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                         AMENDED AND RESTATED INDENTURE

                           Dated as of March ___, 2001

                                     BETWEEN

                       CHUGACH ELECTRIC ASSOCIATION, INC.,

                                     TRUSTOR

                                       AND

                      U.S. BANK TRUST NATIONAL ASSOCIATION,

                                     TRUSTEE

                               SENIOR OBLIGATIONS

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<PAGE>

         THIS AMENDED AND RESTATED  INDENTURE,  dated as of March ___,  2001, is
between CHUGACH ELECTRIC ASSOCIATION,  INC., an Alaska electric cooperative,  as
Trustor  (hereinafter  called  the  "Company"),  and U.S.  BANK  TRUST  NATIONAL
ASSOCIATION,  a national banking association  incorporated under the laws of the
United States, as Trustee (hereinafter called the "Trustee").

                             RECITALS OF THE COMPANY

         The Company has previously  entered into the Pre-Release  Indenture (as
defined  below),  pursuant to which the Company has, prior to the reference date
stated in the first paragraph hereof, issued First Mortgage Bonds of two series,
denominated  "First  Mortgage  Bonds,  1991 Series A" and "First Mortgage Bonds,
CoBank Series." The Company intends to issue, under the Pre-Release Indenture on
or after the  reference  date stated in the first  paragraph  hereof,  new bonds
(including bonds of two series,  denominated "New Bonds, 2001 Series A" and "New
Bonds,  CoBank Series B," authorized by the Tenth Supplemental  Indenture to the
Pre-Release Indenture).

         All bonds issued under the Pre-Release  Indenture are secured by a lien
on and  security  interest in  substantially  all of the assets of the  Company.
However,  the Company  desires that those bonds it issues under the  Pre-Release
Indenture on or after the reference  date stated in the first  paragraph  hereof
(including all "New Bonds" of the series denominated "2001 Series A" and "CoBank
Series B") shall become unsecured general  obligations of the Company,  governed
by and subject to the terms and  conditions  stated in this Amended and Restated
Indenture  (as  hereafter  amended),  beginning on the earliest date as of which
each and every  bond  issued  prior to the  reference  date  stated in the first
paragraph hereof  (including all First Mortgage Bonds,  1991 Series A, and First
Mortgage Bonds, CoBank Series) shall have been paid,  redeemed,  acquired by the
Company or shall otherwise no longer be Outstanding.

         Therefore,  effective as of the Release Date (as defined  below),  this
Indenture  amends  and  restates  the  Pre-Release  Indenture  in its  entirety.
Effective  on and as of the Release  Date,  all  Pre-Existing  Bonds (as defined
below) shall constitute Obligations subject to, and entitled to the benefits of,
this Indenture.

         The Company may from time to time authorize and issue the  Pre-Existing
Bonds and may authorize the creation,  execution and delivery from  time-to-time
on or after the  Release  Date of its  notes,  bonds and  other  obligations  of
substantially  the tenor  hereinafter  provided,  issuable in one or more series
(hereinafter called the "Additional Obligations"; the Pre-Existing Bonds and the
Additional Obligations hereinafter called, collectively, the "Obligations"); and
to provide for the authentication and delivery of the Additional  Obligations by
the Trustee from time-to-time, the Company has duly authorized the execution and
delivery of this Indenture.

         All things have been done which are necessary to make the  Pre-Existing
Bonds and,  when duly executed and issued by the Company and  authenticated  and
delivered  by the  Trustee  hereunder,  the  Additional  Obligations,  the valid
obligations  of the Company,  and to constitute  this Indenture a valid contract
for the benefit of the holders of the Obligations,  in accordance with the terms
of the Obligations and this Indenture.

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         Should the indebtedness  subject to this Indenture be paid according to
the tenor and effect  thereof  when the same shall  become due and  payable  and
should the Company  perform all covenants  herein  contained in a timely manner,
then this Indenture shall be cancelled and surrendered.

         AND IT IS  HEREBY  COVENANTED  AND  DECLARED  that  all the  Additional
Obligations  are to be  authenticated  and  delivered,  subject  to the  further
covenants,  conditions and trusts  hereinafter  set forth,  and the Company does
hereby  covenant  and  agree  to  and  with  the  Trustee,  for  the  equal  and
proportionate benefit of all Holders of the Outstanding Obligations as follows:

1.       DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

1.1      Definitions.

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

(a) The terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular.

(b) At any time at which this Indenture is qualified or required to be qualified
under the TIA (as  hereinafter  defined),  all other terms used herein which are
defined in the TIA either  directly or by reference  therein,  have the meanings
assigned to them therein.

(c) All accounting terms not otherwise defined herein have the meanings assigned
to them, and all  determinations  and computations  herein provided for shall be
made, in accordance with Accounting  Requirements (as hereinafter defined),  and
the express  reference  to  "Accounting  Requirements"  with  respect to certain
terms,  determinations  or  computations  shall  not  imply  that  other  terms,
determinations  and computations shall not be defined or made in accordance with
"Accounting Requirements."

(d)  All  references   herein  to  "Accounting   Requirements"   refer  to  such
requirements as are in use in the United States at the time of the determination
of any  computation  required or permitted  hereunder,  or, at the option of the
Company,  such  requirements in use at the date of the execution and delivery of
this Indenture.

(e) 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.

(f) The words  "include" and "including"  shall not be terms of limitation,  and
shall in all cases,  whether or not expressly provided,  be read to be "include,
without limitation," and "including, without limitation," respectively.

(g) When used herein the terms  "corporation"  and "company" or other equivalent
terms  shall  include  any legal  entity  whether in the form of a  corporation,

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<PAGE>

cooperative,  partnership,  joint  venture,  association,  joint-stock  company,
limited liability company, partnership,  limited liability partnership, trust or
unincorporated organization.

         Certain  terms  used  principally  in  Article  7 are  defined  in that
Article.

         "Accountant"  means a  Person  regularly  engaged  in the  practice  of
accounting who (except as otherwise expressly provided in this Indenture) may be
employed by or  affiliated  with the  Company  and who need not be  independent,
certified, licensed or public.

         "Accounting  Requirements"  means  the  requirements  of the  system of
accounts  prescribed by any regulatory  authority having  jurisdiction  over the
Company or, in the absence  thereof,  the  requirements  of  generally  accepted
accounting principles applicable to similar entities conducting business similar
to that of the Company.  Generally  accepted  accounting  principles refers to a
common set of accounting standards and procedures that are either promulgated by
an  authoritative  accounting  rulemaking body or accepted as appropriate due to
wide-spread application in the United States.

         "acquired"  means  to  acquire  by  purchase,  exchange,  construction,
consolidation,   conveyance,   transfer  or  otherwise.  The  terms  "acquired,"
"acquiring" and "acquisition" have meanings correlative to the foregoing.

         "Act" when used with  respect to any Holder or Holders  has the meaning
stated in Section 1.2.

         "Additional Obligations" has the meaning stated in the first recital of
this Indenture and includes any Obligation authenticated and delivered hereunder
after the date hereof.

         "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 purposes of this definition,  "control"
of any specified Person means the power to direct the management and policies of
such specified Person, directly or indirectly,  whether through the ownership of
voting  securities or membership  interests,  by contract or otherwise;  and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

         "Application"  means an application for the authentication and delivery
of  Additional  Obligations  under any  provision  of this  Indenture  and shall
consist  of,  and shall not be  deemed  complete  until  there  shall  have been
delivered to the Trustee,  such  documents as are required by such  provision to
establish  the right of the  Company to the action  applied  for.  The date of a
particular  Application shall be deemed to be the date of completion of all such
deliveries  to the  Trustee  and not  the  date on any  particular  document  so
delivered.

         "Authenticating  Agent" when used with respect to any particular series
of Obligations means any Person named as Authenticating Agent for said series in
the  provisions  of this  Indenture  creating  said  series  until  a  successor
Authenticating  Agent  therefor  becomes such pursuant  thereto,  and thereafter
"Authenticating Agent" shall mean such successor.

         "Available Margins Certificate" means an Officers'  Certificate,  dated
not more than thirty (30) days prior to the date of the related Application, and

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<PAGE>

signed by, in addition to the two Officers  signing the same, a Person,  who may
be one of such Officers, signing as an Accountant, stating that:

(a) the  Margins  for  Interest  for either (i) the fiscal  year of the  Company
immediately preceding the fiscal year in which the relevant Application is made;
PROVIDED, HOWEVER, that if such Application is made within 90 days of the end of
the  immediately  preceding  fiscal  year for  purposes of the  Application  the
Company  may use the  fiscal  year of the  Company  immediately  preceding  such
immediately  preceding  fiscal  year of the  Company,  or (ii) any  twelve  (12)
consecutive  calendar  months during the period of eighteen (18) calendar months
immediately  preceding the first day of the calendar month in which the relevant
Application  is made,  are not less than 1.10 times the Interest  Charges during
such fiscal year or other twelve (12) month period; and

(b) the  Margins  for  Interest  have been  calculated  in  accordance  with the
definitions contained in this Section.

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

         "Book-Entry  System"  means  that  system  whereby  the  clearance  and
settlement of  transactions  in Obligations  held in such system is made through
electronic  book-entry  changes,  thereby  eliminating  the  need  for  physical
movement of Obligations certificates or other instruments.

         "Cede & Co." means Cede & Co., as nominee  for DTC (as defined  below),
and any successor nominee of DTC.

         "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  theretofore  assigned to it under the TIA,
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
"Company" shall mean such successor Person.

         "Company   Consent,"   "Company  Order"  and  "Company  Request"  mean,
respectively,  a written  consent,  order or  request  signed in the name of the
Company by an Officer of the Company, and delivered to the Trustee.

         "Credit  Enhancement"  means,  with  respect  to  any  Obligation,  the
provision of an  insurance  policy,  letter of credit,  surety bond or any other
undertaking,  whereby the provider thereof becomes unconditionally  obligated to
pay when due, to the extent not paid by the Company or otherwise,  the principal
of and interest on such Obligation or on another obligation the payment on which

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<PAGE>

is (i) secured by such  Obligation  or (ii)  credited  against the principal and
interest due on such Obligation.

         "Credit Enhancer" means any Person that,  pursuant to this Indenture or
a Supplemental  Indenture, is designated as a Credit Enhancer and which provides
Credit Enhancement.

         "Defaulted Interest" has the meaning stated in Section 3.9.

         "Defeasance  Securities"  means  and  includes  any  of  the  following
securities,  if and to the extent the same are not subject to redemption or call
prior to  maturity by anyone  other than the holder  thereof and are at the time
legal for investment of the Company's funds:

         (a) any bonds or other  obligations  which as to principal and interest
constitute  direct  obligations  of, or are  unconditionally  guaranteed by, the
United States of America;

         (b) any bonds or other obligations of any state of the United States of
America or of any agency, instrumentality or local governmental unit of any such
state (i) which are not  callable  prior to  maturity,  or which  have been duly
called for  redemption  by the  obligor on a date or dates  specified  and as to
which  irrevocable  instructions have been given to a trustee in respect of such
bonds or other  obligations by the obligor to give due notice of such redemption
on such date or  dates,  which  date or dates  shall be also  specified  in such
instructions, (ii) which are secured as to principal and interest and redemption
premium, if any, by a fund consisting only of cash or bonds or other obligations
of the character described in clause (a) above which fund may be applied only to
the payment of such principal of and interest and redemption premium, if any, on
such bonds or other  obligations  on the maturity  date or dates  thereof or the
redemption date or dates specified in the irrevocable  instructions  referred to
in  subclause  (i) of this  clause (b),  as  appropriate,  (iii) as to which the
principal  of and  interest  on  the  bonds  and  obligations  of the  character
described  in clause  (a) above on  deposit  in such fund along with any cash on
deposit  in such  fund are  sufficient  to pay  principal  of and  interest  and
redemption premium, if any, on the bonds or other obligations  described in this
clause (b) on the maturity  date or dates thereof or on the  redemption  date or
dates specified in the irrevocable  instructions referred to in subclause (i) of
this clause (b), as  appropriate,  and (iv) which at the time of their  purchase
hereunder  are rated "AAA" by Standard & Poor's  Ratings  Group and, if rated by
Moody's Investors Service, are rated "Aaa" by such agency; and

         (c) any certificates or any other evidences of an ownership interest in
obligations  or in specified  portions  thereof  (which may consist of specified
portions of the interest thereon) of the character described in paragraph (a) or
(b) above.

         "Distribution" has the meaning stated in Section 11.13.

         "DTC" means The  Depository  Trust  Company,  a limited  purpose  trust
company  organized  under the laws of the State of New York,  and its successors
and assigns.

         "DTC  Participant"  means  a  broker-dealer,  bank or  other  financial
institution for which DTC holds Obligations.

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<PAGE>

         "Event of  Default"  has the  meaning  stated in Section  6.1 or in any
Supplemental Indenture. An Event of Default shall "exist" if an Event of Default
shall have occurred and be continuing.

         "Holder" when used with respect to any  Obligation  means the Person in
whose name such Obligation is registered in the Obligation Register.

         "Indenture"  means this instrument as originally  executed or as it may
from time-to-time be supplemented, modified or amended by one or more indentures
or other instruments  supplemental  hereto (including  Supplemental  Indentures)
entered into pursuant to the applicable provisions hereof.

         "Independent" when used with respect to any specified Person means such
a Person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material  indirect  financial  interest in the Company or in any
other obligor upon the Obligations or in any Affiliate of the Company or of such
other obligor and (iii) is not connected  with the Company or such other obligor
as an officer, employee,  promoter,  underwriter,  trustee, partner, director or
person  performing  similar  functions.  Whenever it is herein provided that any
Independent  Person's opinion or certificate  shall be furnished to the Trustee,
such opinion or certificate shall state that the signer has read this definition
and that the signer is Independent within the meaning thereof.

         "Interest  Charges"  for any period  means the total  interest  charges
(whether  capitalized  or  expensed)  of the  Company for such period on (i) all
Outstanding  Debt  Obligations  and (ii) all other  obligations  of the  Company
(other than  Subordinated  Debt) to repay  borrowed money or to pay the deferred
purchase price for property or services, in all cases including  amortization of
debt  discount and premium on issuance  but  excluding  the  interest  component
attributable to any capitalized lease or similar agreement;  PROVIDED,  HOWEVER,
that with respect to any calculation of Interest Charges for any period prior to
the Release Date,  "Interest  Charges" means the total interest charges (whether
capitalized or expensed) of the Company for such period with respect to interest
the  obligation  for the  payment  of which is  secured  under  the  Pre-Release
Indenture or by a lien against  property  subject to the  Pre-Release  Indenture
prior to or on a parity with the lien of the Pre-Release  Indenture,  other than
"Permitted Encumbrances" (as defined in the Pre-Release Indenture), in all cases
including  amortization of debt discount and premium on issuance,  determined in
accordance with Accounting Requirements.

         "Interest  Payment Date" means the Stated Maturity of an installment of
interest on the Obligations.

         "Margins for Interest" means, for any period, the assignable margins of
the Company for such period,  which shall  include  revenues of the Company,  if
any,  subject  to  possible  refund  at a  later  date;  PROVIDED,  HOWEVER,  no
deductions shall be made as a result of refunds ordered in a subsequent  period;
adjusted by:

         (a) adding:

                  (i) Interest Charges;

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<PAGE>

                  (ii)  accruals of Federal  income and other  taxes  imposed on
income after deduction of Interest Charges for such period;

                  (iii) the amount,  if any,  deducted in arriving at assignable
margins on account of any losses  incurred by any Subsidiary or Affiliate of the
Company other than amounts deducted pursuant to clause (b)(ii) below;

                  (iv) the amount, if any, the Company actually receives in such
period as a dividend or other  distribution  of earnings  of any  Subsidiary  or
Affiliate  (whether  or not such  earnings  were for such  period or any earlier
period or periods)  which amount has not otherwise been reflected as an increase
in assignable margins in such period or any earlier period or periods; and

                  (v)  the  amount  of  any  expenses  or  provisions   for  any
non-recurring  charge to income or margins or retained earnings of whatever kind
or nature (including,  without limitation, (x) the recognition of expense due to
the  non-recoverability of assets or expenses and (y) the accelerated portion of
the  amortization  of any deferred  charges or regulatory  assets carried on the
books of the  Company)  that may have been  deducted  or  otherwise  taken  into
account  in  arriving  at  assignable  margins  whether  or  not  recorded  as a
non-recurring charge in the Company's books of account; and

         (b) subtracting:

                  (i) the  amount,  if any,  added  in  arriving  at  assignable
margins on account of any income, gain, earnings or profits of any Subsidiary or
Affiliate of the Company  other than amounts  added  pursuant to clause  (a)(iv)
above; and

                  (ii) the amount,  if any, the Company actually  contributes to
the capital of, or actually  pays under a  guarantee  or like  agreement  by the
Company of an obligation of, any Subsidiary or Affiliate in such period,  to the
extent of any  accumulated  losses  incurred  by such  Subsidiary  or  Affiliate
(whether or not such losses  were for such period or any earlier  periods),  but
only to the extent (x) such losses have not otherwise caused other contributions
or payments to be subtracted from  assignable  margins for purposes of computing
Margins for Interest  for a prior  period and (y) such amount has not  otherwise
been subtracted from assignable margins.

         Margins for Interest shall be determined in accordance  with Accounting
Requirements;  PROVIDED,  HOWEVER,  that such  determination  shall be made on a
Company only and not on a consolidated basis.

         "Maturity" means, when used with respect to any Obligation, the date on
which the principal of such Obligation,  or any installment thereof, becomes due
and payable as therein or herein provided,  whether at the Stated Maturity or by
declaration of  acceleration or call for redemption or purchase or prepayment or
otherwise;  PROVIDED,  HOWEVER,  that any  obligation  to purchase or  otherwise
acquire  any  Additional  Obligation  from its Holder  shall not  constitute  an
undertaking  to pay the  principal  of such  Obligation  if so  provided  in the
Supplemental Indenture creating such Additional Obligation.

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<PAGE>

         "Obligation  Register" and  "Obligation  Registrar" have the respective
meanings stated in Section 3.7.

         "Obligations"  has the  meaning  stated  in the first  recital  of this
Indenture.

         "Officer"  for purposes of any consent,  order,  certificate,  opinion,
request or other action hereunder means the President,  the General Manager, any
Executive Manager or any other officer or employee of the Company  authorized by
a Board Resolution to give such consent, order,  certificate or opinion, or make
such request or perform such action.

         "Officers'  Certificate" means a certificate signed by any two Officers
of the Company.  Wherever this Indenture requires that an Officers'  Certificate
be signed also by an Accountant or other expert, such Accountant or other expert
may (except as otherwise  expressly  provided in this  Indenture) be employed by
the Company.

         "Opinion of Counsel" means a written opinion of counsel who may (except
as otherwise expressly provided in this Indenture) be employed by, or be outside
counsel to the Company and who shall be  reasonably  acceptable  to the Trustee.
The acceptance by the Trustee of such opinion shall be sufficient  evidence that
such counsel is reasonably acceptable to the Trustee.

         "Original Issue Discount  Obligation" means any Obligation  declared to
be an  "Original  Issue  Discount  Obligation"  in  the  Supplemental  Indenture
establishing the series to which such Obligation belongs.

         "Outstanding"  when used with respect to Obligations  means,  as of the
date of  determination,  all Pre-Existing  Bonds and all Additional  Obligations
authenticated and delivered under this Indenture, except:

         (a) Obligations,  or any portion thereof,  theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation or delivered to the Trustee
marked cancelled, satisfied or otherwise evidenced to the Trustee's satisfaction
as paid (and which amount may not be re-advanced);

         (b)  Obligations  for whose payment or  redemption  money or Defeasance
Securities  in the  necessary  amount has been  theretofore  deposited  with the
Trustee or any Paying Agent  (other than the Company) in trust,  for the Holders
of such Obligations,  PROVIDED that, if such Obligations are to be redeemed,  or
prepaid, irrevocable notice of such redemption or prepayment has been duly given
or other provision therefor satisfactory to the Trustee has been made;

         (c)  Obligations  which have been paid  pursuant  to Section  3.8 or in
exchange for or in lieu of which other  Obligations have been  authenticated and
delivered pursuant to this Indenture, other than any such Obligations in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such  Obligations  are held by a bona fide  purchaser  in whose  hands such
Obligations are valid obligations of the Company; and

         (d)  Additional  Obligations  which  have not  been  sold,  pledged  or
subjected to a security  interest and have been  surrendered to the Trustee,  or

                                       8
<PAGE>

which a portion  thereof has not been  advanced and with respect to such portion
either (i) any  commitment  to advance  thereunder  has  terminated,  or (ii) no
commitment to advance exists;

PROVIDED,  HOWEVER,  that in  determining  whether the Holders of the  requisite
principal amount of Obligations  Outstanding or the Obligations Outstanding of a
series,  as the case may be,  have  given any  request,  demand,  authorization,
direction, notice, consent or waiver hereunder, Obligations owned by the Company
or any other obligor upon the  Obligations or any Affiliate of the Company or of
such other  obligor  (unless the  Company,  such  obligor and such  Affiliate or
Affiliates  own all  Obligations  Outstanding  under  this  Indenture,  or as to
matters  relating solely to a particular  series all Obligations  Outstanding of
such series,  as the case may be,  determined  without  regard to this  proviso)
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
Obligations which are registered in the name of the Company, an Affiliate of the
Company another obligor on such Obligations (other than a Credit Enhancer) or an
Affiliate  of such  obligor of which the Trustee has been given  written  notice
shall be so  disregarded.  Obligations  so owned which have been pledged in good
faith  may  be  regarded  as  Outstanding  for  such  purposes  if  the  pledgee
establishes  to the  satisfaction  of the Trustee the pledgee's  right so to act
with respect to such  Obligations and that the pledgee is not the Company or any
other  obligor upon the  Obligations  or any Affiliate of the Company or of such
other  obligor.  For  purposes of the  definition  of  "Outstanding,"  no Credit
Enhancer shall be an obligor upon the Obligations.

         "Outstanding Debt Obligations"  means, as of the date of determination,
(i) all Obligations  then  Outstanding  other than Obligations then owned by the
Company or any  wholly-owned  Subsidiary  and held in its  treasury and (ii) all
Obligations if any,  alleged to have been  destroyed,  lost or stolen which have
been  replaced  or paid as  provided  in  Section  3.8 but whose  ownership  and
enforceability  by the  Holder  thereof  have  been  established  by a court  of
competent  jurisdiction or other competent tribunal or otherwise  established to
the satisfaction of the Company and the Trustee.

         "Paying  Agent"  means  the  Company  and  any  bank or  trust  company
organized  under the laws of the United States or any state of the United States
and having a combined capital and surplus of not less than $100 million which is
authorized  by the  Company to pay the  principal  of (and  premium,  if any) or
interest on any Obligations on behalf of the Company.

         "Periodic  Offering"  means an offering of Additional  Obligations of a
series from  time-to-time  any or all of the specific terms of which  Additional
Obligations,  including  the rate or rates of  interest,  if any,  thereon,  the
Stated Maturity or Maturities thereof and the redemption provision, if any, with
respect  thereto,  are to be determined by the Company or its agents at or about
the time of the issuance of such Additional Obligations.

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

         "Place of Payment"  when used with  respect to the  Obligations  of any
series means a city or any political subdivision thereof in which the Company is

                                       9
<PAGE>

by this  Indenture  required  to maintain an office or agency for the payment of
the principal of or interest on the Obligations of such series.

         "Predecessor  Obligations"  of any  particular  Obligation  means every
previous  Obligation  evidencing  all or a  portion  of the  same  debt  as that
evidenced by such particular  Obligation;  and, for purposes of this definition,
any Obligation  authenticated and delivered under Section 3.8 in lieu of a lost,
destroyed or stolen  Obligation shall be deemed to evidence the same debt as the
lost, destroyed or stolen Obligation.

         "Pre-Existing  Bonds"  means all Bonds (as  defined in the  Pre-Release
Indenture)  that remain  Outstanding  as of the Release Date and that either (i)
are Bonds issued on or after March ___,  2001,  or (ii) are Bonds whose  Holders
shall have  agreed in writing  that the  Release  Date may occur while such Bond
remains Outstanding.

         "Pre-Release  Indenture"  means the Indenture of Trust dated  September
15, 1991, by and between the Company and Security Pacific Bank Washington,  N.A.
(under  which U.S.  Bank Trust  National  Association  acts as trustee as of the
reference  date  state  in the  first  paragraph  hereof),  as the same has been
amended and supplemented prior to the date of this Indenture and as the same may
hereafter be amended and effective prior to the Release Date.

         "Rates" has the meaning stated in Section 11.12.

         "Redemption  Date"  when  used with  respect  to any  Obligation  to be
prepaid  means the date of such  prepayment  and when used with  respect  to any
Obligation to be redeemed means the date fixed for such  redemption  pursuant to
this Indenture.

         "Redemption  Price"  when used with  respect  to any  Obligation  to be
prepaid  means the amount of the  indebtedness  to be prepaid and when used with
respect to any  Obligation  to be redeemed  means the price at which it is to be
redeemed pursuant to this Indenture. It includes the applicable premium, if any,
including any prepayment penalty,  but does not include installments of interest
whose Stated Maturity is on or before the Redemption Date.

         "Regular Record Date" for the interest  payable on any Interest Payment
Date on the  Obligations of any series means the date specified for such purpose
in a Supplemental Indenture creating such series.

         "Release  Date" means the  earliest  date on which  there  ceases to be
Outstanding each and every Bond (as defined in the Pre-Release Indenture) issued
prior to March ___, 2001,  other than any Bond whose Holder shall have agreed in
writing that the Release Date may occur while such Bond remains Outstanding.

         "Responsible  Officer"  when used with respect to the Trustee means the
chairman or vice-chairman of the board of directors of the Trustee, the chairman
or  vice-chairman of the executive  committee of such board, 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,  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 of the Trustee to whom

                                       10
<PAGE>

such matter is referred  because of his  knowledge of and  familiarity  with the
particular subject.

         "Special  Record  Date" for the  payment of any  Defaulted  Interest on
Obligations means a date fixed by the Trustee pursuant to Section 3.9.

         "Stated  Maturity"  when  used  with  respect  to any  Obligation,  any
installment of principal thereof, or any installment of interest thereon,  means
the date specified in such Obligation as the date on which the principal of such
Obligation or any installment  thereof, or such installment of interest,  is due
and  payable  (without  regard to any  provisions  for  redemption,  prepayment,
acceleration, purchase or extension).

         "Subordinated  Debt"  means  any  obligation  of the  Company  to repay
borrowed money, or to pay the deferred  purchase price for property or services,
with  respect  to which (i) any  payment by or for the  account  of the  Company
would,  in the  event of a  bankruptcy,  reorganization  or  liquidation  of the
Company,  be  subordinated  to payment of the  principal  of, and  interest  and
premium (if any) on, all Obligations then Outstanding,  and (ii) the creditor is
required not to accept  payment  from the Company,  or to pay to the Trustee any
amounts received by the creditor from or for the account of the Company,  during
any period  following  the  creditor's  receipt of notice of an Event of Default
under this Indenture and prior to the curing of such Event of Default.

         "Subsidiary"   of  any   specified   Person   means  any   corporation,
partnership,  limited  partnership  or  limited  liability  company  at  least a
majority of whose outstanding capital stock, partnership interests or membership
interests  shall at the time be owned or held,  directly or  indirectly,  by the
specified Person or by one or more of its Subsidiaries.

         "Supplemental  Indenture" means any indenture  supplemental  hereto and
duly authorized in the manner  provided herein (and a supplemental  indenture to
the Pre-Release Indenture shall be deemed to be a Supplemental  Indenture hereto
with respect to any series of Pre-Existing Bonds created thereby).

         "System"  means  all  properties  and  interest  in  properties  of the
Company,  including but not limited to the  Company's  interests in all electric
production, transmission,  distribution,  conservation, load management, general
plant and other related facilities, equipment or property and in any mine, well,
pipeline,  plant,  structure or other facility for the development,  production,
manufacture, storage, fabrication or processing of fossil, nuclear or other fuel
of any kind or in any facility or rights with respect to the supply of water, in
each case for use, in whole or in major part, in any of the Company's generating
plants,  now  existing or  hereafter  acquired by lease,  contract,  purchase or
otherwise or constructed by the Company, including any interest or participation
of the  Company in any such  facilities  or any rights to the output or capacity
thereof, together with all additions,  betterments,  extensions and improvements
to any of the foregoing or any part thereof hereafter made and together with all
lands,  easements and rights of way of the Company and all other works, property
or  structures  of the  Company  and  contract  rights  and other  tangible  and
intangible assets of the Company used or useful in connection with or related to
any of the foregoing,  including,  without limitation, a contract right or other
contractual  arrangement  for  the  long-term  or  short-term   interconnection,
interchange,  exchange,  pooling,  wheeling,  transmission,  purchase or sale of

                                       11
<PAGE>

electric power and energy and other similar  arrangements  with entities  having
generation and transmission capabilities.

         "TIA" or  "Trust  Indenture  Act"  means,  as of any  time,  the  Trust
Indenture Act of 1939, or any successor statute, as amended and in force at such
time.

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

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

         1.2 Acts of Holders.

                  (a) 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 an 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 conclusive in favor of the Company and (subject to Section 7.1) in
favor of the Trustee, if made in the manner provided in this Section.

                  (b) 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 the certificate of any 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.  Whenever
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,  and the authority of the Person executing the same, may also be proved
in any manner which the Trustee deems sufficient.

                  (c) The  ownership  of  Obligations  shall  be  proved  by the
Obligation Register.

                  (d) Any request,  demand,  authorization,  direction,  notice,
consent,  waiver or other Act of the Holder of any  Obligation  shall bind every
future Holder of the same Obligation and the Holder of every  Obligation  issued
upon the 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
Obligation. However, unless such Obligation is held in the Book-Entry System and
the  DTC  letter  of  representations  executed  by the  Company  in  connection
therewith,  as amended from time-to-time,  does not permit such revocation,  any
such  Holder or  subsequent  Holder may revoke by  written  instrument  any such
instrument as to his  Obligation or portion of an Obligation  until such time as
written  instruments  have been  received  by the  Trustee  with  respect to the

                                       12
<PAGE>

requisite   percentage  of  principal  amount  of  Obligations  for  the  action
contemplated by such instruments;  PROVIDED, HOWEVER, that such revocation shall
be effective only if the Trustee  receives  written notice of revocation  before
the date the  Trustee or the  Company  does or suffers  to be done  anything  in
reliance on such instrument.

         1.3 Notices, etc., to Trustee and Company.

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

                  (a) 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 at its principal corporate trust office, or

                  (b) the  Company  by the  Trustee  or by any  Holder  shall be
sufficient for every purpose hereunder (except as otherwise  expressly  provided
in Sections  6.1(c) and 6.1(e)) if in writing  and mailed,  first-class  postage
prepaid,  to the  Company  addressed  to it at P.O.  Box 196300,  Anchorage,  AK
99519-6300,  or at any other  address  specified  for such  purpose  in a notice
previously given by the Company to the Trustee.

         1.4 Notices 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 of such
Obligations,  at the  address of such  Holder as it  appears  in the  Obligation
Register not later than the latest date, and not earlier than the earliest date,
prescribed for 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 mail service or by reason of
any other cause,  it shall be impossible to give such notice by mail,  then such
notification  as shall be  specified  by the  Company  and  satisfactory  to the
Trustee shall constitute a sufficient notification for every purpose hereunder.

         1.5 Form and Contents 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

                                       13
<PAGE>

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, advice
of or representations by, counsel, unless such Officer knows, or in the exercise
of  reasonable  care  should  know,  that the  certificate,  opinion,  advice or
representations  with  respect  to the  matters  upon which his  certificate  or
opinion is based are erroneous.

         Any Opinion of Counsel  may be based,  insofar as it relates to factual
matters or matters of business  judgment,  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
Officers,   unless  such  counsel  knows  that  the   certificate,   opinion  or
representations  with  respect to such  matters  are  erroneous.  Any Opinion of
Counsel may be based upon such  assumptions,  be subject to such  qualifications
and may be stated in such language as at the time delivered is considered in the
jurisdiction whose laws are covered by such opinion to be standard practice with
respect to opinions relating to such matters. In addition, in giving any Opinion
of Counsel,  counsel may, except with respect to any opinion required by Article
5, rely upon (i) prior  opinions of counsel for the  Company,  (ii)  opinions of
special  counsel for the  Company,  (iii)  opinions of in-house  counsel for the
Company and (iv) title  insurance  policies,  title  insurance  commitments  and
reports,  lien search  certificates and other similar evidences of the existence
of liens.

         Whenever  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 document.

         Wherever  in  this  Indenture,  in  connection  with  any  Application,
certificate  or report to the  Trustee,  it is provided  that the Company  shall
deliver any document as a condition of the granting of such  Application,  or as
evidence of the Company's  compliance with any term hereof,  it is intended that
the truth and accuracy,  at the time of the granting of such  Application  or at
the effective  date of such  certificate  or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Company to have such Application granted or to the
sufficiency of such certificate or report.  Notwithstanding anything else herein
to the contrary, the validity of any action taken or Obligation issued hereunder
based upon any  Application,  certificate or report shall not be affected by the
truth and accuracy of such Application,  certification or report. Nothing in the
immediately  preceding  sentence  shall,  however,  limit any rights or remedies
available to the Trustee or the Holders under this Indenture or at law or equity
against the Company,  any officer  thereof or any Person with respect to a false
or inaccurate Application, certification or report other than any remedy seeking
to invalidate the action so taken or Obligation issued.

         Whenever a clerical, typographical,  inadvertent or unintentional error
or omission  shall be discovered in any document  filed with the Trustee,  a new
document in corrected  form,  executed as prescribed  herein for that originally
filed and which may bear the same date as the document  originally filed, may be
substituted  therefor  with  the  same  force  and  effect  as if  the  document
originally  filed  had been  filed  in the  corrected  form,  or in lieu of such

                                       14
<PAGE>

substitution an appropriate adjustment may be made in a like document filed with
the  Trustee  after such  discovery.  To the extent  that  action has been taken
hereunder  which could not have been taken had the original  document been filed
in corrected form, such action shall be validated and rendered  effective if the
substituted  or adjusting  document  shall indicate that any deficiency has been
fully satisfied since the filing of the original document.

         1.6 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 identifying the relevant provisions of this
Indenture and 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  certificates
provided pursuant to Section 11.10 hereof) shall include:

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

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

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

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

         1.7 Conflict with Trust Indenture Act.

         At any time at which this  Indenture  is  qualified  or  required to be
qualified under the TIA, if any provision hereof limits,  qualifies or conflicts
with another provision hereof which is required to be included in this Indenture
by any of the provisions of the TIA, such required provision shall control.

         1.8 Effect of Headings and Table of Contents.

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

                                       15
<PAGE>

         1.9 Successors and Assigns.

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

         1.10 Severability Clause.

         In case any provision in this Indenture or in the Obligations  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.

         1.11 Benefits of Indenture.

         Nothing in this  Indenture or in the  Obligations,  express or implied,
shall  give to any  Person,  other than the  parties  hereto,  their  successors
hereunder and the Holders,  any benefit or any legal or equitable right,  remedy
or claim under this Indenture.

         1.12 Governing Law.

         This Indenture and the  Obligations  shall be governed by and construed
in accordance with the laws of the State of Alaska.

         1.13 Action by Credit Enhancer When Action by Holders Required.

         Notwithstanding  anything  herein to the contrary,  except as otherwise
provided in a Supplemental  Indenture  authorizing  Obligations of any series or
maturity within a series for which Credit Enhancement is being provided,  if not
in  default  in  respect  of any of  its  obligations  with  respect  to  Credit
Enhancement  for such  Obligations,  the Credit Enhancer for, and not the actual
Holders  of,  such  Obligations,  shall  be  deemed  to be the  Holder  of  such
Obligations  at all times for the purpose of (i) giving any  approval or consent
to the effectiveness of any Supplemental  Indenture or to any amendment,  change
or modification of this Indenture which requires the written approval or consent
of Holders of such Obligations;  PROVIDED,  HOWEVER, that the provisions of this
clause (i) shall not apply to any change  which  could not be made  pursuant  to
Section 10.2 without the consent of each Holder of Obligations affected thereby,
and (ii) giving any other approval or consent, giving any notice,  effecting any
waiver or authorization, exercising any remedies, giving any direction or taking
any other action in accordance with the provisions of this Indenture.

         1.14 Bank Holidays.

         Except as specified in a Pre-Existing Bond or a Supplemental Indenture,
if the  specified  date for the  making  of any  payment  or the  last  date for
performance  of any act or the  exercising  of any right,  as  provided  in this
Indenture,  shall  be a  Saturday,  Sunday  or legal  holiday  or a day on which
banking  institutions  in the city in which is located the office from which the
Trustee performs the functions to which such act or right relates are authorized
by law to remain  closed,  such  payment may be made or act  performed  or right
exercised  on the next  succeeding  day which is not one of the  foregoing  days
without  additional  interest  and with the same  force  and  effect as if made,
performed or exercised on the specified date for such payment.

                                       16
<PAGE>

         1.15 Maturity of Obligations.

         The  Stated  Maturity  of the  Pre-Existing  Bonds is set  forth in the
Pre-Existing  Bonds or the  Supplemental  Indenture  establishing  the series to
which  such  Pre-Existing  Bonds  belong.  The  Stated  Maturity  of  Additional
Obligations  authorized  pursuant to Article 4 and  governed  by this  Indenture
shall be as provided in Supplemental  Indentures  adopted in accordance with and
pursuant to Sections 3.3 and Article 10.

         1.16 Acceptance of Trust by Trustee.

         The Trustee accepts the trusts in this Indenture declared and provided,
upon the terms and conditions herein set forth.

         1.17 Investment of Cash Held by Trustee.

         Any cash held by the Trustee or any Paying Agent under any provision of
this Indenture shall, except as otherwise provided in Article 5 and Section 6.4,
at the  request of the  Company  evidenced  by a Company  Request be invested or
reinvested as designated by the Company,  and,  unless an Event of Default shall
exist,  any  interest on such  investments  shall be  promptly  paid over to the
Company as received free and clear of any lien. Such  investments  shall be held
subject to the same provisions hereof as was the cash used to purchase the same,
but upon a like request of the Company  shall be sold, in whole or in designated
part, and the proceeds of such sale shall be held subject to the same provisions
hereof as was the cash used to purchase the investments so sold.

         1.18 Principal Amount of Obligations Other than Bonds.

         At any point in time, the principal amount of an Obligation in any form
other than a bond shall not include any amount not then advanced and outstanding
thereunder.  The principal amount of any Obligation  evidencing an assumption by
the Company of all or a part of another obligation shall be the principal amount
of the other  obligation,  or the  portion  thereof,  assumed  pursuant  to such
Obligation.  The principal  amount of such an Obligation shall be reduced as the
principal  amount  of  such  Obligation  (or  the  obligation  it  evidences  an
assumption  of) is paid or otherwise  reduced.  The principal  amount of such an
Obligation  may be  evidenced  from  time-to-time  by an  Officers'  Certificate
delivered  to the Trustee and the Holder of such  Obligation.  In the absence of
any timely objection by the Holder to the principal amount of such an Obligation
set forth in such Officers'  Certificate,  the Trustee may conclusively  rely on
such Officers'  Certificate.  Following any timely objection by the Holder,  the
Trustee  may  require  such  other  evidence  of the  principal  amount  of such
Obligation as shall be satisfactory to the Trustee in its sole discretion.

2.       OBLIGATION FORMS

         2.1 Forms of Additional Obligations Generally.

         Additional  Obligations  of each series shall be in  substantially  the
form set forth in the Supplemental Indenture creating such series, or in a Board
Resolution  establishing  such series and  delivered  to the  Trustee,  or in an
Officers'  Certificate pursuant to a Supplemental  Indenture or Board Resolution

                                       17
<PAGE>

delivered  to the  Trustee,  in each  case  with  such  appropriate  insertions,
omissions,  substitutions  and other  variations as are required or permitted by
this  Indenture,   and  may  have  such  letters,  numbers  or  other  marks  of
identification  and  such  legends  or  endorsements  placed  thereon  as may be
required  to  comply  with  the  rules  of any  securities  exchange  or as may,
consistently  herewith,  be determined by the Officers executing such Additional
Obligations, as evidenced by their execution of such Additional Obligations. The
Place of Payment of Additional  Obligations of each series shall be set forth in
such  Additional  Obligations.  Any  portion  of  the  text  of  any  Additional
Obligation may be set forth on the reverse or subsequent pages thereof,  with an
appropriate  reference  thereto  on the  face of the  Additional  Obligation  if
desired. Such Additional Obligations may be printed, lithographed,  typewritten,
mimeographed or otherwise produced.

         2.2 Form of Trustee's  Certificate of  Authentication  for Pre-Existing
Bonds.

         The Trustee's  certificate of  authentication  for  Pre-Existing  Bonds
shall be in substantially the following form:

                  This is one of the Bonds  referred  to in and  secured  by the
                  Indenture  of Trust dated as of  September  15,  1991,  by and
                  between  Chugach  Electric  Association,   Inc.  and  Security
                  Pacific Bank Washington,  N.A., as the same may be amended and
                  effective  from time to time  prior to the  Release  Date (the
                  "Pre-Release Indenture"), under which the undersigned now acts
                  as Trustee. From and after the Release Date (as defined in the
                  Tenth  Supplemental  Indenture  of  Trust  to the  Pre-Release
                  Indenture),   this  shall  constitute  one  of  the  unsecured
                  Obligations  referred to in and  entitled  to the  benefits of
                  that Amended and  Restated  Indenture  dated March ___,  2001,
                  between Chugach Electric Association, Inc. and U.S. Bank Trust
                  National Association, the form of which is attached as Exhibit
                  A to such  Tenth  Supplemental  Indenture  (the  "Amended  and
                  Restated  Indenture"),  which  Amended and Restated  Indenture
                  amends  and  supersedes  the  Pre-Release   Indenture  in  its
                  entirety from and after the Release Date.

                                  ---------------------------------------
                                  as Trustee

                                  By:
                                     ------------------------------------
                                     Authorized Signatory

                                       18
<PAGE>

         2.3 Form of Trustee's  Certificate  of  Authentication  for  Additional
Obligations.

         The Trustee's  certificate of authentication  for Obligations issued on
or after the Release Date shall be in substantially the following form:

                  This  is one  of the  Obligations  of  the  series  designated
                  therein referred to in the within-mentioned Indenture.

                                  ---------------------------------------
                                  as Trustee

                                  By:
                                     ------------------------------------
                                     Authorized Signatory

3.       THE OBLIGATIONS

         3.1 Terms and Forms of Pre-Existing Bonds.

         Authentication of the Pre-Existing  Bonds shall be in substantially the
form set forth in Section 2.2 and may be either on the Pre-Existing  Bonds or on
an allonge to be affixed to such  Pre-Existing  Bonds.  The  Pre-Existing  Bonds
shall be in the forms of such  instruments  as are  delivered to the Trustee for
authentication under the Pre-Release Indenture.  The terms and conditions of the
Pre-Existing Bonds,  including series designations,  principal amounts,  maximum
aggregate principal amount (if any), maturity dates,  interest rates and payment
and  redemption  provisions,  shall  be  as  provided  for  therein  or  in  the
Supplemental  Indenture establishing the series to which such Pre-Existing Bonds
belong.

         3.2 General Limitations; Issuable in Series.

                  (a) Any increase in the principal  amount of any  Pre-Existing
Bond (other than an advance under a Pre-Existing Bond held by a Credit Enhancer)
shall be deemed an issuance of an Additional Obligation and shall, therefore, be
subject to satisfying the conditions for the issuance of Additional  Obligations
provided in Article 4.

                  (b) The aggregate  principal amount of Additional  Obligations
which may be authenticated and delivered and Outstanding under this Indenture is
not  limited,  except  as  provided  in  Article  4 and  the  provisions  of any
Supplemental  Indenture  creating any series of Obligations and except as may be
limited by law.

The  Additional  Obligations  may be  issued  in  series  as  from  time-to-time
authorized by the Board of Directors.

                                       19
<PAGE>

With respect to the Additional Obligations of any particular series, the Company
may  incorporate in or add to the general title of such  Additional  Obligations
any words, letters or figures designed to distinguish that series.

         3.3 Terms of Particular Series.

                  (a)  The  terms  and  conditions  of the  Pre-Existing  Bonds,
including,  without limitation,  the timing and amount of principal and interest
payments  due  thereon  and  prepayment  rights,  shall  be as  provided  in the
Pre-Existing Bonds or the Supplemental Indenture creating such series.

                  (b) Each series of Additional  Obligations shall be created by
a Supplemental  Indenture  authorized by the Board of Directors and establishing
the terms and provisions of such series of Additional  Obligations.  The several
series of  Additional  Obligations  may differ as between  series and may differ
from  Pre-Existing  Bonds in any respect not in conflict with the  provisions of
this Indenture and as may be prescribed in the Supplemental  Indenture  creating
such series.

         The  Company  may,  at the  time  of the  creation  of  any  series  of
Additional  Obligations  or at any time  thereafter,  make,  and the  Additional
Obligations of such series may contain, provision for:

                           (i) the  exchange  or  conversion  of the  Additional
Obligations of such series,  at the option of the Holders  thereof,  for or into
new Additional Obligations of a different series;

                           (ii) a sinking,  amortization,  improvement  or other
analogous fund or for other payment of principal by installments or otherwise;

                           (iii) limiting the aggregate  principal amount of the
Additional Obligations of such series;

                           (iv)  exchanging   Additional   Obligations  of  such
series, at the option of the Holders thereof,  for other Additional  Obligations
of the same  series  of the  same  aggregate  principal  amount  of a  different
authorized kind or authorized denomination or denominations;

                           (v) the  authentication of Additional  Obligations of
such series by the Authenticating Agent;

                           (vi)   providing   for  the  issuance  of  Additional
Obligations of such series in bearer or book-entry form;

                           (vii)  specifying  redemption or prepayment terms and
procedures with respect to such series; and

                           (viii) specifying business days, grace periods, other
provisions and such covenants  and/or events of default or remedies with respect
to such series; and

                                       20
<PAGE>

                           (ix) any other terms of the Additional Obligations of
such series,  or any maturity  thereof,  not inconsistent with the provisions of
this Indenture;

all upon such terms as the Board of  Directors  may  determine as evidenced by a
Board Resolution.

                  (c) With respect to Additional Obligations of a series subject
to a Periodic Offering, the Supplemental  Indenture or the Board Resolution,  or
Officers'   Certificate   pursuant  to  the  Supplemental   Indenture  or  Board
Resolution,  as the case may be,  which  establishes  such  series  may  provide
general  terms or  parameters  for  Additional  Obligations  of such  series and
specify procedures,  acceptable to the Trustee, by which such specific terms are
to be established  (which procedures may provide for authentication and delivery
pursuant  to oral or  electronic  instructions  from the Company or any agent or
agents  thereof,   which  oral   instructions  are  to  be  promptly   confirmed
electronically or in writing).

         3.4 Denominations.

         The  Additional  Obligations  of each series  shall be issuable in such
denominations  as  shall  be  provided  in the  provisions  of any  Supplemental
Indenture  creating  such  series.  In the  absence of any such  provision  with
respect to the Additional  Obligations of any particular  series, the Additional
Obligations  of such  series  shall  be of the  denomination  of  $1,000  or any
integral multiple thereof.

         Additional Obligations may be in the form of bonds, notes,  debentures,
guarantees  or any  other  undertaking  for the  payment  of  borrowed  money or
purchase money indebtedness.

         3.5 Execution, Authentication, Delivery and Dating.

         The Additional  Obligations  shall be executed on behalf of the Company
by any  Officer,  and  attested  by  its  Secretary  or  one  of  its  Assistant
Secretaries.   The  signature  of  any  of  these  Officers  on  the  Additional
Obligations  may be manual or  facsimile.  Additional  Obligations  bearing  the
manual or facsimile  signatures of  individuals  who were at any time the proper
Officers  of the  Company  shall  bind the  Company,  notwithstanding  that such
individuals  or any of them shall have ceased to hold such offices  prior to the
authentication  and delivery of such  Additional  Obligations  or shall not have
held such offices at the date of such Additional Obligations.

         At any time and from  time-to-time  after the execution and delivery of
this Indenture,  the Company may deliver Additional  Obligations executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication  and  delivery of such  Additional  Obligations,  and the Trustee
shall authenticate and deliver such Additional  Obligations as in this Indenture
provided and not otherwise.

         All   Additional   Obligations   shall  be  dated  the  date  of  their
authentication.

         No  Obligation  shall be  entitled  to any right or benefit  under this
Indenture,  or be valid or obligatory  for any purpose,  unless there appears on
such  Obligation  (or  an  allonge  thereto)  a  certificate  of  authentication
substantially  in the form  provided for herein,  executed by the Trustee or the

                                       21
<PAGE>

Authenticating  Agent  by  manual  signature,  and  such  certificate  upon  any
Obligation (or an allonge  thereto) shall be conclusive  evidence,  and the only
evidence,  that  such  Obligation  has been  duly  authenticated  and  delivered
hereunder.

         3.6 Temporary Obligations.

         Pending the  preparation  of  definitive  Additional  Obligations,  the
Company may execute, and upon Company Request the Trustee shall authenticate and
deliver,  temporary  Additional  Obligations  which are  printed,  lithographed,
typewritten,  photocopied or otherwise produced or reproduced, in any authorized
denomination,   substantially   of  the  tenor  of  the  definitive   Additional
Obligations  in lieu of  which  they  are  issued,  and  with  such  appropriate
insertions,  omissions,  substitutions  and  other  variations  as the  Officers
executing  such  Additional  Obligations  may  determine,  as evidenced by their
execution of such Additional Obligations.

         If temporary Additional  Obligations are issued, the Company will cause
the definitive Additional Obligations to be prepared without unreasonable delay.
After the  preparation  of  definitive  Additional  Obligations,  the  temporary
Additional   Obligations   shall  be  exchangeable  for  definitive   Additional
Obligations upon surrender of the temporary Additional Obligations at the office
or agency of the Trustee in a Place of Payment  therefor,  without charge to the
Holder. Upon surrender for cancellation of any one or more temporary  Additional
Obligations,  the Company shall execute and the Trustee shall  authenticate  and
deliver in exchange  therefor a like principal  amount of definitive  Additional
Obligations  of  authorized   denominations.   Until  so  exchanged,   temporary
Additional Obligations shall in all respects be entitled to the benefits of this
Indenture.

         3.7 Registration; Registration of Transfer and Exchange.

         The  Company  shall  cause to be kept at one of the offices or agencies
maintained  by the  Company  as  provided  in Section  11.2 a  register  (herein
sometimes  referred to as the "Obligation  Register") in which,  subject to such
reasonable  regulations as it may  prescribe,  the Trustee shall provide for the
registration  of Obligations and  registration of transfers of Obligations.  The
Trustee  is  hereby  appointed   "Obligation   Registrar"  for  the  purpose  of
registering Obligations and transfers of Obligations as herein provided.

         Upon  surrender for  registration  of transfer of any Obligation at the
office or agency of the Trustee in a Place of Payment  therefor (or the delivery
of other evidence satisfactory to the Trustee of the transfer of an Obligation),
the Company shall execute,  and the Trustee shall  authenticate and deliver,  in
the  name  of  the  designated  transferee  or  transferees,  one  or  more  new
Obligations of the same series and maturity, of any authorized  denomination and
of a like  aggregate  principal  amount  (in the event  such  Obligation  is not
surrendered  for  transfer,  upon  delivery to the Trustee of such  satisfactory
evidence of a transfer, the Obligation Registrar shall register such transfer on
the Obligations Register).

         All  Obligations  surrendered  upon  registration  of any  exchange  or
transfer  provided  for in this  Indenture  shall be promptly  cancelled  by the
Trustee and thereafter the Trustee shall retain such Obligations or destroy such
Obligations and deliver a certificate of destruction to the Company.

                                       22
<PAGE>

         All Obligations issued upon any registration of transfer or exchange of
Obligations shall be the valid  obligations of the Company,  evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Obligations
surrendered upon such registration of transfer or exchange.

         Every Obligation  presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Obligation Registrar) be
duly endorsed,  or be  accompanied  by a written  instrument of transfer in form
satisfactory to the Company and the Obligation  Registrar duly executed,  by the
Holder thereof or his attorney duly authorized in writing.

         No service  charge shall be made for any  registration,  discharge from
registration,  registration  of transfer or  exchange  of  Obligations,  but the
Company  may  require  payment  of a sum  sufficient  to cover  any tax or other
governmental  charge that may be imposed in connection with any  registration of
transfer or exchange of  Obligations,  other than exchanges  under Sections 3.6,
10.6 or 12.7 not involving any transfer.

         Except as  provided in a  Supplemental  Indenture  and with  respect to
Pre-Existing Bonds, the Company shall not be required (i) to issue, register the
transfer of or exchange any  Obligation of any series during a period  beginning
at the opening of business  fifteen (15) days before the day of the mailing of a
notice of redemption of Obligations of such series under Section 12.4 and ending
at the close of business  on the day of such  mailing,  or (ii) to register  the
transfer of or exchange any Obligation so selected for redemption in whole or in
part, except the unredeemed portion of an Obligation being redeemed in part.

         3.8 Mutilated, Destroyed, Lost and Stolen Obligations.

         If (i) any mutilated  Obligation is surrendered to the Trustee,  or the
Company  and  the  Trustee  receive  evidence  to  their   satisfaction  of  the
destruction, loss or theft of any Obligation, and (ii) there is delivered to the
Trustee  such  security or  indemnity as may be required to save the Company and
the Trustee each of them harmless, then, in the absence of notice to the Company
or the Trustee that such  Obligation has been acquired by a bona fide purchaser,
the  Company  shall  execute and upon its  written  request  the  Trustee  shall
authenticate  and deliver,  in exchange for, or in lieu of, any such  mutilated,
destroyed, lost or stolen Obligation, a new Obligation of the same series and of
like tenor and  principal  amount and bearing a number not assigned to any other
Obligation contemporaneously Outstanding.

         In case any such mutilated,  destroyed,  lost or stolen  Obligation has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Obligation, pay such Obligation.

         Upon the issuance of any new Obligation under this Section, the Company
may  require  the  payment  of a sum  sufficient  to  cover  any  tax  or  other
governmental  charge  that may be  imposed  in  relation  thereto  and any other
expense (including the fees and expenses of the Trustee) connected therewith.

         Every new  Obligation  issued  pursuant to this  Section in lieu of any
destroyed,  lost or stolen  Obligation shall  constitute an original  additional
contractual  obligation of the Company,  whether or not the  destroyed,  lost or
stolen  Obligation  shall be at any time  enforceable  by  anyone,  and shall be

                                       23
<PAGE>

entitled to all the  benefits  of this  Indenture  equally and ratably  with all
other Outstanding Obligations.

         The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the  replacement or
payment of mutilated, destroyed, lost or stolen Obligations.

         3.9 Payment of Interest; Interest Rights Preserved.

         Interest  on any  Obligation  of any series  which is  payable,  and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the  Person  in  whose  name  that  Obligation  (or one or  more  Predecessor
Obligations)  is registered at the close of business on the Regular  Record Date
for such interest as specified  herein or in the provisions of the  Supplemental
Indenture creating such series.

         Any interest on any  Obligation of any series which is payable,  but is
not punctually  paid or duly provided for, on any Interest  Payment Date (herein
called "Defaulted Interest") shall be payable as provided in such Obligation, or
if not so  provided,  shall  forthwith  cease to be payable to the Holder on the
relevant  Regular  Record Date solely by virtue of such Holder  having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election,
as provided in paragraphs (a) or (b) below:

                  (a) The  Company  may elect to make  payment of any  Defaulted
Interest  on the  Obligations  of any series to the  Persons in whose names such
Obligations (or their respective Predecessor  Obligations) are registered at the
close of  business on a Special  Record  Date for the payment of such  Defaulted
Interest, which shall be fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted  Interest  proposed to be paid
on each  Obligation  and the date of the proposed  payment  (which date shall be
such as will enable the Trustee to comply with the next sentence hereof), and at
the same time the  Company  shall  deposit  with the  Trustee an amount of money
equal to the aggregate  amount  proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment,  such money when deposited to be held
in trust for the benefit of the Persons  entitled to such Defaulted  Interest as
in this  paragraph  provided.  Thereupon the Trustee shall fix a Special  Record
Date for the  payment of such  Defaulted  Interest  which shall be not more than
fifteen  (15) days nor less than ten (10) days prior to the date of the proposed
payment  and not less than ten (10) days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the Company of
such  Special  Record Date and,  in the name and at the expense of the  Company,
shall cause notice of the proposed  payment of such  Defaulted  Interest and the
Special Record Date therefor to be mailed,  first-class postage prepaid, to each
Holder of an  Obligation  of such  series at his  address  as it  appears in the
Obligation  Register  not less than ten (10) days prior to such  Special  Record
Date. Notice of the proposed payment of such Defaulted  Interest and the Special
Record Date therefor  having been mailed as aforesaid,  such Defaulted  Interest
shall be paid to the Persons in whose names the  Obligations  of such series (or
their respective Predecessor  Obligations) are registered on such Special Record
Date and shall no longer be payable pursuant to the following paragraph (b).

                                       24
<PAGE>

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

         Subject to the foregoing  provisions of this Section,  each  Obligation
delivered  under this Indenture upon  registration of transfer of or in exchange
for or in lieu of any other  Obligation  shall  carry all the rights to interest
accrued and unpaid,  and to accrue,  which were carried by such other Obligation
and each such  Obligation  shall bear interest from such date, that neither gain
nor loss in interest shall result from such transfer, exchange or substitution.

3.10     Persons Deemed Owners.

         Subject to the provisions of Sections 1.13, prior to due presentment of
such Obligation for registration of transfer,  the Company,  the Trustee and any
agent of the  Company  or the  Trustee  may treat the  Person in whose  name any
Obligation  is  registered  as the owner of such  Obligation  for the purpose of
receiving payment of principal of (and premium,  if any) and (subject to Section
3.9) interest on such Obligation and for all other purposes whatsoever,  whether
or not such Obligation be overdue,  and, to the extent permitted by law, neither
the  Company,  the Trustee nor any such agent shall be affected by notice to the
contrary.

         All Obligations surrendered for payment, redemption, transfer, exchange
or conversion, if surrendered to the Trustee, shall be promptly cancelled by it,
and, if surrendered to any Person other than the Trustee,  shall be delivered to
the Trustee and, if not already  cancelled,  shall be promptly  cancelled by it.
The  Company  may at any  time  deliver  to the  Trustee  for  cancellation  any
Obligations previously authenticated and delivered hereunder,  which the Company
may have acquired in any manner  whatsoever,  and all  Obligations  so delivered
shall be promptly cancelled by the Trustee. No Obligation shall be authenticated
in lieu of or in  exchange  for any  Obligation  cancelled  as  provided in this
Section,  except  as  expressly  provided  by  this  Indenture.   All  cancelled
Obligations  held by the Trustee shall be destroyed and  thereafter  the Trustee
shall deliver a certificate of destruction to the Company.

4.       AUTHENTICATION AND DELIVERY OF ADDITIONAL OBLIGATIONS

         Additional  Obligations of any one or more series,  or within a series,
may from  time-to-time  be executed by the Company and  delivered to the Trustee
for  authentication  and thereupon the same shall be authenticated and delivered
by the Trustee upon Company Request, upon receipt in each case by the Trustee of
the  following  upon or prior to the date of the initial  issuance of Additional
Obligations of such series:

                  (a)  A  Board   Resolution   authorizing  and  requesting  the
authentication  and delivery under this Article from time-to-time or at any time
of a  specified  principal  amount of  Additional  Obligations  of a  designated
series;

                  (b) An Officers' Certificate, dated within thirty (30) days of
the date of the relevant  Application for the authentication and delivery of the
initial  issuance of such  Additional  Obligations  and stating that no Event of
Default exists and that all conditions  precedent provided for in this Indenture
relating

                                       25
<PAGE>

to the initial  authentication and delivery of such Additional  Obligations have
been complied with (and, in the event such Additional Obligations are subject to
a Periodic  Offering,  that the statements  made in such  Certificates  shall be
deemed remade at the time of each subsequent authentication and delivery of such
Additional Obligations);

                  (c) an Available Margins Certificate; and

                  (d) An Opinion of Counsel  (which may be based on  opinions of
other counsel believed by such counsel to be reliable):

                  (i)  specifying  the  certificate or other evidence that shows
the  authorization,  approval  or consent of or to the  initial  issuance by the
Company of the Additional  Obligations then applied for by any Federal, state or
other governmental regulatory agency whose authorization, approval or consent is
at the time required to be obtained by the Company  having  jurisdiction  in the
premises,  or  stating  that no  such  authorization,  approval  or  consent  is
required;

                           (ii) stating that all conditions  precedent  provided
for in this Indenture relating to the authentication and delivery of the initial
issuance of such Additional Obligations have been complied with; and

                           (iii) stating that such Additional Obligations,  when
executed by the Company and  authenticated and delivered by the Trustee and when
issued by the Company (and, in the event of Additional  Obligations subject to a
Periodic  Offering,  when the  terms of such  Additional  Obligations  have been
established  as provided in the manner  contemplated  by this  Indenture  or the
Supplemental Indenture under which such Additional Obligations are established),
will be the legal, valid and binding  obligations of the Company  enforceable in
accordance  with their terms and the terms of this Indenture and entitled to the
benefits  of this  Indenture  equally  and  ratably  with all other  Outstanding
Obligations; and

         (e)  stating  that  the  documents  which  have  been or are  therewith
delivered to the Trustee conform to the requirements of this Indenture, and that
the  conditions  precedent to  authentication  and  delivery of the  Obligations
applied for under this Article have been satisfied.

5.       DEFEASANCE

         5.1 Termination of Company's Obligations.

                  (a) The  Company  may  terminate  its  obligations  under  the
Obligations and this Indenture if all Obligations  previously  authenticated and
delivered  (other than  destroyed,  lost or stolen  Obligations  which have been
replaced  or paid or  Obligations  for whose  payment  money or  securities  has
theretofore been held in trust and thereafter repaid to the Company, as provided
in Section  5.3) have been  delivered  to the Trustee for  cancellation  and the
Company has paid all sums payable by it hereunder and thereunder; or

                  (b) Except as otherwise provided in this Section,  the Company
may terminate its  obligations  under any Obligations and all of its obligations
under this  Indenture to or for the benefit of the Holders of such  Obligations,
if:

                                       26
<PAGE>

                           (i)  the   Company  has  (A)  in  case  any  of  such
Obligations are to be redeemed on any date prior to their final Stated Maturity,
given to the Trustee irrevocable  instructions to give as provided in Article 12
notice of redemption of such Obligations (other than Obligations which have been
purchased by the Trustee at the direction of the Company as hereinafter provided
prior to the giving of such notice of redemption), and (B) irrevocably deposited
or caused to be  deposited  with the Trustee or Paying  Agent (if other than the
Company),  under  the  terms  of an  irrevocable  trust  agreement  in form  and
substance  satisfactory to the Trustee and any such Paying Agent, as trust funds
in trust for the benefit of the Holders of such  Obligations  for that  purpose,
money or  Defeasance  Securities  maturing as to principal  and interest in such
amounts  and at such times as are  sufficient  (in the  opinion of a  nationally
recognized  firm of Independent  public  accountants  expressed in a certificate
signed by such firm and delivered to the Trustee),  without consideration of any
reinvestment  of  such  interest,  to pay  principal  or  Redemption  Price  (if
applicable)  of, and  interest due or to become due on such  Obligations  (other
than destroyed,  lost or stolen  Obligations which have been replaced or paid or
Obligations for whose payment money or securities has  theretofore  been held in
trust and  thereafter  repaid to the Company as  provided in Section  5.3) on or
prior to the Redemption Date or final Stated Maturity  thereof,  as the case may
be,  in  accordance  with the  terms  of this  Indenture  and such  Obligations;
PROVIDED that the Trustee or Paying Agent shall have been irrevocably instructed
to apply such money or the proceeds of such Defeasance Securities to the payment
of  said  principal,   Redemption  Price  and  interest  with  respect  to  such
Obligations;

                           (ii) no Event of Default  shall  exist on the date of
such deposit or shall occur as a result of such deposit;

                           (iii) the Company shall have delivered to the Trustee
either (A) a ruling  from the  Internal  Revenue  Service  and  directed  to the
Trustee to the effect that the Holders of such  Obligations  will not  recognize
income,  gain or loss  for  Federal  income  tax  purposes  as a  result  of the
Company's  exercise of its option  under this  paragraph  and will be subject to
Federal  income tax on the same  amount  and in the same  manner and at the same
times as would have been the case if such option had not been exercised,  or (B)
an Opinion of Counsel from nationally  recognized tax counsel not an employee of
the Company to the same effect as the ruling described in clause (A);

                           (iv) the  Company  has paid or  caused to be paid all
sums then due from the Company hereunder and under such Obligations;

                           (v) the Company has  delivered  an Opinion of Counsel
stating  that the deposit  shall not result in the  Company,  the Trustee or the
trust  becoming  or  being  deemed  to  be an  "investment  company"  under  the
Investment Company Act of 1940;

                           (vi) the Company has  delivered an Opinion of Counsel
from a  nationally  recognized  law  firm  stating  that  the  Holders  of  such
Obligations  (or the  Trustee  for the  benefit  of such  Holders)  shall have a
perfected  security  interest  under  applicable  law in the money or Defeasance
Securities so deposited; and

                                       27
<PAGE>

                           (vii) the  Company has  delivered  to the Trustee and
any Paying Agent an Officers' Certificate,  each stating that the conditions set
forth in clauses (i) through (vi) above have been complied with.

         After any such  irrevocable  deposit,  the Trustee upon Company Request
shall  acknowledge in writing the discharge of the Company's  obligations  under
such  Obligations and of the Company's  obligations to or for the benefit of the
Holders of such Obligations or under this Indenture,  except for those surviving
obligations specified below.

                  (c)  Notwithstanding  the  satisfaction  of the conditions set
forth in  paragraph  (b) with  respect to any  Obligations,  the  Company's  and
Trustee's  obligations  to or for  the  Holders  of  such  Obligations,  and the
Company's  obligations  to the Trustee,  in either case under Sections 3.7, 3.8,
5.2, 5.3, 5.4, 7.7,  7.10,  8.2, 11.1,  11.2 and 11.3,  shall survive until such
Obligations  are  no  longer   Outstanding.   Thereafter,   only  the  Company's
obligations  under  Sections 5.3, 5.4 and 7.7 shall survive with respect to such
Holders or the Trustee.  If and when a ruling from the Internal  Revenue Service
or Opinion of Counsel  referred  to in  paragraph  (b)(iii)  above is able to be
provided  specifically  without  regard  to,  and  not  in  reliance  upon,  the
continuance  of the  Company's  obligations  to such Holders under Section 11.1,
then the  Company's  obligations  to such Holders  under such Section 11.1 shall
cease upon  delivery  to the  Trustee of such  ruling or Opinion of Counsel  and
compliance with the other conditions  precedent  provided for herein relating to
the satisfaction and discharge of this Indenture with respect to such Holders.

                  (d) The Trustee or Paying Agent  shall,  if so directed by the
Company  (i) prior to the final  Stated  Maturity of  Obligations  in respect of
which a deposit has been made under  paragraph  (b)(i) above which are not to be
redeemed prior to their final Stated Maturity or (ii) prior to the giving of the
notice of redemption  referred to in paragraph  (b)(i) above with respect to any
Obligations in respect of which a deposit has been made under  paragraph  (b)(i)
which are to be redeemed on a date prior to their final Stated  Maturity,  apply
moneys  deposited with the Trustee in respect of such  Obligations and redeem or
sell Defeasance  Securities so deposited with the Trustee and apply the proceeds
thereof to the purchase of such  Obligations  and the Trustee shall  immediately
thereafter cancel all such Obligations so purchased; PROVIDED, HOWEVER, that the
Trustee  shall have received a certificate  of a nationally  recognized  firm of
Independent   Accountants    certifying,    and   setting   forth   calculations
demonstrating,  that the moneys and Defeasance  Securities  remaining on deposit
with the Trustee or Paying  Agent after the purchase  and  cancellation  of such
Obligations  shall be  sufficient  to pay when due the  principal or  Redemption
Price (if  applicable) of, and interest due or to become due on, all Obligations
in respect of which such moneys and Defeasance  Securities are being held by the
Trustee  or  Paying  Agent on or prior to the  Redemption  Date or final  Stated
Maturity thereof,  as the case may be. In the event that on any date as a result
of any purchases and  cancellations of Obligations as provided in this paragraph
the total amount of moneys and Defeasance  Securities  remaining on deposit with
the Trustee or Paying  Agent under this Section is in excess of the total amount
that would have been  required to be deposited  with the Trustee or Paying Agent
on such date under paragraph (b)(i) in respect of the remaining  Obligations for
which such  moneys and  Defeasance  Securities  are being  held,  the Trustee or
Paying Agent shall,  if requested by the Company and upon receipt by the Trustee
or Paying Agent of a certificate of a nationally  recognized firm of Independent
Accountants setting forth the calculation of such excess, pay the amount of such

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<PAGE>

excess to the  Company  free and clear of any trust,  lien,  security  interest,
pledge or assignment  securing such Obligations or otherwise existing under this
Indenture.

                  (e) If the  requirements  of this Section have been  satisfied
with respect to all  Obligations  theretofore  Outstanding,  then,  upon Company
Request,  the  rights  and  interest  created  hereby  shall  be  cancelled  and
surrendered (except as otherwise provided herein).

         5.2   Application  of  Deposited   Money  and  Money  From   Defeasance
Securities.

         Money or Defeasance Securities deposited with the Trustee or the Paying
Agent  pursuant to Section 5.1 shall  constitute  a separate  trust fund for the
benefit of persons entitled thereto.  Subject to the provisions of Section 11.3,
the Trustee or Paying Agent shall hold in trust money or  Defeasance  Securities
deposited  with it pursuant to Section 5.1, and shall apply the deposited  money
and the money from  Defeasance  Securities  to the payment of the  principal  or
Redemption Price (if applicable) of, and interest on, the Obligations in respect
of which such money and Defeasance Securities are deposited.  If money deposited
with the Trustee  under this  Article 5, or money  received  from  principal  or
interest payments on Defeasance Securities deposited with the Trustee under this
Article 5, will be  required  at a later date for  payment of the  principal  or
Redemption Price (if applicable) of, and interest on, the Obligations in respect
of which such money and Defeasance  Securities are deposited,  such money shall,
at the written investment  direction of the Company,  to the extent practicable,
be reinvested in  Defeasance  Securities  maturing at times and in amounts that,
together  with other moneys so deposited or to be generated by other  Defeasance
Securities, will be sufficient to pay when due the principal or Redemption Price
(if  applicable)  of, and interest to become due on, such  Obligations,  and the
interest earned from such  reinvestments  shall be paid over to the Company,  as
received by the Trustee,  free and clear of any trust  otherwise  existing under
this Indenture.

         5.3 Repayment to Company.

         Subject  to  Section  5.1,  to the  extent  any  Defeasance  Securities
deposited with the Trustee or Paying Agent under this Article,  or cash received
from principal or interest payments on such Defeasance  Securities,  will not be
required for the payment of the  principal or Redemption  Price (if  applicable)
of,  and  interest  on,  the  Obligations  in  respect  of which  such money and
Defeasance  Securities  are  deposited,  the Trustee and the Paying Agent shall,
upon Company  Request  accompanied by a certificate  of a nationally  recognized
firm of  Independent  Accountants  calculating  such  excess,  promptly  pay and
deliver to the Company any such  Defeasance  Securities  and cash, and thereupon
the Trustee or Paying Agent shall be relieved  from any  liability  with respect
thereto.  Without limiting the foregoing, the Trustee and the Paying Agent shall
pay to the Company upon  Company  Request any money held by them for the payment
of principal,  Redemption Price or interest that remains unclaimed for two years
after the date such  payment  was due.  After  payment to the  Company,  Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law  designates  another  person,  and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.

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<PAGE>

         5.4 Reinstatement.

         If the  Trustee  or  Paying  Agent  is  unable  to apply  any  money or
Defeasance  Securities in accordance with Section 5.1 and the second sentence of
Section  5.2 by  reason  of any  legal  proceeding  or by reason of any order or
judgment  of any  court or  governmental  authority  enjoining,  restraining  or
otherwise  prohibiting such  application,  the Company's  obligations under this
Indenture to or for the benefit of the Holders of Obligations  for whose benefit
such money or Defeasance  Securities  were deposited and under such  Obligations
shall be revived and  reinstated  as though no deposit had occurred  pursuant to
Section 5.1 until such time as the Trustee or Paying Agent is permitted to apply
all such  money and  Defeasance  Securities  in  accordance  with  Section  5.1;
PROVIDED,  HOWEVER,  that if the  Company has made any payment of interest on or
principal of any Obligations  because of the  reinstatement  of its obligations,
the Company shall be subrogated to the rights of the Holders of such Obligations
to receive such payment from the money or Defeasance Securities held therefor by
the  Trustee  or  Paying  Agent.  Notwithstanding  the  foregoing  or any  other
provision  of this  Indenture,  during any period in which the Trustee or Paying
Agent is unable,  for any of the reasons described in the first sentence of this
Section,  to apply in  accordance  with  Section 5.1 and the second  sentence of
Section  5.2 for the  benefit  of the  Holders of any  Obligations  any money or
proceeds from Defeasance  Securities  deposited with the Trustee with respect to
such  Obligations  pursuant to Section  5.1, the  Company's  right to obtain any
excess funds from such moneys or proceeds,  and the Company's subrogation rights
arising hereunder with respect to such Obligations, shall be suspended.

6.       EVENTS OF DEFAULT AND REMEDIES

         6.1 Events of Default.

         "Event  of  Default"  means,  wherever  used  herein,  any  one  of the
following  events  (whatever the reason,  for such event 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):

                  (a) default in the payment of any interest upon any Obligation
when such interest becomes due and payable,  and continuance of such default for
a  period  of  thirty  (30)  days  or such  other  period  provided  for in such
Obligation  or in the  Supplemental  Indenture  under which such  Obligation  is
issued; or

                  (b) default in the payment of the principal of (or premium, if
any,  on)  any  Obligation  at its  Maturity  and,  if so  provided  for in such
Obligation or the Supplemental  Indenture under which such Obligation is issued,
the continuance of such default for the period so provided; or

                  (c) 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 the  performance or breach of which is dealt with in paragraph (a) or
(b) of this Section),  and continuance of such default or breach for a period of
thirty (30) 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 10% in  principal  amount  of the  Obligations  Outstanding,  a written

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<PAGE>

notice  specifying  such  default or breach and  requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or

                  (d) a failure to pay any portion of the principal when due and
payable  (other than  amounts due and payable on  acceleration)  under any bond,
debenture,  note or other  evidence of  indebtedness  for money  borrowed by the
Company,  other than any  indebtedness  evidenced  or secured by an  Obligation,
whether  such  indebtedness  now exists or shall  hereafter  be  created,  which
failure shall have resulted in such indebtedness  becoming or being declared due
and payable  prior to the date on which it would  otherwise  have become due and
payable in an aggregate  principal  amount  exceeding  $10,000,000  without such
indebtedness  having been discharged or such acceleration  having been rescinded
or annulled within a period of ten (10) days after such acceleration; or

                  (e) the  rendering  against the Company of a judgment  for the
payment of moneys in excess of the sum of  $10,000,000  and the  continuance  of
such judgment  unsatisfied and without stay of execution thereon for a period of
thirty (30) days after the entry of such  judgment,  or the  continuance of such
judgment  unsatisfied  for a period of thirty (30) days after the termination of
any stay of execution  thereon entered within such first  mentioned  thirty (30)
days;  but only in  either  case if such  judgment  shall  have  been  continued
unstayed or  unsatisfied  for a period of ten (10) days after written  notice of
default hereunder shall have been given, by registered or certified mail, to the
Company by the  Trustee or to the  Company and the Trustee by the holders of not
less than 10% in principal amount of the Obligations Outstanding; or

                  (f) the entry by a court having  jurisdiction  in the premises
of (i) 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 (ii) 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 of any such other  decree or order  unstayed
and in effect for a period of sixty (60) consecutive days; or

                  (g) 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

                                       31
<PAGE>

its debts generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action.

         6.2 Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default exists,  then and in every such case the Trustee
or the  Holders  of not less than 25% in  principal  amount  of the  Obligations
Outstanding  may declare the principal  (or, in the case of  Obligations  of any
series  constituting  Original Issue Discount  Obligations,  such portion of the
principal amount of such Original Issue Discount Obligations as may be specified
in the  terms  of such  series)  of all the  Obligations  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  shall  become
immediately due and payable.

         At any time after such a declaration of acceleration has been made, but
before any  judgment or decree for payment of money due on any  Obligations  has
been  obtained by the  Trustee as  hereinafter  in this  Article  provided,  the
Holders of a majority in principal amount of the Obligations Outstanding (unless
such  declaration  has been made  under  Section  6.17 only  with  respect  to a
particular series of Outstanding Obligations,  in which event only a majority in
principal  amount of the  Obligations  of such series) may, by written notice to
the  Company  and the  Trustee,  rescind  and  annul  such  declaration  and its
consequences if:

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

                           (i)  all  overdue  installments  of  interest  on all
Obligations,

                           (ii) the principal of (and  premium,  if any, on) any
Obligations  which  have  become  due  otherwise  than  by such  declaration  of
acceleration and interest  thereon at the rate or rates  prescribed  therefor in
such Obligations,

                           (iii) to the extent that payment of such  interest is
lawful,  interest  upon  overdue  installments  of interest at the rate or rates
prescribed therefor in such Obligations, and

                           (iv)  all  late  payment  charges  or  fees,  if any,
prescribed in such Obligations, and

                           (v)  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

                  (b) all Events of Default,  other than the  non-payment of the
principal of  Obligations  which have become due solely by such  declaration  of
acceleration, have been cured or have been waived as provided in Section 6.13.

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

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<PAGE>

         6.3  Covenant to Pay Trustee  Amounts Due on  Obligations  and Right of
Trustee to Judgment.

         The Company covenants that, if:

                  (a)  default  is made in the  payment of any  interest  on any
Obligation  when  such  interest  becomes  due and  payable,  and  such  default
continues for the period prescribed in paragraph (a) of Section 6.1; or

                  (b)  default is made in the  payment of the  principal  of (or
premium,  if any, on) any Obligation at its Maturity,  and, if applicable,  such
default continues for the period prescribed in paragraph (b) of Section 6.1;

then upon demand of the Trustee,  the Company  will pay to the Trustee,  for the
benefit  of the  Holders  of such  Obligations,  the whole  amount  then due and
payable on such  Obligations  (including  any  amount  accelerated  pursuant  to
Section 6.2) for principal (and premium, if any) and interest,  with interest at
the respective rate or rates  prescribed  therefor in the Obligations on overdue
principal (and premium, if any) and, to the extent that payment of such interest
is legally enforceable,  on overdue  installments of interest;  and, in addition
thereto,  all  late  payment  charges  and  fees,  if  any,  prescribed  in such
Obligations  and 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,  shall be  entitled to sue for
and  recover  judgment  against  the  Company  and  any  other  obligor  on  the
Obligations  for the whole  amount so due and  unpaid  and  exercise  such other
rights and  remedies  as may be provided by law or any  agreement  entered  into
pursuant to Section 11.4.

         6.4 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 and,
except as otherwise provided in an Obligation or Supplemental Indenture creating
the Series to which such Obligation belongs, in case of the distribution of such
money  on  account  of  principal  (or  premium,  if  any)  or  interest,   upon
presentation of the Obligations and the notation  thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

                  (a) First: To the payment of all amounts due the Trustee under
Section 7.7;

                  (b) Second:  To the  payment of the  interest,  principal  and
premium (if any) then due on the Obligations, as follows:

                           (i) unless the  principal  of all of the  Obligations
shall have become due and payable,

                                    First:  Interest  - To  the  payment  to the
                           Persons  entitled  thereto  of  all  installments  of
                           interest then due (and, to the extent that payment of
                           such  interest  is legally  enforceable,  interest on
                           overdue installments of interest) on Outstanding Debt

                                       33
<PAGE>

                           Obligations  in the  order  of the  maturity  of such
                           installments,   together   with  accrued  and  unpaid
                           interest on the  Obligations  theretofore  called for
                           redemption   or   prepayment,   and,  if  the  amount
                           available  shall not be sufficient to pay in full any
                           installment  or  installments  maturing  on the  same
                           date, then to the payment thereof ratably,  according
                           to the amounts due thereon,  to the Persons  entitled
                           thereto,  without any  discrimination  or preference;
                           and

                                    Second:   Principal  or  Premium  -  To  the
                           payment to the Persons entitled thereto of the unpaid
                           principal  and  premium  (if any) of any  Outstanding
                           Debt Obligations which shall have become due, whether
                           at   Maturity   or  by   call   for   redemption   or
                           acceleration,  and, if the amount available shall not
                           be  sufficient  to pay in full  all  the  Obligations
                           which  shall have  become  due,  then to the  payment
                           thereof   ratably,   according   to  the  amounts  of
                           principal  and  premium  (if any) due, to the Persons
                           entitled  thereto,   without  any  discrimination  or
                           preference; and

                           (ii) if the principal of all of the Obligations shall
have become due and payable,  to the payment of the principal,  premium (if any)
and interest then due and unpaid upon the Outstanding Debt  Obligations  without
preference  or priority of  principal  and premium (if any) over  interest or of
interest over principal and premium (if any), or of any  installment of interest
over any other  installment  of interest,  or of any  Obligation  over any other
Obligation,  ratably,  according to the amounts due  respectively for principal,
premium (if any) and  interest,  to the  Persons  entitled  thereto  without any
discrimination or preference; and

                  (c) Third:  To the  payment of the  remainder,  if any, to the
Company or to  whosoever  may be  lawfully  entitled to receive the same or as a
court of competent jurisdiction may direct.

         Until such funds are so  distributed,  such funds  shall be invested by
the  Trustee in  overnight  deposits  with  commercial  banks  having a combined
capital and surplus of not less than $500 million or in shares of a money market
mutual fund or other collective  investment fund registered under the Investment
Company Act of 1940,  whose shares are  registered  under the  Securities Act of
1933,  having assets of at least $100 million and having a rating AAAm or AAAm-G
by Standard & Poor's  Ratings  Group,  including  money market mutual funds from
which the  Trustee or its  affiliates  derive a fee for  investment  advisory or
other  services to the fund.  The  interest  or other gains on such  investments
shall be  distributed  by the Trustee as if such  interest or gains were amounts
recovered from the Company.

         6.5 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
Obligations  or the  property of the  Company or of such other  obligor or their
creditors, the Trustee (irrespective of whether the principal of the Obligations
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

                                       34
<PAGE>

the Company for the payment of overdue principal,  premium or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,

                  (a) to file  and  prove  a  claim  for  the  whole  amount  of
principal (and premium,  if any) and interest owing and unpaid in respect of the
Outstanding  Debt  Obligations 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,  its agents and  counsel)  and of the  Holders  allowed in such
judicial proceeding, and

                  (b) 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 to it  for  the  reasonable  compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7.

         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 Obligations
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.

         6.6 Trustee May Enforce Claims Without Possession of Obligations.

         All rights of action and claims under this Indenture or the Obligations
may be prosecuted  and enforced by the Trustee  without the possession of any of
the Obligations 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.  Any  recovery  of judgment  shall,  after
provision   for  the   payment  of  the   reasonable   compensation,   expenses,
disbursements  and advances of the Trustee,  its agents and counsel,  be for the
ratable  benefit  of the  Holders  of the  Obligations  in respect of which such
judgment has been recovered.

         6.7 Limitation on Suits.

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

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

                  (b) the  Holders of not less than 25% in  principal  amount of
the  Obligations  Outstanding  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;

                                       35
<PAGE>

                  (c) such Holder or Holders  (other  than the United  States of
America or its  agencies  or  instrumentalities)  have  offered  to the  Trustee
indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;

                  (d) the  Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity, if any is required pursuant to paragraph
(c), has failed to institute any such proceeding; and

                  (e) 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 Obligations Outstanding;

it being  understood  and intended  that no one or more  Holders of  Obligations
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  Holders of  Obligations,  or to obtain or to seek to obtain  priority  or
preference  over any other Holders or to enforce any right under this Indenture,
except in the manner  herein  provided and for the equal and ratable  benefit of
all Outstanding Debt Obligations.

         6.8 Unconditional  Right of Holders to Receive  Principal,  Premium and
Interest.

         Notwithstanding  any other provision in this  Indenture,  the Holder of
any  Obligation  shall  have the  absolute  and  unconditional  right to receive
payment  of the  principal  of  (and  premium,  if  any)  and  interest  on such
Obligation on the dates provided therefor in such Obligation (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.

         6.9 Restoration of Positions.

         If the Trustee or any Holder has  instituted  any proceeding to enforce
any right or remedy under this Indenture by foreclosure,  entry or otherwise 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  the  Company,   the  Trustee  and  the  Holders  shall,   subject  to  any
determination  in  such  proceeding,  be  restored  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.

         6.10 Rights and Remedies Cumulative.

         Except as otherwise provided in Sections 3.8, 5.3 and 11.3 with respect
to  the  replacement  or  payment  of  mutilated,   destroyed,  lost  or  stolen
Obligations  or the  payment  of  certain  moneys,  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

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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.

         6.11 Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any  Obligation
to exercise any right or remedy  accruing  upon an 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.

         6.12 Control by Holders.

         The  Holders  of a  majority  in  principal  amount of the  Obligations
Outstanding shall have the right, during the continuance of an Event of Default,

                  (a)  to  require  the  Trustee  to  proceed  to  enforce  this
Indenture,  by judicial  proceedings  for the  enforcement of the payment of the
Obligations or otherwise; and

                  (b) 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 upon the Trustee hereunder, PROVIDED that

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

                           (ii) the  Trustee  may take any other  action  deemed
proper by the Trustee which is not inconsistent with such direction, and

                           (iii) the Trustee shall not determine that the action
so directed would be unjustly prejudicial to the Holders not taking part in such
direction.

         6.13 Waiver of Past Defaults.

         Before  any  judgment  or  decree  for  payment  of money  due has been
obtained by the Trustee as  provided  in this  Article,  the Holders of not less
than a majority in principal  amount of the Obligations  Outstanding may, by Act
of such  Holders  delivered  to the  Trustee and the  Company,  on behalf of the
Holders  of all  the  Obligations  waive  any  past  default  hereunder  and its
consequences, except a default:

                  (a) in the payment of the principal of (or premium, if any) or
interest on any Obligation, or

                  (b) in respect of a covenant or  provision  hereof which under
Article 10 cannot be  modified  or amended  without the consent of the Holder of
each Outstanding Obligation affected.

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<PAGE>

         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.

         6.14 Undertaking for Costs.

         All parties to this Indenture  agree, and each Holder of any Obligation
by 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 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 in such suit,  having due regard to the merits and good faith
of the claims or defenses made by such party; but the provisions of this Section
shall not apply to any suit  instituted by the Trustee,  by the United States of
America (or its  agencies or  instrumentalities)  or by any Holder,  or group of
Holders,  holding  in the  aggregate  more than 10% in  principal  amount of the
Obligations  Outstanding,  or to any  suit  instituted  by any  Holder  for  the
enforcement of the payment of the principal of (or premium,  if any) or interest
on any Obligation on or after the respective Stated Maturities expressed in such
Obligation  (or,  in the case of  redemption  or  acceleration,  on or after the
Redemption Date or date of acceleration).

         6.15 Remedies Subject to Applicable Law.

         All  rights,  remedies  and  powers  provided  by this  Article  may be
exercised  only to the extent  that the  exercise  thereof  does not violate any
applicable provision of law, and all the provisions of this Article are intended
to be  subject  to all  applicable  mandatory  provisions  of law  which  may be
controlling  and to be  limited to the  extent  necessary  so that they will not
render this  Indenture  invalid,  unenforceable  or not entitled to be recorded,
registered, or filed under the provisions of any applicable law.

         6.16 Principal Amount of Original Issue Discount Obligation.

         The principal  amount of an Original Issue Discount  Obligation  shall,
for purposes of voting,  directing the time,  place or manner or exercising  any
remedy,  applying moneys,  authenticating and delivering Additional Obligations,
and for all other purposes  hereunder,  be determined in the manner specified in
the Supplemental  Indenture establishing the series to which such Original Issue
Discount Obligation belongs.

         6.17 Default Not Affecting All Series of Obligations.

         If an  Event  of  Default  affecting  the  rights  of  the  Holders  of
Obligations of any one or more series which does not similarly affect the rights
of  Holders  of  all  other  series  of  Obligations  at  the  time  Outstanding
(including,  without limitation, an Event of Default specified in a Supplemental
Indenture  creating  a  series  of  Obligations)  shall  have  occurred  and  be
continuing,   then  whatever  action   (including,   without   limitation,   the
acceleration  of  Obligations  under  Section  6.2, the giving of any request or
direction to the Trustee  under Section 6.7 or 6.12 or the waiver of any default
under Section 6.13) may or shall be taken under this Article upon the occurrence
of such Event of Default by or upon the  request of the  Holders of a  specified
percentage in principal amount of the Obligations then Outstanding, may or shall

                                       38
<PAGE>

be taken in  respect of the  Obligations  then  Outstanding  of the series as to
which such Event of Default  shall have been made, by or upon the request of the
Holders  of the  same  percentage  in  principal  amount  of  such  series  then
Outstanding.

7.       THE TRUSTEE

         7.1 Certain Duties and Responsibilities.

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

                           (i) 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

                           (ii) 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 this Indenture;
but in the case of any such  certificates  or  opinions  which by any  provision
hereof are  specifically  required to be furnished  to the Trustee,  the Trustee
shall  be under a duty to  examine  the same to  determine  whether  or not they
conform to the requirements of this Indenture.

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

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

                           (i) this  paragraph  shall not be  construed to limit
the effect of paragraph (a) above;

                           (ii) 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;

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

                           (iv) no provision of this Indenture shall require the
Trustee  to  expend  or risk its own  funds or  otherwise  incur  any  financial
liability in the performance of any of its duties hereunder,  or in the exercise
of any of its  rights  or  powers,  if it  shall  have  reasonable  grounds  for

                                       39
<PAGE>

believing that repayment of such funds or adequate  indemnity  against such risk
or liability is not reasonably assured to it.

                  (d)  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.

         7.2 Notice of Defaults.

         Within ninety (90) days after the occurrence of any default  hereunder,
the Trustee shall  transmit by mail to all Holders  entitled to receive  reports
pursuant  to  Section  8.3(c),  if  operative,  and  if  Section  8.3(c)  is not
operative,  to all Holders of Obligations as their names and addresses appear in
the Obligation 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,  repayment or  prepayment of the
principal  of (or  premium,  if any) or  interest  on any  Obligation  or in the
payment of any  sinking or  purchase  fund  installment,  the  Trustee  shall be
protected in  withholding  such notice if and so long as the board of directors,
the executive  committee or a trust  committee of directors  and/or  Responsible
Officers of the Trustee in good faith  determine  that the  withholding  of such
notice is in the  interests of the Holders;  and PROVIDED  FURTHER  that, in the
case of any default of the character  specified in Section 6.1(c) or 6.1(d),  no
such  notice to Holders  shall be given until at least sixty (60) 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.

         7.3 Certain Rights of Trustee.

         Except as otherwise provided in Section 7.1:

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

                  (b) any request 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;

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

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

                                       40
<PAGE>

                  (e) the Trustee  shall be under no  obligation to exercise any
of the  rights  or powers  vested  in it by this  Indenture  at the  request  or
direction of any of the Holders pursuant to this Indenture,  unless such Holders
(other than the United  States of America or its agencies or  instrumentalities)
shall have offered to the Trustee security or indemnity reasonably  satisfactory
to the  Trustee  against  the costs,  expenses  and  liabilities  which might be
incurred by it in compliance with such request or direction;

                  (f) the Trustee  shall not be bound to make any  investigation
into the facts or  matters  stated in any  resolution,  certificate,  statement,
instrument,  opinion, report, notice, request, direction,  consent, order, bond,
debenture,  note, other evidence of indebtedness or other paper or document, or,
except as  specifically  provided  herein,  compliance  by the Company  with its
agreements or covenants in this Indenture,  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;

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

                  (h) the  Trustee  shall not be  required  to take notice or be
deemed to have  notice of any  default  (as  defined in Section  7.2)  hereunder
unless the Trustee shall be specifically  notified in writing of such default by
the  Company  or by the  Holder of any  Obligation  as to the  Events of Default
described in paragraph  (a) or (b) of Section 6.1, or by the Holders of not less
than ten percent (10%) in principal amount of the Obligations  Outstanding as to
any other default (as defined in Section 7.2).

         7.4 Not Responsible  for Recitals,  Application of Proceeds or Contents
of Disclosure Materials.

         The  recitals  contained  herein  and in the  Obligations,  except  the
Trustee's  certificate of authentication  on the Obligations,  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  Obligations.  The Trustee shall not be
accountable  for the use or  application  by the Company of  Obligations  or the
proceeds thereof or of any money paid to the Company or upon Company Order under
any provision hereof.  The Trustee shall have no responsibility  with respect to
any  information,  statement  or recital  in any  offering  memorandum  or other
disclosure material prepared or distributed with respect to the Obligations.

         7.5 May Hold Obligations.

         The Trustee,  any Paying Agent,  Obligation  Registrar,  Authenticating
Agent  or any  other  agent  of the  Company,  in its  individual  or any  other
capacity,  may  become  the owner or  pledgee  of  Obligations  and,  subject to
Sections 7.8 and 7.13,  if operative,  may otherwise  deal with the Company with

                                       41
<PAGE>

the same rights it would have if it were not Trustee,  Paying Agent,  Obligation
Registrar, Authenticating Agent or such other agent.

         7.6 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 with the Company and except as provided in the last sentence of
Section 6.4. The Trustee shall have no liability or responsibility  for any loss
or failure to maximize earnings resulting from any investment made in accordance
with the provisions of this Indenture.

         7.7 Compensation and Reimbursement.

         The Company agrees

                  (a)  to  pay  to  the  Trustee  and  each  Paying  Agent  from
time-to-time  such  compensation  as may be  specifically  agreed  upon with the
Trustee or Paying Agent and, absent specific agreement,  reasonable compensation
for all  services  rendered by it  hereunder  (which  compensation  shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);

                  (b)  except  as  otherwise   expressly   provided  herein,  to
reimburse the Trustee and each Paying Agent upon its request for all  reasonable
expenses,  disbursements  and advances incurred or made by the Trustee or Paying
Agent in accordance  with any provision of this  Indenture or as a result of its
performance  of any obligation  under 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 the
Trustee's or Paying Agent's negligence or bad faith; and

                  (c) to indemnify the Trustee and each Paying Agent for, and to
hold it  harmless  against,  any loss,  liability  or expense  incurred  without
negligence or bad faith on its part,  arising out of or in  connection  with the
acceptance or administration  of this trust or its duties  hereunder,  including
the costs and  expenses of  defending  itself  against any claim or liability in
connection  with the  exercise  or  performance  of any of its  powers or duties
hereunder.

All such payments and  reimbursements  shall be made with interest at the "prime
rate" as  quoted  by and in effect  from  time to time by the  Trustee  plus one
percent (1%) per annum (such rate to be recomputed, and as so recomputed to take
effect,  as of the day  immediately  following  the  date on which  the  Trustee
publicly announces any change in its "prime rate").

         7.8 Disqualification; Conflicting Interests.

                  (a) If  the  Trustee  has or  shall  acquire  any  conflicting
interest,   as  defined  in  this  Section  (certain  terms  being  defined  and
percentages calculated as hereinafter stated in this Section), if the default to
which such  conflicting  interest  relates  has not been cured or duly waived or
otherwise eliminated within the ninety (90) day period immediately following the
date on which the Trustee ascertains that it has such conflicting  interest,  it

                                       42
<PAGE>

shall,  within such ninety (90) day period,  either  eliminate such  conflicting
interest or resign in the manner and with the effect  hereinafter  specified  in
this Article.

                  (b) In the event that the  Trustee  shall fail to comply  with
the  provisions of paragraph (a) above the Trustee  shall,  within ten (10) days
after the  expiration  of such ninety (90) day period,  transmit  notice of such
failure to the  Holders in the  manner  and to the  extent  provided  in Section
8.3(c).

                  (c) For the  purposes of this  Section,  the Trustee  shall be
deemed to have a conflicting interest if there is an Event of Default and

                           (i) the Trustee is trustee  under  another  indenture
under which any other  securities,  or certificates of interest or participation
in any other securities, of the Company are outstanding,  or is trustee for more
than one outstanding series of securities,  as hereafter defined, under a single
indenture of the  Company,  unless such other  indenture  is a collateral  trust
indenture under which the only collateral  consists of Obligations  issued under
this Indenture, PROVIDED that there shall be excluded from the operation of this
clause other series under this  Indenture and any indenture or indentures  under
which other  securities,  or certificates of interest or  participation in other
securities, of the Company are outstanding,  if the Company shall have sustained
the burden of proving,  on application  to the Commission and after  opportunity
for  hearing  thereon,  that  trusteeship  under this  Indenture  and such other
indenture or indentures or under more than one outstanding series under a single
indenture is not so likely to involve a material conflict of interest as to make
it  necessary  in the public  interest or for the  protection  of  investors  to
disqualify the Trustee from acting as such under one of such  indentures or with
respect to such series; or

                           (ii) the Trustee or any of its directors or executive
officers is an underwriter for the Company; or

                           (iii) the Trustee directly or indirectly  controls or
is directly or indirectly  controlled  by or is under direct or indirect  common
control with the Company or an underwriter for the Company; or

                           (iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee,  appointee or representative
of the Company,  or of an  underwriter  (other than the Trustee  itself) for the
Company who is currently  engaged in the business of  underwriting,  except that
(A) one  individual may be a director or an executive  officer,  or both, of the
Trustee and a director or an executive officer,  or both, of the Company but may
not be at the  same  time an  executive  officer  of both  the  Trustee  and the
Company;  (B) if and so long as the number of directors of the Trustee in office
is more than nine, one  additional  individual may be a director or an executive
officer,  or both,  of the Trustee and a director  of the  Company;  and (C) the
Trustee may be designated by the Company or by any  underwriter  for the Company
to act in the capacity of transfer agent,  registrar,  custodian,  paying agent,
fiscal agent, escrow agent, or depositary, or in any other similar capacity, or,
subject to the provisions of clause (i) above, to act as trustee,  whether under
an indenture or otherwise; or

                                       43
<PAGE>

                           (v)  10% or  more  of the  voting  securities  of the
Trustee is beneficially owned either by the Company or by any director, partner,
or  executive  officer  thereof,  or 20% or more of such  voting  securities  is
beneficially owned, collectively,  by any two or more of such persons; or 10% or
more of the voting securities of the Trustee is beneficially  owned either by an
underwriter  for the Company or by any  director,  partner or executive  officer
thereof,  or is  beneficially  owned,  collectively,  by any  two or  more  such
persons; or

                           (vi) the Trustee is the beneficial owner of, or holds
as collateral  security for an obligation which is in default (as hereinafter in
this paragraph defined), (A) 5% or more of the voting securities, or 10% or more
of any other class of security,  of the Company not  including  the  Obligations
issued under this  Indenture  and  securities  issued under any other  indenture
under  which the  Trustee  is also  trustee,  or (B) 10% or more of any class of
security of an underwriter for the Company; or

                           (vii)  the  Trustee  is the  beneficial  owner of, or
holds  as  collateral  security  for  an  obligation  which  is in  default  (as
hereinafter in this paragraph  defined),  5% or more of the voting securities of
any person who, to the knowledge of the Trustee,  owns 10% or more of the voting
securities of, or controls directly or indirectly or is under direct or indirect
common control with, the Company; or

                           (viii)  the  Trustee is the  beneficial  owner of, or
holds  as  collateral  security  for  an  obligation  which  is in  default  (as
hereinafter in this paragraph defined),  10% or more of any class of security of
any person who, to the knowledge of the Trustee,  owns 50% or more of the voting
securities of the Company; or

                           (ix) the  Trustee  owns,  upon the  occurrence  of an
Event of Default (or any  occurrence  that would  constitute an Event of Default
upon the lapse of time or  giving of  notice)  or any  anniversary  of such date
while such Event of Default or occurrence remains  outstanding,  in the capacity
of  executor,  administrator,  testamentary  or inter vivos  trustee,  guardian,
committee or conservator,  or in any other similar capacity, an aggregate of 25%
or more of the voting  securities,  or of any class of security,  of any person,
the  beneficial  ownership  of  a  specified  percentage  of  which  would  have
constituted a conflicting interest under clauses (vi), (vii) or (viii) above. As
to any such securities of which the Trustee acquired  ownership through becoming
executor,  administrator,  or  testamentary  trustee of an estate which included
them, the provisions of the preceding  sentence shall not apply, for a period of
two (2)  years  from the  date of such  acquisition,  to the  extent  that  such
securities  included in such estate do not exceed 25% of such voting  securities
or 25% of any such class of  security.  Promptly  after any Event of Default (or
other  occurrence  that would  constitute  an Event of Default upon the lapse of
time or giving of notice) and annually in each succeeding year that any Event of
Default or other occurrence remains outstanding,  the Trustee shall make a check
of its holdings of such securities in any of the  above-mentioned  capacities as
of such dates. If the Company fails to make payment in full of the principal of,
or the premium,  if any, or interest on, any of the Obligations  when and as the
same becomes due and payable,  and such failure  continues  for thirty (30) days
thereafter,  the  Trustee  shall  make a prompt  check of its  holdings  of such
securities  in any of  the  above-mentioned  capacities  as of the  date  of the
expiration of such thirty (30) day period, and after such date,  notwithstanding
the  foregoing  provisions  of this clause,  all such  securities so held by the
Trustee,  with sole or joint control over such  securities  vested in it, shall,

                                       44
<PAGE>

but  only so long as such  failure  shall  continue,  be  considered  as  though
beneficially  owned by the Trustee for the purposes of clauses  (vi),  (vii) and
(viii) above; or

                           (x)  except  under  the  circumstances  described  in
Section 7.13(b), the Trustee shall become a creditor of the Company.

         For purposes of clause (i) above,  the term "series of  securities"  or
"series"  means a  series,  class  or  group  of  securities  issuable  under an
indenture  pursuant to whose terms holders of one such series may vote to direct
the  Trustee,  or  otherwise  take action  pursuant  to a vote of such  Holders,
separately  from  Holders of  another  such  series;  PROVIDED  that  "series of
securities"  or "series"  shall not include  any series of  securities  issuable
under an indenture if all such series rank equally and are wholly unsecured.

         The  specification  of  percentages  in clauses (v) to (ix)  inclusive,
above,  shall  not be  construed  as  indicating  that  the  ownership  of  such
percentages  of the  securities of a person is or is not necessary or sufficient
to  constitute  direct or indirect  control for the  purposes of clause (iii) or
(vii) above.

         For the purposes of clauses  (vi),  (vii),  (viii) and (ix) above only,
(a) the terms "security" and "securities"  shall include only such securities as
are generally known as corporate  securities,  but shall not include any note or
other evidence of indebtedness  issued to evidence an obligation to repay moneys
lent to a person by one or more banks,  trust companies or banking firms, or any
certificate  of  interest  or  participation  in any such  note or  evidence  of
indebtedness;  (b) an  obligation  shall be  deemed  to be "in  default"  when a
default in payment of  principal  shall have  continued  for thirty (30) days or
more and shall not have been cured;  and (c) the Trustee  shall not be deemed to
be the  owner or  holder  of (1) any  security  which  it  holds  as  collateral
security, as trustee or otherwise,  for an obligation which is not in default as
defined above,  or (2) any security which it holds as collateral  security under
this Indenture, irrespective of any default hereunder, or (3) any security which
it holds as agent for collection, or as custodian,  escrow agent, or depositary,
or in any similar representative capacity.

         Except in the case of the failure to pay, repay or prepay the principal
of or  interest  on any  Obligation,  or to pay any  sinking  or  purchase  fund
installment,  on the date on which it  becomes  due,  the  Trustee  shall not be
required to resign as  provided by this  paragraph  if such  Trustee  shall have
sustained the burden of proving,  on  application  to the  Commission  and after
opportunity for hearing thereon, that:

                           (A) the Event of Default  (or other  event that would
constitute  an Event of  Default  upon the  passage of time or giving of notice)
otherwise  giving rise to an obligation by the Trustee to resign may be cured or
waived  during a reasonable  period and under the  procedures  described in such
application, and

                           (B) a stay of the  Trustee's  duty to resign will not
be inconsistent with the interests of Holders of the Obligations.  The filing of
such an  application  shall  automatically  stay the  performance of the duty to
resign until the Commission orders otherwise.

                                       45
<PAGE>

         Any  resignation  of the Trustee shall become  effective  only upon the
appointment of a successor  trustee and such  successor's  acceptance of such an
appointment.

                  (d) For the purposes of this Section:

                           (i) The term  "underwriter"  when used with reference
to the Company  means every person who,  within one year prior to the time as of
which the  determination is made, has purchased from the Company with a view to,
or has offered or sold for the Company in connection  with, the  distribution of
any security of the Company outstanding at such time, or has participated or has
had a  direct  or  indirect  participation  in  any  such  undertaking,  or  has
participated or has had a participation  in the direct or indirect  underwriting
of any such undertaking, but such term shall not include a person whose interest
was limited to a commission  from an  underwriter or dealer not in excess of the
usual and customary distributors' or sellers' commission.

                           (ii) The term  "director"  means  any  director  of a
corporation,  or any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.

                           (iii)  The  term  "person"  means  an  individual,  a
corporation,  a partnership,  an association, a joint-stock company, a trust, an
unincorporated  organization,  or a government or political subdivision thereof.
As used in this clause,  the term "trust"  shall  include only a trust where the
interest or interests of the  beneficiary  or  beneficiaries  are evidenced by a
security.

                           (iv) The term  "voting  security"  means any security
presently  entitling  the owner or holder  thereof to vote in the  direction  or
management of the affairs of a person,  or any security issued under or pursuant
to any trust, agreement or arrangement whereby a trustee or trustees or agent or
agents for the owner or holder of such security are  presently  entitled to vote
in the direction or management of the affairs of a person.

                           (v) The term  "Company"  means any  obligor  upon the
Obligations.

                           (vi)  The  term   "executive   officer"   means   the
president,   every  vice  president,  every  trust  officer,  the  cashier,  the
secretary,  and the treasurer of a corporation,  and any individual  customarily
performing   similar   functions  with  respect  to  any  organization   whether
incorporated or unincorporated,  but shall not include the chairman of the board
of directors.

                  (e) The percentages of voting  securities and other securities
specified in this Section shall be  calculated in accordance  with the following
provisions:

                           (i) A specified  percentage of the voting  securities
of the  Trustee,  the Company or any other  person  referred to in this  Section
(each of whom is referred to as a "person" in this clause)  means such amount of
the  outstanding  voting  securities  of such person as  entitles  the holder or
holders  thereof to cast such specified  percentage of the aggregate votes which
the holders of all the outstanding voting securities of such person are entitled
to cast in the direction or management of the affairs of such person.

                                       46
<PAGE>

                           (ii) A specified  percentage of a class of securities
of a person means such  percentage of the aggregate  amount of securities of the
class outstanding.

                           (iii) The term "amount" means, when used in regard to
securities,  the principal amount if relating to evidences of indebtedness,  the
number of shares if  relating  to  capital  shares,  and the  number of units if
relating to any other kind of security.

                           (iv) The term "outstanding" means issued and not held
by or for the  account of the  issuer.  The  following  securities  shall not be
deemed outstanding within the meaning of this definition:

                                    (A)  securities  of  an  issuer  held  in  a
sinking fund relating to securities of the issuer of the same class;

                                    (B)  securities  of  an  issuer  held  in  a
sinking  fund  relating to another  class of  securities  of the issuer,  if the
obligation  evidenced by such other class of  securities is not in default as to
principal or interest or otherwise;

                                    (C) securities pledged by the issuer thereof
as security  for an  obligation  of the issuer not in default as to principal or
interest or otherwise; and

                                    (D)  securities  held in escrow if placed in
escrow by the issuer thereof;

PROVIDED,  HOWEVER,  that any  voting  securities  of an issuer  shall be deemed
outstanding  if any person  other than the issuer is entitled  to  exercise  the
voting rights thereof.

                           (v) A  security  shall  be  deemed  to be of the same
class as another  security if both securities  confer upon the holder or holders
thereof substantially the same rights and privileges;  PROVIDED,  HOWEVER, that,
in the case of secured evidences of indebtedness,  all of which are issued under
a single  indenture,  differences  in the  interest  rates or maturity  dates of
various series thereof shall not be deemed  sufficient to constitute such series
as  different  classes,  and  PROVIDED  FURTHER  that,  in the case of unsecured
evidences of  indebtedness,  differences in the interest rates or maturity dates
thereof  shall  not be  deemed  sufficient  to  constitute  them  securities  of
different classes, whether or not they are issued under a single indenture.

7.9      Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee  hereunder which (i) shall be (A)
a corporation  organized and doing  business under the laws of the United States
of America, any State or Territory thereof or the District of Columbia, which is
authorized  under such laws to exercise  corporate trust powers,  and subject to
supervision  or  examination  by  Federal,  state,  territorial  or  District of
Columbia  authority,  or (B) a corporation  or other Person  organized and doing
business  under the laws of a foreign  government  and permitted by order of the
Commission to act as a trustee  under an indenture  qualified or to be qualified
under the TIA, which is authorized under the laws of such foreign  government to
exercise  corporate trust powers and is subject to supervision or examination by
authority  of  such  foreign  government  or  a  political  subdivision  thereof

                                       47
<PAGE>

substantially  equivalent to  supervision  or  examination  applicable to United
States  institutional  trustees,  and (ii)  shall have a  combined  capital  and
surplus  of at least  $50,000,000.  If such  corporation  publishes  reports  of
condition  at least  annually,  pursuant to law or to the  requirements  of such
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 shall serve
as Trustee  hereunder.  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.

         7.10 Resignation and Removal; Appointment of Successor.

                  (a)  No   resignation   or  removal  of  the  Trustee  and  no
appointment  of a  successor  Trustee  pursuant  to this  Article  shall  become
effective  until the acceptance of  appointment  by the successor  Trustee under
Section 7.11.

                  (b) The  Trustee  may  resign  at any time by  giving  written
notice  thereof to the Company.  If an  instrument  of acceptance by a successor
Trustee  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.

                  (c) Unless an Event of Default  (or an  occurrence  that would
constitute an Event of Default upon the passage of time or the giving of notice)
exists, the Company may remove the Trustee with or without cause, by delivery to
the Trustee of a Board  Resolution  effecting  such removal.  The Trustee may be
removed with or without cause at any time by Act of the Holders of a majority in
principal amount of the Obligations Outstanding, delivered to the Trustee and to
the Company.

                  (d) If at any time:

                           (i) the  Trustee  shall fail to comply  with  Section
7.8(a) after  written  request  therefor by the Company or by any Holder who has
been a bona fide Holder of an Obligation for at least six (6) months, or

                           (ii) the Trustee  shall  cease to be  eligible  under
Section  7.9 and shall fail to resign  after  written  request  therefor  by the
Company or by any such Holder, or

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

then,  in any such case,  (1) the Company by a Board  Resolution  may remove the
Trustee,  or (2)  subject to Section  6.14,  any Holder who has been a bona fide
Holder of an  Obligation  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 and the appointment of a successor Trustee.

                                       48
<PAGE>

                  (e)  If  the  Trustee  shall  resign,  be  removed  or  become
incapable  of acting,  or if a vacancy  shall occur in the office of Trustee for
any  cause,  the  Company,  by a Board  Resolution,  shall  promptly  appoint  a
successor  Trustee.  In case all or  substantially  all of the  property  of the
Company shall be in the possession of a receiver or trustee lawfully  appointed,
such  receiver  or  trustee,  by written  instrument,  may  similarly  appoint a
successor to fill such vacancy  until a new Trustee shall be so appointed by the
Holders. 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 Obligations  Outstanding
delivered  to the Company and the retiring  Trustee,  the  successor  Trustee so
appointed shall,  forthwith upon its acceptance of such appointment,  become the
successor  Trustee and supersede the successor  Trustee appointed by the Company
or by such  receiver  or trustee.  If no  successor  Trustee  shall have been so
appointed by the Company or the Holders and accepted  appointment  in the manner
hereinafter provided, subject to Section 6.14, the Trustee or any Holder who has
been a bona fide  Holder of an  Obligation  for at least six (6) months  may, on
behalf  of  himself  and all other  similarly  situated,  petition  any court of
competent jurisdiction for the appointment of a successor Trustee.

                  (f) 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 the
Holders of  Obligations  as their names and addresses  appear in the  Obligation
Register  and to the Holders of Notes as their  addresses  have been  previously
provided to the Trustee in writing.  Each notice  shall  include the name of the
successor Trustee and the address of its principal corporate trust office.

         7.11 Acceptance of Appointment by Successor.

         Every successor Trustee appointed hereunder 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 estates,  properties,
rights,  powers,  trusts and duties of the retiring Trustee;  but, on request of
the Company or the successor Trustee,  such retiring Trustee shall, upon payment
of its charges,  execute and deliver an instrument conveying and transferring to
such  successor  Trustee  upon the  trusts  herein  expressed  all the  estates,
properties,  rights,  powers and trusts of the retiring Trustee,  and shall duly
assign,  transfer and deliver to such  successor  Trustee all property and money
held by such  retiring  Trustee  hereunder.  Upon request of any such  successor
Trustee,  the Company shall execute any and all  instruments  for more fully and
certainly  vesting in and confirming to such successor Trustee all such estates,
properties, rights, powers and trusts.

         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, to the extent operative.

         7.12 Merger, Conversion, Consolidation or Succession to Business.

         Any  corporation  into which the Trustee may be merged or  converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust

                                       49
<PAGE>

business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder,
provided such corporation  shall be otherwise  qualified and eligible under this
Article,  to the extent operative,  without the execution or filing of any paper
or any  further  act on the  part of any of the  parties  hereto.  In  case  any
Obligations  shall have been  authenticated,  but not delivered,  by the Trustee
then in office,  any successor by merger,  conversion or  consolidation  to such
authenticating Trustee may adopt such authentication and deliver the Obligations
so  authenticated  with the same effect as if such successor  Trustee had itself
authenticated such Obligations.

         7.13 Preferential Collection of Claims against Company.

                  (a) Subject to paragraph (b) below, if the Trustee shall be or
shall become a creditor,  directly or indirectly,  secured or unsecured,  of the
Company  within three (3) months prior to a default (as defined in paragraph (c)
below),  or  subsequent to such a default,  then,  unless and until such default
shall be cured,  the Trustee  shall set apart and hold in a special  account for
the benefit of the Trustee individually,  the Holders of the Obligations and the
holders of other indenture securities (as defined in paragraph (c) below:

                           (i) an amount equal to any and all  reductions in the
amount due and owing upon any claim as such  creditor in respect of principal or
interest,  effected after the beginning of such three (3) month period and valid
as against  the  Company  and its other  creditors,  except  any such  reduction
resulting from the receipt or  disposition  of any property  described in clause
(ii) below, or from the exercise of any right of set-off which the Trustee could
have  exercised  if a petition  in  bankruptcy  had been filed by or against the
Company upon the date of such default; and

                           (ii) all property  received by the Trustee in respect
of any claim as such creditor,  either as security therefor,  or in satisfaction
or  composition  thereof,  or  otherwise,  after the beginning of such three (3)
month  period,  or an amount  equal to the  proceeds  of any such  property,  if
disposed of,  SUBJECT,  HOWEVER,  to the rights,  if any, of the Company and its
other creditors in such property or such proceeds.

         Nothing  herein  contained,  however,  shall  affect  the  right of the
Trustee:

                                    (A)  to  retain  for  its  own  account  (i)
payments  made on  account  of any such  claim  by any  Person  (other  than the
Company) who is liable  thereon,  and (ii) the proceeds of the bona fide sale of
any such claim by the Trustee to a third person, and (iii) distributions made in
cash,  securities  or other  property  in respect of claims  filed  against  the
Company in  bankruptcy  or  receivership  or in  proceeding  for  reorganization
pursuant to the Federal Bankruptcy Code or applicable state law; or

                                    (B) to realize,  for its own  account,  upon
any property held by it as security for any such claim,  if such property was so
held prior to the beginning of such three (3) month period; or

                                    (C) to  realize,  for its own  account,  but
only to the extent of the claim hereinafter mentioned, upon any property held by
it as security for any such claim, if such claim was created after the beginning
of such three (3) month  period  and such  property  was  received  as  security

                                       50
<PAGE>

therefor  simultaneously  with the creation  thereof,  and if the Trustee  shall
sustain the burden of proving that at the time such property was so received the
Trustee had no  reasonable  cause to believe  that a default  would occur within
three (3) months; or

                                    (D) to receive payment on any claim referred
to in subclause  (B) or (C) above,  against the release of any property  held as
security for such claim as provided in subclause  (B) or (C) above,  as the case
may be, to the extent of the fair value of such property.

         For the  purposes  of  subclauses  (B),  (C) and  (D)  above,  property
substituted after the beginning of such three (3) month period for property held
as security at the time of such  substitution  shall,  to the extent of the fair
value of the property  released,  have the same status as the property released,
and,  to the extent  that any claim  referred  to in any of said  subclauses  is
created in renewal of or in  substitution  for or for the purpose of repaying or
refunding any  pre-existing  claim of the Trustee as such  creditor,  such claim
shall have the same status as such pre-existing claim.

         If the Trustee  shall be required  to account,  the funds and  property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee,  the Holders and the holders of other indenture  securities in such
manner  that the  Trustee,  the  Holders  and the  holders  of  other  indenture
securities  realize,  as a result of  payments  from such  special  account  and
payments of  dividends  on claims  filed  against the Company in  bankruptcy  or
receivership or in proceedings for liquidation or reorganization pursuant to the
Federal  Bankruptcy  Code or applicable  state law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the  receipt by it from the  Company of the funds and  property in
such  special  account  and before  crediting  to the  respective  claims of the
Trustee and the Holders and the holders of other indenture  securities dividends
on claims  filed  against  the  Company  in  bankruptcy  or  receivership  or in
proceedings for liquidation or reorganization pursuant to the Federal Bankruptcy
Code or applicable state law, but after crediting thereon receipts on account of
the indebtedness  represented by their respective  claims from all sources other
than from such dividends and from the funds and property so held in such special
account.  As used  in this  paragraph,  with  respect  to any  claim,  the  term
"dividends"  shall  include any  distribution  with  respect to such  claim,  in
bankruptcy or  receivership or proceedings  for  reorganization  pursuant to the
Federal  Bankruptcy Code or applicable state law,  whether such  distribution is
made in cash,  securities,  or other  property,  but shall not  include any such
distribution  with respect to the secured  portion,  if any, of such claim.  The
court in which such bankruptcy, receivership or proceeding for reorganization is
pending shall have jurisdiction (i) to apportion among the Trustee,  the Holders
and the holders of other indenture securities, in accordance with the provisions
of this  paragraph,  the funds and  property  held in such  special  account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to
give to the provisions of this paragraph due  consideration  in determining  the
fairness of the  distributions to be made to the Trustee and the Holders and the
holders of other indenture  securities with respect to their respective  claims,
in which event it shall not be  necessary  to liquidate or to appraise the value
of any securities or other property held in such special  account or as security
for any such claim, or to make a specific  allocation of such  distributions  as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.

                                       51
<PAGE>

         Any Trustee  which has resigned or been removed  after the beginning of
such three (3) month period shall be subject to the provisions of this paragraph
(a) as though such  resignation or removal had not occurred.  If any Trustee has
resigned or been removed  prior to the beginning of such three (3) month period,
it shall be subject to the  provisions of this  paragraph (a) if and only if the
following conditions exist:

                           (x) the receipt of property  or  reduction  of claim,
which would have given rise to the  obligation  to account,  if such Trustee had
continued  as  Trustee,  occurred  after the  beginning  of such three (3) month
period; and

                           (y) such  receipt of property or  reduction  of claim
occurred within three (3) months after such resignation or removal.

                  (b) there shall be excluded  from the  operation  of paragraph
(a) above a creditor relationship arising from:

                           (i) the ownership or acquisition of securities issued
under any indenture or any security or securities  having a maturity of one year
or more at the time of acquisition by the Trustee; or

                           (ii)  disbursements  made in the  ordinary  course of
business  in the  capacity  of  trustee  under  an  indenture,  transfer  agent,
registrar, custodian, paying agent, fiscal agent or depositary, or other similar
capacity; or

                           (iii) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness  created as a result of goods or
securities sold in a cash transaction (as defined in paragraph (c) below); or

                           (iv) the ownership of stock or of other securities of
a  corporation  organized  under the  provisions of Section 25(a) of the Federal
Reserve  Act, as amended,  which is  directly  or  indirectly  a creditor of the
Company; or

                           (v)  the   acquisition,   ownership,   acceptance  or
negotiation of any drafts,  bills of exchange,  acceptances or obligations which
fall  within  the  classification  of  self-liquidating  paper  (as  defined  in
paragraph (c) below).

                  (c) For the purposes of this Section only:

                           (i) The term  "default"  means  any  failure  to make
payment in full of the  principal  of or interest on any of the  Obligations  or
upon the other  indenture  securities  when and as such  principal  or  interest
become due and payable;

                           (ii)  The term  "other  indenture  securities"  means
securities upon which the Company is an obligor  outstanding (within the meaning
of that term in Section  7.8(e)(iv))  under any other  indenture (A) under which
the Trustee is also trustee, (B) which contains provisions substantially similar
to the  provisions of this Section,  and (C) under which a default exists at the
time of the  apportionment  of the  funds  and  property  held  in such  special
account;

                                       52
<PAGE>

                           (iii)   The  term   "cash   transaction"   means  any
transaction  in which full payment for goods or  securities  sold is made within
seven days after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;

                           (iv)  The term  "self-liquidating  paper"  means  any
draft,  bill of  exchange,  acceptance  or  obligation  which  is  made,  drawn,
negotiated or incurred by the Company for the purpose of financing the purchase,
processing,  manufacturing,  shipment,  storage  or  sale  of  goods,  wares  or
merchandise and which is secured by documents  evidencing  title to,  possession
of, or a lien upon,  the  goods,  wares or  merchandise  or the  receivables  or
proceeds  arising from the sale of the goods,  wares or  merchandise  previously
constituting  the  security,  provided  the  security is received by the Trustee
simultaneously  with the creation of the creditor  relationship with the Company
arising from the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation;

                           (v) The term  "Company"  means any  obligor  upon the
Obligations;

                           (vi) The term "Federal  Bankruptcy  Code" means Title
11 of the United States Code, as it may be amended from time-to-time; and

         7.14 Authenticating Agent.

         The Trustee may appoint an  Authenticating  Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Obligations issued
upon  original  issue and upon  exchange,  registration  of  transfer or partial
redemption  or pursuant to Sections 3.6, 3.7, 3.8 or 12.7,  and  Obligations  so
authenticated  shall be entitled to the benefits of this  Indenture and shall be
valid  and  obligatory  for all  purposes  as if  authenticated  by the  Trustee
hereunder.  Such  Authenticating  Agent  shall  at all  times be a bank or trust
company,  and shall at all times be a corporation  organized and doing  business
under the laws of the United  States or of any state,  territory or the District
of Columbia,  with a combined  capital and surplus of at least  $50,000,000  and
authorized  under such laws to exercise  corporate  trust  powers and subject to
supervision  or  examination  by  Federal,  state,  territorial  or  District of
Columbia authority.  If such corporation publishes reports of condition at least
annually  pursuant to law or the  requirements of such  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.

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

         Any  Authenticating  Agent may at any time  resign  by  giving  written
notice of  resignation  to the Trustee and the  Company.  The Trustee may at any

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<PAGE>

time terminate the agency of any  Authenticating  Agent by giving written notice
of termination to such Authenticating Agent and the Company. Upon receiving such
a notice of resignation  or upon such a termination,  or in case at any time any
Authenticating  Agent shall cease to be eligible under this Section, the Trustee
shall  promptly  appoint a successor  Authenticating  Agent,  shall give written
notice  of such  appointment  to the  Company  and  shall  mail  notice  of such
appointment by first-class mail, postage prepaid,  to all Holders of Obligations
of the  applicable  series as the names and addresses of such Holders  appear on
the Obligation Register.

         If at any time an  Authenticating  Agent  shall cease to be eligible in
accordance with the provisions of this Section,  such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.

         The Trustee agrees to pay to the Authenticating Agent from time-to-time
reasonable  compensation  for its  services  under this  Section and the Trustee
shall be entitled to be reimbursed by the Company for such payments,  subject to
Section 7.7. The provisions of Sections 3.10, 7.4 and 7.5 shall be applicable to
any Authenticating Agent.

         Any successor  Authenticating  Agent upon acceptance of its appointment
hereunder  shall  become  vested with all the  rights,  powers and duties of its
predecessor   hereunder,   with  like  effect  as  if  originally  named  as  an
Authenticating  Agent.  No  successor  Authenticating  Agent shall be  appointed
unless eligible under the provisions of this Section.

         The  Trustee   agrees  to  pay  to  each   Authenticating   Agent  from
time-to-time  reasonable  compensation for its services under this Section,  and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 7.7.

         If an appointment is made pursuant to this Section, the Obligations may
have endorsed thereon,  in lieu of the Trustee's  certificate of authentication,
an alternative certificate of authentication in the following form:

         This  is one  of  the  Obligations  described  in the  within-mentioned
Indenture.

                                  As Trustee

                                  By: ---------------------------------------
                                        As Authenticating Agent

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

8.       HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

         8.1 Company to Furnish Trustee Semi-Annual Lists of Holders.

         The  Company  will  furnish  or cause to be  furnished  to the  Trustee
semiannually,  not less than  forty-five (45) days nor more than sixty (60) days
after  March 15 and  September  15 of each year,  and at such other times as the
Trustee  may request in writing,  within  thirty (30) days after  receipt by the

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<PAGE>

Company of any such request,  a list in such form as the Trustee may  reasonably
require  containing  all the  information  in the  possession  or control of the
Company, or any of its Paying Agents other than the Trustee, as to the names and
addresses of the Holders of Obligations, obtained since the date as of which the
next previous  list,  if any, was  furnished,  EXCLUDING  from any such list the
names and  addresses  received  by the  Trustee in its  capacity  as  Obligation
Registrar.  Any such list may be dated as of a date not more than  fifteen  (15)
days  prior to the time  such  information  is  furnished  and need not  include
information received after such date.

         8.2 Preservation of Information; Communications to Holders.

                  (a) The  Trustee  shall  preserve,  in as current a form as is
reasonably  practicable,  the names and addresses of Holders of Obligations  (i)
contained  in the most  recent  list  furnished  to the  Trustee as  provided in
Section 8.1, (ii) received by the Trustee in the capacity of Paying Agent (if so
acting) hereunder, (iii) filed with the Trustee by Holders of Obligations within
the two (2)  preceding  years as  provided  for in Section  8.3(c)(ii),  or (iv)
received by the Trustee in its capacity as Obligation Registrar.

         The Trustee may (1) destroy any list  furnished to it under Section 8.1
upon receipt of a new list so furnished, (2) destroy any information received by
it as  Paying  Agent  (if so  acting)  hereunder  upon  delivering  to itself as
Trustee, not earlier than forty-five (45) days after each March 15 and September
15 of each year,  a list  containing  the names and  addresses of the Holders of
Obligations  obtained  from  such  information  since the  delivery  of the next
previous list, if any, (3) destroy any list delivered to itself as Trustee which
was  compiled  from  information  received by it as Paying  Agent (if so acting)
hereunder  upon the receipt of a new list so  delivered,  and (4)  destroy,  not
earlier than two (2) years after filing,  any  information as to their names and
addresses  filed with the Trustee by Holders of  Obligations  as provided for in
Section 8.3(c)(ii).

                  (b) If  three  or more  Holders  of  Obligations  (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee  reasonable proof that each such applicant has owned an Obligation 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 of  Obligations  with respect to their  rights  under this  Indenture or
under the Obligations 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

                           (i) afford such applicants  access to the information
preserved at the time by the Trustee in accordance with Section 8.2(a), or

                           (ii) inform  such  applicants  as to the  approximate
number  of  Holders  of  Obligations  whose  names and  addresses  appear in the
information  preserved  at the time by the Trustee in  accordance  with  Section
8.2(a),  and as to the  approximate  cost of mailing to such Holders the form of
proxy or other communication, if any, specified in such application.

                                       55
<PAGE>

         If the Trustee shall elect not to afford such applicants access to such
information,  the Trustee shall,  upon the written  request of such  applicants,
mail to each Holder whose name and address appear in the  information  preserved
at the time by the Trustee in accordance with Section 8.2(a), a copy of the form
of  proxy or  other  communication  which is  specified  in such  request,  with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of such
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 interests of the Holders
of  Obligations  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 Obligations,  by receiving and holding the
same,  agrees with the Company and the Trustee  that neither the Company nor the
Trustee  nor any  Paying  Agent  shall  be held  accountable  by  reason  of the
disclosure of any such  information as to the names and addresses of the Holders
of Obligations in accordance with Section 8.2(b),  regardless of the source from
which such  information  was  derived,  and that the  Trustee  shall not be held
accountable  by reason of mailing any material  pursuant to a request made under
Section 8.2(b).

         8.3 Reports by Trustee.

         This Section shall be operative  only while this  Indenture is required
to be qualified under the TIA.

                  (a) The term "reporting  date" means, as used in this Section,
June 30 in each year,  beginning  with the first June 30 falling on or after the
Release Date.  Within sixty (60) days after the reporting date in each year, the
Trustee shall  transmit to the Holders,  as provided in paragraph  (c) below,  a
brief  report  dated  as of  such  reporting  date  with  respect  to any of the
following  events which may have occurred within the previous twelve (12) months
(but if no such event has  occurred  within  such  period no such report need be
transmitted):

                           (i) any change to its  eligibility  under Section 7.9
and its qualifications under Section 9.8;

                           (ii) the  creation  of or any  material  change  to a
relationship specified in clauses (i) through (x) of Section 7.8(c);

                           (iii) the  character  and amount of any advances (and
if the Trustee  elects so to state,  the  circumstances  surrounding  the making
thereof)  made by the Trustee (as such) which remain  unpaid on the date of such
report,  and for the  reimbursement  of which it  claims  or may claim a lien or

                                       56
<PAGE>

charge,  prior to that of the  Obligations,  on any  property  or funds  held or
collected by it as Trustee,  except that the Trustee  shall not be required (but
may  elect) to  report  such  advances  if such  advances  so  remaining  unpaid
aggregate  not more than 1/2 of 1% of the  principal  amount of the  Obligations
Outstanding on the date of such report;

                           (iv) the amount,  interest  rate and maturity date of
all other  indebtedness  owing by the  Company  (or by any other  obligor on the
Obligations)  to the  Trustee in its  individual  capacity,  on the date of such
report,  with a brief  description  of any property held as collateral  security
therefor,  except an indebtedness based upon a creditor  relationship arising in
any manner described in Section 7.13(b)(ii), (iii) or (v);

                           (v) any change to the  property  and  funds,  if any,
physically in the possession of the Trustee as such on the date of such report;

                           (vi) any additional  issue of  Obligations  which the
Trustee has not previously reported; and

                           (vii)  any  action   taken  by  the  Trustee  in  the
performance of its duties  hereunder  which it has not  previously  reported and
which in its  opinion  materially  affects  the  Obligations,  except  action in
respect  of a  default,  notice  of which has been or is to be  withheld  by the
Trustee in accordance with Section 7.2.

                  (b) The Trustee shall transmit to the Holders,  as provided in
paragraph (c) below,  a brief report with respect to the character and amount of
any  advances  (and  if  the  Trustee  elects  so to  state,  the  circumstances
surrounding  the making thereof) made by the Trustee (as such) since the date of
the last  report  transmitted  pursuant  to  paragraph  (a) above (or if no such
report  has yet  been so  transmitted,  since  the  date  of  execution  of this
instrument)  for the  reimbursement  of which it  claims  or may claim a lien or
charge,  prior to that of the  Obligations,  on any  property  or funds  held or
collected by it as Trustee, and which it has not previously reported pursuant to
this paragraph, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate 10%
or less of the principal  amount of the  Obligations  Outstanding  at such time,
such report to be transmitted within ninety (90) days after such time.

                  (c) Reports  pursuant to this Section shall be  transmitted by
mail:

                           (i) to all Holders of  Obligations,  as the names and
addresses of such Holders appear in the Obligation Register;

                           (ii) to such  Holders  as  have,  within  the two (2)
years  preceding  such  transmission,  filed their names and addresses  with the
Trustee for that purpose; and

                           (iii)  except  in the  case of  reports  pursuant  to
paragraph  (b)  above,  to all  Holders  whose  names  and  addresses  have been
furnished to or received by the Trustee pursuant to Section 8.1.

                  (d) 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 of the  Obligations  are  listed  and also with the  Commission.  The

                                       57
<PAGE>

Company  will notify the Trustee  when the  Obligations  are listed on any stock
exchange.

         8.4 Reports by Company.

         This Section shall be operative  only while this  Indenture is required
to be qualified under the TIA.

         The Company shall:

                  (a) 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 will file with
the  Trustee  and the  Commission,  in  accordance  with  rules and  regulations
prescribed  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 in such rules
and regulations;

                  (b) file with the Trustee and the  Commission,  in  accordance
with  rules  and  regulations  prescribed  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 by such
rules and regulations; and

                  (c) transmit to the Holders of Obligations, within thirty (30)
days after the filing thereof with the Trustee,  in the manner and to the extent
provided in Section 8.3(c) with respect to reports  pursuant to Section  8.3(a),
such summaries of any information, documents and reports required to be filed by
the Company pursuant to paragraphs (a) and (b) above as may be required by rules
and regulations prescribed by the Commission.

9.       CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

         9.1  Consolidation,  Merger,  Conveyance  or  Transfer  only on Certain
Terms.

         The Company shall not  consolidate  with or merge into any other Person
or convey or transfer all or  substantially  all of its properties and assets to
any Person, unless:

                  (a) the Person formed by such  consolidation or into which the
Company is merged or the Person which  acquires by conveyance or transfer all or
substantially  all of the  Company's  properties  and  assets  shall be a Person
organized and validly  existing  under the laws of the United States of America,
any state  thereof or the District of Columbia and shall  execute and deliver to
the  Trustee a  Supplemental  Indenture,  in form  satisfactory  to the  Trustee
containing  an  assumption  by such  successor  Person  of the due and  punctual
payment  of the  principal  of (and  premium,  if any) and  interest  on all the
Obligations  and the  performance and observance of every covenant and condition

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<PAGE>

of this  Indenture  and the  Obligations  to be  performed  or  observed  by the
Company;

                  (b) immediately  after giving effect to such  transaction,  no
Event of Default hereunder shall exist; and

                  (c)  the  Company  shall  have  delivered  to the  Trustee  an
Officers'  Certificate and an Opinion of Counsel, each of which shall state that
such  consolidation,  merger,  conveyance  or  transfer  and  such  Supplemental
Indenture  comply with this  Article and that all  conditions  precedent  herein
provided for relating to such transaction shall be complied with.

         9.2 Successor Person Substituted.

         Upon any  consolidation  or merger in accordance  with Section 9.1, the
successor  Person  formed by such  consolidation  or into  which the  Company is
merged shall succeed to, and be  substituted  for, and may exercise  every right
and power of, the Company under this  Indenture  with the same effect as if such
successor Person had been named as the Company herein.

10.      SUPPLEMENTAL INDENTURES

         10.1 Supplemental Indentures Without Consent of Holders.

         Without  the consent of the Holders of any  Obligations,  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  Supplemental  Indentures,  in form
satisfactory to the Trustee, for any of the following purposes:

                  (a) to add to the conditions,  limitations and restrictions on
the authorized amount,  terms or purposes of issue,  authentication and delivery
of Obligations or of any series of Obligations,  as herein set forth, additional
conditions, limitations and restrictions thereafter to be observed; or

                  (b) to create  any series of  Obligations  and make such other
provisions as provided in Section 3.3; or

                  (c) 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 Obligations contained; or

                  (d) to evidence the  appointment  of any successor  trustee or
separate  trustee or trustees or co-trustee  or  co-trustees  hereunder,  and to
define the  rights,  powers,  duties  and  obligations  conferred  upon any such
separate trustee or trustees or co-trustee or co-trustees; or

                  (e) to add to the  covenants  of the  Company or the Events of
Default for the benefit of the Holders of all or any series of Obligations or to
surrender any right or power herein conferred upon the Company; or

                                       59
<PAGE>

                  (f) to cure  any  ambiguity,  to  correct  or  supplement  any
provision herein which may be inconsistent with any other provision herein or to
make any other  provisions,  with respect to matters or questions  arising under
this  Indenture,  which shall not be  inconsistent  with the  provisions of this
Indenture,  PROVIDED such action shall not adversely affect the interests of the
Holders of the Obligations in any material respect; or

                  (g) to  modify,  eliminate  or add to the  provisions  of this
Indenture to such extent as shall be necessary  to effect the  qualification  of
this  Indenture  under the TIA or under any similar  federal  statute  hereafter
enacted,  and to add to this Indenture such other provisions as may be expressly
permitted by the TIA, EXCLUDING,  HOWEVER, the provisions referred to in Section
316(a)(2)  of the TIA as in effect at the date as of which this  instrument  was
executed or any corresponding provision in any similar federal statute hereafter
enacted; or

                  (h) to add or change any of the  provisions of this  Indenture
to such extent as shall be  necessary  to permit or  facilitate  the issuance of
Obligations  (i) in bearer form,  registrable or not registrable as to principal
and with or without interest coupons or (ii) in book-entry form; or

                  (i)  to  make  any  change  in  the  Indenture  that,  in  the
reasonable judgment of the Trustee, will not materially and adversely affect the
rights  of  Holders.  For  purposes  of  this  paragraph  of this  Section,  any
Supplemental  Indenture will be presumed not to materially and adversely  affect
the rights of the Holders if (1) this Indenture,  as supplemented and amended by
such  Supplemental  Indenture,  provides  equally and ratably for the payment of
principal  of (and  premium,  if  any)  and  interest  on the  Outstanding  Debt
Obligations which are to remain Outstanding and (2) subject to the last sentence
of this  paragraph,  the Company shall furnish to the Trustee  written  evidence
from at least two (2) nationally  recognized  statistical  rating  organizations
then  rating  the  Obligations  (or  other  obligations   primarily  secured  by
Outstanding Debt Obligations)  that their respective  ratings of the Outstanding
Debt  Obligations (or other  obligations  primarily  secured by Outstanding Debt
Obligations) that are not subject to Credit Enhancement will not be withdrawn or
reduced  as  a  result  of  the  changes  in  the  Indenture  effected  by  such
Supplemental Indenture;  PROVIDED,  HOWEVER, that the failure to qualify for the
presumption  set forth in this sentence shall not create any  presumption to the
contrary or be used to  question  the  judgment  of the  Trustee  and  PROVIDED,
FURTHER,  that  the  provisions  of this  paragraph  may not be used to amend or
modify the items listed in paragraphs  (a) through (e) of Section 10.2 hereof in
any way that is  inconsistent  with the  provisions  of such Section  10.2.  The
Trustee  may  rely  on  the  written  evidence  of  the  nationally   recognized
statistical   rating   organizations  then  rating  the  Obligations  (or  other
obligations primarily secured by Outstanding Obligations) with respect to credit
matters  relating to the Company to the extent that it deems such reliance to be
appropriate.

         The Company shall  promptly  give notice to any Credit  Enhancer of any
Supplemental  Indenture  entered into pursuant to the provisions of this Section
10.1.

         10.2 Supplemental Indentures With Consent of Holders.

         With  the  consent  of the  Holders  of not  less  than a  majority  in
principal amount of the Obligations of all series then  Outstanding  affected by

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<PAGE>

such Supplemental Indenture, by Act of such Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into a Supplemental Indenture 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 the
Obligations under this Indenture;  PROVIDED,  HOWEVER, that no such Supplemental
Indenture  shall,  without  the  consent  of  the  Holder  of  each  Outstanding
Obligation affected thereby,

                  (a) change the Stated  Maturity  of the  principal  of, or any
installment  of interest  on, any  Obligation,  or reduce the  principal  amount
thereof or the  interest  thereon or any  premium  payable  upon the  redemption
thereof, or change any Place of Payment where, or the coin or currency in which,
any  Obligation,  or the  interest  thereon is  payable,  or impair the right to
institute  suit for the  enforcement  of any such payment on or after the Stated
Maturity  thereof  (or, in the case of  redemption,  on or after the  Redemption
Date); or

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

                  (c)  modify  or alter the  provisions  of the  proviso  to the
definition of the term "Outstanding"; or

                  (d) modify any of the provisions of this Section,  Section 6.8
or Section  8.13,  except to  increase  any  percentage  provided  thereby or to
provide that certain other  provisions of this  Indenture  cannot be modified or
waived without the consent of the Holder of each Outstanding Obligation affected
thereby; or

                  (e) modify, in the case of Obligations of any series for which
a mandatory sinking fund is provided, any of the provisions of this Indenture in
such  manner as to affect the rights of the Holders of such  Obligations  to the
benefits of such sinking fund; or

(f)      modify or alter Section 6.4 of this Indenture.

         The  Trustee  may in  its  discretion  determine  whether  or  not  any
Obligation  would  be  affected  by any  Supplemental  Indenture  and  any  such
determination  shall be conclusive upon the Holder of all  Obligations,  whether
theretofore or thereafter authenticated and delivered hereunder, and the Trustee
shall  have  no  liability  to  any  Holder  of  any  Obligation  for  any  such
determination made in good faith.

         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.

         10.3 Execution of Supplemental Indentures.

         In  executing,  or  accepting  the  additional  trusts  created by, any
Supplemental  Indenture permitted by this Article or the modification thereby of
the trust created by this  Indenture,  the Trustee shall be entitled to receive,
and,  subject to Section  7.1,  shall be fully  protected  in relying  upon,  an

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<PAGE>

Opinion of Counsel stating that the execution of such Supplemental  Indenture is
authorized  or  permitted  by this  Indenture.  The Trustee  may, but shall not,
except to the extent  required in the case of a Supplemental  Indenture  entered
into under Section  10.1(g),  be obligated to, enter into any such  Supplemental
Indenture which adversely affects the Trustee's own rights, duties or immunities
under this Indenture.

         10.4 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 Obligations  theretofore or thereafter  authenticated and delivered hereunder
shall be bound thereby.

         10.5 Conformity with Trust Indenture Act.

         After qualification of this Indenture under the TIA, every Supplemental
Indenture  executed  pursuant to this Article  thereafter  shall  conform to the
requirements of the TIA as then in effect.

         10.6 Reference in Obligations to Supplemental Indentures.

         Obligations  authenticated  and  delivered  after the  execution of any
Supplemental  Indenture  pursuant to this  Article  may,  and if required by the
Trustee or the Company shall, bear a notation in form approved by the Trustee as
to any matter provided for in such Supplemental  Indenture. If the Company shall
so determine,  new Obligations so modified as to conform,  in the opinion of the
Trustee and the Board of Directors,  to any such  Supplemental  Indenture may be
prepared  and  executed by the Company and  authenticated  and  delivered by the
Trustee in exchange for Outstanding Obligations.

11.      COVENANTS

         11.1 Payment of Principal, Premium and Interest.

         The Company will duly and punctually pay the principal of (and premium,
if any) and  interest on the  Obligations  in  accordance  with the terms of the
Obligations and this Indenture.

         11.2 Maintenance of Office or Agency.

         The Company will  maintain an office or agency in each Place of Payment
where Obligations may be presented or surrendered for payment, where Obligations
entitled to be registered,  transferred, exchanged or converted may be presented
or  surrendered  for  registration,  transfer,  exchange or conversion and where
notices  and demands to or upon the  Company in respect of the  Obligations  and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location,  and of any change in the location,  of any such office
or agency.  If at any time the Company  shall fail to maintain such an office or
agency or shall fail to furnish  the  Trustee  with the  address  thereof,  such
presentations,  surrenders,  notices  and  demands  may be made or served at the
principal corporate trust office of the Trustee, and the Company hereby appoints

                                       62
<PAGE>

the Trustee its agent to receive all such presentations, surrenders, notices and
demands.

         11.3 Money for  Obligation  Payments to be Held in Trust;  Repayment of
Unclaimed Money.

         If the Company shall at any time act as its own Paying Agent,  it will,
on or before each due date of the principal of (and premium, if any) or interest
on any of the  Obligations,  segregate  and hold in trust for the benefit of the
Holders of such  Obligations a sum sufficient to pay the principal (and premium,
if any) or  interest  so  becoming  due until  such  sums  shall be paid to such
Holders or  otherwise  disposed  of as herein  provided,  and the  Company  will
promptly notify the Trustee of its action or failure so to act.

         Whenever  the Company  shall have one or more Paying  Agents,  it will,
prior to each due date of the principal of (and premium,  if any) or interest on
any  Obligations,  deposit  with a  Paying  Agent  a sum  sufficient  to pay the
principal (and premium, if any) or interest so becoming due, such sum to be held
in trust for the  benefit of the  Holders of such  Obligations  entitled to such
principal  (and premium,  if any) or interest,  and (unless such Paying Agent is
the  Trustee)  the  Company  will  promptly  notify the Trustee of its action or
failure so to act.

         Moneys so segregated or deposited and held in trust shall  constitute a
separate trust fund for the benefit of the Persons  entitled to such  principal,
premium or interest.  Except in the case of moneys so  segregated by the Company
when acting as its own Paying Agent,  moneys held in trust by the Trustee or any
other Paying  Agent for the payment of the  principal  (or  premium,  if any) or
interest on the Obligations  need not be segregated from other funds,  except to
the extent required by law.

         The  Company  will cause each  Paying  Agent other than the Company and
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

                  (a) hold all sums held by it for the payment of  principal  of
(and premium, if any) or interest on Obligations in trust for the benefit of the
Holders of such  Obligations  until  such sums  shall be paid to the  Holders or
otherwise disposed of as herein provided;

                  (b) give the Trustee  notice of any default by the Company (or
any  other  obligor  upon the  Obligations)  in the  making  of any  payment  of
principal (and premium, if any) or interest; and

                  (c) 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 money held
in trust by the  Company  or such  Paying  Agent,  such  money to be held by the
Trustee  upon the same  trusts as those  upon  which  such money was held by the
Company or such Paying Agent; and, upon such payment by the Company, the Company

                                       63
<PAGE>

shall be discharged from such trust,  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 held by the
Company in trust for the payment of the  principal of (and  premium,  if any) or
interest on any Obligation and remaining  unclaimed for two (2) years after such
principal (and premium,  if any) or interest has become due and payable shall be
paid to the Company on Company  Request,  or (if then held by the Company) shall
be  discharged  from  such  trust;  and  the  Holder  of such  Obligation  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.

         11.4 Limitations on Security Interests.

         The Company  shall not create,  assume or suffer to exist any  Security
Interest  (as defined  below) on any  property or assets now owned or  hereafter
acquired by the Company without equally and ratably  securing the obligations of
the  Company  to the  Holders  of any and all  Obligations  of any  series  then
Outstanding,  except Security  Interests  securing  amounts not to exceed in the
aggregate  $5,000,000  at any one time  outstanding.  As used  herein,  the term
"Security  Interest"  with respect to any property as assets means any mortgage,
lien,  pledge,  charge,  security  interest or other  encumbrance of any kind in
respect of such  property  or assets  (other  than a lien or  security  interest
arising  by  operation  of law)  securing  repayment  of  borrowed  money or the
obligation  to pay the deferred  purchase  price for  property or services  (but
excluding,  in any  case,  any sale and  leaseback  agreement  or other  similar
agreement).

         11.5 Maintenance of Properties.

         The Company will cause all its properties used or useful in the conduct
of its business to be maintained and kept in good condition,  repair and working
order and supplied  with all  necessary  equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the  judgment  of the Company may be  necessary  so that the  business
carried on in connection therewith may be properly and advantageously  conducted
at all times; PROVIDED,  HOWEVER, that nothing in this Section shall prevent the
Company  from  discontinuing  the  operation  and  maintenance  of  any  of  its
properties if such discontinuance is, in the judgment of the Company,  desirable
in the conduct of its business and not  disadvantageous  in any material respect
to the Holders.

         The  Company  will  promptly  classify,  and  record on its  books,  as
retired,  all property that has  permanently  ceased to be used or useful in the
business of the Company.

         11.6 To Insure.

         The Company  will at all times keep all its  property  of an  insurable
nature and of the  character  usually  insured by  companies  operating  similar
properties,  insured in amounts customarily  carried, and against loss or damage
from such causes as are customarily insured against,  by similar companies.  All
such insurance shall be effected with responsible insurance carriers.

                                       64
<PAGE>

         11.7 Corporate Existence.

         Subject  to  Article  9,  the  Company  will do or cause to be done all
things  necessary  to preserve  and keep in full force and effect its  corporate
existence,  rights  (charter and statutory) and franchises;  PROVIDED,  HOWEVER,
that the Company shall not be required to preserve any right or franchise if the
Board of Directors  shall determine that the  preservation  thereof is no longer
desirable  in the  conduct  of the  business  of the  Company  and that the loss
thereof is not disadvantageous in any material respect to the Holders.

         11.8 To Keep Books; Inspection by Trustee.

         The Company will keep proper books of record and account, in which full
and  correct  entries  shall be made of all  dealings or  transactions  of or in
relation to the Obligations and the plant,  properties,  business and affairs of
the Company in accordance with Accounting  Requirements.  The Company will, upon
reasonable  written  notice by the  Trustee to the Company and at the expense of
the Company, permit the Trustee by its representatives to inspect the plants and
properties,  books of account, records, reports and other papers of the Company,
and to take  copies  and  extracts  therefrom,  and will  afford  and  procure a
reasonable opportunity to make any such inspection, and the Company will furnish
to the Trustee any and all  information as the Trustee may  reasonably  request,
with  respect  to the  performance  by the  Company  of its  covenants  in  this
Indenture;  PROVIDED,  HOWEVER,  the  Company  shall  not be  required  to  make
available any information  supplied to it by a third party which is subject to a
confidentiality agreement with such third party except to the extent allowed by,
and subject to the terms of such confidentiality agreement.

         11.9 Advances by Trustee.

         If the  Company  shall fail to  perform  any of its  covenants  in this
Indenture,  the Trustee may, at any time and from time-to-time,  after notice to
the Company,  make advances to effect performance of any such covenant on behalf
of the Company; and all moneys so used or advanced by the Trustee, together with
interest at the "prime rate" as quoted by and in effect from time to time by the
Trustee plus one percent (1%) per annum (such rate to be  recomputed,  and as so
recomputed to take effect, as of the day immediately following the date on which
the Trustee publicly announces any change in its "prime rate"),  shall be repaid
by the Company upon demand. Nothing contained herein shall be deemed to obligate
the Trustee to advance its own monies for any purpose.

         11.10 Statement as to Compliance.

         The Company will deliver to the Trustee,  within one hundred and twenty
(120) days after the end of each calendar  year, a written  statement  signed by
the  principal  executive  officer  and by the  principal  financial  officer or
principal  accounting  officer  of the  Company  stating  that a  review  of the
Company's  activities has been made under their supervision and that the Company
has fulfilled its obligations hereunder in all material respects.

         Promptly  after any Officer of the Company may  reasonably be deemed to
have knowledge of a default (as defined in Section 7.2)  hereunder,  the Company

                                       65
<PAGE>

will deliver to the Trustee a written notice specifying the nature and period of
existence thereof and the action the Company is taking and proposes to take with
respect thereto.

         Promptly upon becoming  aware of the ownership of any Obligation by any
Affiliate  of the  Company,  any other  obligor  under  such  Obligation  or any
Affiliate of such obligor, the Company shall give the Trustee notice thereof.

         11.11 Waiver of Certain Covenants.

         The  Company  may omit in any  particular  instance  to comply with any
covenant or condition  set forth in this Article  except  Sections  11.1,  11.2,
11.3,  11.7,  11.8,  11.9 and the first  sentence of Section  11.12 if before or
after  the  time for such  compliance  the  Holders  of at least a  majority  in
principal  amount of all  Obligations  then  Outstanding  shall,  by Act of such
Holders,  either waive in writing such  compliance in such instance or generally
waive in writing such  compliance  with such covenant or condition,  but no such
waiver shall extend to or affect such covenant 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
covenant or condition shall remain in full force and effect.

         11.12 Rate Covenant.

         The Company shall establish and collect rates, rents, charges, fees and
other  compensation  (collectively,  "Rates")  for  the  use or the  sale of the
output,  capacity  or service of the System  that,  together  with other  moneys
available to the Company,  produce  moneys  sufficient  to enable the Company to
comply with all its  covenants  under this  Indenture.  Subject to any necessary
regulatory  approval or  determination,  the Company  also shall  establish  and
collect  Rates for the use or the sale of  output,  capacity  or  service of the
System  that,  together  with  other  revenues  available  to the  Company,  are
reasonably  expected to yield  Margins for  Interest for each fiscal year of the
Company equal to at least 1.10 times Interest Charges for such period.  Promptly
upon any material  change in the  circumstances  which were  contemplated at the
time such Rates were most recently  reviewed,  but not less frequently than once
every twelve (12) months,  the Company shall review the Rates so established and
shall  promptly  establish  or revise such Rates as necessary to comply with the
foregoing  requirements,  subject  in the  case  of the  foregoing  Margins  for
Interest requirement to any necessary regulatory approval or determination.

         11.13 Distributions to Members.

         The  Company  shall  not  directly  or  indirectly  declare  or pay any
dividend or make any payments of,  distributions of, or retirements of patronage
capital to its members (each a "Distribution")  if, at the time thereof or after
giving  effect  thereto,  (i) an  Event  of  Default  shall  exist,  or (ii) the
Company's  equities  and  margins  (determined  in  accordance  with  Accounting
Requirements) as of the end of the Company's most recent fiscal quarter would be
less  than  thirty  percent  (30%) of the  Company's  total  long-term  debt and
equities and margins (determined in accordance with Accounting  Requirements) at
such time; provided,  however,  that the Company may, in any fiscal year, make a
Distribution  of up to the  lesser  of (x) five  percent  (5%) of the  Company's
aggregate  margins and equities on the books of the Company as of the end of the

                                       66
<PAGE>

immediately preceding fiscal year or (y) fifty percent (50%) of the prior fiscal
year's  margins  (determined  in accordance  with the  definition of Margins for
Interest). For purposes of this Section,  determination of aggregate margins and
equities and total  long-term  debt and equities shall not include any amount on
account of earnings  retained in any  Subsidiary or Affiliate of the Company and
any such  determination  of total  long-term debt and equities shall exclude the
debt of any Subsidiary or Affiliate.

12.      REDEMPTION OF OBLIGATIONS; SINKING FUNDS

         12.1 Applicability of Sections 12.1 Through 12.7.

         Obligations  which by their express terms are  redeemable  before their
Stated  Maturity shall be redeemable in accordance  with their terms and (except
as otherwise  provided with respect to the Obligations of any particular  series
by  the  provisions  of  a  Supplemental  Indenture  creating  such  series)  in
accordance with Sections 12.1 through 12.7, inclusive.

         12.2 Election to Redeem; Notice to Trustee.

         The  election  of the  Company  to  redeem  any  Obligations  shall  be
evidenced by a Board  Resolution.  In case of any  redemption at the election of
the Company of less than all the  Outstanding  Obligations  of any  series,  the
Company shall, at least  forty-five (45) days prior to the Redemption Date fixed
by the Company  (unless a shorter notice shall be  satisfactory  to the Trustee)
notify  the  Trustee in writing  of such  Redemption  Date and of the  principal
amount of  Obligations  of such series to be redeemed  and of the numbers of any
Outstanding Obligations of such series then owned by the Company.

         If the Obligations of any series to be redeemed  consist of Obligations
having different Stated Maturities or different rates of interest (or methods of
computing  interest),  then the  Company  may,  in the notice  delivered  to the
Trustee  pursuant to this Section,  direct that the Securities of such series to
be  redeemed  shall be selected  from among  groups of such  Obligations  having
specified  Stated  Maturities  or rates of  interest  (or  methods of  computing
interest) and the Trustee shall thereafter select the particular  Obligations to
be redeemed  in the manner set forth below from among the groups of  Obligations
so specified.

         12.3 Selection by Trustee of Obligations to be Redeemed.

         Unless  otherwise  provided in a Supplemental  Indenture  authorizing a
particular series of Obligations,  if less than all the Outstanding  Obligations
of any series or maturity  within a series are to be  redeemed,  the  particular
Obligations to be redeemed shall be selected not more than sixty (60) days prior
to the Redemption Date by the Trustee from the  Outstanding  Obligations of such
series or maturity  within a series  which have not  previously  been called for
redemption by such method as the Trustee shall deem fair and appropriate. In any
such  selection   pursuant  to  this  Section,   the  Trustee  shall  make  such
adjustments,  reallocations  and eliminations as it shall deem proper to the end
that the principal  amount of  Obligations  of such series or maturity  within a
series so  selected  shall be equal to the  greater of $1,000  and the  smallest
authorized  denomination  of the  Obligations  of  such  series,  or a  multiple
thereof,  by  increasing or  decreasing  or  eliminating  the amount which would
otherwise be allocable to any Holder by an amount not  exceeding  such  minimum.
The Trustee in its discretion may determine the particular Obligations (if there

                                       67
<PAGE>

is more than one) registered in the name of any Holder which are to be redeemed,
in whole or in part.  In any case  where  any  Obligations  of such  series  are
registered  in the same  name,  the  Trustee  in its  discretion  may  treat the
aggregate  principal  amount  so  registered  as if it were  represented  by one
Obligation of such series.

         The  Trustee  shall  promptly  notify  the  Company  in  writing of the
Obligations  selected for redemption and, in the case of any Obligation selected
for partial redemption, the principal amount thereof to be redeemed.

         For all  purposes  of this  Indenture,  unless  the  context  otherwise
requires, all provisions relating to the redemption of Obligations shall relate,
in the case of any  Obligation  redeemed or to be redeemed  only in part, to the
portion of the principal of such Obligation which has been or is to be redeemed.

         12.4 Notice of Redemption.

         Except as otherwise  provided in a  Supplemental  Indenture,  notice of
redemption shall be given by first-class mail, postage prepaid,  mailed not less
than thirty (30) nor more than sixty (60) days prior to the Redemption  Date, to
each  Holder of  Obligations  of such  series  to be  redeemed,  at his  address
appearing in the Obligation Register.

         Except as otherwise provided in a Supplemental  Indenture,  all notices
of redemption-shall state:

                  (a)  the  CUSIP  number  (if  any)  of all  Obligations  to be
redeemed,

                  (b) the Redemption Date,

                  (c) the Redemption Price,

                  (d) the principal  amount of  Obligations of each series to be
redeemed,  and, if less than all  Outstanding  Obligations of a series are to be
redeemed,  the  identification  (and,  in the case of  partial  redemption,  the
respective principal amounts) of the Obligations of such series to be redeemed,

                  (e) that on the Redemption  Date the Redemption  Price of each
of the  Obligations  to be  redeemed  will  become due and  payable and that the
interest  thereon shall cease to accrue from and after said  Redemption  Date if
the Redemption Price is then paid,

                  (f) the place or places where the  Obligations  of each series
to be redeemed are to be surrendered for payment of the Redemption Price,  which
shall be the office or agency of the  Company in each Place of Payment  for such
series, and

                  (g) if it be the case,  that  such  redemption  is to  satisfy
sinking fund requirements.

                                       68
<PAGE>

         Notice of redemption of  Obligations  to be redeemed at the election of
the Company shall be given by the Company or, at the Company's  request,  by the
Trustee in the name and at the expense of the Company.

         12.5 Deposit of Redemption Price.

         Prior to any  Redemption  Date,  the  Company  shall  deposit  with the
Trustee or with a Paying  Agent (or,  if the Company is acting as its own Paying
Agent,  segregate  and hold in trust as provided  in Section  11.3) an amount of
money sufficient to pay the Redemption Price of all the Obligations which are to
be redeemed  on that date.  Such money shall be held in trust for the benefit of
the Persons entitled to such Redemption Price.

         Subject to the requirements of any Supplemental Indenture,  the Company
may  determine  what  sinking  fund  requirements  (if  any) to  apply  redeemed
Obligations against.

         12.6 Obligations Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Obligations so
to be redeemed  shall,  on the  Redemption  Date,  become due and payable at the
Redemption  Price  therein  specified  and from and after such date  (unless the
Company shall default in the payment of the Redemption  Price) such  Obligations
shall  cease  to bear  interest.  Upon  surrender  of any  such  Obligation  for
redemption in accordance with said notice or compliance with such other terms as
may be provided in any Supplemental  Indenture relating thereto, such Obligation
shall be paid by the Company at the Redemption  Price.  Installments of interest
with a Stated  Maturity on or prior to the  Redemption  Date shall be payable to
the Holders of the  Obligations  registered as such on the relevant Record Dates
according to the terms of such Obligations and the provisions of Section 3.9.

         If any  Obligation  called  for  redemption  shall  not be so paid upon
surrender thereof for redemption or as otherwise  provided under Section 12.7 in
lieu of surrender,  the principal (and premium,  if any) shall, until paid, bear
interest  from  the  Redemption  Date at the  rate  prescribed  therefor  in the
Obligation.

         12.7 Obligations Redeemed in Part.

         Unless otherwise provided in any Supplemental Indenture, any Obligation
which is to be redeemed only in part shall be  surrendered at a Place of Payment
therefor (with,  if the Company or the Trustee so requires,  due endorsement by,
or a written  instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly  authorized in
writing) and the Company shall execute and the Trustee  shall  authenticate  and
deliver  to the  Holder  of  such  Obligation,  without  service  charge,  a new
Obligation  or  Obligations  of the same series and  maturity of any  authorized
denomination or denominations as requested by such Holder in aggregate principal
amount equal to and in exchange for the  unredeemed  portion of the principal of
the Obligation so surrendered.

         In lieu of  surrender  under the  preceding  paragraph,  payment of the
Redemption  Price of a portion of any Obligation  held in the Book-Entry  System
may be made directly to the Holder thereof  without  surrender  thereof if there
shall have been filed with the Trustee  either (i) a written  agreement  between

                                       69
<PAGE>

the Company  and such  Holder  and, if such Holder is a nominee,  the Person for
whom  such  Holder is a  nominee,  that  payment  shall be so made and that such
Holder will not sell,  transfer or otherwise  dispose of such Obligation  unless
prior to delivery  thereof such Holder  shall  present  such  Obligation  to the
Trustee for notation thereon of the portion of the principal thereof redeemed or
shall  surrender such Obligation in exchange for a new Obligation or Obligations
for the  unredeemed  balance of the principal of the  surrendered  Obligation or
(ii) a  certificate  of the Company that such an agreement has been entered into
and remains in force.

         12.8 Applicability of Sections 12.8 Through 12.10.

         The  provisions of Sections  12.8 through  12.10,  inclusive,  shall be
applicable  to any sinking  fund for the  retirement  of  Obligations  except as
otherwise  specified  as  contemplated  by  Section  3.3  for  Obligations  of a
particular series.

         The minimum  amount of any sinking  fund  payment  provided  for by the
terms of Obligations of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount  provided for by
the terms of  Obligations  of any series is herein  referred to as an  "optional
sinking  fund  payment."  If  provided  for by the terms of  Obligations  of any
series,  the cash amount of any sinking fund payment may be subject to reduction
as provided in Section  12.9.  Each sinking fund payment shall be applied to the
redemption  of  Obligations  of any  series  as  provided  for by the  terms  of
Obligations of such series.

         12.9 Satisfaction of Sinking Fund Payments with Obligations.

         The Company (1) may deliver Outstanding  Obligations of a series (other
than any  previously  called for  redemption)  and (2) may  apply,  as a credit,
Obligations  of a series which have been redeemed  either at the election of the
Company  pursuant to the terms of such Obligations or through the application of
permitted  optional  sinking  fund  payments  pursuant  to  the  terms  of  such
Obligations, in each case in satisfaction of all or any part of any sinking fund
payment  with  respect to the  Obligations  of such  series  required to be made
pursuant to the terms of such  Obligations  as provided for by the terms of such
series;  PROVIDED that such  Obligations  have not been  previously so credited.
Such Obligations  shall be received and credited for such purpose by the Trustee
at the Redemption  Price specified in such  Obligations  for redemption  through
operation of the sinking fund and the amount of such sinking fund payment  shall
be reduced accordingly.

         12.10 Redemption of Obligations for Sinking Fund.

         Not less than sixty (60) days prior to each  sinking  fund payment date
for any series of  Obligations,  the  Company  will  deliver  to the  Trustee an
Officers'  Certificate  specifying  the amount of the next ensuing  sinking fund
payment  for that  series  pursuant  to the terms of that  series,  the  portion
thereof,  if any,  which is to be  satisfied  by payment of cash and the portion
thereof,  if  any,  which  is  to  be  satisfied  by  delivering  and  crediting
Obligations of that series pursuant to Section 12.9 and will also deliver to the
Trustee  any  Obligations  to be so  delivered.  Not less than  thirty (30) days
before  each such  sinking  fund  payment  date the  Trustee  shall  select  the
Obligations  to be redeemed  upon such  sinking  fund payment date in the manner

                                       70
<PAGE>

specified in Section 12.3 and cause notice of the redemption thereof to be given
in the name of and at the  expense  of the  Company in the  manner  provided  in
Section  12.4.  Such  notice  having  been duly given,  the  redemption  of such
Obligations  shall be made upon the terms and in the manner  stated in  Sections
12.6 and 12.7.

                                  " " " " " " "

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

                                       71
<PAGE>

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

                                             CHUGACH ELECTRIC ASSOCIATION, INC.,
                                             an Alaska electric cooperative

                                             By:
                                                --------------------------------
                                                Name:
                                                      --------------------------
                                                Title:
                                                      --------------------------

                                       72
<PAGE>

                                             U.S.     BANK    TRUST     NATIONAL
                                             ASSOCIATION,
                                             a national banking association,
                                             as Trustee

                                             By:
                                                --------------------------------
                                                Name:
                                                      --------------------------
                                                Title:
                                                      --------------------------

                                       73
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>      <C>                                                                                                    <C>
 RECITALS OF THE COMPANY..........................................................................................1

 1.      DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................2
         1.1      Definitions....................................................................................2
         1.2      Acts of Holders...............................................................................12
         1.3      Notices, etc., to Trustee and Company.........................................................13
         1.4      Notices to Holders; Waiver....................................................................13
         1.5      Form and Contents of Documents Delivered to Trustee...........................................13
         1.6      Compliance Certificates and Opinions..........................................................15
         1.7      Conflict with Trust Indenture Act.............................................................15
         1.8      Effect of Headings and Table of Contents......................................................15
         1.9      Successors and Assigns........................................................................16
         1.10     Severability Clause...........................................................................16
         1.11     Benefits of Indenture.........................................................................16
         1.12     Governing Law.................................................................................16
         1.13     Action by Credit Enhancer When Action by Holders Required.....................................16
         1.14     Bank Holidays.................................................................................16
         1.15     Maturity of Obligations.......................................................................17
         1.16     Acceptance of Trust by Trustee................................................................17
         1.17     Investment of Cash Held by Trustee............................................................17
         1.18     Principal Amount of Obligations Other than Bonds..............................................17

 2.      OBLIGATION FORMS.......................................................................................17
         2.1      Forms of Additional Obligations Generally.....................................................17
         2.2      Form of Trustee's Certificate of Authentication for Pre-Existing Bonds........................18
         2.3      Form of Trustee's Certificate of Authentication for Additional Obligations....................19

 3.      THE OBLIGATIONS........................................................................................19
         3.1      Terms and Forms of Pre-Existing Bonds.........................................................19
         3.2      General Limitations; Issuable in Series.......................................................19
         3.3      Terms of Particular Series....................................................................20
         3.4      Denominations.................................................................................21
         3.5      Execution, Authentication, Delivery and Dating................................................21
         3.6      Temporary Obligations.........................................................................22
         3.7      Registration; Registration of Transfer and Exchange...........................................22
         3.8      Mutilated, Destroyed, Lost and Stolen Obligations.............................................23
         3.9      Payment of Interest; Interest Rights Preserved................................................24
         3.10     Persons Deemed Owners.........................................................................25

 4.      AUTHENTICATION AND DELIVERY OF ADDITIONAL OBLIGATIONS..................................................25

 5.      DEFEASANCE.............................................................................................26

                                       i
<PAGE>

         5.1      Termination of Company's Obligations..........................................................26
         5.2      Application of Deposited Money and Money From Defeasance Securities...........................29
         5.3      Repayment to Company..........................................................................29
         5.4      Reinstatement.................................................................................30

 6.      EVENTS OF DEFAULT AND REMEDIES.........................................................................30
         6.1      Events of Default.............................................................................30
         6.2      Acceleration of Maturity; Rescission and Annulment............................................32
         6.3      Covenant to Pay Trustee Amounts Due on Obligations and Right of Trustee to Judgment...........33
         6.4      Application of Money Collected................................................................33
         6.5      Trustee May File Proofs of Claim..............................................................34
         6.6      Trustee May Enforce Claims Without Possession of Obligations..................................35
         6.7      Limitation on Suits...........................................................................35
         6.8      Unconditional Right of Holders to Receive Principal, Premium and Interest.....................36
         6.9      Restoration of Positions......................................................................36
         6.10     Rights and Remedies Cumulative................................................................36
         6.11     Delay or Omission Not Waiver..................................................................37
         6.12     Control by Holders............................................................................37
         6.13     Waiver of Past Defaults.......................................................................37
         6.14     Undertaking for Costs.........................................................................38
         6.15     Remedies Subject to Applicable Law............................................................38
         6.16     Principal Amount of Original Issue Discount Obligation........................................38
         6.17     Default Not Affecting All Series of Obligations...............................................38

 7.      THE TRUSTEE  39
         7.1      Certain Duties and Responsibilities...........................................................39
         7.2      Notice of Defaults............................................................................40
         7.3      Certain Rights of Trustee.....................................................................40
         7.4      Not Responsible for Recitals, Application of Proceeds or Contents of Disclosure
                  Materials.....................................................................................41
         7.5      May Hold Obligations..........................................................................41
         7.6      Money Held in Trust...........................................................................42
         7.7      Compensation and Reimbursement................................................................42
         7.8      Disqualification; Conflicting Interests.......................................................42
         7.9      Corporate Trustee Required; Eligibility.......................................................47
         7.10     Resignation and Removal; Appointment of Successor.............................................48
         7.11     Acceptance of Appointment by Successor........................................................49
         7.12     Merger, Conversion, Consolidation or Succession to Business...................................49
         7.13     Preferential Collection of Claims against Company.............................................50
         7.14     Authenticating Agent..........................................................................53

 8.      HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY......................................................54
         8.1      Company to Furnish Trustee Semi-Annual Lists of Holders.......................................54
         8.2      Preservation of Information; Communications to Holders........................................55
         8.3      Reports by Trustee............................................................................56

                                       ii
<PAGE>

         8.4      Reports by Company............................................................................58

 9.      CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER..........................................................58
         9.1      Consolidation, Merger, Conveyance or Transfer only on Certain Terms...........................58
         9.2      Successor Person Substituted..................................................................59

 10.     SUPPLEMENTAL INDENTURES................................................................................59
         10.1     Supplemental Indentures Without Consent of Holders............................................59
         10.2     Supplemental Indentures With Consent of Holders...............................................60
         10.3     Execution of Supplemental Indentures..........................................................61
         10.4     Effect of Supplemental Indentures.............................................................62
         10.5     Conformity with Trust Indenture Act...........................................................62
         10.6     Reference in Obligations to Supplemental Indentures...........................................62

 11.     COVENANTS    62
         11.1     Payment of Principal, Premium and Interest....................................................62
         11.2     Maintenance of Office or Agency...............................................................62
         11.3     Money for Obligation Payments to be Held in Trust; Repayment of Unclaimed Money...............63
         11.4     Limitations on Security Interests.............................................................64
         11.5     Maintenance of Properties.....................................................................64
         11.6     To Insure.....................................................................................64
         11.7     Corporate Existence...........................................................................65
         11.8     To Keep Books; Inspection by Trustee..........................................................65
         11.9     Advances by Trustee...........................................................................65
         11.10    Statement as to Compliance....................................................................65
         11.11    Waiver of Certain Covenants...................................................................66
         11.12    Rate Covenant.................................................................................66
         11.13    Distributions to Members......................................................................66

 12.     REDEMPTION OF OBLIGATIONS; SINKING FUNDS...............................................................67
         12.1     Applicability of Sections 12.1 Through 12.7...................................................67
         12.2     Election to Redeem; Notice to Trustee.........................................................67
         12.3     Selection by Trustee of Obligations to be Redeemed............................................67
         12.4     Notice of Redemption..........................................................................68
         12.5     Deposit of Redemption Price...................................................................69
         12.6     Obligations Payable on Redemption Date........................................................69
         12.7     Obligations Redeemed in Part..................................................................69
         12.8     Applicability of Sections 12.8 Through 12.10..................................................70
         12.9     Satisfaction of Sinking Fund Payments with Obligations........................................70
         12.10    Redemption of Obligations for Sinking Fund....................................................70

</TABLE>

                                      iiiAMENDATORY AGREEMENT NO. 1

                                       TO

              AGREEMENT FOR THE SALE AND PURCHASE OF NONFIRM ENERGY
                                     BETWEEN
                       CHUGACH ELECTRIC ASSOCIATION, INC.,
                                       AND
                    GOLDEN VALLEY ELECTRIC ASSOCIATION, INC.
                               DATED MAY 18, 1988

WHEREAS,  Chugach  Electric  Association  ("Chugach") and Golden Valley Electric
Association  ("GVEA")  entered  into an  Agreement  for the Sale and Purchase of
Nonfirm Energy dated May 18, 1989 ("Agreement");

WHEREAS,  Chugach and Marathon  desire to modify the Agreement to facilitate its
approval by the Rural Electrification Administration;

NOW, THEREFORE,  in consideration of the mutual agreements contained herein, the
Parties agree as follows:

         Section 10(a)(1) of the Agreement is amended to read:

                  (1) Establish, and from time to time revise, written operating
                  procedures and standard practices consistent with the terms of
                  this  Agreement  to be  followed  by the  parties'  respective
                  dispatchers.

         Section 20 is amended to read as follows:

                  This  Agreement  and all of the  terms and  provisions  hereof
                  shall  be  binding  upon  and  inure  to  the  benefit  of the
                  respective  successors and assigns of the parties hereto, save
                  that no assignment or other  transfer of this agreement or any
                  interest  hereunder  by any party  hereto  shall be  effective
                  without  the prior  written  consent of the other  party which
                  consent shall not be unreasonably withheld), and said assignee
                  must,  in the  commercially  reasonable  opinion  of the other
                  party,  be financially  capable of assuming such  obligations.
                  This article  shall not prevent  either party from pledging or
                  mortgaging   its  rights   hereunder   of  security   for  its
                  indebtedness or prevent a financing entity from exercising all
                  rights and  remedies  available  to it under law or  contract,
                  provided  that  performance  of this  Agreement is not thereby
                  impaired.

                  Notwithstanding  the foregoing  provisions of this Section 20,
                  either party hereto may assign this  Agreement,  together with
                  all its rights and obligations thereunder,  (i) to or in trust
                  for REA for the purpose of securing  obligations  for borrowed

                                                                     Page 1 of 2
<PAGE>

                  money,  or (ii)  pursuant to the exercise by REA of any of the
                  rights,  powers or privileges provided for by the mortgages or
                  other security  instruments of such party for borrowed  money;
                  provided that if REA  exercises  any of the rights,  powers or
                  privileges of said mortgages or other security  instruments of
                  such party with respect to this Agreement,  then and only then
                  shall REA assume the  obligations  to be performed  under this
                  Agreement by such party,  as provided  for in this  Agreement;
                  provided,  further, that in the event REA exercises any of its
                  rights,  powers,  or privileges  under said mortgages or other
                  security  instruments  of  such  party  with  respect  to this
                  Agreement, REA may thereafter assign this Agreement,  together
                  with all the rights and obligations thereunder,  to any entity
                  authorized  and able to  perform  the  obligations  and duties
                  under this Agreement, which entity shall assume all the rights
                  and obligations of such party under this  Agreement,  and such
                  assignment and  assumption  shall release REA from any further
                  liability,  obligations or duties under this Agreement.  Prior
                  to the exercise by REA of any rights  under said  mortgages or
                  security  agreements  with  respect  to  this  Agreement,   as
                  provided for in the preceding sentence of this Section 20, REA
                  shall give the  parties  reasonable  notice that it intends to
                  exercise  such rights or remedies.  The  provisions of the two
                  preceding  sentences of this Section 20 shall be applicable to
                  each party to this  Agreement  as long as such  party  remains
                  indebted to REA.

CHUGACH ELECTRIC ASSOCIATION,                     GOLDEN VALLEY ELECTRIC
INC.                                              ASSOCIATION, INC.

By      /s/ David L. Highers                       By      /s/ Mike Kelly
   --------------------------                         --------------------------
        David L. Highers,                                  Mike Kelly,
        General Manager                                    General Manager

Dated        12/14/89                              Dated     12-14-89
      ---------------------                              ---------------------

                                                                     Page 2 of 2

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