or Private
 Exchange Securities pursuant to such Shelf Registration Statement.

     (q) In the case of a Shelf Registration Statement, the Company shall (i)
 make reasonably available for inspection by a representative of, and Special
 Counsel (as defined below) acting for, Holders of a majority in aggregate
 principal amount of the Securities, Exchange Securities and Private Exchange
 Securities being sold and any underwriter participating in any disposition of
 Securities, Exchange Securities or Private Exchange Securities pursuant to such
 Shelf Registration Statement, all relevant financial and other records,
 pertinent corporate documents and properties of the Company and its
 subsidiaries to the same extent the Company would customarily make such
 information available in the context of due diligence for an underwritten
 public offering and (ii) use its reasonable best efforts to have its officers,
 directors, employees, accountants and counsel supply all relevant information
 reasonably

                                      -10-
<PAGE>

 requested by such representative, Special Counsel or any such underwriter (an
 "Inspector") in connection with the preparation of such Shelf Registration
 Statement.

     (r) In the case of a Shelf Registration Statement, the Company shall if
 requested by Holders of a majority in aggregate principal amount of the
 Securities, Exchange Securities and Private Exchange Securities being sold,
 their Special Counsel or the managing underwriters (if any) in connection with
 such Shelf Registration Statement, use its reasonable best efforts to cause (i)
 its counsel to deliver an opinion relating to the Shelf Registration Statement
 and the Securities, Exchange Securities or Private Exchange Securities, as
 applicable, in customary form, (ii) its officers to execute and deliver all
 customary documents and certificates requested by Holders of a majority in
 aggregate principal amount of the Securities, Exchange Securities and Private
 Exchange Securities being sold, their Special Counsel or the managing
 underwriters (if any) and (iii) its independent public accountants to provide a
 comfort letter or letters in customary form, subject to receipt of appropriate
 documentation as contemplated, and only if permitted, by Statement of Auditing
 Standards No. 72.

     5. Registration Expenses. The Company and the Support Provider will bear
 all expenses incurred in connection with the performance of its obligations
 under Sections 1, 2, 3 and 4, and the Company will reimburse the Initial
 Purchaser and the Holders for the reasonable fees and disbursements of one firm
 of attorneys (in addition to any local counsel) chosen by the Holders of a
 majority in aggregate principal amount of the Securities, the Exchange
 Securities and the Private Exchange Securities, as the case may be, to be sold
 pursuant to each Registration Statement (the "Special Counsel") acting for the
 Initial Purchaser or Holders in connection therewith.

     6. Indemnification.

     (a) In the event of a Shelf Registration Statement or in connection with
 any prospectus delivery pursuant to an Exchange Offer Registration Statement by
 the Initial Purchaser or Exchanging Dealer, as applicable, the Company and the
 Support Provider shall jointly and severally indemnify and hold harmless each
 Holder (including, without limitation, the Initial Purchaser or any such
 Exchanging Dealer), its affiliates, their respective officers, directors,
 employees, representatives and agents, and each person, if any, who controls
 such Holder within the meaning of the Securities Act or the Exchange Act
 (collectively referred to for purposes of this Section 6 and Section 7 as a
 Holder) from and against any loss, claim, damage or liability, joint or
 several, or any action in respect thereof (including, without limitation, any
 loss, claim, damage, liability or action relating to purchases and sales of
 Securities, Exchange Securities or Private Exchange Securities), to which that
 Holder may become subject, whether commenced or threatened, under the
 Securities Act, the Exchange Act, any other federal or state statutory law or
 regulation, at common law or otherwise, insofar as such loss, claim, damage,
 liability or action arises out of, or is based upon, (i) any untrue statement
 or alleged untrue statement of a material fact contained in any such
 Registration Statement or any prospectus forming part thereof or in any
 amendment or supplement thereto or (ii) the omission or alleged omission to
 state therein a material fact required to be stated therein or necessary in
 order to make the statements therein, in the light of the circumstances under
 which they were made, not misleading, and shall reimburse

                                      -11-
<PAGE>

 each Holder promptly upon demand for any legal or other expenses reasonably
 incurred by that Holder in connection with investigating or defending or
 preparing to defend against or appearing as a third party witness in connection
 with any such loss, claim, damage, liability or action as such expenses are
 incurred; provided, however, that the Company and the Support Provider shall
 not be liable in any such case to the extent that any such loss, claim, damage,
 liability or action arises out of, or is based upon, an untrue statement or
 alleged untrue statement in or omission or alleged omission from any of such
 documents in reliance upon and in conformity with any Holders' Information; and
 provided, further, that with respect to any such untrue statement in or
 omission from any related preliminary prospectus, the indemnity agreement
 contained in this Section 6(a) shall not inure to the benefit of any Holder
 from whom the person asserting any such loss, claim, damage, liability or
 action received Securities, Exchange Securities or Private Exchange Securities
 to the extent that such loss, claim, damage, liability or action of or with
 respect to such Holder results from the fact that both (A) a copy of the final
 prospectus was not sent or given to such person at or prior to the written
 confirmation of the sale of such Securities, Exchange Securities or Private
 Exchange Securities to such person and (B) the untrue statement in or omission
 from the related preliminary prospectus was corrected in the final prospectus
 unless, in either case, such failure to deliver the final prospectus was a
 result of non-compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g).

     (b) In the event of a Shelf Registration Statement, each Holder shall
 indemnify and hold harmless the Company, the Support Provider and their
 respective affiliates, their respective officers, directors, employees,
 representatives and agents, and each person, if any, who controls the Company
 or the Support Provider within the meaning of the Securities Act or the
 Exchange Act (collectively referred to for purposes of this Section 6(b) and
 Section 7 as the Company), from and against any loss, claim, damage or
 liability, joint or several, or any action in respect thereof, to which the
 Company may become subject, whether commenced or threatened, under the
 Securities Act, the Exchange Act, any other federal or state statutory law or
 regulation, at common law or otherwise, insofar as such loss, claim, damage,
 liability or action arises out of, or is based upon, (i) any untrue statement
 or alleged untrue statement of a material fact contained in any such
 Registration Statement or any prospectus forming part thereof or in any
 amendment or supplement thereto or (ii) the omission or alleged omission to
 state therein a material fact required to be stated therein or necessary in
 order to make the statements therein, in the light of the circumstances under
 which they were made, not misleading, but in each case only to the extent that
 the untrue statement or alleged untrue statement or omission or alleged
 omission was made in reliance upon and in conformity with any Holders'
 Information furnished to the Company by such Holder, and shall reimburse the
 Company for any legal or other expenses reasonably incurred by the Company in
 connection with investigating or defending or preparing to defend against or
 appearing as a third party witness in connection with any such loss, claim,
 damage, liability or action as such expenses are incurred; provided, however,
 that no such Holder shall be liable for any indemnity claims hereunder in
 excess of the amount of net proceeds received by such Holder from the sale of
 Securities, Exchange Securities or Private Exchange Securities pursuant to such
 Shelf Registration Statement.

     (c) Promptly after receipt by an indemnified party under this Section 6 of
 notice of any claim or the commencement of any action, the indemnified party
 shall, if a claim in

                                      -12-
<PAGE>

 respect thereof is to be made against the indemnifying party pursuant to
 Section 6(a) or 6(b), notify the indemnifying party in writing of the claim or
 the commencement of that action; provided, however, that the failure to notify
 the indemnifying party shall not relieve it from any liability which it may
 have under this Section 6 except to the extent that it has been materially
 prejudiced (through the forfeiture of substantive rights or defenses) by such
 failure; and provided, further, that the failure to notify the indemnifying
 party shall not relieve it from any liability which it may have to an
 indemnified party otherwise than under this Section 6. If any such claim or
 action shall be brought against an indemnified party, and it shall notify the
 indemnifying party thereof, the indemnifying party shall be entitled to
 participate therein and, to the extent that it wishes, jointly with any other
 similarly notified indemnifying party, to assume the defense thereof with
 counsel reasonably satisfactory to the indemnified party. After notice from the
 indemnifying party to the indemnified party of its election to assume the
 defense of such claim or action, the indemnifying party shall not be liable to
 the indemnified party under this Section 6 for any legal or other expenses
 subsequently incurred by the indemnified party in connection with the defense
 thereof other than the reasonable costs of investigation; provided, however,
 that an indemnified party shall have the right to employ its own counsel in any
 such action, but the fees, expenses and other charges of such counsel for the
 indemnified party will be at the expense of such indemnified party unless (1)
 the employment of counsel by the indemnified party has been authorized in
 writing by the indemnifying party, (2) the indemnified party has reasonably
 concluded (based upon advice of counsel to the indemnified party) that there
 may be legal defenses available to it or other indemnified parties that are
 different from or in addition to those available to the indemnifying party, (3)
 a conflict or potential conflict exists (based upon advice of counsel to the
 indemnified party) between the indemnified party and the indemnifying party (in
 which case the indemnifying party will not have the right to direct the defense
 of such action on behalf of the indemnified party) or (4) the indemnifying
 party has not in fact employed counsel reasonably satisfactory to the
 indemnified party to assume the defense of such action within a reasonable time
 after receiving notice of the commencement of the action, in each of which
 cases the reasonable fees, disbursements and other charges of counsel will be
 at the expense of the indemnifying party or parties. It is understood that the
 indemnifying party or parties shall not, in connection with any proceeding or
 related proceedings in the same jurisdiction, be liable for the reasonable
 fees, disbursements and other charges of more than one separate firm of
 attorneys (in addition to any local counsel) at any one time for all such
 indemnified party or parties. Each indemnified party, as a condition of the
 indemnity agreements contained in Sections 6(a) and 6(b), shall use all
 reasonable efforts to cooperate with the indemnifying party in the defense of
 any such action or claim. No indemnifying party shall be liable for any
 settlement of any such action effected without its written consent (which
 consent shall not be unreasonably withheld), but if settled with its written
 consent or if there be a final judgment for the plaintiff in any such action,
 the indemnifying party agrees to indemnify and hold harmless any indemnified
 party from and against any loss or liability by reason of such settlement or
 judgment. No indemnifying party shall, without the prior written consent of the
 indemnified party (which consent shall not be unreasonably withheld), effect
 any settlement of any pending or threatened proceeding in respect of which any
 indemnified party is or could have been a party and indemnity could have been
 sought hereunder by such indemnified party, unless

                                      -13-
<PAGE>

 such settlement includes an unconditional release of such indemnified party
 from all liability on claims that are the subject matter of such proceeding.

     7. Contribution. If the indemnification provided for in Section 6 is
 unavailable or insufficient to hold harmless an indemnified party under Section
 6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
 indemnified party, contribute to the amount paid or payable by such indemnified
 party as a result of such loss, claim, damage or liability, or action in
 respect thereof, (i) in such proportion as shall be appropriate to reflect the
 relative benefits received by the Company and the Support Provider from the
 offering and sale of the Securities, on the one hand, and a Holder with respect
 to the sale by such Holder of Securities, Exchange Securities or Private
 Exchange Securities, on the other, or (ii) if the allocation provided by clause
 (i) above is not permitted by applicable law, in such proportion as is
 appropriate to reflect not only the relative benefits referred to in clause (i)
 above but also the relative fault of the Company and the Support Provider on
 the one hand and such Holder on the other with respect to the statements or
 omissions that resulted in such loss, claim, damage or liability, or action in
 respect thereof, as well as any other relevant equitable considerations. The
 relative benefits received by the Company and the Support Provider on the one
 hand and a Holder on the other with respect to such offering and such sale
 shall be deemed to be in the same proportion as the total net proceeds from the
 offering of the Securities (before deducting expenses) received by or on behalf
 of the Company, on the one hand, bear to the total proceeds received by such
 Holder with respect to its sale of Securities, Exchange Securities or Private
 Exchange Securities, on the other. The relative fault shall be determined by
 reference to, among other things, whether the untrue or alleged untrue
 statement of a material fact or the omission or alleged omission to state a
 material fact relates to the Company and the Support Provider or information
 supplied by the Company and the Support Provider on the one hand or to any
 Holders' Information supplied by such Holder on the other, the intent of the
 parties and their relative knowledge, access to information and opportunity to
 correct or prevent such untrue statement or omission. The parties hereto agree
 that it would not be just and equitable if contributions pursuant to this
 Section 7 were to be determined by pro rata allocation or by any other method
 of allocation that does not take into account the equitable considerations
 referred to herein. The amount paid or payable by an indemnified party as a
 result of the loss, claim, damage or liability, or action in respect thereof,
 referred to above in this Section 7 shall be deemed to include, for purposes of
 this Section 7, any legal or other expenses reasonably incurred by such
 indemnified party in connection with investigating or defending or preparing to
 defend any such action or claim. Notwithstanding the provisions of this Section
 7, an indemnifying party that is a Holder of Securities, Exchange Securities or
 Private Exchange Securities shall not be required to contribute any amount in
 excess of the amount by which the total price at which the Securities, Exchange
 Securities or Private Exchange Securities sold by such indemnifying party to
 any purchaser exceeds the amount of any damages which such indemnifying party
 has otherwise paid or become liable to pay by reason of any untrue or alleged
 untrue statement or omission or alleged omission. No person guilty of
 fraudulent misrepresentation (within the meaning of Section 11(f) of the
 Securities Act) shall be entitled to contribution from any person who was not
 guilty of such fraudulent misrepresentation.

                                      -14-
<PAGE>

     8. Rules 144 and 144A. The Support Provider shall use its reasonable best
 efforts to file the reports required to be filed by it under the Securities Act
 and the Exchange Act in a timely manner and, if at any time the Support
 Provider is not required to file such reports, it will, upon the written
 request of any Holder of Transfer Restricted Securities, make publicly
 available other information so long as necessary to permit sales of such
 Holder's securities pursuant to Rules 144 and 144A. The Company and the Support
 Provider covenant that they will take such further action as any Holder of
 Transfer Restricted Securities may reasonably request, all to the extent
 required from time to time to enable such Holder to sell Transfer Restricted
 Securities without registration under the Securities Act within the limitation
 of the exemptions provided by Rules 144 and 144A (including, without
 limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
 any Holder of Transfer Restricted Securities, the Company and the Support
 Provider shall deliver to such Holder a written statement as to whether they
 have complied with such requirements. Notwithstanding the foregoing, nothing in
 this Section 8 shall be deemed to require the Company to register any of its
 securities pursuant to the Exchange Act.

     9. Underwritten Registrations. If any of the Transfer Restricted Securities
 covered by any Shelf Registration Statement are to be sold in an underwritten
 offering, the investment banker or investment bankers and manager or managers
 that will administer the offering will be selected by the Holders of a majority
 in aggregate principal amount of such Transfer Restricted Securities included
 in such offering, subject to the consent of the Company (which shall not be
 unreasonably withheld or delayed), and such Holders shall be responsible for
 all underwriting commissions and discounts in connection therewith.

     No person may participate in any underwritten registration hereunder unless
 such person (i) agrees to sell such person's Transfer Restricted Securities on
 the basis reasonably provided in any underwriting arrangements approved by the
 persons entitled hereunder to approve such arrangements and (ii) completes and
 executes all questionnaires, powers of attorney, indemnities, underwriting
 agreements and other documents reasonably required under the terms of such
 underwriting arrangements.

     10. Miscellaneous.

     (a) Amendments and Waivers. The provisions of this Agreement may not be
 amended, modified or supplemented, and waivers or consents to departures from
 the provisions hereof may not be given as to the Securities, the Exchange
 Securities or the Private Exchange Securities unless the Company has obtained
 the written consent of Holders of a majority in aggregate principal amount of
 the Securities, the Exchange Securities and the Private Exchange Securities,
 taken as a single class. Notwithstanding the foregoing, a waiver or consent to
 depart from the provisions hereof with respect to a matter that relates
 exclusively to the rights of Holders whose Securities, Exchange Securities or
 Private Exchange Securities are being sold pursuant to a Registration Statement
 and that does not directly or indirectly affect the rights of other Holders may
 be given by Holders of a majority in aggregate principal amount of the
 Securities, the Exchange Securities and the Private Exchange Securities being
 sold by such Holders pursuant to such Registration Statement.

                                      -15-
<PAGE>

     (b) Notices. All notices and other communications provided for or permitted
 hereunder shall be made in writing by hand-delivery, first-class mail,
 telecopier or air courier guaranteeing next-day delivery:

          (1) if to a Holder, at the most current address given by such Holder
     to the Company in accordance with the provisions of this Section 10(b),
     which address initially is, with respect to each Holder, the address of
     such Holder maintained by the Registrar under the Indenture, with a copy in
     like manner to the Initial Purchaser;

          (2) if to the Initial Purchaser, initially at Lehman Brothers Inc.,
     3 World Financial Center, 200 Vesey St., New York, NY 10285, Attention:
     Fixed Income Syndicate Desk;

          (3) if to the Company, initially at Verizon Global Funding Corp.,
     Attention Janet M. Garrity, President and Treasurer, 3900 Washington
     Street-2nd Floor, Wilmington, DE 19802; and

          (4) if to the Support Provider, initially at Verizon Communications
     Inc., Attention William F. Heitmann, Senior Vice President and Treasurer,
     1095 Avenue of the Americas, New York, New York 10036

     All such notices and communications shall be deemed to have been duly
 given: when delivered by hand, if personally delivered; one business day after
 being delivered to a next-day air courier; five business days after being
 deposited in the mail; and when receipt is acknowledged by the recipient's
 telecopier machine, if sent by telecopier.

     (c) Successors And Assigns. This Agreement shall be binding upon the
 Company, the Support Provider and their respective successors and assigns.

     (d) Counterparts. This Agreement may be executed in any number of
 counterparts (which may be delivered in original form or by telecopier) and by
 the parties hereto in separate counterparts, each of which when so executed
 shall be deemed to be an original and all of which taken together shall
 constitute one and the same agreement.

     (e) Definition of Terms. For purposes of this Agreement, (a) the term
 "business day" means any day on which the New York Stock Exchange, Inc. is open
 for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
 under the Securities Act and (c) except where otherwise expressly provided, the
 term "affiliate" has the meaning set forth in Rule 405 under the Securities
 Act.

     (f) Headings. The headings in this Agreement are for convenience of
 reference only and shall not limit or otherwise affect the meaning hereof.

     (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
 ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                      -16-
<PAGE>

     (h) Remedies. In the event of a breach by the Company or the Support
 Provider or by any Holder of any of their respective obligations under this
 Agreement, each Holder or the Company or the Support Provider, as the case may
 be, in addition to being entitled to exercise all rights granted by law,
 including recovery of damages (other than the recovery of damages for a breach
 by the Company or the Support Provider of their obligations under Sections 1 or
 2 hereof for which additional interest have been paid pursuant to Section 3
 hereof), will be entitled to specific performance of its rights under this
 Agreement. The Company, the Support Provider and each Holder agree that
 monetary damages would not be adequate compensation for any loss incurred by
 reason of a breach by it of any of the provisions of this Agreement and hereby
 further agree that, in the event of any action for specific performance in
 respect of such breach, it shall waive the defense that a remedy at law would
 be adequate.

     (i) No Inconsistent Agreements. Each of the Company and the Support
 Provider represents, warrants and agrees that (i) it has not entered into,
 shall not, on or after the date of this Agreement, enter into any agreement
 that is inconsistent with the rights granted to the Holders in this Agreement
 or otherwise conflicts with the provisions hereof, (ii) it has not previously
 entered into any agreement which remains in effect granting any registration
 rights with respect to any of its debt securities to any person and (iii)
 without limiting the generality of the foregoing, without the written consent
 of the Holders of a majority in aggregate principal amount of the then
 outstanding Transfer Restricted Securities, it shall not grant to any person
 the right to request the Company to register any debt securities of the Company
 under the Securities Act unless the rights so granted are not in conflict or
 inconsistent with the provisions of this Agreement.

     (j) No Piggyback on Registrations. No security holders of the Company
 (other than the Holders of Transfer Restricted Securities in such capacity)
 shall have the right to include any securities of the Company in any Shelf
 Registration or Registered Exchange Offer other than Transfer Restricted
 Securities.

     (k) Severability. The remedies provided herein are cumulative and not
 exclusive of any remedies provided by law. If any term, provision, covenant or
 restriction of this Agreement is held by a court of competent jurisdiction to
 be invalid, illegal, void or unenforceable, the remainder of the terms,
 provisions, covenants and restrictions set forth herein shall remain in full
 force and effect and shall in no way be affected, impaired or invalidated, and
 the parties hereto shall use their reasonable best efforts to find and employ
 an alternative means to achieve the same or substantially the same result as
 that contemplated by such term, provision, covenant or restriction. It is
 hereby stipulated and declared to be the intention of the parties that they
 would have executed the remaining terms, provisions, covenants and restrictions
 without including any of such that may be hereafter declared invalid, illegal,
 void or unenforceable.

                                      -17-
<PAGE>

     Please confirm that the foregoing correctly sets forth the agreement among
 the Company, the Support Provider and the Initial Purchaser.

                                       Very truly yours,

                                       VERIZON GLOBAL FUNDING CORP.

                                       By  /s/ Janet M. Garrity
                                           ------------------------
                                           Name:  Janet M. Garrity
                                           Title: President and Treasurer

                                       VERIZON COMMUNICATIONS INC.

                                       By  /s/ William F. Heitmann
                                           ------------------------
                                           Name:  William F. Heitmann
                                           Title: Senior Vice President and
                                                  Treasurer
Accepted:

LEHMAN BROTHERS INC.

By  /s/ Victor Forte
    ------------------------
    Name:  Victor Forte
    Title: Managing Director

                                      -18-
<PAGE>

                                                                         ANNEX A

     Each broker-dealer that receives Exchange Securities for its own account
 pursuant to the Registered Exchange Offer must acknowledge that it will deliver
 a prospectus in connection with any resale of such Exchange Securities. The
 Letter of Transmittal states that by so acknowledging and by delivering a
 prospectus, a broker-dealer will not be deemed to admit that it is an
 "underwriter" within the meaning of the Securities Act. This Prospectus, as it
 may be amended or supplemented from time to time, may be used by a
 broker-dealer in connection with resales of Exchange Securities received in
 exchange for Securities where such Securities were acquired by such
 broker-dealer as a result of market-making activities or other trading
 activities. The Company has agreed that, for a period of 90 days after the
 Expiration Date (as defined herein), it will make this Prospectus available to
 any broker-dealer for use in connection with any such resale. See "Plan of
 Distribution".

<PAGE>

                                                                         ANNEX B

     Each broker-dealer that receives Exchange Securities for its own account in
 exchange for Securities, where such Securities were acquired by such
 broker-dealer as a result of market-making activities or other trading
 activities, must acknowledge that it will deliver a prospectus in connection
 with any resale of such Exchange Securities. See "Plan of Distribution".

<PAGE>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

     Each broker-dealer that receives Exchange Securities for its own account
 pursuant to the Registered Exchange Offer must acknowledge that it will deliver
 a prospectus in connection with any resale of such Exchange Securities. This
 Prospectus, as it may be amended or supplemented from time to time, may be used
 by a broker-dealer in connection with resales of Exchange Securities received
 in exchange for Securities where such Securities were acquired as a result of
 market-making activities or other trading activities. The Company has agreed
 that, for a period of 90 days after the Expiration Date, it will make this
 prospectus, as amended or supplemented, available to any broker-dealer for use
 in connection with any such resale. In addition, until __________, 2001, all
 dealers effecting transactions in the Exchange Securities may be required to
 deliver a prospectus.

     The Company will not receive any proceeds from any sale of Exchange
 Securities by broker-dealers. Exchange Securities received by broker-dealers
 for their own account pursuant to the Registered Exchange Offer may be sold
 from time to time in one or more transactions in the over-the-counter market,
 in negotiated transactions, through the writing of options on the Exchange
 Securities or a combination of such methods of resale, at market prices
 prevailing at the time of resale, at prices related to such prevailing market
 prices or at negotiated prices. Any such resale may be made directly to
 purchasers or to or through brokers or dealers who may receive compensation in
 the form of commissions or concessions from any such broker-dealer or the
 purchasers of any such Exchange Securities. Any broker-dealer that resells
 Exchange Securities that were received by it for its own account pursuant to
 the Registered Exchange Offer and any broker or dealer that participates in a
 distribution of such Exchange Securities may be deemed to be an "underwriter"
 within the meaning of the Securities Act and any profit on any such resale of
 Exchange Securities and any commission or concessions received by any such
 persons may be deemed to be underwriting compensation under the Securities Act.
 The Letter of Transmittal states that, by acknowledging that it will deliver
 and by delivering a prospectus, a broker-dealer will not be deemed to admit
 that it is an "underwriter" within the meaning of the Securities Act.

     For a period of 90 days after the Expiration Date the Company will promptly
 send additional copies of this Prospectus and any amendment or supplement to
 this Prospectus to any broker-dealer that requests such documents in the Letter
 of Transmittal. The Company has agreed to pay all expenses incident to the
 Registered Exchange Offer (including the expenses of one counsel for the
 Holders of the Securities) other than commissions or concessions of any
 broker-dealers and will indemnify the Holders of the Securities (including any
 broker-dealers) against certain liabilities, including liabilities under the
 Securities Act.

<PAGE>

                                                                         ANNEX D

     [ ]  CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
          ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
          SUPPLEMENTS THERETO.

          Name:
          Address:

 If the undersigned is not a broker-dealer, the undersigned represents that it
 is not engaged in, and does not intend to engage in, a distribution of Exchange
 Securities. If the undersigned is a broker-dealer that will receive Exchange
 Securities for its own account in exchange for Securities that were acquired as
 a result of market-making activities or other trading activities, it
 acknowledges that it will deliver a prospectus in connection with any resale of
 such Exchange Securities; however, by so acknowledging and by delivering a
 prospectus, the undersigned will not be deemed to admit that it is an
 "underwriter" within the meaning of the Securities Act.<PAGE>
                                                                     Exhibit 4-I

                                 TRUST INDENTURE

                      U.S. BANK TRUST NATIONAL ASSOCIATION

                                     TRUSTEE

                                    INDENTURE

                          DATED AS OF DECEMBER 1, 2001

                       VARIABLE DENOMINATION SUBORDINATED
                              FIXED RATE TERM NOTES

<PAGE>

                                TABLE OF CONTENTS
<TABLE>

<S>                                                                                                             <C>
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................5
Section 1.01          Definitions.................................................................................5
Section 1.02          Compliance Certificates and Opinions.......................................................10
Section 1.03          Form of Documents Delivered to Trustee.....................................................11
Section 1.04          Acts of Holders............................................................................11
Section 1.05          Notices, Etc., to Trustee and Company......................................................12
Section 1.06          Notice to Holders; Waiver..................................................................13
Section 1.07          Conflict with Trust Indenture Act..........................................................13
Section 1.08          Effect of Headings, Table of Contents, and Reconciliation and Tie..........................13
Section 1.09          Successors and Assigns.....................................................................13
Section 1.10          Separability Clause........................................................................14
Section 1.11          Benefits of Indenture......................................................................14
Section 1.12          Governing Law..............................................................................14
Section 1.13          Legal Holidays.............................................................................14
Section 1.14          Persons Deemed Owners......................................................................14

ARTICLE II AMOUNT, PAYMENT AND RESTRICTION OF TRANSFER OF SECURITIES.............................................14
Section 2.01          Amount Limited.............................................................................14
Section 2.02          Payment....................................................................................14
Section 2.03          Restriction on Transfer and Pledge of Securities...........................................15

ARTICLE III REDEMPTION OF SECURITIES.............................................................................15
Section 3.01          Redemption at Option of the Company........................................................15
Section 3.02          Notice of Redemption.......................................................................15
Section 3.03          Payment of Redemption Price................................................................15
Section 3.04          Redemption of Notes if Holder is Not Eligible to Participate in the Program................16

ARTICLE IV SATISFACTION AND DISCHARGE OF INDENTURE...............................................................16
Section 4.01          Satisfaction and Discharge of Indenture....................................................16
Section 4.02          Application of Trust Money.................................................................16
Section 4.03          Repayment by Paying Agents.................................................................17

ARTICLE V REMEDIES...............................................................................................17
Section 5.01          Events of Default..........................................................................17
Section 5.02          Acceleration of Maturity; Rescission and Annulment.........................................19
Section 5.03          Collection of Indebtedness and Suits for Enforcement by Trustee............................20
Section 5.04          Trustee May File Proofs of Claim...........................................................21
Section 5.05          Trustee May Enforce Claim Without Possession of Securities.................................21
</TABLE>

                                      -2-

<PAGE>

<TABLE>

<S>                                                                                                             <C>
Section 5.06          Application of Money Collected.............................................................22
Section 5.07          Limitation on Suits........................................................................22
Section 5.08          Unconditional Right of Holders to Receive Principal, and Interest..........................22
Section 5.09          Restoration of Rights and Remedies.........................................................23
Section 5.10          Rights and Remedies Cumulative.............................................................23
Section 5.11          Delay or Omission Not Waiver...............................................................23
Section 5.12          Control by Holders.........................................................................23
Section 5.13          Waiver of Past Defaults....................................................................24
Section 5.14          Undertaking for Costs......................................................................24
Section 5.15          Waiver of Stay or Extension Laws...........................................................24

ARTICLE VI THE TRUSTEE...........................................................................................25
Section 6.01          Certain Duties and Responsibilities........................................................25
Section 6.02          Notice of Defaults.........................................................................26
Section 6.03          Certain Rights of Trustee..................................................................27
Section 6.05          May Hold Securities........................................................................28
Section 6.06          Money Held in Trust........................................................................28
Section 6.07          Compensation and Reimbursement.............................................................28
Section 6.08          Disqualification; Conflicting Interests....................................................29
Section 6.09          Corporate Trustee Required; Eligibility....................................................29
Section 6.10          Resignation and Removal; Appointment of Successor..........................................30
Section 6.11          Acceptance of Appointment by Successor.....................................................31
Section 6.12          Merger, Conversion, Consolidation or Succession to Business................................32

ARTICLE VII HOLDERS' LISTS, PROGRAM INFORMATION AND REPORTS BY TRUSTEE AND COMPANY...............................32
Section 7.01          Company to Furnish Trustee Names and Addresses of Holders and Other Information............32
Section 7.02          Preservation of Information; Communications to Holders.....................................33
Section 7.03          Reports by Trustee.........................................................................34
Section 7.04          Reports by Company.........................................................................35

ARTICLE VIII SUPPLEMENTAL INDENTURES.............................................................................35
Section 8.01          Supplemental Indentures without Consent of Holders.........................................35
Section 8.02          Supplemental Indentures with Consent of Holders............................................36
Section 8.03          Execution of Supplemental Indentures.......................................................37
Section 8.04          Effect of Supplemental Indentures..........................................................37
Section 8.05          Conformity with Trust Indenture Act........................................................37

ARTICLE IX COVENANTS.............................................................................................37
Section 9.01          Administration of Program; Payment of Principal and Interest...............................37
Section 9.02          Maintenance of Security Register, Maintenance of Office or Agency..........................38
Section 9.03          Money for Securities Payments to Be Held in Trust..........................................38
Section 9.04          Certificate of Officers of the Company.....................................................39
Section 9.05          Waiver of Certain Covenants................................................................40
</TABLE>

                                      -3-
<PAGE>

<TABLE>
<S>                                                                                                             <C>
ARTICLE X SUBORDINATION..........................................................................................40
Section 10.01         Agreement to Subordinate...................................................................40
Section 10.02         Subordination..............................................................................40
Section 10.03         Payments by Trustee or Securities Holders to Holders of Senior Indebtedness................42
Section 10.04         Subrogation................................................................................42
Section 10.05         Obligation of Company Unconditional........................................................42
Section 10.06         Payments on Securities Permitted...........................................................43
Section 10.07         Effectuation of Subordination by Trustee...................................................43
Section 10.08         Trustee Not Charged with Knowledge of Prohibition..........................................43
Section 10.09         Trustee May Hold Senior Indebtedness.......................................................43
Section 10.10         Rights of Holders of Senior Indebtedness Not Impaired......................................44
Section 10.11         Rights and Obligations Subject to Power of Court...........................................44
</TABLE>

                                      -4-
<PAGE>

         INDENTURE, dated as of December 1, 2001 between TruServ Corporation, a
corporation duly organized and existing under the laws of the State of
Delaware,(herein called the "Company"), having its principal office at 8600 West
Bryn Mawr Avenue, Chicago, Illinois 60631 and U.S. Bank Trust National
Association, having its principal offices at 180 East Fifth Street, St. Paul,
Minnesota 55101, a national banking organization organized under the laws of the
United States, as Trustee (herein called the "Trustee").

         RECITALS OF THE COMPANY

         The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated variable denomination fixed rate term Securities (herein called the
"Securities") pursuant subordinated to the Program (as defined below). All
things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:

                                   ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

         Section 1.01 Definitions.

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

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

         (2)  all other terms used herein which are defined in the Trust
              Indenture Act or by Commission rule under the Trust Indenture Act,
              either directly or by reference therein, have the meanings
              assigned to them therein;

         (3)  all accounting terms not otherwise defined herein have the
              meanings assigned to them in accordance with generally accepted
              accounting principles, and, except as otherwise herein expressly
              provided, the term "generally accepted accounting principles" with
              respect to any computation required or permitted hereunder shall
              mean such accounting principles as are generally accepted in the
              United States of America at the date of such computation; and

                                      -5-
<PAGE>

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

         Certain terms, used principally in Article Six, are defined in that
Article.

         "Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Agent Bank" means a bank or corporation, and its successors and
assigns, appointed by the Company to act as agent under the Program and to
perform all functions required of such agent pursuant to the provisions of the
Program and to serve as Paying Agent pursuant to the provisions of this
Indenture.

         "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.

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

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the Agent Bank or Trustee is authorized or
obligated by law to close.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
shall mean such successor corporation.

         "Company Member" means any member in good standing of TruServ
Corporation.

                                      -6-
<PAGE>
         "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.

         "Consolidated Net Tangible Assets" means as of any particular time the
aggregate amount of assets after deducting therefrom (a) all current liabilities
(excluding any such liability that by its terms is extendable or renewable at
the option of the obligor thereon to a time more than 12 months after the time
as of which the amount thereof is being computed) and (b) all goodwill, excess
of cost over assets acquired, patents, copyrights, trademarks, trade names,
unauthorized debt discount and expense and other like intangibles, all as shown
in the most recent consolidated financial statements of the Company and its
Subsidiaries prepared in accordance with generally accepted accounting
principles.

         "Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which at the date hereof is located at 180 East Fifth Street, St. Paul,
Minnesota 55101. With respect to the paying agent, the corporate trust office
means the principal office of the paying agent at which any particular time its
paying agent business shall be administered, which at the date hereof is located
at 50 South LaSalle Street, Chicago, Illinois 60675.

         "Corporation" includes corporations, associations, companies and
business trusts.

         "Event of Default" has the meaning specified in Section 5.01.

         "Holder" means, with respect to a Security, a Person in whose name at
the time a particular Security is registered in the Security Register.

         "Indebtedness" with respect to any Person at any date means and
includes all items of indebtedness or liability which, in accordance with
generally accepted accounting principles, would be included in determining total
liabilities as shown on the liabilities side of a balance sheet of such Person
at such date, and shall include (a) amounts due trade creditors, (b) all
indebtedness guaranteed or endorsed (other than for purposes of collection in
the ordinary course of business), directly or indirectly, in any manner, by such
Person, and contingent obligations of such Person in respect of, or to purchase
or otherwise acquire, indebtedness of others (regardless of whether such
indebtedness would appear on a balance sheet), and (c) all indebtedness secured
by any mortgage, lien, pledge, charge or encumbrance upon property owned by such
Person, whether or not the indebtedness so secured has been assumed by such
Person (but if such Person has not assumed such indebtedness, the amount thereof
shall be deemed the lesser of the amount of such indebtedness or the fair market
value of the property that is subject to such lien, based on the appraisal of a
reputable appraiser that is independent of the Company, which appraisal is as of
a date not more than twelve months prior to the date of determination).

                                      -7-
<PAGE>

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

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.

         "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or other counsel satisfactory to the
Trustee, which is delivered to the Trustee.

         "Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities in which Holders have made investments as
shown on the Securities Register, except:

         (1)  Securities or portions thereof theretofore redeemed by the Holders
              pursuant to the provisions of the Program and this Indenture;

         (2)  Securities or portions thereof theretofore redeemed by the Company
              pursuant to the provisions of this Indenture;

         (3)  Securities or portions thereof for whose payment or redemption
              money in the necessary amount has been theretofore deposited with
              the trustee or any Paying Agent (other than the Company) in trust
              or set aside and segregated in trust by the Company (if the
              Company shall act as its own Paying Agent), for the Holders of
              such Securities; provided that, if such Securities are to be
              redeemed, notice of such redemption has been duly given pursuant
              to this Indenture or provision therefor satisfactory to the
              Trustee has been made; provided, however, that in determining
              whether the Holders of the requisite principal amount of the
              Outstanding Securities have given any request, demand,
              authorization, direction, notice, consent or waiver hereunder,
              Securities owned by the Company or any other obligor upon the
              Securities or any Affiliate of the Company or of such other
              obligor shall be disregarded and deemed not to be Outstanding,
              except that, in determining whether the Trustee shall be protected
              in relying upon any such request, demand, authorization,
              direction, notice, consent or waiver, only Securities which the
              Trustee knows to be so owned shall be so disregarded.

         "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Agent Bank shall serve as Paying Agent pursuant to the terms of
this Indenture.

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

                                      -8-
<PAGE>

         "Program" means the TruServ Corporation Variable Denomination
Subordinated Fixed Rate Term Note Program established by the Company and in
effect on the date hereof, as the same may be amended or supplemented by the
Company from time to time.

         "Principal Amount", when used with reference to a Security, means, as
of a particular time, the sum of the funds invested in a Security, plus the sum
of interest accrued, paid and reinvested in a Security, less the sum of
redemptions from time to time.

         "Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

         "Secured Debt" means indebtedness for money borrowed which is secured
by a mortgage, pledgee, lien, security interest or encumbrance on any property
of any character of the Company.

         "Security" or "Securities" means any Variable Denomination Subordinated
Fixed Rate Term Note or Notes, as the case may be, issued pursuant to the
Program and under this Indenture, which are evidenced by an individual record or
entries in the name of the Particular Holder established on the Security
Register.

         "Security Register" has the meaning specified in Section 9.02.

         "Senior Indebtedness" means the principal amount of, and the interest
on, fees, expenses, indemnities, reimbursement obligations and all other
obligations with respect to any Indebtedness of the Company for money borrowed,
whether presently outstanding or hereafter incurred, unless it is provided in
the appropriate instruments that such Indebtedness for money borrowed is not
senior to the Securities.

         "Subsidiary" means, with respect to the Company, a corporation more
than fifty percent (50%) of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.

                                      -9-
<PAGE>

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter.

         "Trustee" shall mean or include each Person who is then a Trustee
hereunder.

         "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed, except as
provided in Section 8.05.

         "United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.

         "Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".

         "Wholly-owned Subsidiary" means any Subsidiary of which, at the time of
determination, all of the outstanding voting stock (other than directors'
qualifying shares) is owned by the Company, directly or indirectly. For purposes
of this definition, "voting stock" has the same meaning as under the definition
of "Subsidiary".

         Section 1.02 Compliance Certificates and Opinions.

         Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than annual
certificates provided pursuant to Section 9.04) shall include:

         (1)  a statement that each individual signing such certificate or
              opinion has read such covenant or condition and the definitions
              herein relating thereto;

         (2)  a brief statement as to the nature and scope of the examination or
              investigation upon which the statements or opinions contained in
              such certificate or opinion are based;

                                      -10-
<PAGE>

         (3)  a statement that, in the opinion of each such individual, he/she
              has made such examination or investigation as is necessary to
              enable him/her to express an informed opinion as to whether or not
              such covenant or condition has been complied with; and

         (4)  a statement as to whether, in the opinion of each such individual,
              such condition or covenant has been complied with.

         Section 1.03 Form of Documents Delivered to Trustee.

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his/her certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

         Section 1.04 Acts of Holders.

         (1)  Any request, demand, authorization, direction, notice, consent,
              waiver or other action provided by this Indenture to be given or
              taken by Holders may be embodied in and evidenced by one or more
              instruments of substantially similar tenor signed by such Holders
              in person or by agent duly appointed in writing; and, except as
              herein otherwise expressly provided, such action shall become
              effective when such instrument or instruments are delivered to the
              Trustee and, where it is hereby expressly required, to the
              Company. Such instrument or instruments (and the action embodied
              therein and evidenced thereby) are herein sometimes referred to as
              the "Act" of the Holders signing such instrument or instruments.
              Proof of execution of any such instrument or of a writing
              appointing any such agent shall be sufficient for any purpose of
              this Indenture and (subject to Section 6.01)

                                      -11-
<PAGE>

              conclusive in favor of the Trustee and the Company, if made in the
              manner provided in this Section.

         (2)  The fact and date of the execution by any Person of any such
              instrument or writing may be proved by the affidavit of a witness
              of such execution or by a certificate of a notary public or other
              officer authorized by law to take acknowledgments of deeds,
              certifying that the individual signing such instrument or writing
              acknowledged to him the execution thereof. Where such execution is
              by a signer acting in a capacity other than his individual
              capacity, such certificate or affidavit shall also constitute
              sufficient proof of his authority. The fact and date of the
              execution of any such instrument or writing, or the authority of
              the Person executing the same, may also be proved in any other
              manner which the Trustee deems sufficient.

         (3)  The ownership of Securities shall be proved by reference to the
              Security Register.

         (4)  Any request, demand, authorization, direction, notice, consent,
              waiver or other Act of the Holder of any Security shall bind every
              future Holder of the same Security and the Holder of every
              Security issued upon the registration of transfer thereof or in
              exchange therefor or in lieu thereof in respect of anything done,
              omitted or suffered to be done by the Trustee or the Company in
              reliance thereon, whether or not notation of such action is made
              upon such Security.

         (5)  The Company may set a record date for purposes of determining the
              identity of Holders entitled to give any request, demand,
              authorization, direction, notice, consent, waiver or other Act
              which record date shall be the later of ten (10) days prior to the
              first solicitation of such action or the date of the most recent
              list of Holders furnished to the Trustee pursuant to Section 7.01
              of this Indenture prior to such solicitation. If a record date is
              fixed, those persons who were Holders of Securities at such record
              date (or their duly designated proxies), and only those persons
              shall be entitled to take such action or to revoke any such
              previous action, whether or not such persons continue to be
              Holders after such record date. No such request, demand,
              authorization, direction, notice, consent, waiver or other Act
              shall be valid or effective for more than one hundred and twenty
              (120) days after such record date.

         Section 1.05 Notices, Etc., to Trustee and Company.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

                                      -12-
<PAGE>

         (1)  the Trustee by any Holder or by the Company shall be sufficient
              for every purpose hereunder if made, given, furnished or filed in
              writing to or with the Trustee and received at its Corporate Trust
              Office, Attention: Corporate Trust Department, or

         (2)  the Company by the Trustee or by any Holder shall be sufficient
              for every purpose hereunder (unless otherwise herein expressly
              provided) if in writing and mailed, first-class postage prepaid,
              to the Company addressed to it at the address of its principal
              office specified in the first paragraph of this instrument or at
              any other address previously furnished in writing, to the Trustee
              or Holders by the Company.

         Section 1.06 Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address, as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver. In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.

         Section 1.07 Conflict with Trust Indenture Act.

         If any provision hereof limits, qualifies or conflicts with the duties
imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture Act
through operation of Section 318(c) thereof, such imposed duties shall control.

         Section 1.08 Effect of Headings, Table of Contents, and Reconciliation
and Tie.

         The Article and Section headings herein and the Table of Contents and
Reconciliation and Tie are for convenience only and shall not affect the
construction hereof.

         Section 1.09 Successors and Assigns.

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

                                      -13-
<PAGE>

         Section 1.10 Separability Clause.

         In case any provision in this Indenture or in the Securities 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 1.11 Benefits of Indenture.

         Nothing in this Indenture or in the Securities, 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 Indenture.

         Section 1.12 Governing Law.

         This Indenture and the Securities shall be governed by and construed in
accordance with Federal law and with the laws of the State of Illinois.

         Section 1.13 Legal Holidays.

         In any case where any Redemption Date shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of the redemption price need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Redemption Date, provided that no interest shall accrue for the period from
and after such Redemption Date.

         Section 1.14 Persons Deemed Owners.

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of or interest
on such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.

                                   ARTICLE II

                               AMOUNT, PAYMENT AND
                      RESTRICTION OF TRANSFER OF SECURITIES

         Section 2.01 Amount Limited.

         The Securities shall be issued pursuant to the Program and under this
Indenture in a principal amount not to exceed the amount of Securities as stated
in the Program's prospectus relating to the Variable Denomination Subordinated
Fixed Rate Term Notes.

         Section 2.02 Payment.

                                      -14-
<PAGE>

         The Securities shall be payable at the office or agency of the Agent
Bank as may from time to time be designated in writing, maintained for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.

         Section 2.03 Restriction on Transfer and Pledge of Securities.

         The notes may be transferred, in whole or in part, only to another
Company Member or current Holder and only with the prior written consent of the
Company. The Securities may not be pledged, in whole or in part, either directly
or by operation of law or otherwise.

                                  ARTICLE III

                            REDEMPTION OF SECURITIES

         Section 3.01 Redemption at Option of the Company.

         The Company may redeem, at any time in its discretion, all or any
portion of the Securities issued pursuant to the Program and under this
Indenture. Any partial redemption of the entirety of the Notes will be effected
by lot or pro rata or by any other method that is deemed fair and appropriate by
the Trustee.

         Section 3.02 Notice of Redemption.

         The Company may give prior written notice of at least thirty (30) days
but not more than ninety (90) days to Holders whose Notes are subject to full or
partial redemption. A copy of any notices shall be given to the Trustee. Such
notice from the Company will specify the effective date of redemption, the
amount being redeemed and the effective date the redeemed amount shall become
due and payable and that interest shall cease to accrue as of that date. All
partial redemption notices will list the remaining, principal amount of the
Security.

         If the Company directs the Trustee to deliver notice of redemption to
holders, the Company will provide written notice to the Trustee at least 45 days
prior to the Redemption Date.

         Section 3.03 Payment of Redemption Price.

         Upon redemption the full or partial Principal Amount of the Securities
being redeemed, plus accrued and unpaid interest thereon to the date of
redemption, shall be paid by check to the Holder. The Company covenants that it
will pay or cause to be paid to the Trustee or to the Agent Bank or to another
Paying Agent cash in an amount sufficient to pay the principal amount of the
Security or portion thereof to be redeemed on such date. Interest on the
redeemed amount shall cease to accrue on and after the effective date the
redeemed amount shall have become due and payable.

                                      -15-
<PAGE>

         Section 3.04 Redemption of Notes if Holder is Not Eligible to
Participate in the Program.

         The Company also may redeem, at any time in its sole and absolute
discretion, any Security issued pursuant to the Program and under this Indenture
if the Holder of such Security is not eligible to participate in the Program as
defined in the annual Program Description. Notice of such redemption will be
given in the manner provided in Section 3.02, and payment of the redemption
price shall be made as provided in Section 3.03.

                                   ARTICLE IV

                     SATISFACTION AND DISCHARGE OF INDENTURE

         Section 4.01 Satisfaction and Discharge of Indenture.

         If at any time:

         (1)  the Company shall have terminated the Program pursuant to its
              provisions,

         (2)  all the Notes shall have become due and payable,

         (3)  the Company shall have deposited or caused to be deposited with
              the Trustee as trust funds the entire amount (other than moneys
              repaid by any Paying Agent to the Trustee in accordance with
              Section 4.03) sufficient to pay all the Notes, including principal
              and interest due or to become due to such date of maturity, and

         (4)  the Company shall have paid or caused to be paid all other sums
              payable hereunder by the Company, then this Indenture shall cease
              to be of further effect, and the Trustee, on demand of and at the
              cost and expense of the Company shall execute proper instruments
              acknowledging satisfaction of and discharge of this Indenture,
              which instruments shall be prepared by the Company. The Company
              agrees to reimburse the Trustee for any costs or expenses
              thereafter reasonably and properly incurred by the Trustee in
              connection with this Indenture, the Program or the Notes.

         Section 4.02 Application of Trust Money.

         All moneys deposited with the Trustee pursuant to Section 4.01 shall be
held in trust and applied by it to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent), to the
Holders of the Notes for the payment of which such moneys have been deposited
with the Trustee of all sums due and to become due thereon for principal and
interest. The Trustee shall be under no obligation to invest or pay interest on
any moneys so held in trust.

                                      -16-
<PAGE>

         Section 4.03 Repayment by Paying Agents.

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

                                   ARTICLE V

                                    REMEDIES

         Section 5.01 Events of Default.

         "Events of Default", means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

         (1)  default in the payment of any part of or all the principal of or
              interest on any Security as and when the same shall be due and
              payable, in accordance with the then current provisions and rules
              and regulations of the Program and this Indenture; provided,
              however, that:

              a. the failure of the Company to make any payment of the principal
                 of or interest on any Security, or any delay in making such
                 payment shall not be considered in determining whether an
                 "Event of Default" shall have occurred if:

                 i.  the Trustee believes in good faith that the Security is
                     subject to a conflicting claim, attachment, lien or
                     proceeding, or any person demanding such payment is not, or
                     may not be, legally entitled thereto, or the amount of the
                     payment demanded exceeds the principal amount of the
                     Security according to the Security Register, or the demand
                     for payment has not been made in accordance with the then
                     current provisions and rules and regulations of the
                     Program, or the payment cannot be made in accordance with
                     the then current provisions and rules and regulations of
                     the Program, or

                 ii. the Company shall have paid over to the Trustee for deposit
                     to an account not subject to offset, charge or encumbrance
                     by the Trustee the amount of the principal of or interest
                     on any Security which has become due and payable, and if
                     requested by the Trustee the Company shall have furnished
                     the Trustee with an Officers'

                                      -17-
<PAGE>

                     Certificates as to the matters described in the foregoing
                     clauses (i) and (ii); or

              b. an administrative error relating to a Security or improperly
                 identifying the Security of a Holder shall not be considered in
                 determining whether an "Event of Default" shall have occurred
                 unless such error shall have continued uncorrected for a period
                 of sixty (60) days after written notification thereof to the
                 Agent Bank or the Trustee by a Holder, the Trustee to be the
                 sole judge of whether the error has been corrected (the above
                 enumeration of specific examples of situations which shall not
                 be considered in determining whether an "Event of Default"
                 shall have occurred shall not be exclusive, and the Trustee may
                 determine in any particular instance and, absence bad faith,
                 shall incur no liability to any person in so determining
                 whether the circumstances concerning a particular Security
                 should be considered in determining whether an "Event of
                 Default" shall have occurred); or

         (2)  default in the performance, or breach, of any covenant or warranty
              of the Company in this Indenture (other than a covenant or
              warranty a default in whose performance or whose breach is
              elsewhere in this Section specifically dealt with), and
              continuance of such default or breach for a period of sixty (60)
              days after there has been given, by registered or certified mail,
              to the Company by the Trustee or to the Company and the Trustee by
              the Holders of at least twenty-five per cent (25%) in principal
              amount of the Outstanding Securities a written notice specifying
              such default or breach and requiring it to be remedied and stating
              that such notice is a "Notice of Default" hereunder; or

         (3)  the entry by a court having jurisdiction in the premises of:

              a. a decree or order for relief in respect of the Company in an
                 involuntary case or proceeding under any applicable Federal or
                 State bankruptcy, insolvency, reorganization or other similar
                 law or

              b. a decree or order adjudging the Company a bankrupt or
                 insolvent, or approving as properly filed a petition seeking
                 reorganization, arrangement, adjustment or composition of or in
                 respect of the Company under any applicable Federal or State
                 law, or appointing a custodian, receiver, liquidator, assignee,
                 trustee, sequestrator or other similar official of the Company
                 or of any substantial part of its property, or ordering the
                 winding up or liquidation of its affairs, and the continuance
                 of any such decree or order for relief or any such decree or
                 order remains

                                      -18-
<PAGE>

                 unstayed and in effect for a period of sixty (60) consecutive
                 days; or

         (4)  the commencement by the Company of a voluntary case or proceeding
              under any applicable Federal or State bankruptcy, insolvency,
              reorganization or other similar law or of any other case or
              proceeding to be adjudicated a bankrupt or insolvent, or the
              consent by it to the entry of a decree or order for relief in
              respect of the Company in an involuntary case or proceeding under
              any applicable Federal or State bankruptcy, insolvency,
              reorganization or other similar law or to the commencement of any
              bankruptcy or insolvency case or proceeding against it, or the
              filing by it of a petition or answer or consent seeking
              reorganization or relief under any applicable Federal or State
              law, or the consent by it to the filing of such petition or to the
              appointment of or taking possession by a custodian, receiver,
              liquidator, assignee, trustee, sequestrator or similar official of
              the Company or of any substantial part of its property, or the
              making by it of an assignment for the benefit of creditors, or the
              admission by it in writing of its inability to pay its debts
              generally as they become due, or the taking of corporate action by
              the Company in furtherance of any such action; or

         (5)  in connection with any proceeding under any law relating to
              bankruptcy, insolvency or reorganization or relief of debtors,
              involving the Company or one of its Subsidiaries an order for
              relief shall be entered by a court of competent jurisdiction which
              affects any significant part of the assets of the Company or any
              of its Subsidiaries.

         Section 5.02 Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default with respect to the Notes occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
fifty percent (50%) in the principal amount of the Outstanding Securities may
declare all of the Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount shall become immediately due and payable.

         At any time after such a declaration of acceleration with respect to
the Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, shall rescind and
annul such declaration and its consequences if:

         (1) the Company has paid or deposited with the Trustee a sum sufficient
             to pay

                                      -19-

<PAGE>

              a. the principal of any Securities which have become due otherwise
                 than by such declaration of acceleration and interest thereon
                 at the rate or rates prescribed therefor in such Securities;

              b. to the extent that payment of such interest is lawful, interest
                 upon overdue interest at the rate or rates prescribed therefor
                 in such Securities, and

              c. all sums paid or advanced by the Trustee hereunder and the
                 reasonable compensation, expenses, disbursements and advances
                 of the Trustee, its agents and counsel; and

         (2)  all Events of Default with respect to the Securities, other than
              the non-payment of the principal of Securities which have become
              due solely by such declaration of acceleration, have been cured or
              waived as provided in Section 5.13.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

         Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Trustee.

         The Company covenants that if default is made in the payment of the
principal of or interest on any Security when the same shall have become due and
payable the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

         If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

         If an Event of Default with respect to the Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of the Securities by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.

                                      -20-
<PAGE>

         Section 5.04 Trustee May File Proofs of Claim.

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

         (1)  to file and prove a claim for the whole amount of principal and
              interest owing and unpaid in respect of the Securities, to
              participate as a member, voting or otherwise, of any official
              committee appointed in such matter, and to file such other papers
              or documents as may be necessary or advisable in order to have the
              claims of the Trustee (including any claim for the reasonable
              compensation, expenses, disbursements and advances of the Trustee
              and any predecessor Trustee, their agents and counsel) and of the
              Holders allowed in such judicial proceeding, and

         (2)  to collect and receive any moneys or other property payable or
              deliverable on any such claims and to distribute the same; and any
              custodian, receiver, assignee, trustee, liquidator, sequestrator
              or other similar official in any such judicial proceeding is
              hereby authorized by each Holder to make such payments to the
              Trustee and, in the event that the Trustee shall consent to the
              making of such payments directly to the Holders, to pay to the
              Trustee any amount due it for the reasonable compensation,
              expenses, disbursements and advances of the Trustee and any
              predecessor Trustee, their agents and counsel, and any other
              amounts due the Trustee and any predecessor Trustee under Section
              6.07.

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

         Section 5.05 Trustee May Enforce Claim Without Possession of
Securities.

         All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,

                                      -21-
<PAGE>

disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities.

         Section 5.06 Application of Money Collected.

         Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee:
FIRST: To the payment of all amounts due the Trustee and any predecessor Trustee
under Section 6.07; and SECOND: To the payment of the amounts then due and
unpaid for principal of and interest on the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and interest, respectively.

         Section 5.07 Limitation on Suits.

         No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

         (1)  such Holder has previously given written notice to the Trustee of
              a continuing Event of Default with respect to the Securities;

         (2)  the Holders of not less than fifty percent (50%) in principal
              amount of the Outstanding Securities shall have made written
              request to the Trustee to institute proceedings in respect of such
              Event of Default in its own name as Trustee hereunder;

         (3)  such Holder or Holders have offered to the Trustee reasonable
              indemnity against the costs, expenses and liabilities to be
              incurred in compliance with such request;

         (4)  the Trustee for sixty (60) days after its receipt of such notice,
              request and offer of indemnity has failed to institute any such
              proceeding; and

         (5)  no direction inconsistent with such written request has been given
              to the Trustee during such sixty (60) day period by the Holders of
              a majority in principal amount of the Outstanding Securities; it
              being understood and intended that no one or more of such Holders
              shall have any right in any manner whatever by virtue of, or by
              availing of, any provision of this Indenture to affect, disturb or
              prejudice the rights of any other of such Holders, or to obtain or
              to seek to obtain priority or preference over any other of such
              Holders or to enforce any right under this Indenture, except in
              the manner herein provided and for the equal and ratable benefit
              of all such Holders.

         Section 5.08 Unconditional Right of Holders to Receive Principal, and
Interest.

                                      -22-
<PAGE>

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Security on the
applicable due date provided therefor pursuant to the Program (or, in the case
of redemption, on the redemption date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.

         Section 5.09 Restoration of Rights and Remedies.

         If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

         Section 5.10 Rights and Remedies Cumulative.

         No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

         Section 5.11 Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy acting upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.

         Section 5.12 Control by Holders.

         The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to the Securities,
provided that

         (1)  such direction shall not be in conflict with any rule of law or
              with this Indenture,

         (2)  subject to Section 6.01, the Trustee shall have the right to
              decline to follow any such direction if the Trustee shall
              reasonably determine, in

                                      -23-
<PAGE>

              good faith, that the action or proceeding so directed would be
              unjustly prejudicial to any Holders not joining in such direction
              or would involve the Trustee in any personal liability unless
              indemnified to its reasonable satisfaction, and

         (3)  the Trustee may take any other action deemed proper by the Trustee
              which is not inconsistent with such direction.

         Section 5.13 Waiver of Past Defaults.

         The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default:

         (1)  in the payment of the principal of or interest on any Security, or

         (2)  in respect of a covenant or provision hereof which under Article
              Eight cannot be modified or amended without the consent of the
              Holders of each Outstanding Security affected.

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

         Section 5.14 Undertaking for Costs.

         All Parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than ten percent
(10%) in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or interest on the Security on or after the applicable due date therefor
provided pursuant to the Program (or, in the case of redemption, on or after,
the Redemption Date).

         Section 5.15 Waiver of Stay or Extension Laws.

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or any time hereafter in

                                      -24-
<PAGE>

force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

                                   ARTICLE VI

                                   THE TRUSTEE

         Section 6.01 Certain Duties and Responsibilities.

         (1)  Except during the continuance of an Event of Default,

              a. the Trustee undertakes to perform such duties and only such
                 duties as are specifically set forth in this Indenture, and no
                 implied covenants or obligations shall be read into this
                 Indenture against the Trustee; and

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

         (2)  In case an Event of Default has occurred and is continuing, the
              Trustee shall exercise such of the rights and powers vested in it
              by this Indenture, and use the same degree of care and would in
              their exercise, as a prudent person would exercise or use under
              the circumstances in the conduct of his/her own affairs.

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

              a. this Subsection shall not be construed to limit the effect of
                 Subsection (1) of this Section;

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

                                      -25-

<PAGE>

              c. the Trustee shall not be liable with respect to any action
                 taken or omitted to be taken by it in good faith in accordance
                 with the direction of the Holders of a majority in principal
                 amount of the Outstanding Securities, determined as provided in
                 Section 5.12, relating to the time, method and place of
                 conducting any proceeding for any remedy available to the
                 Trustee, or exercising any trust or power conferred upon the
                 Trustee, under this Indenture with respect to the Securities;
                 and

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

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

         (5)  Except with respect to Section 9.01(2), the Trustee shall have no
              duty to inquire as to the performance of the Company with respect
              to the covenants contained in Article Nine. In addition, the
              Trustee shall not be deemed to have knowledge of an Event of
              Default except (i) any Event of Default occurring pursuant to
              Section 5.01(1) or (ii) any Event of Default of which the Trustee
              shall have received written notification or obtained actual
              knowledge.

         (6)  Delivery of reports, information and documents to the Trustee
              under Articles Seven and Nine is for informational purposes only
              and the Trustee's receipt of the foregoing shall not constitute
              constructive notice of any information contained therein or
              determinable from information contained therein, including the
              Company's compliance with any of its covenants hereunder (as to
              which the Trustee is entitled to rely exclusively on Officers'
              Certificates).

         Section 6.02 Notice of Defaults.

         Within ninety (90) days after the occurrence of any default hereunder
with respect to the Securities, the Trustee shall transmit by mail to all
Holders of Securities, as their names and addresses appear in the Security
Register, notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of or interest on any
Security, the Trustee shall be protected in withholding such notice if and so
long as the

                                      -26-
<PAGE>

board of directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Holders of Securities; and provided,
further, that in the case of any default of the character specified in Section
5.01(3) with respect to the Securities, no such notice to Holders shall be given
until at least thirty (30) days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.

         Section 6.03 Certain Rights of Trustee.

         Subject to the provisions of Section 6.01:

         (1)  the Trustee may rely and shall be protected in acting or
              refraining from acting upon any resolution, certificate,
              statement, instrument, opinion, report, notice, request,
              direction, consent, order, bond, debenture, Securities, other
              evidence of indebtedness or other paper or document believed to be
              genuine and to have been signed or presented by the proper party
              or parties;

         (2)  any request or direction of the Company mentioned herein shall be
              sufficiently evidenced by a Company Request or Company Order and
              any resolution of the Board of Directors may be sufficiently
              evidenced by a Board Resolution;

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

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

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

         (6)  the Trustee shall not be bound to make any investigation into the
              facts or matters stated in any resolution, certificate, statement,
              instrument, opinion, report, notice, request, direction, consent,
              order, bond, debenture, Note, other evidence of indebtedness or
              other paper or

                                      -27-
<PAGE>

              document, but the Trustee, in its discretion, may make such
              further inquiry or investigation into such facts or matters as it
              may see fit, and, if the Trustee shall determine to make such
              further inquiry or investigation, it shall be entitled to examine
              the books, records and premises of the Company, personally or by
              agent or attorney;

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

         (8)  the Trustee shall not be liable for any action taken, suffered or
              omitted by it in good faith and believed by it to be authorized or
              within the discretion or rights or powers conferred upon it by the
              Indenture.

         Section 6.04 Not responsible for Recitals or Issuance of Securities.

         The recitals contained herein and the statements in the Program
prospectus shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of securities or the proceeds thereof.

         Section 6.05 May Hold Securities.

         Subject to the provisions of the Program with respect to Persons who
may hold Securities, the Trustee, the Agent Bank, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner of Securities and, subject to Sections 6.08 and
6.13, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Agent Bank, Paying Agent, Security Registrar or such other
agent.

         Section 6.06 Money Held in Trust.

         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.

         Section 6.07 Compensation and Reimbursement.

         The Company agrees:

         (1)  to pay to the Trustee from time to time reasonable compensation
              for all services rendered by it hereunder (which compensation
              shall not be

                                      -28-
<PAGE>

              limited by any provision of law in regard to the compensation of a
              trustee of an express trust);

         (2)  except as otherwise expressly provided herein, to reimburse the
              Trustee upon its request for all reasonable expenses,
              disbursements and advances incurred or made by the Trustee in
              accordance with any provision of this Indenture (including the
              reasonable compensation and the expenses and disbursements of its
              agents and counsel), except any such expense, disbursement or
              advance as may be attributable to its negligence or bad faith or
              willful misconduct; and

         (3)  to indemnify each of the Trustee and any predecessor Trustee for,
              and to hold it harmless against, any loss, liability or expense
              incurred without negligence, bad faith or willful misconduct, on
              Trustee's or any predecessor Trustee's part, arising out of or in
              connection with the acceptance or administration of the trust or
              trusts hereunder or the performance of their duties hereunder,
              including the costs and expenses of enforcing this Indenture
              against the Company (including this Section 6.07), defending
              itself against any claim (whether asserted by any Holder or the
              Company) or liability in connection with the exercise or
              performance of any of its powers or duties hereunder. To secure
              the Company's payment obligations in this Section 6.07, the

         Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
particular Securities.

         The Company's payment obligations pursuant to this Section 6.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a default specified in Sections 5.01(3), (4) or (5), the
expenses are intended to constitute expenses of administration, under federal or
state bankruptcy laws.

         Section 6.08 Disqualification; Conflicting Interests.

         The Trustee shall be subject to the provisions of Section 310(b) of the
Trustee Indenture Act during the period of time provided for therein. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second-to-last paragraph of Section 310(b) of the Trust
Indenture Act.

         Section 6.09 Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $25,000,000, subject to supervision or examination by Federal or
State authority; provided, however, that if Section 310(a) of the Trust
Indenture Act or the rules and regulations of the Commission under the Trust
Indenture Act at any time permit a corporation organized and doing business
under the laws of any

                                      -29-
<PAGE>

other jurisdiction to serve as trustee of an indenture qualified under the Trust
Indenture Act, this Section 6.09 shall be automatically amended to permit a
corporation organized and doing business under the laws of any such other
jurisdiction to serve as Trustee hereunder. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. Neither the Company nor any person directly or
indirectly controlling, controlled by or under common control with the Company
may serve as Trustee. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.

         Section 6.10 Resignation and Removal; Appointment of Successor.

         (1)  No resignation or removal of the Trustee and no appointment of a
              successor Trustee pursuant to this Article shall become effective
              until the acceptance of appointment by the successor Trustee in
              accordance with the applicable requirements of Section 6.11.

         (2)  The Trustee may resign at any time with respect to the Securities
              by giving written notice thereof to the Company. If the instrument
              of acceptance by a successor Trustee required by Section 6.11
              shall not have been delivered to the Trustee within thirty (30)
              days after the giving of such notice of resignation, the resigning
              Trustee may petition any court of competent jurisdiction for the
              appointment of a successor Trustee with respect to the Securities
              of such series.

         (3)  The Trustee may be removed at any time with respect to the
              Securities by Act of the Holders of a majority in principal amount
              of the Outstanding Securities, delivered to the Trustee and to the
              Company.

         (4)  If at any time:

              a. the Trustee shall fail to comply with Section 6.08 after
                 written request therefor by the Company or by any Holder who
                 has been a bona fide Holder of a Security for at least six (6)
                 months, unless the Trustee's duty to resign has been stayed as
                 provided in Section 310(b) of the Trust Indenture Act, or

              b. the Trustee shall cease to be eligible under Section 6.09 and
                 shall fail to resign after written request therefor by the
                 Company or by any such Holder, or

              c. the Trustee shall become incapable of acting or shall be
                 adjudged a bankrupt or insolvent or a receiver of the Trustee
                 or of its property shall be appointed or any public officer
                 shall take charge or control of the Trustee or of its property
                 or affairs for

                                      -30-
<PAGE>

                 the purpose of rehabilitation, conservation or liquidation.
                 then, in any case, (i) the Company by a Board Resolution may
                 remove the Trustee with respect to all Securities, or (ii)
                 subject to Section 5.14, any Holder who has been a bona fide
                 Holder of a Security for at least six (6) months may, on behalf
                 of himself and all others similarly situated, petition any
                 court of competent jurisdiction for the removal of the Trustee
                 with respect to all Securities and the appointment of a
                 successor Trustee or Trustees.

         (5)  If the Trustee shall resign, be removed or become incapable of
              acting, or if a vacancy shall occur in the office of Trustee for
              any cause, the Company, by a Board Resolution, shall promptly
              appoint a successor Trustee and shall comply with the applicable
              requirements of Section 6.11. If, within one (1) year after such
              resignation, removal or incapability, or the occurrence of such
              vacancy, a successor Trustee shall be appointed by Act of the
              Holders of a majority in principal amount of the Outstanding
              Securities delivered to the Company and the retiring Trustee, the
              successor Trustee so appointed shall, forthwith upon its
              acceptance of such appointment in accordance with the applicable
              requirements of Section 6.11, become the successor Trustee and to
              that extent supersede the successor Trustee appointed by the
              Company. If no successor Trustee shall have been so appointed by
              the Company or the Holders and accepted appointment in the manner
              required by Section 6.11, any Holder who has been a bona fide
              Holder of a Security for at least six (6) months may, on behalf of
              himself and all others similarly situated, petition any court of
              competent jurisdiction for the appointment of a successor Trustee.

         (6)  The Company shall give notice of each resignation and each removal
              of the Trustee and each appointment of a successor Trustee by
              mailing written notice of such event by first-class mail, postage
              prepaid, to all Holders of Securities as their names and addresses
              appear in the Security Register. Each notice shall include the
              name of the successor Trustee and the address of its Corporate
              Trust Office.

         Section 6.11 Acceptance of Appointment by Successor.

         (1)  In case of the appointment hereunder of a successor Trustee, every
              such successor Trustee so appointed shall execute, acknowledge and
              deliver to the Company and to the retiring Trustee an instrument
              accepting such appointment, and thereupon the resignation or
              removal of the retiring Trustee shall become effective and such
              successor Trustee, without any further act, deed or conveyance,
              shall become vested with all the rights, powers, trusts and duties
              of the retiring Trustee; but, on the request of the Company or the
              successor Trustee, such retiring

                                      -31-
<PAGE>

              Trustee shall, upon payment of its charges, execute and deliver an
              instrument transferring to such successor Trustee all the rights,
              powers and trusts of the retiring Trustee and shall duly assign,
              transfer and deliver to such successor Trustee all property and
              money held by such retiring Trustee hereunder.

         (2)  Upon request of any such successor Trustee, the Company shall
              execute any and all instruments for more fully and certainly
              vesting in and confirming to such successor Trustee all such
              rights, powers and trusts referred to in paragraph (1) of this
              Section.

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

         Section 6.12 Merger, Conversion, Consolidation or Succession to
Business.

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

         Section 6.13 Preferential Collection of Claim Against Company.

         Upon and so long as the Indenture is qualified under the TIA, the
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed is
subject to TIA Section 311(a) to the extent indicated.

                                  ARTICLE VII

     HOLDERS' LISTS, PROGRAM INFORMATION AND REPORTS BY TRUSTEE AND COMPANY

         Section 7.01 Company to Furnish Trustee Names and Addresses of Holders
and Other Information.

         The Company will furnish or cause to be furnished to the Trustee:

         (1)  semi-annually, not later than March 1 and September 1 in each
              year, a list in such form as the Trustee may reasonably require,
              of the names and addresses of the Holders as of the preceding
              February 15 or August 15, as the case may be;

                                      -32-

<PAGE>

         (2)  at such other times as the Trustee may request in writing, within
              thirty (30) days after the receipt by the Company of any such
              request, a list of similar form and content as of a date not more
              than fifteen (15) days prior to the time such list is furnished;

         (3)  from time to time, all current information and rules and
              regulations regarding the Program, including all amendments
              thereto. excluding from any such list names and addresses received
              by the Trustee in the event that it is the Security Registrar; and

         (4)  any agreement(s) with the Agent Bank, and any amendments thereto.

         Section 7.02 Preservation of Information; Communications to Holders.

         (1)  The Trustee shall preserve, in as current a form as is reasonably
              practicable, the names and addresses of Holders contained in the
              most recent list furnished to the Trustee as provided in Section
              7.01 and the names and addresses of Holders received by the
              Trustee in its capacity as Security Registrar. The Trustee may
              destroy any list furnished to it as provided in Section 7.01 upon
              receipt of a new list so furnished.

         (2)  If three (3) or more Holders (herein referred to as "applicants")
              apply in writing to the Trustee, and furnish to the Trustee
              reasonable proof that each such applicant has owned a Security for
              a period of at least six (6) months preceding the date of such
              application, and such application states that the applicants
              desire to communicate with other Holders with respect to their
              rights under this Indenture or under the Securities and is
              accompanied by a copy of the form of proxy or other communication
              which such applicants propose to transmit, then the Trustee shall,
              within five (5) business days after the receipt of such
              application, at its election, either

              a. afford such applicants access to the information preserved at
                 the time by the Trustee in accordance with Section 7.02(1), or

              b. inform such applicants as to the approximate number of Holders
                 whose names and addresses appear in the information preserved
                 at the time by the Trustee in accordance with Section 7.02(1),
                 and as to the approximate cost of mailing to such Holders the
                 form of proxy or other communication, if any, specified in such
                 application. If the Trustee shall elect not to afford such
                 applicants access to such information, the Trustee shall, upon
                 written request of such applicants, mail to each Holder whose
                 name and address appear in the information preserved at the
                 time by the Trustee in accordance with Section 7.02(1) a copy
                 of the form of proxy or other communication which is specified
                 in such request, with reasonable promptness after a tender to
                 the

                                      -33-

<PAGE>

                 Trustee of the material to be mailed and of payment, or
                 provision for the payment, of the reasonable expenses of
                 mailing, unless within five (5) days after such tender the
                 Trustee shall mail to such applicants and file with the
                 Commission, together with a copy of the material to be mailed,
                 a written statement to the effect that, in the opinion of the
                 Trustee, such mailing would be contrary to the best interest of
                 the Holders or would be in violation of applicable law. Such
                 written statement shall specify the basis of such opinion. If
                 the Commission, after opportunity for a hearing upon the
                 objections specified in the written statement so filed, shall
                 enter an order refusing to sustain any of such objections or
                 if, after the entry of an order sustaining one or more of such
                 objections, the Commission shall find, after notice and
                 opportunity for hearing, that all the objections so sustained
                 have been met and shall enter an order so declaring, the
                 Trustee shall mail copies of such material to all such Holders
                 with reasonable promptness after the entry of such order and
                 the renewal of such tender; otherwise the Trustee shall be
                 relieved of any obligation or duty to such applicants
                 respecting their application.

              c. Every Holder of Securities, by receiving and holding the same,
                 agrees with the Company and the Trustee that neither the
                 Company nor the Trustee nor any agent of either of them shall
                 be held accountable by reason of the disclosure of any such
                 information as to the names and addresses of the Holders in
                 accordance with Section 7.02(2), regardless of the source from
                 which such information was derived, and that the Trustee shall
                 not be hold accountable by reason of mailing any material
                 pursuant to a request made under Section 7.02.

         Section 7.03 Reports by Trustee.

         (1)  Within sixty (60) days after May 15 of each year beginning with
              the year 2002, the Trustee shall transmit by mail to all Holders,
              as their names and addresses appear in the Security Register, a
              brief report dated as of such May 15 that complies with TIA
              Section 313(a), if required by such Section 313(a). The Trustee
              also shall comply with TIA Section 313(b).

         (2)  A copy of each such report shall, at the time of such transmission
              to Holders, be filed by the Trustee with each stock exchange upon
              which any Securities are listed, with the Commission and with the
              Company. The Company will notify the Trustee when any Securities
              are listed on any stock exchange.

                                      -34-

<PAGE>

         Section 7.04 Reports by Company.

         The  Company shall:

         (1)  file with the Trustee, within fifteen (15) days after the Company
              is required to file the same with the Commission, copies of the
              annual reports and of the information, documents and other reports
              (or copies of such portions of any of the foregoing as the
              Commission may from time to time by rules and regulations
              prescribe) which the Company may be required to file with the
              Commission pursuant to Section 13 or Section 15(d) of the
              Securities Exchange Act of 1934; or, if the Company is not
              required to file information, documents or reports pursuant to
              either of said Sections, then it shall file with the Trustee and
              the Commission, in accordance with rules and regulations
              prescribed from time to time by the Commission, such of the
              supplementary and periodic information, documents and reports
              which may be required pursuant to Section 13 of the Securities
              Exchange Act of 1934 in respect of a security listed and
              registered on a national securities exchange as may be prescribed
              from time to time in such rules and regulations;

         (2)  file with the Trustee and the Commission, in accordance with rules
              and regulations prescribed from time to time by the Commission,
              such additional information, documents and reports with respect to
              compliance by the Company with the conditions and covenants of
              this Indenture as may be required from time to time by such rules
              and regulations; and

         (3)  transmit by mail to all Holders, as their names and addresses
              appear in the Security Register, within thirty (30) days after the
              filing thereof with the Trustee, such summaries of any
              information, documents and reports required to be filed by the
              Company pursuant to paragraphs (1) and (2) of this Section as may
              be required by rules and regulations prescribed from time to time
              by the Commission.

                                  ARTICLE VIII

                             SUPPLEMENTAL INDENTURES

         Section 8.01 Supplemental Indentures without Consent of Holders.

         Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

                                      -35-
<PAGE>

         (1)  to evidence the succession of another corporation to the Company
              and the assumption by any such successor of the covenants of the
              Company herein and in the Securities; or

         (2)  to add to the covenants of the Company for the benefit of the
              Holders of the Securities or to surrender any right or power
              herein conferred upon the Company; or

         (3)  to add any additional Events of Default; or

         (4)  to evidence and provide for the acceptance of appointment
              hereunder by a successor Trustee and to add to or change any of
              the provisions of this Indenture as shall be necessary to provide
              for or facilitate the administration of the trusts hereunder by
              more than one Trustee, pursuant to the requirements of Section
              6.11(2); or

         (5)  to cure any ambiguity, or correct or supplement any provision
              herein which may be defective or inconsistent with any other
              provision herein, or to make any other provisions with respect to
              matters or questions arising under this Indenture, provided that
              such action shall not adversely affect the interests of the
              Holders of Securities in any material respect.

         Section 8.02 Supplemental Indentures with Consent of Holders.

         With the consent of the Holders of not less than sixty-six and
two-thirds percent (66 2/3%) in principal amount of the Outstanding Securities,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,

         (1)  reduce the principal amount of any Security or impair the right to
              institute suit for the enforcement of any such payment on or after
              the applicable due date thereof (or, in the case of redemption, on
              or after the Redemption Date), or

         (2)  reduce the percentage in principal amount of the Outstanding
              Securities, the consent of whose Holders is required for any such
              supplemental indenture, or the consent of whose Holders is
              required for any waiver (of compliance with certain provisions of
              this Indenture or certain defaults hereunder and their
              consequences) provided for in this Indenture, or

                                      -36-
<PAGE>

         (3)  Change any obligation of the Company, with respect to Outstanding
              Securities, to maintain an office or agency in the places and for
              the purposes specified in Section 9.02, or

         (4)  modify any of the provisions of this Section, Section 5.13 or
              Section 9.04, except to increase any such percentage or to provide
              that certain other provisions of this Indenture cannot be modified
              or waived without the consent of the Holder of each outstanding
              Security affected thereby; provided, however, that this clause
              shall not be deemed to require the consent of any Holder with
              respect to changes in the references to "the Trustee" and
              concomitant changes in this Section and Section 9.04, or the
              deletion of this proviso, in accordance with the requirements of
              Sections 6.11(2) and 8.01(5).

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

         Section 8.03 Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

         Section 8.04 Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

         Section 8.05 Conformity with Trust Indenture Act.

         Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

                                   ARTICLE IX

                                   COVENANTS

         Section 9.01 Administration of Program; Payment of Principal and
Interest.

                                      -37-
<PAGE>

         (1)  The Company covenants and agrees to maintain and administer the
              Program and the Securities issued pursuant thereto in accordance
              with the provisions of the Program, as the same may from time to
              time be in force and effect, and this Indenture; provided,
              however, that nothing herein shall prevent the Company from
              exercising any of its rights to amend, modify or terminate the
              Program, or to adopt, amend or rescind the rules established under
              the Program, as provided therein.

         (2)  The Company covenants and agrees for the benefit of Holders of
              Securities that it will duly and punctually pay the principal of
              and interest on the Securities in accordance with the terms of the
              Program and this Indenture. Interest will accrue on the Securities
              in accordance with the provisions of the Program. The interest
              rate on the Securities shall be determined in accordance with the
              provisions of the Program. Interest rates will vary from time to
              time. There are no minimum or maximum interest rates.

         Section 9.02 Maintenance of Security Register, Maintenance of Office or
Agency.

         (1)  The Company will keep at an office or agency proper books of
              record and account (which books may be in written form or in any
              other form capable of being converted into written form) in which
              full and correct entries shall be made of all funds invested in
              the Securities, together with interest accrued thereon, and all
              redemptions thereof, in accordance with sound accounting practice
              and which shall contain the names and addresses of all Holders and
              the principal amounts of their respective Securities
              (collectively, the "Security Register").

         (2)  The Company will maintain in the City of Chicago or such other
              city where the Company maintains its corporate headquarters an
              office or agency where notices and demands hereunder may be given
              to or made upon the Company in respect of the Securities and this
              Indenture may be served. The Company will give prompt written
              notice to the Trustee and the Holders of the location, and any
              change in the location, of any such office or agency. If at any
              time the Company shall fail to maintain any such required office
              or agency or shall fail to furnish the Trustee with the address
              thereof, such notices and demands may be made or served at the
              Corporate Trust Office of the Trustee.

         Section 9.03 Money for Securities Payments to Be Held in Trust.

         Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of, or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal or interest. If the Company fails to

                                      -38-
<PAGE>

deposit such sums with the Paying Agent, unless such Paying Agent is the
Trustee, the Company will promptly notify the Trustee of its failure so to act.

         The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject, to the provisions of this Section, that
such Paying Agent will:

         (1)  hold all sums held by it for the payment of the principal of or
              interest on Securities in trust for the benefit of the Persons
              entitled thereto until such sums shall be paid to such Persons or
              otherwise disposed of as herein provided;

         (2)  give the Trustee notice of any default by the Company (or any
              other obligor upon the Securities) in the making of any payment of
              principal or interest on the Securities; and

         (3)  at any time during the continuance of any such default, upon the
              written request of the Trustee, forthwith pay to the Trustee all
              sums so held in trust by such Paying Agent.

         The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paving Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for three years after such principal or
interest has become due and payable shall be paid to the Company upon the
Company's request; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the City of
Chicago, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than thirty (30) days from the date
of such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

         Section 9.04 Certificate of Officers of the Company.

         On or before the last day of March of each year beginning with the year
2002, the Company will file with the Trustee a certificate of the principal
executive officer,

                                      -39-
<PAGE>

principal financial officer or principal accounting officer stating whether or
not the signer has obtained knowledge of any action or failure to act on the
part of the Company during the preceding calendar year in violation of any
covenant, agreement, provision or condition contained in this Indenture and, if
so, specifying, each such default of which the signers may have knowledge and
the nature thereof. For purposes of this Section 9.04, compliance shall be
determined without regard to any period of grace or requirement of notice
provided pursuant to the terms of this Indenture.

         Section 9.05 Waiver of Certain Covenants.

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 9.02 to 9.04, inclusive, if
before the time for such compliance the Holders of at least sixty-six and
two-thirds percent (66 2/3%) in principal amount of the Outstanding Securities
shall, by Act of such Holders, either waive such compliance in such instance or
general waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

                                   ARTICLE X

                                 SUBORDINATION

         Section 10.01 Agreement to Subordinate

         The Company covenants and agrees, and each Holder of Securities by his
or her acceptance thereof, likewise covenants and agrees, that the Indebtedness
represented by the Securities and the payment of the principal of and interest
on each and all of the Securities and all claims arising in connection with the
Securities, including without limitation, the payment of all fees, other costs,
rescission claims and indemnities, is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, in right of payment to the prior
payment in full of all Senior Indebtedness and all liabilities of the Company
and its Subsidiaries incurred in the ordinary course of business as provided in
this Article 10.

         Section 10.02 Subordination

         (1)  Upon any distribution of assets of the Company upon any
              dissolution, winding up, liquidation or reorganization of the
              Company (whether in bankruptcy, insolvency, reorganization or
              receivership proceedings) or upon an assignment for the benefit of
              creditors or any other marshalling of the assets and liabilities
              of the Company or if an event of default shall have occurred and
              be continuing with respect to any Senior Indebtedness or if the
              principal of the Securities shall have been declared due and
              payable pursuant to Section 5.02 hereof and such

                                      -40-
<PAGE>

              declaration shall not have been rescinded and annulled as provided
              in such Section 5.02, then:

              a. the holders of all Senior Indebtedness shall first be entitled
                 to receive payment in full of the principal thereof and
                 interest due thereon, or adequate provision shall be made for
                 such payment, before the Holders are entitled to receive any
                 further payment on account of the principal of or interest on
                 indebtedness evidenced by the Securities; and

              b. any further payment by, or distribution of assets of, the
                 Company of any kind or character, whether in cash, property or
                 securities (other than securities of the Company as reorganized
                 or readjusted or securities of the Company or any Person
                 provided for by a plan of reorganization or readjustment the
                 payment of which is subordinate, at least to the extent
                 provided in this Article 10 with respect to the Securities, to
                 the payment of all Senior Indebtedness, provided that the
                 rights of the holders of Senior Indebtedness are not altered by
                 such reorganization or readjustment), to which the Holders or
                 the Trustee would be entitled except for the provisions of this
                 Article 10 shall be paid or delivered by the person making such
                 payment or distribution, whether a trustee in bankruptcy, a
                 receiver or liquidating trustee or otherwise directly to the
                 holders of Senior Indebtedness or their representative or
                 representatives or to the trustee or trustees under any
                 indenture under which any instruments evidencing any of such
                 Senior Indebtedness may have been issued, ratably according to
                 the aggregate amounts remaining unpaid on account of the Senior
                 Indebtedness and held or represented by each, to the extent
                 necessary to make payment in full of all Senior Indebtedness
                 remaining unpaid after giving effect to any concurrent payment
                 or distribution to the holders of such Senior Indebtedness or
                 provision therefor.

         (2)  In the case of an event of default shall have occurred and be
              continuing with respect to any Senior Indebtedness, the Holders
              may not receive payments of principal on the Notes, without the
              consent of the holders of Senior Indebtedness. In such event, the
              interest would continue to accrue on the unpaid principal amount
              of the Notes then outstanding. Upon the cure or other remediation
              of the event of default to the satisfaction of the holders of the
              Senior Indebtedness, any delayed principal payments and accrued
              interest related thereto would be remitted to the Holders.

                                      -41-
<PAGE>

         Section 10.03 Payments by Trustee or Securities Holders to Holders of
Senior Indebtedness

         In the event that any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property or securities (other
than securities of the Company as reorganized or readjusted or securities of the
Company or any Person provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided in this
Article 10 with respect to the Securities, to the payment of all Senior
Indebtedness, provided that the rights of the holders of Senior Indebtedness are
not altered by such reorganization or readjustment), shall be received by the
Trustee or the Holders before all Senior Indebtedness is paid in full, contrary
to the provisions of this Article 10, such payment or distribution shall be paid
over to the holders of such Senior Indebtedness (which shall have been
identified in writing to the Trustee) or their representative or representatives
or to the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably as
aforesaid, for application to the payment of all Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness or provision therefor.

         Section 10.04 Subrogation

         Subject to the payment in full of all Senior Indebtedness, the Holders
shall be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all amounts owing on the Securities
shall be paid in full, and, as between the Company, its creditors other than
holders of Senior Indebtedness and the Holders, no such payment or distribution
made to the holders of Senior Indebtedness by virtue of this Article 10 which
otherwise would have been made to the Holders shall be deemed to be a payment by
the Company on account of the Senior Indebtedness, it being understood that the
provisions of this Article 10 are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
Senior Indebtedness on the other hand.

         Section 10.05 Obligation of Company Unconditional

         Nothing contained in this Article 10 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or affect the
relative rights of the Holders and creditors of the Company other than the
holders of Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of any Securities from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 10 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.

                                      -42-
<PAGE>

         Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which any
such dissolution, winding-up, liquidation or reorganization proceeding affecting
the affairs of the Company is pending or upon a certificate of the liquidating
trustee or agent or other person making any payment or distribution to the
Trustee or to the Holders for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount paid or distributed therein and all other facts
pertinent thereto or to this Article 10.

         Section 10.06 Payments on Securities Permitted

         Nothing contained in this Indenture, or in any of the Securities, shall
affect the obligation of the Company to make, or prevent the Company from
making, payments of principal of or interest on the Securities, except as
otherwise provided in this Article 10.

         Section 10.07 Effectuation of Subordination by Trustee

         Each Holder of Securities, by his or her acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 10 and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.

         Section 10.08 Trustee Not Charged with Knowledge of Prohibition

         Notwithstanding the provisions of this Article or any other provision
of this Indenture, but subject to the provisions of Section 6.01 as between the
Holders of Securities and the Trustee, neither the Trustee nor any Paying Agent
shall be charged with knowledge of any facts which would prohibit the making of
any payment of moneys to or by the Trustee or any such Paying Agent, unless and
until the Trustee or such Paying Agent shall have received written notice
thereof at its Corporate Trust Office from the Company or any holder of Senior
Indebtedness or the trustee or representative of any holder of such Senior
Indebtedness on his behalf; and, prior to the receipt of any such written
notice, the Trustee and any such Paying Agent shall be entitled to assume that
no such facts exist. If the Trustee or Paying Agent, as the case may be, shall
not have received, at least five Business Days prior to the date upon which by
the terms hereof any such moneys may become payable for any purpose (including,
without limitation, the payment of the principal of, premium, if any, or the
interest on any Security) with respect to such moneys, the notice provided for
in this Section, then, anything herein contained to the contrary
notwithstanding, the Trustee and such Paying Agent, as the case may be, shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received and shall not be affected by any notice
to the contrary which may be received by it within five Business Days prior to
such date.

         Section 10.09 Trustee May Hold Senior Indebtedness

                                      -43-
<PAGE>

         The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness at the time held by it, to
the same extent as any other holder of Senior Indebtedness and nothing in
Section 6.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Sections 5.06 or 6.07.

         Section 10.10 Rights of Holders of Senior Indebtedness Not Impaired

         No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

         Section 10.11 Rights and Obligations Subject to Power of Court

         The right of the holders of Senior Indebtedness and the obligations of
the Trustee and the Noteholders set forth in this Article 10 are subject to the
power of a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in this Indenture upon the Senior Indebtedness
and the holders thereof with respect to the Securities and the Holders thereof
by a plan of reorganization under applicable bankruptcy law.

                                      -44-
<PAGE>

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

                               TruServ Corporation

                               By:  __________________________________
                                        Vice President

                               U.S. Bank Trust National Association

                               By:  __________________________________
                                        Vice President

                                      -45-

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