Document:

Exhibit 4.7

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                                 XL CAPITAL LTD

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION,

                                     Trustee

                                   ----------

                                    INDENTURE

                          Dated as of January 23, 2003

                                   ----------

                   Subordinated Deferrable Interest Debentures

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                        CROSS-REFERENCE TABLE
  TIA                                                                 INDENTURE
SECTION                                                                SECTION

  310    (a)(1).......................................................   7.10
         (a)(2).......................................................   7.10
         (a)(3).......................................................   N.A.
         (a)(4).......................................................   N.A.
         (b)..........................................................   7.08;
                                                                         7.10
         (c)..........................................................   N.A.
  311    (a)..........................................................   7.11
         (b)..........................................................   7.11
         (c)..........................................................   N.A.
  312    (a)..........................................................   2.07
         (b)..........................................................   N.A.
         (c)..........................................................   N.A.
  313    (a)..........................................................   7.06
         (b)(1).......................................................   N.A.
         (b)(2).......................................................   7.06
         (c)..........................................................   N.A.
         (d)..........................................................   7.06
  314    (a)..........................................................   4.02
         (b)..........................................................   N.A.
         (c)(1).......................................................   N.A.
         (c)(2).......................................................   N.A.
         (c)(3).......................................................   N.A.
         (d)..........................................................   N.A.
         (e)..........................................................   11.05
         (f)..........................................................   N.A.
  315    (a)..........................................................   7.01(b)
         (b)..........................................................   7.05
         (c)..........................................................   7.01(a)
         (d)..........................................................   7.01(c)
         (e)..........................................................   6.11
  316    (a)(last sentence)...........................................   N.A.
         (a)(1)(A)....................................................   6.05
         (a)(1)(B)....................................................   6.04
         (a)(2).......................................................   N.A.
         (b)..........................................................   6.07
  317    (a)(1).......................................................   6.08
         (a)(2).......................................................   6.09
         (b)..........................................................   2.06
  318    (a)..........................................................   N.A.

----------
N.A. means Not Applicable.
This Cross-Reference Table does not constitute part of the Indenture

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                                TABLE OF CONTENTS

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ARTICLE ONE  DEFINITIONS AND INCORPORATION BY REFERENCE........................1

SECTION 1.01.   Definitions....................................................1
SECTION 1.02.   Other Definitions..............................................4
SECTION 1.03.   Incorporation by Reference of Trust Indenture Act..............4
SECTION 1.04.   Rules of Construction..........................................5

ARTICLE TWO  THE SECURITIES....................................................5

SECTION 2.01.   Forms Generally and Dating.....................................5
SECTION 2.02.   Amount Unlimited; Issuable in Series...........................6
SECTION 2.03.   Denominations..................................................9
SECTION 2.04.   Execution and Authentication..................................10
SECTION 2.05.   Registrar and Paying Agent....................................13
SECTION 2.06.   Paying Agent to Hold Money and Securities in Trust............13
SECTION 2.07.   Securityholder Lists..........................................14
SECTION 2.08.   Transfer and Exchange.........................................14
SECTION 2.09.   Replacement Securities........................................17
SECTION 2.10.   Outstanding Securities........................................18
SECTION 2.11.   Temporary Securities..........................................19
SECTION 2.12.   Cancellation..................................................20
SECTION 2.13.   Payment of Interest; Defaulted Interest.......................20
SECTION 2.14.   Persons Deemed Owners.........................................21
SECTION 2.15.   Securities in Global Form.....................................21
SECTION 2.16.   CUSIP Numbers.................................................23

ARTICLE THREE  REDEMPTION.....................................................23

SECTION 3.01.   Applicability of Article......................................23
SECTION 3.02.   Notices to Trustee............................................23
SECTION 3.03.   Selection of Securities to be Redeemed........................24
SECTION 3.04.   Notice of Redemption..........................................25
SECTION 3.05.   Effect of Notice of Redemption................................26
SECTION 3.06.   Deposit of Redemption Price...................................26
SECTION 3.07.   Securities Redeemed in Part...................................26

ARTICLE FOUR  COVENANTS.......................................................27

SECTION 4.01.   Payment of Securities.........................................27
SECTION 4.02.   SEC Reports...................................................27

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SECTION 4.03.   Compliance Certificate........................................27
SECTION 4.04.   Corporate Existence...........................................28
SECTION 4.05.   Calculation of Original Issue Discount........................28

ARTICLE FIVE  SUCCESSOR CORPORATION...........................................28

SECTION 5.01.   When Company May Merge, etc...................................28

ARTICLE SIX  DEFAULTS AND REMEDIES............................................29

SECTION 6.01.   Events of Default.............................................29
SECTION 6.02.   Acceleration..................................................30
SECTION 6.03.   Other Remedies................................................31
SECTION 6.04.   Waiver of Existing Defaults...................................32
SECTION 6.05.   Control by Majority...........................................32
SECTION 6.06.   Limitation of Suits...........................................32
SECTION 6.07.   Rights of Holders to Receive Payment and to Convert...........33
SECTION 6.08.   Collection Suit by Trustee....................................33
SECTION 6.09.   Trustee May File Proofs of Claim..............................33
SECTION 6.10.   Priorities....................................................34
SECTION 6.11.   Undertaking for Costs.........................................34

ARTICLE SEVEN  TRUSTEE........................................................35

SECTION 7.01.   Duties of Trustee.............................................35
SECTION 7.02.   Rights of Trustee.............................................36
SECTION 7.03.   Individual Rights of Trustee..................................37
SECTION 7.04.   Trustee's Disclaimer..........................................37
SECTION 7.05.   Notice of Defaults............................................37
SECTION 7.06.   Reports by Trustee to Holders.................................38
SECTION 7.07.   Compensation and Indemnity....................................38
SECTION 7.08.   Replacement of Trustee........................................39
SECTION 7.09.   Successor Trustee by Merger, etc..............................40
SECTION 7.10.   Eligibility; Disqualification.................................40
SECTION 7.11.   Preferential Collection of Claims Against Company.............41
SECTION 7.12.   Trustee's Application for Instructions from the Company.......41

ARTICLE EIGHT  DISCHARGE OF INDENTURE.........................................41

SECTION 8.01.   Termination of Company's Obligations..........................41
SECTION 8.02.   Application of Trust Fund.....................................43
SECTION 8.03.   Repayment to Company..........................................43

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ARTICLE NINE  AMENDMENTS, SUPPLEMENTS AND WAIVERS.............................43

SECTION 9.01.   Without Consent of Holders....................................43
SECTION 9.02.   With Consent of Holders.......................................44
SECTION 9.03.   Compliance with the Trust Indenture Act.......................46
SECTION 9.04.   Revocation and Effect of Consents.............................46
SECTION 9.05.   Notation on or Exchange of Securities.........................46
SECTION 9.06.   Trustee to Sign Amendments, etc...............................46

ARTICLE TEN  SUBORDINATION....................................................47

SECTION 10.01.  Subordination Terms...........................................47

ARTICLE ELEVEN  MISCELLANEOUS.................................................47

SECTION 11.01.  Trust Indenture Act Controls..................................47
SECTION 11.02.  Notices.......................................................47
SECTION 11.03.  Communication by Holders with Other Holders...................48
SECTION 11.04.  Certificate and Opinion as to Conditions Precedent............49
SECTION 11.05.  Statements Required in Certificate or Opinion.................49
SECTION 11.06.  When Treasury Securities Disregarded..........................50
SECTION 11.07.  Rules by Trustee and Agents...................................50
SECTION 11.08.  Legal Holidays................................................50
SECTION 11.09.  Governing Law.................................................50
SECTION 11.10.  No Adverse Interpretation of Other Agreements.................50
SECTION 11.11.  No Recourse Against Others....................................51
SECTION 11.12.  Successors....................................................51
SECTION 11.13.  Duplicate Originals...........................................51
SECTION 11.14.  Table of Contents, Headings, Etc..............................51
SECTION 11.15.  Acts of Holders...............................................51
SECTION 11.16.  Assignment....................................................53

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              INDENTURE dated as of January 23, 2003, between XL CAPITAL LTD, a
Cayman Islands exempted limited company ("Company"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association ("Trustee").

              The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes, bonds or other evidences of subordinated
indebtedness ("Securities"), to be issued in one or more series as provided in
this Indenture.

              Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the respective Holders from time to
time of Securities or of a series thereof:

                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.        DEFINITIONS.

              AFFILIATE of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person.

              AGENT means any Registrar, Paying Agent or co-Registrar. See
Section 2.05.

              BOARD OF DIRECTORS means the Board of Directors of the Company or
any authorized committee thereof.

              BUSINESS DAY means any day which is not a Legal Holiday.

              COMPANY means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions of this Indenture
and thereafter means the successor.

              HOLDER OR SECURITYHOLDER means the person in whose name a Security
is registered on the Registrar's books.

              INDENTURE means this Indenture as amended or supplemented from
time to time and, unless the context indicates oth-

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                                      -2-

erwise, shall include the form and terms of a particular series of Securities
established as contemplated hereunder.

              INTEREST, when used with respect to an Original Issue Discount
Security which by its terms bears interest only after maturity or upon default
in any other payment due on such Security, means interest payable after maturity
or upon such default, as the case may be.

              INTEREST PAYMENT DATE means the date, if any, specified in the
Securities of any series as the fixed date on which any installment of interest
on the Securities of that series is due and payable.

              OFFICER means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.

              OFFICERS' CERTIFICATE means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company and delivered to the Trustee. See Sections 11.04 and 11.05.

              OPINION OF COUNSEL means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee. See Sections 11.04 and 11.05.

              ORIGINAL ISSUE DISCOUNT of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt security
(as set forth, in the case of an Original Issue Discount Security, on the face
of such Security).

              ORIGINAL ISSUE DISCOUNT SECURITY means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
acceleration of the maturity thereof pursuant to Section 6.02.

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

              PREDECESSOR SECURITIES means, with respect to any Security, every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security,

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                                      -3-

and, for the purpose of this definition, any Security authenticated and
delivered under Section 2.09 in exchange for or in lieu of a mutilated, lost,
destroyed or wrongfully-taken Security shall be deemed to evidence the same debt
as the mutilated, lost, destroyed or wrongfully-taken Security.

              PRINCIPAL of a debt security, including any Security, means the
amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect to
such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Company, upon any purchase or exchange at the option of the
Company or the holder of such debt security and upon any acceleration of the
maturity of such debt security).

              PRINCIPAL AMOUNT of a debt security, including any Security, means
the principal amount as set forth on the face of such debt security.

              REGULAR RECORD DATE means the date, if any, specified in the
Securities of any series as the record date for the determination of
Securityholders to whom interest is payable on the next succeeding Interest
Payment Date.

              SEC means the Securities and Exchange Commission.

              SECURITIES means the Securities that are issued from time to time
in one or more series under this Indenture as such Securities are amended or
supplemented from time to time.

              SUBSIDIARY means (i) a corporation a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is at
the time, directly or indirectly owned by the Company, by the Company and a
Subsidiary (or Subsidiaries) of the Company or by a Subsidiary (or Subsidiaries)
of the Company or (ii) any other person (other than a corporation) in which the
Company, a Subsidiary (or Subsidiaries) of the Company or the Company and a
Subsidiary (or Subsidiaries) of the Company, directly or indirectly, at the date
of determination thereof has at least majority ownership interest; provided that
no corporation shall be deemed a Subsidiary until the Company, a Subsidiary (or
Subsidiaries) of the Company acquires more than 50% of the outstanding voting
stock thereof and has elected a majority of its board of directors.
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                                      -4-

              TIA means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.

              TRUSTEE means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor and if at any time
there is more than one such party, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.

              TRUST OFFICER shall mean, when used with respect to the Trustee,
(a) any officer within the corporate trust department of the Trustee, including
any vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and (b) who shall have direct responsibility for the
administration of this Indenture.

              UNITED STATES means the United States of America.

              U.S. GOVERNMENT OBLIGATIONS means direct obligations of, or
obligations entitled to the full faith and credit of, the United States.

SECTION 1.02.        OTHER DEFINITIONS.

                         TERM                        DEFINED IN SECTION
                   Bankruptcy Law                          6.01
                   Code                                    9.01
                   Custodian                               6.01
                   Event of Default                        6.01
                   Legal Holiday                          11.08
                   Paying Agent                            2.05
                   Registrar                               2.05

SECTION 1.03.        INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

              Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a

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                                      -5-

part of this Indenture. The following TIA terms used in this Indenture have the
following meanings:

              COMMISSION means the SEC.

              INDENTURE SECURITIES means the Securities.

              INDENTURE SECURITY HOLDER means a Securityholder.

              INDENTURE TO BE QUALIFIED means this Indenture.

              INDENTURE TRUSTEE OR INSTITUTIONAL TRUSTEE means the Trustee.

              OBLIGOR on the indenture securities means the Company and any
other obligor thereon.

SECTION 1.04.        RULES OF CONSTRUCTION.

              Unless the context otherwise requires:

              (1)    a term has the meaning assigned to it;

              (2)    an accounting term not otherwise defined has the meaning
       assigned to it in accordance with generally accepted accounting
       principles in effect in the United States;

              (3)    "or" is not exclusive; and

              (4)    words in the singular include the plural, and in the plural
       include the singular.

                                   ARTICLE TWO

                                 THE SECURITIES

SECTION 2.01.        FORMS GENERALLY AND DATING.

              The Securities of each series may be issued in whole or in part in
the form of one or more global Securities as shall be specified as contemplated
by Section 2.02.

              The Securities of each series (including any temporary global
Securities) shall be in one of the forms established from time to time by or
pursuant to a resolution of the

<PAGE>
                                      -6-

Board of Directors or in or pursuant to one or more indentures supplemental
hereto, which shall set forth the information required by Section 2.02. The
Securities shall have such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture or by a
resolution of the Board of Directors or indenture supplemental hereto and may
have such notations, legends or endorsements as the Company may deem appropriate
and as are not inconsistent with the provisions of this Indenture, or as may be
required by law, stock exchange rule or usage. The Company shall approve the
forms of the Securities and any notation, legend or endorsement on them. If the
form or forms of Securities of any series is established by action taken
pursuant to a resolution of the Board of Directors or indenture supplemental
hereto, a copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the written order of the Company contemplated by
Section 2.04 for the authentication and delivery of such Securities.

              Each Security shall be dated the date of its authentication. The
form of the Trustee's certificate of authentication to be borne by the
Securities shall be substantially as follows:

                          CERTIFICATE OF AUTHENTICATION

              This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.

                                             U.S. BANK NATIONAL ASSOCIATION

                                                  as Trustee

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

SECTION 2.02.        AMOUNT UNLIMITED; ISSUABLE IN SERIES.

              The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

              The Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution of

<PAGE>
                                      -7-

the Board of Directors or established in or pursuant to one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:

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

              (2)    any limit upon the aggregate principal amount of Securities
       of the series which may be authenticated and delivered under this
       Indenture (except for Securities authenticated and delivered upon
       registration of transfer of, or in exchange for, or in lieu of, other
       Securities of the series pursuant to Sections 2.08, 2.09, 2.11, 3.07 or
       9.05 and except for any Securities which pursuant to Section 2.04 are
       deemed not to have been authenticated and delivered hereunder);

              (3)    (A) whether any of the Securities of the series are to be
       issuable in global form and, if so, (i) the identity of the depositary
       with respect to any such global Security and (ii) whether beneficial
       owners of interests in any such global Security may exchange such
       interests for Securities of the same series and of like tenor and of any
       authorized form and denomination, and, if so, the circumstances under
       which and the manner in which any such exchanges may occur, if other than
       as specified in Section 2.08; (B) if any of the Securities of the series
       are to be issuable in global form, the date as of which any global
       Security shall be dated (if other than the date of original issuance of
       the first of such Securities to be issued); and (C) if Securities of the
       series are to be issuable in definitive form (whether upon original
       issue, upon exchange of a temporary Security of such series, or in
       exchange for a beneficial ownership interest in a permanent global
       Security) only upon receipt of certain certificates or other documents or
       satisfaction of other conditions, or if Securities of the series are
       initially issuable in temporary global form and if owners of beneficial
       interests therein may exchange such interest for an interest in a
       permanent global Security only upon receipt of certain certificates or
       other documents or satisfaction of other conditions, then the form and/or
       terms of such certificates, documents or conditions;

              (4)    the date or dates (and whether fixed or extendible) on
       which the principal of Securities of the series is payable;
<PAGE>
                                      -8-

              (5)    the rate or rates at which Securities of the series shall
       bear interest, or the method of determining the same, if any, the date or
       dates from which such interest shall accrue, or the method of determining
       the same, if any, the Interest Payment Dates (and whether fixed or
       extendible) and the Regular Record Dates;

              (6)    the place or places where the principal of and any interest
       on Securities of the series shall be payable;

              (7)    any provisions relating to the issuance of Securities of
       such series at an original issue discount (including, without limitation,
       the issue price thereof, the rate or rates at which such original issue
       discount shall accrue, if any, and the date or dates from or to which or
       period or periods during which such original issue discount shall accrue
       at such rate or rates);

              (8)    the price or prices at which, the period or periods within
       which and the terms and conditions upon which Securities of the series
       may be redeemed or otherwise purchased, in whole or in part, at the
       option of the Company, pursuant to any sinking fund or otherwise
       (including, without limitation, the form or method of payment thereof if
       other than in cash);

              (9)    the obligation, if any, of the Company to redeem, purchase
       or repay Securities of the series pursuant to any sinking fund or
       analogous provisions or at the option of a Securityholder thereof and the
       price or prices at which and the period or periods within which and the
       terms and conditions upon which Securities of the series shall be
       redeemed, purchased or repaid, in whole or in part, pursuant to such
       obligation (including, without limitation, the form or method of payment
       thereof, if other than in cash);

              (10)   if other than denominations of $25 and any integral
       multiple thereof, the denominations in which Securities of the series
       shall be issuable;

              (11)   if other than the principal amount thereof, the portion of
       the principal amount of Securities of the series which shall be payable
       upon acceleration of the maturity thereof pursuant to Section 6.02 or
       provable in bankruptcy pursuant to Section 6.09;
<PAGE>
                                      -9-

              (12)   any Events of Default with respect to the Securities of a
       particular series in lieu of or in addition to those set forth herein and
       the remedies therefor;

              (13)   the terms of the subordination of Securities of the series;
       and

              (14)   any other terms of a particular series and any other
       provisions expressing or referring to the terms and conditions upon which
       the Securities of that series are to be issued under this Indenture,
       which terms and provisions are not in conflict with the provisions of
       this Indenture; PROVIDED, HOWEVER, that the addition to or subtraction
       from or variation of Articles Four, Five, Six and Eight (and Sections
       1.01 and 1.02, insofar as they relate to the definition of certain terms
       as used in such Articles) with regard to the Securities of a particular
       series shall not be deemed to constitute a conflict with the provisions
       of those Articles.

              All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto. Not all Securities of any one series need be issued at the
same time, and, unless otherwise so provided, a series may be reopened for
issuances of additional Securities of such series.

              If any of the terms of the Securities of a series are established
by action taken pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee with an Officers' Certificate setting forth the terms
or the manner of determining the terms of the Securities of such series. With
respect to Securities of a series which are not to be issued at one time, such
resolution of the Board of Directors or action may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a written
order of the Company or that such terms shall be determined by the Company or
its agents in accordance with a written order of the Company as contemplated by
the proviso clause of the fourth paragraph of Section 2.04.
<PAGE>
                                      -10-

SECTION 2.03.        DENOMINATIONS.

              The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 2.02. In the absence of any such provisions with respect to the
Securities of any series, the securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

SECTION 2.04.        EXECUTION AND AUTHENTICATION.

              Two Officers shall sign the Securities for the Company by manual
or facsimile signature. The Company's seal shall be reproduced on the
Securities.

              If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.

              A Security shall not be entitled to any benefit under this
Indenture or be valid for any purpose until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
Notwithstanding the foregoing, if any Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.12 together with a written statement (which need not
comply with Sections 11.04 and 11.05 and need not be accompanied by an Opinion
of Counsel) stating that such Security has not been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed not to
have been authenticated and delivered hereunder and shall not be entitled to the
benefits of this Indenture.

              At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, and the Trustee shall
authenticate and deliver said Securities to or upon the written order of the
Company, signed by two Officers or by an Officer and an Assistant Treasurer of
the Company, without any further action by the Company. Such written order shall
specify the date on which said Securities shall be authenticated; PROVIDED,
HOWEVER, that if not all the Securities of a series are to be issued at one time
and if the resolution of the Board of Directors or indenture supplemental hereto
establishing such series as contemplated by Sec-

<PAGE>
                                      -11-

tions 2.01 and 2.02 shall so permit, such written order may set forth procedures
acceptable to the Trustee for the issuance of such Securities and for
determining the form or terms of particular Securities of such series including,
but not limited to, interest rate, maturity date, date of issuance and date from
which interest shall accrue.

              If the form or forms or terms of the Securities of the series have
been established in or pursuant to one or more resolutions of the Board of
Directors or indentures supplemental hereto as permitted by Sections 2.01 and
2.02, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating:

              (1)    if the form or forms of such Securities has been
       established by or pursuant to a resolution of the Board of Directors or
       indenture supplemental hereto, that such form or forms has been
       established in conformity with the provisions of this Indenture;

              (2)    if the terms of such Securities have been established by or
       pursuant to a resolution of the Board of Directors or indenture
       supplemental hereto, that such terms have been established in conformity
       with the provisions of this Indenture; and

              (3)    that such Securities, when authenticated and delivered by
       the Trustee and issued by the Company in the manner and subject to any
       conditions specified in such Opinion of Counsel, will have been duly
       issued and will constitute valid and legally binding obligations of the
       Company, enforceable in accordance with their terms, subject to
       bankruptcy, insolvency, fraudulent conveyance, reorganization and other
       laws of general applicability relating to or affecting the enforcement of
       creditors' rights and to general equitable principles;

PROVIDED, HOWEVER, that, with respect to Securities of a series which are not to
be issued at one time, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the opinions described in clauses (2) and (3)
above may state, respectively,
<PAGE>
                                      -12-

              (a)    that, when the terms of such Securities shall have been
       established pursuant to a written order of the Company or pursuant to
       such procedures as may be specified from time to time by a written order
       of the Company, all as contemplated by and in accordance with a
       resolution of the Board of Directors or an Officers' Certificate pursuant
       to a resolution of the Board of Directors or indenture supplemental
       hereto, as the case may be, such terms will have been established in
       conformity with the provisions of this Indenture; and

              (b)    that such Securities, when (i) executed by the Company,
       (ii) completed, authenticated and delivered by the Trustee in accordance
       with this Indenture, (iii) issued and delivered by the Company and (iv)
       paid for, all as contemplated by and in accordance with the aforesaid
       written order of the Company or specified procedures, as the case may be,
       will have been duly issued and will constitute valid and legally binding
       obligations of the Company, enforceable in accordance with their terms,
       subject to bankruptcy, insolvency, fraudulent conveyance, reorganization
       and other laws of general applicability relating to or affecting the
       enforcement of creditors' rights and to general equitable principles.

              Notwithstanding the provisions of Sections 2.01, 2.02, 11.04 and
this Section, if all the Securities of a series are not to be originally issued
at one time, the resolution of the Board of Directors or indenture supplemental
hereto, and certified copy of the record of action taken pursuant to such
resolution or supplemental indenture, the Officers' Certificate, the written
order of the Company and any other documents otherwise required pursuant to such
Sections need not be delivered at or prior to the time of authentication of each
Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be
issued; PROVIDED, HOWEVER, that any subsequent request by the Company to the
Trustee to authenticate Securities of such series shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to Section
11.04 at or prior to authentication of the first such Security shall be true and
correct on the date thereof as if made on and as of the date thereof.

              The Trustee shall have the right to decline to authenticate and
make available for delivery any Securities under this Section if the issuance of
such Securities pursuant to

<PAGE>
                                      -13-

this Indenture will affect the Trustee's own rights, duties or immunities under
the Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.

              With respect to Securities of a series which are not all issued at
one time, the Trustee may conclusively rely, as to the authorization by the
Company of any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of
Counsel, Officers' Certificate and other documents delivered pursuant to
Sections 2.01, 2.02, 11.04 and this Section, as applicable, at or prior to the
time of the first authentication of Securities of such series unless and until
such opinion, certificate or other documents have been superseded or revoked. In
connection with the authentication and delivery of Securities of a series which
are not all issued at one time, the Trustee shall be entitled to assume that the
Company's instructions to authenticate and deliver such Securities do not
violate any rules, regulations or orders of any governmental agency or
commission having jurisdiction over the Company.

SECTION 2.05.        REGISTRAR AND PAYING AGENT.

              The Company shall maintain an office or agency where Securities of
each series may be presented for registration of transfer or for exchange
("Registrar"), and an office or agency where Securities of each series may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Securities of each series issued hereunder and of their transfer and
exchange. The Company may have one or more co-Registrars (provided that there
shall be only one register, which shall be maintained by the principal
Registrar) and one or more additional paying agents with respect to any series.
The term "Paying Agent" includes any additional paying agent.

              The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.

              The Company initially appoints the Trustee Registrar and Paying
Agent for each series.
<PAGE>
                                      -14-

SECTION 2.06.        PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST.

              Subject to any applicable terms of the Securities of the relevant
series relating to subordination (as contemplated by Article Ten and Section
2.02), each Paying Agent shall hold in trust for the benefit of Securityholders
of such series or the Trustee all money and securities held by the Paying Agent
for the payment of any amount in respect of the Securities of such series, and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
such money and securities and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money and securities held by it
to the Trustee and account for any funds or securities disbursed. Upon doing so
the Paying Agent shall have no further liability for the money or securities.

SECTION 2.07.        SECURITYHOLDER LISTS.

              The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before either (1) April 1 and October 1 in each year in the
case of Original Issue Discount Securities of any series which by their terms do
not bear interest prior to maturity (other than upon a default in any payment
upon such a Security) or (2) each Interest Payment Date for the Securities of
any other series, but in no event less frequently than semi-annually, and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Securityholders.

SECTION 2.08.        TRANSFER AND EXCHANGE.

              Where a Security is presented to the Registrar or a co-Registrar
with a request to register a transfer, the Registrar shall register the transfer
as requested if its requirements for such transfer are met. Notwithstanding any
other provision of this Section, unless and until it is exchanged in whole or in
part for Securities in definitive form, a global Security representing all or a
portion of the Securities of or within a series may not be transferred except as
a whole by the depositary for such series to a nominee of such depositary or by
a nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor depositary
for such series or a nominee

<PAGE>
                                      -15-

of such successor depositary. Where Securities are presented to the Registrar or
a co-Registrar with a request to exchange them for an equal aggregate principal
amount of Securities of the same series of other authorized denominations, the
Registrar shall make the exchange as requested (other than with respect to a
global Security, except as provided below or as otherwise specified as
contemplated by Section 2.02) if its requirements for such exchange are met. The
Registrar shall require, among other things, that any Security presented or
surrendered for transfer or exchange be duly endorsed, or be accompanied by
appropriate transfer documents duly endorsed, or be accompanied by appropriate
transfer documents duly executed, by the Holder thereof or his attorney duly
authorized in writing. To permit transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. Any exchange or transfer
shall be without charge, except that the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.

              The Registrar need not transfer or exchange any Security selected
for redemption or purchase (except, in the case of Securities to be redeemed or
purchased in part, the portion thereof not to be redeemed or purchased) any
Security in respect of which a notice requiring the purchase or redemption
thereof by the Company at the option of the Holder has been given and not
withdrawn by the Holder thereof in accordance with the terms of such Securities
(except in the case of Securities to be so purchased or redeemed in part, the
portion thereof not to be so purchased or redeemed) or transfer or exchange
Securities of any particular series during a period of 15 days before a
selection of Securities of such series to be redeemed.

              Except as otherwise provided with respect to the Securities of any
series as contemplated by Section 2.02, a global Security may be exchanged only
as provided below in this Section.

              If at any time the depositary with respect to a global Security
representing all or a portion of the Securities of or within a series notifies
the Company that it is unwilling, unable or ineligible to continue as such
depositary, the Company shall appoint a successor depositary with respect to
such Securities. Unless otherwise provided with respect to a series of
Securities as contemplated by Section 2.02, if a successor depositary is not so
appointed by the Company within 90 days after the Company receives such notice,
the Company will

<PAGE>
                                      -16-

execute and the Trustee, upon receipt of a written order of the Company as
contemplated by Section 2.04 for the authentication and delivery of definitive
Securities of such series (or, if such written order has previously been
delivered, then upon receipt of written instructions from the person or persons
specified in such written order), will authenticate and deliver Securities of
such series in definitive form equal in aggregate principal amount to the
principal amount of the global Security or Securities representing such series
in exchange for such global Security or Securities.

              The Company may at any time and in its sole discretion determine
that the Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or Securities.
In such event the Company will execute and the Trustee, upon receipt of a
written order of the Company as contemplated by Section 2.04 for the
authentication and delivery of definitive Securities of such series (or, if such
written order has previously been delivered, then upon receipt of written
instructions from the person or persons specified in such written order), will
authenticate and deliver Securities of such series in definitive form equal in
aggregate principal amount to the principal amount of the global Security or
Securities representing such series in exchange for such global Security or
Securities.

              If a global Security is otherwise exchangeable as specified by the
Company pursuant to Section 2.02(3) with respect to a series of Securities, the
depositary with respect to a global Security representing all or a portion of
the Securities of or within such series may surrender such global Security to
the Trustee, as the Company's agent for such purpose, to be exchanged in whole
or in part for Securities of such series in definitive form in the manner and
under the circumstances so specified and on such terms as are acceptable to the
Company and such depositary. In such event, the Company shall execute and the
Trustee shall authenticate and deliver or make available for delivery:

              (i)    to each Person specified by such depositary a new Security
       or Securities of the same series and of like tenor, of any authorized
       form and denomination as requested by such Person in aggregate principal
       amount equal to and in exchange for such Person's beneficial interest in
       the global Security; and

              (ii)   unless endorsement of the surrendered global Security as
       contemplated by Section 2.15 or another proce-

<PAGE>
                                      -17-

       dure is specified for the Securities of such series as contemplated by
       Section 2.02, to such depositary a new global Security in a denomination
       equal to the difference, if any, between the principal amount of the
       surrendered global Security and the aggregate principal amount of
       Securities delivered pursuant to clause (i) above in exchange for
       beneficial interests in such surrendered global Security.

              In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate and
deliver Securities in definitive registered form in authorized denominations.

              Upon the exchange of a global Security for Securities in
definitive form, such global Security shall be cancelled by the Trustee, unless
endorsement of the surrendered global Security as contemplated by Section 2.15
or another procedure is specified for the Securities of such series as
contemplated by Section 2.02. Securities issued in exchange for a global
Security pursuant to this Section shall be registered in such names and in such
authorized denominations as the depositary for such global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the persons
in whose names such Securities are so registered.

              If a Security is issued in exchange for any portion of a global
Security after the close of business at the office or agency where such exchange
occurs (i) on any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) on any special
record date and before the opening of business at such office or agency on the
related date for payment of defaulted interest, interest or defaulted interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such global Security is payable in accordance with the provisions of this
Indenture.

              All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
<PAGE>
                                      -18-

SECTION 2.09.        REPLACEMENT SECURITIES.

              If a mutilated Security is surrendered to the Registrar or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, then in the absence of notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company shall
issue and the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced. Upon the issuance of any new Security 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 expenses (including the fees and expenses of the Trustee) connected
therewith.

              In case any such lost, destroyed or wrongfully-taken Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to any provision of the Securities of such series providing for
the purchase thereof at the option of the Holder or the Company, the Company in
its discretion may, instead of issuing a new Security, pay or purchase such
Security.

              Every new Security issued pursuant to this Section in lieu of any
lost, destroyed or wrongfully-taken Security shall constitute a separate
obligation of the Company, whether or not the lost, destroyed or
wrongfully-taken Security shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued hereunder.

              The provisions of this Section, as amended or supplemented
pursuant to this Indenture with respect to particular Securities or generally,
shall be exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement or payment of mutilated, lost,
destroyed or wrongfully-taken Securities.

SECTION 2.10.        OUTSTANDING SECURITIES.

              Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in

<PAGE>
                                      -19-

this Section as not being outstanding. A Security does not cease to be
outstanding because the Company or one of its Affiliates holds the Security.

              If a Security is replaced pursuant to Section 2.09, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

              If the Paying Agent holds on a redemption date or maturity date or
on the Business Day following a date on which Securities of such series are to
be purchased by the Company pursuant to any provision thereof providing for such
purchase at the option of the Holder or the Company, money (or securities if
permitted by the terms of such Securities) in trust or, if the Company, acting
as its own Paying Agent, sets aside and segregates money (or securities if
permitted by the terms of such Securities) in trust, sufficient to pay
Securities payable on that date, then, on and after that date such Securities
cease to be outstanding and interest, if any (and original issue discount, if
Original Issue Discount Securities), on them ceases to accrue, unless the Paying
Agent is restricted under the terms of the Securities of such series (specified
as contemplated by Section 2.02) in applying such money.

SECTION 2.11.        TEMPORARY SECURITIES.

              Pending the preparation of a permanent global Security or
definitive Securities of any series, the Company may execute and the Trustee,
upon the written order of the Company pursuant to Section 2.04, shall
authenticate and deliver temporary Securities. Temporary Securities of any
series shall be in authorized denominations and substantially of the tenor of
the definitive Securities of that series in lieu of which they are issued, but
may have variations that the Company considers appropriate for temporary
Securities. In the case of Securities of any series, such temporary Securities
may be in global form. If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, and upon surrender for cancellation of any one or more temporary
Securities of such series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like aggregate principal amount
of definitive Securities of authorized denominations of the same series and
containing identical terms and provisions. Until so exchanged, the temporary
Securities of any series shall, except as otherwise specified as contemplated

<PAGE>
                                      -20-

by Section 2.02 (including with respect to the payment of interest on temporary
Securities), in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder.

SECTION 2.12.        CANCELLATION.

              The Company at any time may deliver Securities to the Trustee for
cancellation, including Securities authenticated which the Company has not
issued and sold. The Company and each Agent shall forward to the Trustee any
Securities surrendered to them for transfer, exchange, payment, redemption, or
purchase by the Company pursuant to any provision thereof providing for such
purchase at the option of the Holder. The Trustee and no one else shall cancel
all Securities surrendered for transfer, exchange, payment, redemption,
purchase, or cancellation, and may dispose of cancelled Securities as the
Company directs; provided, however, that the Trustee shall not be required to
destroy such cancelled Securities. Except as otherwise provided in the
resolution of the Board of Directors or indenture supplemental hereto
establishing such series as contemplated by Section 2.02, the Company may not
issue new Securities of a series to replace Securities of the same series that
it has paid or that have been delivered to the Trustee for cancellation.

SECTION 2.13.        PAYMENT OF INTEREST; DEFAULTED INTEREST.

              Unless otherwise provided with respect to the Securities of any
series as contemplated by Section 2.02, interest (except defaulted interest) on
any Security of any series which is payable on any Interest Payment Date shall
be paid to the Holder in whose name that Security (or one or more Predecessor
Securities) is registered on the security register at the close of business on
the Regular Record Date for such interest payment. At the option of the Company,
payment of interest on any Security may be made (i) by check mailed to the
address of the Person entitled thereto as such address appears in the security
register, or (ii) if so specified with respect to the Securities of such series
as contemplated by Section 2.02, by wire transfer to any account designated by
such Person so long as the Paying Agent is notified in writing at least five
Business Days prior to such Interest Payment Date.

              If the Company defaults in a payment of interest on the Securities
of any series on any Interest Payment Date, it shall pay the defaulted interest
to the Persons who are Securi-
<PAGE>
                                      -21-

tyholders of such series at the close of business on a subsequent special record
date. The Company shall fix the special record date and payment date. At least
15 days before the record date, the Company shall mail to each Securityholder of
such series a notice that states the special record date, the payment date and
the amount of defaulted interest proposed to be paid. The Company shall notify
the Trustee in writing of the amount of the defaulted interest proposed to be
paid on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Paying Agent 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 Paying Agent
for such deposit prior to the date of the proposed payment. The Company may pay
defaulted interest in any other lawful manner.

SECTION 2.14.        PERSONS DEEMED OWNERS.

              Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any Agent may treat the person in whose
name such Security is registered as the owner of such Security for the purpose
of receiving payment of principal of and (subject to Section 2.13) interest on
such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any Agent shall be affected by notice to the contrary.

              No holder of any beneficial interest in any global Security held
on its behalf by a depositary shall have any rights under this Indenture with
respect to such global Security, and such depositary (or its nominee, if such
global Security is registered in the name of a nominee) may be treated by the
Company, the Trustee, and any Agent as the owner of such global Security for all
purposes whatsoever. None of the Company, the Trustee, or any Agent will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

              Notwithstanding the foregoing, with respect to any global
Security, nothing herein shall prevent the Company, the Trustee, or any Agent
from giving effect to any written certification, proxy or other authorization
furnished by any depositary, as a Holder, with respect to such global Security
or impair, as between such depositary and owners of beneficial interests in such
global Security, the operation of customary
<PAGE>
                                      -22-

practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.

SECTION 2.15.        SECURITIES IN GLOBAL FORM.

              If the Company shall establish pursuant to Section 2.02 that the
Securities of or within a series are to be issued in whole or in part in global
form, then the Company shall execute, and the Trustee shall, in accordance with
Section 2.04 and the written order of the Company contemplated thereby,
authenticate and deliver one or more global Securities in temporary or permanent
form that (i) shall be registered in the name of the depositary for such global
Security or Securities or the nominee of such depositary, (ii) shall be
delivered by the Trustee to such depositary or pursuant to such depositary's
instructions, and (iii) shall bear a legend substantially to the following
effect: "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY." Each depositary designated pursuant to Section
2.02 for a global Security in registered form must be, to the extent required by
applicable law or regulation, a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and any other applicable statute or
regulation, at the time of its designation and at all times that it serves as
depositary. Notwithstanding clause (14) of Section 2.02 and the provisions of
Section 2.03, any such global Security shall represent such of the outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be increased or decreased
to reflect exchanges. Any endorsement of a Security in a global form to reflect
the amount, or any increase or decrease in the amount, or changes in the rights
of Holders, of outstanding Securities represented thereby shall be made in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in the written order of the Company to be delivered to the
Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04 and,
if applicable, Section 2.11, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable written order of
the Company. If a written order of the Company pursuant to
<PAGE>
                                      -23-

Section 2.04 has been, or simultaneously is, delivered, any instructions with
respect to a Security in global form shall be in writing but need not comply
with Sections 11.04 and 11.05 and need not be accompanied by an Opinion of
Counsel.

              The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Security represented by a Security in global
form if such Security was never issued and sold by the Company and the Company
delivers to the Trustee the Security in global form together with written
instructions (which need not comply with Sections 11.04 and 11.05 and need not
be accompanied by an Opinion of Counsel) with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of the third paragraph of Section
2.04.

SECTION 2.16.        CUSIP NUMBERS.

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

                                  ARTICLE THREE

                                   REDEMPTION

SECTION 3.01.        APPLICABILITY OF ARTICLE.

              Securities of any series which are redeemable before their stated
maturity at the election of the Company or through the operation of any sinking
fund for the retirement of Securities of such series shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 2.02 for Securities of any series) in accordance with this Article.
<PAGE>
                                      -24-

SECTION 3.02.        NOTICES TO TRUSTEE.

              If the Company elects to redeem all or less than all the
Securities of any series, it shall notify the Trustee of the redemption date,
the principal amount of Securities to be redeemed, the specific provision of the
Securities pursuant to which the Securities being called for redemption are
being redeemed and the redemption price. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction. If the Company wants to make any permitted
optional sinking fund payment, it shall notify the Trustee of the principal
amount of the Securities to be redeemed.

              The Company (1) may deliver outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed or otherwise purchased either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities in satisfaction of all or any part of any sinking fund
payment required to be made pursuant to the terms of the Securities of such
series as provided for by the terms of such series: PROVIDED, HOWEVER, that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the redemption price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
The Company shall notify the Trustee of its intention to so reduce the amount of
such sinking fund payment, the amount of the reduction and the basis for it. The
Company shall deliver to the Trustee with such notice any Securities to be
credited for such purpose that it has not previously delivered to the Trustee
for cancellation.

              The Company shall give each notice and Officers' Certificate
provided for in this Section at least 60 days before the redemption date (unless
a shorter notice shall be satisfactory to the Trustee or is otherwise specified
as contemplated by Section 2.02 for Securities of any series).

SECTION 3.03.        SELECTION OF SECURITIES TO BE REDEEMED.

              Except as otherwise specified as contemplated by Section 2.02 for
Securities of any series, if less than all the

<PAGE>
                                      -25-

Securities of any series are to be redeemed, the particular Securities to be
redeemed shall be selected from Securities of the same series outstanding not
previously called for redemption by such method as the Trustee considers fair
and appropriate (and in such manner as complies with applicable requirements of
any stock exchange on which Securities of such series are listed) and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series that have
denominations larger than the minimum authorized denomination for Securities of
that series. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.

SECTION 3.04.        NOTICE OF REDEMPTION.

              At least 30 days but no more than 60 days before a redemption date
(unless a shorter notice is specified as contemplated by Section 2.02 for
Securities of any series), the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities of the series to be redeemed.

              The notice shall identify the Securities, including CUSIP number,
if any (and, in the case of partial redemption, the principal amount of the
Securities), to be redeemed and shall state:

              (1)    The redemption date;

              (2)    the redemption price and method of payment, if other than
       in cash;

              (3)    the name and address of the Paying Agent;

              (4)    that Securities called for redemption must be surrendered
       to the Paying Agent to collect the redemption price;

              (5)    that interest, if any (or original issue discount, if
       Original Issue Discount Securities), on Securities called for redemption
       ceases to accrue on and after the redemption date, unless the Company
       defaults in making such redemption payment; and

              (6)    that the redemption is for a sinking fund or at the
       election of the Company, whichever is the case.
<PAGE>
                                      -26-

              At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company shall have furnished to the Trustee the Officers' Certificate and
Opinion of Counsel required pursuant to Section 11.04 at least 15 days prior to
the date that the Trustee is required to take any action in connection with a
redemption.

SECTION 3.05.        EFFECT OF NOTICE OF REDEMPTION.

              Once notice of redemption is mailed, Securities of the series
called for redemption become due and payable on the redemption date and at the
redemption price therein specified and on and after such date (unless the
Company shall default in the payment of the redemption price and accrued
interest, if any) such Securities shall cease to bear interest, if any (and
original issue discount, if such Securities are Original Issue Discount
Securities, shall cease to accrue). Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus, if applicable, accrued
interest, if any, to the redemption date: PROVIDED, HOWEVER, that installments
of interest the Interest Payment Date for which is on or prior to the redemption
date shall be payable to the persons who are Holders of such Securities (or one
or more Predecessor Securities) on the relevant record dates for such interest
according to their terms and Section 2.13.

              If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the redemption date at the rate prescribed therefor in the Security.

SECTION 3.06.        DEPOSIT OF REDEMPTION PRICE.

              On or before 10:00 a.m., New York time, on the redemption date,
the Company shall deposit with the Paying Agent money (or securities if
permitted by the terms of such Securities) sufficient to pay the redemption
price of, and (except if the redemption date is an Interest Payment Date)
accrued interest, if any, on, all Securities to be redeemed on that date other
than Securities or portions thereof called for redemption on that date which are
delivered by the Company to the Trustee for cancellation.

SECTION 3.07.        SECURITIES REDEEMED IN PART.

              Any Security that is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if

<PAGE>
                                      -27-

the Company, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Registrar 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 Security without service
charge, a new Security or Securities of the same series, containing identical
terms and provisions, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal amount of the Security so surrendered, and, unless
otherwise specified as contemplated by Section 2.02, if a global Security is so
surrendered, the Company shall execute, and the Trustee shall authenticate and
deliver to the depositary for such global Security, without service charge, a
new global Security in a denomination equal to and in exchange for the
unredeemed portion of the principal amount of the global Security so
surrendered.

                                  ARTICLE FOUR

                                    COVENANTS

SECTION 4.01.        PAYMENT OF SECURITIES.

              The Company shall pay the principal of and any interest on the
Securities of each series in accordance with the terms of the Securities of such
series and this Indenture.

              To the extent enforceable under applicable law, the Company shall
pay interest on overdue principal at the rate borne by the Securities of such
series (unless a different rate is specified as contemplated by Section 2.02 for
Securities of such series).

SECTION 4.02.        SEC REPORTS.

              The Company shall file with the Trustee within 15 days after it
files them with the SEC 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 SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. The Company also shall comply with the other provisions of TIA
ss.314(a).
<PAGE>
                                      -28-

SECTION 4.03.        COMPLIANCE CERTIFICATE.

              The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officers' Certificate stating whether
or not the signers know of the existence of any default or Event of Default by
the Company and whether all of the conditions and covenants of the Company are
being complied with regardless of any period of grace or requirement of notice
provided under this Indenture. If they do know of such a default or Event of
Default, the certificate shall describe the default or Event of Default, as the
case may be, and its status. The first Officers' Certificate to be delivered
pursuant to this Section 4.03 shall be for the fiscal year ending immediately
after the date that the Securities are issued.

SECTION 4.04.        CORPORATE EXISTENCE.

              Subject to the provisions of Section 5.01, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

SECTION 4.05.        CALCULATION OF ORIGINAL ISSUE DISCOUNT.

              The Company shall file with the Trustee promptly at the end of
each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods), if any, accrued on
outstanding Securities as of the end of such year.

                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION

SECTION 5.01.        WHEN COMPANY MAY MERGE, ETC.

              The Company shall not consolidate with or merge into, or transfer
its properties and assets substantially as an entirety to, another corporation
unless (1) either XL Capital is the successor, or, if XL Capital is not the
surviving Person, the surviving Person assumes by supplemental indenture all the
obligations of the Company under the Securities and this Indenture; and (2)
immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing. Thereafter, unless otherwise specified as
contemplated by

<PAGE>
                                      -29-

Section 2.02 for the Securities of any series, all such obligations of the
predecessor corporation shall terminate.

                                   ARTICLE SIX

                              DEFAULTS AND REMEDIES

SECTION 6.01.        EVENTS OF DEFAULT.

              An "Event of Default" with respect to Securities of any series
means each of the events specified below in this Section 6.01, unless it is
either inapplicable to a particular series or is specifically deleted or
modified as contemplated by Section 2.02 for the Securities of such series, and
any other events as may be specified as contemplated by Section 2.02 for the
Securities of such series:

              (1)    the Company defaults in the payment of any interest on any
       Security of that series when the same becomes due and payable and the
       default continues for a period of 60 days;

              (2)    the Company defaults in the payment of the principal of any
       Security of that series when the same becomes due and payable at
       maturity, upon redemption (including default in the making of any
       mandatory sinking fund payment), upon purchase by the Company at the
       option of the Holder pursuant to the terms of such Security or otherwise;

              (3)    the Company fails to comply with any of its other
       agreements in Securities of that series or this Indenture (other than an
       agreement which has expressly been included in this Indenture solely for
       the benefit of Securities of any series other than that series or is
       expressly made inapplicable to the Securities of such series as
       contemplated by Section 2.02) and the default continues for the period
       and after the notice specified below;

              (4)    the Company pursuant to or within the meaning of any
       Bankruptcy Law:

                            (A)    commences a voluntary case, or consents to
              the commencement of a case against it,
<PAGE>
                                      -30-

                            (B)    consents to the entry of an order for relief
              against it in an involuntary case,

                            (C)    consents to the appointment of a Custodian of
              it or for all or substantially all of its property, or

                            (D)    makes a general assignment for the benefit of
              its creditors;

              (5)    a court of competent jurisdiction enters an order or decree
       under any Bankruptcy Law that:

                            (A)    is for relief against the Company in an
              involuntary case or adjudicates the Company insolvent or bankrupt,

                            (B)    appoints a Custodian of the Company or for
              all or substantially all of its property, or

                            (C)    orders the winding up or liquidation of the
              Company, and the order or decree remains unstayed and in effect
              for 90 days; or

              (6)    any other Event of Default provided with respect to
       Securities of that series occurs.

              The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

              A default under clause (3) is not an Event of Default until the
Trustee notifies the Company or the Holders of at least 25% in aggregate
principal amount of the outstanding Securities of that series notify the Company
and the Trustee of the default and the Company does not cure the default within
90 days after receipt of the notice. The notice must specify the default, demand
that it be remedied and state that the notice is a "Notice of Default."

SECTION 6.02.        ACCELERATION.

              If an Event of Default (other than an Event of Default specified
in Section 6.01(4) or (5)) occurs and is continuing with respect to Securities
of any series at the time outstanding, the Trustee by notice to the Company, or
the Holders of at least 25% in aggregate principal amount of the out-

<PAGE>
                                      -31-

standing Securities of that series by notice to the Company and the Trustee, may
declare to be due and payable immediately (1) the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of the Securities of
that series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of acceleration. Upon such declaration,
such principal amount (or specified amount) and interest, if any, shall be due
and payable immediately. If an Event of Default specified in Section 6.01 (4) or
(5) occurs and is continuing, (1) the principal amount (or, if the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of the Securities of that
series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of such acceleration shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or Securityholders. The Holders of a majority in aggregate principal
amount of the outstanding Securities of the series with respect to which an
acceleration applies by notice to the Trustee may rescind an acceleration and
its consequences with respect to such series if all existing Events of Default
(other than the non-payment of the principal of and accrued interest, if any, on
Securities that have become due solely by such acceleration) with respect to
Securities of that series have been cured or waived and if the rescission would
not conflict with any judgment or decree. No such rescission shall affect any
subsequent default or impair any right consequence thereon.

SECTION 6.03.        OTHER REMEDIES.

              If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of the whole amount which
then shall have become due and remain unpaid for principal or interest, if any,
on the Securities of that series or to enforce the performance of any provision
of the Securities of that series or this Indenture.

              The Trustee may maintain a proceeding even if it does not possess
any of the Securities of that series or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver or acquiescence in the Event
of Default. No remedy is exclusive of any other remedy. All available remedies
are cumulative.
<PAGE>
                                      -32-

SECTION 6.04.        WAIVER OF EXISTING DEFAULTS.

              Subject to Section 9.02, the Holders of a majority in aggregate
principal amount of the outstanding Securities of any series by notice to the
Trustee may waive on behalf of the Holders of all the Securities of such series
an existing Default or Event of Default and its consequences. When a Default or
Event of Default is waived, it is cured and stops continuing.

SECTION 6.05.        CONTROL BY MAJORITY.

              The Holders of a majority in aggregate principal amount of the
outstanding Securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it, with respect to the Securities of such
series. The Trustee, however, may refuse to follow any direction that conflicts
with law or this Indenture, that is unduly prejudicial to the rights of another
Securityholder or that would involve the Trustee in personal liability.

SECTION 6.06.        LIMITATION OF SUITS.

              No Holder of any Security of any series shall have the right to
pursue any remedy with respect to this Indenture or the Securities unless:

              (1)    the Holder gives to the Trustee written notice of a
       continuing Event of Default with respect to the Securities of that
       series;

              (2)    the Holders of at least 25% in aggregate principal amount
       of the outstanding Securities of that series in respect of which the
       Event of Default has occurred make a written request to the Trustee to
       pursue the remedy;

              (3)    such Holder or Holders offer and provide to the Trustee
       indemnity satisfactory to the Trustee against any loss, liability or
       expense;

              (4)    the Trustee does not comply with the request within 60 days
       after receipt of the request and the offer of indemnity; and

              (5)    no direction inconsistent with such written request has
       been given to the Trustee during such 60-day pe-

<PAGE>
                                      -33-

       riod by the Holders of a majority in aggregate principal amount of the
       outstanding Securities of such series.

              A Securityholder of any series may not use this Indenture to
prejudice the rights of another Securityholder of such series or to obtain a
preference or priority over another Securityholder of such series, except in the
manner herein provided and for the equal and ratable benefit of all
Securityholders of such series.

SECTION 6.07.        RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT.

              Subject to the terms of the Securities of any series relating to
subordination (as contemplated by Article Ten and Section 2.02) and
notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of principal of and (subject to Section 2.13)
interest, if any, on the Security, on or after the respective due dates with
respect to such payments expressed in such Security, and, if applicable, to
convert such Security on the terms and subject to the conditions applicable to
Securities of such series, or to bring suit for the enforcement of any such
payment on or after such respective dates or of such right to convert, if any,
shall not be impaired or affected without the consent of the Holder.

SECTION 6.08.        COLLECTION SUIT BY TRUSTEE.

              If an Event of Default specified in Section 6.01(1) or (2) occurs
and is continuing with respect to the Securities of any series, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount which then shall have become due and remain unpaid
for principal and interest, if any, on the Securities of such series.

SECTION 6.09.        TRUSTEE MAY FILE PROOFS OF CLAIM.

              The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Securityholders allowed in any judicial proceedings relative to
the Company, its creditors or its property and to collect and receive money,
property or securities payable or deliverable on any such claims and to
distribute the same.
<PAGE>
                                      -34-

SECTION 6.10.        PRIORITIES.

              If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:

              First: to the Trustee for amounts due under Section 7.07;

              Second: to the payment of items to which the Securities have been
       subordinated as contemplated by Article Ten and Section 2.02;

              Third: to the payment of amounts due and unpaid for principal and
       interest, if any, on the Securities in respect of which such money has
       been collected, ratably, without preference or priority of any kind,
       according to the amounts which then shall have become due and payable on
       such Securities for principal and interest, respectively; and

              Fourth: to the Company.

              The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section, notice of which shall be mailed to
each Securityholder by the Company at least 15 days before such record date.

SECTION 6.11.        UNDERTAKING FOR COSTS.

              In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the outstanding Securities of any series.
<PAGE>
                                      -35-

                                  ARTICLE SEVEN

                                     TRUSTEE

              All the provisions of this Article Seven apply to the Trustee
acting in all its appointed capacities pursuant to this Indenture unless any
provision specifically applies to the Trustee only in its capacity as Trustee.

SECTION 7.01.        DUTIES OF TRUSTEE.

              (a)    If an Event of Default with respect to Securities of any
series has occurred and is continuing, the Trustee shall with respect to such
series exercise such of the rights and powers vested in it by this Indenture
with respect to such series and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

              (b)    With respect to Securities of any series, except during the
continuance of an Event of Default with respect to Securities of such series:

              (1)    The Trustee need perform only those duties that are
       specifically set forth in this Indenture or the TIA and no others.

              (2)    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. The Trustee, however, shall, with respect to certificates or
       opinions which by any provision hereof are required to be provided to the
       Trustee, examine the certificates and opinions to determine whether or
       not they conform to the requirements of this Indenture (but need not
       confirm or investigate the accuracy of mathematical calculations or other
       facts stated therein).

              (c)    The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its willful misconduct,
except that:

              (1)    This paragraph does not limit the effect of paragraph (b)
       of this Section.
<PAGE>
                                      -36-

              (2)    The Trustee shall not be liable for any error of judgment
       made in good faith by a Trust Officer, unless it is proved that the
       Trustee was negligent in ascertaining the pertinent facts.

              (3)    The Trustee shall not be liable with respect to any action
       it takes or omits to take in good faith in accordance with a direction
       received by it pursuant to Section 6.05.

              (d)    Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

              (e)    The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.

              (f)    The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

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

SECTION 7.02.        RIGHTS OF TRUSTEE.

              (a)    The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.

              (b)    Before the Trustee acts or refrains from acting, it may
consult with counsel of its selection or require an Officers' Certificate, an
Opinion of Counsel, and/or an accountant's certificate. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
advice of such counsel the Officers' Certificate, Opinion of Counsel or
accountant's certificate.
<PAGE>
                                      -37-

              (c)    The Trustee may act through agents and counsel and shall
not be responsible for the misconduct or negligence of any agent or counsel
appointed with due care.

              (d)    The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.

              (e)    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.

              (f)    The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.

SECTION 7.03.        INDIVIDUAL RIGHTS OF TRUSTEE.

              The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.

SECTION 7.04.        TRUSTEE'S DISCLAIMER.

              The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities; it shall not be accountable for the
Company's use of the proceeds from the Securities; and it shall not be
responsible for any statement in the Indenture or the Securities other than its
certificate of authentication.

SECTION 7.05.        NOTICE OF DEFAULTS.

              If a Default occurs and is continuing with respect to Securities
of any series and if it is actually known to a Trust Officer of the Trustee, the
Trustee shall transmit by mail to each Securityholder or such series in the
manner and to the extent provided in TIA ss. 313(c) notice of the Default within
90 days after its occurs or as soon as reasonably practicable thereafter. Except
in the case of a default in payment of principal of or interest on any Security
of such series (in-

<PAGE>
                                      -38-

cluding default in the making of any mandatory sinking fund or mandatory
repurchase payment), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders of such series.

SECTION 7.06.        REPORTS BY TRUSTEE TO HOLDERS.

              Within 60 days after each May 15 beginning with the May 15
following the date on which Securities are originally issued under this
Indenture, the Trustee shall transmit by mail to each Securityholder in the
manner and to the extent provided in TIA ss. 313(c) a brief report dated as of
such May 15 that complies with TIA ss. 313(a) if such report is required by TIA
ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).

              A copy of each report at the time of its mailing to
Securityholders shall be filed by the Company with the SEC and each stock
exchange on which the Securities are listed.

              The Company will promptly notify the Trustee if and when the
Securities of any series are listed on any stock exchange.

SECTION 7.07.        COMPENSATION AND INDEMNITY.

              The Company shall pay to the Trustee such compensation for its
services as shall be agreed upon in a writing between the Company and the
Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.

              The Company shall indemnify the Trustee or any predecessor Trustee
and their agents for and to hold them harmless against any loss, damages,
claims, expenses or liability incurred by it arising out of or in connection
with the acceptance or administration of this trust and its duties hereunder.
The Trustee shall notify the Company promptly of any claims asserted against the
Trustee for which it may seek indemnity. Failure of the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall have the right to elect to defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any

<PAGE>
                                      -39-

settlement made without its written consent, which consent shall not be
unreasonably withheld. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence or bad
faith.

              To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.

              When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(4) or (5) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

              The provisions of this Section shall survive the termination of
this Indenture.

SECTION 7.08.        REPLACEMENT OF TRUSTEE.

              The Trustee may resign at any time with respect to Securities of
one or more series by so notifying the Company. The Holders of a majority in
aggregate principal amount of the outstanding Securities of any series may
remove the Trustee with respect to the Securities of such series by so notifying
the removed Trustee and may appoint a successor Trustee with the Company's
consent. The Company shall remove the Trustee if:

              (1)    the Trustee fails to comply with Section 7.10;

              (2)    the Trustee is adjudged a bankrupt or an insolvent;

              (3)    a receiver or other public officer takes charge of the
       Trustee or its property; or

              (4)    the Trustee becomes incapable of acting.

              If the Trustee resigns or is removed, or if a vacancy exists in
the office of the Trustee for any reason, with respect to the Securities of one
or more series, the Company shall promptly appoint a successor Trustee or
Trustees (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such

<PAGE>
                                      -40-

series and that at any time there shall be only one Trustee with respect to the
Securities of any particular series).

              A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to its lien, if any, provided for in Section 7.07),
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.

              If a successor Trustee with respect to Securities of any series
does not take office within 30 days after the retiring Trustee resigns or is
removed, the retiring Trustee (at the expense of the Company), the Company or
the Holders of a majority in aggregate principal amount of the outstanding
Securities of such series may petition any court of competent jurisdiction for
the appointment of a successor Trustee.

              If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee.

SECTION 7.09.        SUCCESSOR TRUSTEE BY MERGER, ETC.

              If the Trustee consolidates with, mergers or converts into, or
transfers all or substantially all of its corporate trust assets (including the
administration of this Indenture) to, another corporation or national banking
association, the successor corporation or national banking association without
any further act shall be the successor Trustee.

SECTION 7.10.        ELIGIBILITY; DISQUALIFICATION.

              This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a). The Trustee shall always have (or in the case of
a subsidiary of a bank holding company that guarantees the obligations of the
Trustee under this Indenture, such holding company parent shall have) a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. With respect to the Securities of each
series, the Trustee shall comply with TIA ss. 310(b). In determining whether the
Trustee has a conflicting interest as defined in TIA ss. 310(b) with re-

<PAGE>
                                      -41-

spect to the Securities of any series, there shall be excluded this Indenture
with respect to the Securities of any series other than that series. Nothing
herein shall prevent the Trustee from filing with the SEC the application
referred to in the second to last paragraph of TIA ss. 310(b).

SECTION 7.11.        PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

              The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

SECTION 7.12.        TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.

              Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

                                  ARTICLE EIGHT

                             DISCHARGE OF INDENTURE

SECTION 8.01.        TERMINATION OF COMPANY'S OBLIGATIONS.

              The Company may terminate all of its obligations under the
Securities of any series and this Indenture with respect to the Securities of
such series if either (1) all Securities of such series previously authenticated
and delivered (other than destroyed, lost or stolen Securities which have been
replaced or paid or Securities for whose payment money

<PAGE>
                                      -42-

(or, if permitted by the terms of such Securities, securities) has theretofore
been held in trust and thereafter repaid to the Company, as provided in Section
8.03) have been delivered to the Trustee for cancellation; or (2) the Company
irrevocably deposits in trust with the Trustee money or U.S. Government
Obligations sufficient to pay the principal of and interest, if any, on all
Securities of such series not theretofore cancelled or delivered to the Trustee
for cancellation (other than destroyed, lost or stolen Securities which have
been replaced or paid or Securities for whose payment money (or, if permitted by
the terms of such Securities, securities) has theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.03) to maturity or
redemption, as the case may be.

              The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08,
2.09, 4.01, 7.07, 7.08 and 8.03 of this Indenture, however, shall survive until
the Securities of such series are no longer outstanding. Thereafter, the
Company's obligations in Sections 7.07 and 8.03 shall survive. Notwithstanding
the satisfaction and discharge of this Indenture with respect to the Securities
of any series, if money or U.S. Government Obligations shall have been deposited
with the Trustee pursuant to clause (2) of the first paragraph of this Section,
the obligations of the Trustee under Section 8.02 and the second sentence of
Section 8.03 shall survive.

              After a deposit and if all other conditions thereto are met, the
Trustee for the Securities of such series shall be required to execute an
instrument acknowledging satisfaction and discharge of this Indenture with
respect to such Securities, except for those surviving obligations specified
above; PROVIDED, HOWEVER, that the Trustee shall not be required to execute such
instrument until the expiration of 90 days after the date of a deposit and that
such instrument may be made subject to the condition that such deposit had been
in compliance with any applicable terms of the Securities of such series
relating to subordination (as contemplated by Article Ten and Section 2.02).

              In order to have money available on a payment date to pay the
principal of or interest, if any, on the Securities, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
<PAGE>
                                      -43-

SECTION 8.02.        APPLICATION OF TRUST FUND.

              The Trustee shall hold in trust money and U.S. Government
Obligations deposited with it pursuant to Section 8.01. Subject to any
applicable terms of the Securities of any series relating to subordination (as
contemplated by Article Ten and Section 2.02), the Trustee shall apply the
deposited money and the money from the U.S. Government Obligations through the
Paying Agent and in accordance with the provisions of the Securities of such
series and this Indenture to the payment of principal of and interest, if any,
on the Securities of such series for the payment of which such money or U.S.
Government Obligations has been deposited with the Trustee.

              The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 8.01 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Securities.

SECTION 8.03.        REPAYMENT TO COMPANY.

              The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written request
any money or securities held by them for the payment of principal or interest,
if any, that remains unclaimed for two years. After that, Holders entitled to
the money or securities must look to the Company for payment unless an
applicable abandoned property law designates another Person.

                                  ARTICLE NINE

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 9.01.        WITHOUT CONSENT OF HOLDERS.

              The Company and the Trustee may amend or supplement this Indenture
or the Securities of any series without notice to or consent of any
Securityholder:

              (1)    to cure any ambiguity, defect or inconsistency;
<PAGE>
                                      -44-

              (2)    to comply with Section 5.01;

              (3)    to establish the form or terms of Securities of any series
       as permitted by Sections 2.01 and 2.02;

              (4)    to add to the covenants of the Company for the benefit of
       the Holders of all or any series of Securities (and if such covenants are
       to be for the benefit of less than all series of Securities, stating that
       such covenants are expressly being included solely for the benefit of
       such series) or to surrender any right or power herein conferred upon the
       Company;

              (5)    to add any additional Events of Default (and if such Events
       of Default are to be applicable to less than all series of Securities,
       stating that such Events of Default are expressly being included solely
       to be applicable to such series);

              (6)    to change or eliminate any of the provisions of this
       Indenture, provided that, except as otherwise contemplated by Section
       2.02(14), any such change or elimination shall become effective only when
       there is no Security outstanding of any series created prior thereto
       which is entitled to the benefit of such provision;

              (7)    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
       Securities in bearer form, registrable or not registrable as to
       principal, and with or without interest coupons, or to provide for
       uncertificated Securities in addition to certificated Securities (so long
       as any "registration-required obligation" within the meaning of Section
       163(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code")
       is in registered form for purposes of the Code);

              (8)    to make any change that does not materially adversely
       affect the rights of any Securityholder; or

              (9)    to comply with any requirement of the SEC in connection
       with the qualification of this Indenture under the TIA.

SECTION 9.02.        WITH CONSENT OF HOLDERS.

              The Company and the Trustee may amend or supplement this Indenture
or the Securities of any series without notice

<PAGE>
                                      -45-

to any Securityholder but with the written consent of the Holders of a majority
in aggregate principal amount of the outstanding Securities of each series
affected by such amendment or supplement. The Holders of a majority in aggregate
principal amount of the outstanding Securities of any series may on behalf of
the Holders of all Securities of such series waive compliance by the Company
with any provision of this Indenture or of Securities of such series without
notice to any Securityholder. Without the consent of each Securityholder
affected, however, the amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:

              (1)    reduce the amount of Securities of any series whose Holders
       must consent to an amendment, supplement or waiver;

              (2)    reduce the rate of or extend the time for payment of
       interest on any Security (or, in the case of an Original Issue Discount
       Security, reduce the rate of accrual of original issue discount);

              (3)    reduce the principal of (or any premium payable upon the
       redemption of) or change the fixed maturity of any Security (or, in the
       case of an Original Issue Discount Security, reduce the portion of the
       principal amount that would be due and payable upon acceleration of the
       maturity thereof pursuant to Section 6.02);

              (4)    change the amount or time of any payment required by any
       sinking fund provisions of the Securities of any series;

              (5)    make any change that materially adversely affects the
       rights of a Holder to require the Company to purchase a Security in
       accordance with the terms thereof and this Indenture;

              (6)    waive a default in the payment of the principal of or
       interest, if any, on any Security; or

              (7)    make any Security payable in money or securities other than
       that stated in the Security.

              It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed supplement, but it
shall be sufficient if such consent approves the substance thereof.
<PAGE>
                                      -46-

              An amendment to or supplement of this Indenture which changes or
eliminates any covenant or other provision of this Indenture which has expressly
been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any other
series.

SECTION 9.03.        COMPLIANCE WITH THE TRUST INDENTURE ACT.

              Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.

SECTION 9.04.        REVOCATION AND EFFECT OF CONSENTS.

              A consent to an amendment, supplement, waiver or other action by a
Holder of a Security shall bind the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any Security.
Any such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement, waiver or other action becomes effective. An amendment, supplement,
waiver or other action shall become effective on receipt by the Trustee of
written consents from the Holders of the requisite percentage in aggregate
principal amount of the outstanding Securities of the relevant series. After an
amendment, supplement or waiver becomes effective, it shall bind every
Securityholder of each series of Securities so affected.

SECTION 9.05.        NOTATION ON OR EXCHANGE OF SECURITIES.

              If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.

SECTION 9.06.        TRUSTEE TO SIGN AMENDMENTS, ETC.

              The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article if the amendment,

<PAGE>
                                      -47-

supplement or waiver does not adversely affect the rights, duties, immunities or
liabilities of the Trustee. If it does, the Trustee may but need not sign it.
The Company may not sign an amendment or supplement until the Board of Directors
approves it.

              In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture.

                                   ARTICLE TEN

                                  SUBORDINATION

SECTION 10.01.       SUBORDINATION TERMS.

              The payment by the Company of the principal of, premium, if any,
and interest on the Securities of any series shall be subordinated in the manner
and to the extent provided in the Securities of such series, as contemplated by
Sections 2.01 and 2.02.

                                 ARTICLE ELEVEN

                                  MISCELLANEOUS

SECTION 11.01.       TRUST INDENTURE ACT CONTROLS.

              If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by any of TIA ss.ss. 310 to 317, inclusive, through
operation of TIA ss. 318(c), such imposed duties shall control.

SECTION 11.02.       NOTICES.

              Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by first-class mail addressed as
follows:
<PAGE>
                                      -48-

              If to the Company:

                     XL Capital Ltd
                     XL House
                     One Bermudiana Road
                     Hamilton HM11
                     Bermuda
                     Attention:  Paul S. Giordano

              If to the Trustee:

                     U.S. Bank National Association
                     180 East Fifth Street
                     St. Paul, MN 55101
                     Attn: Corporate Trust Administration
                     (XL Capital Ltd)

              The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

              Any notice or communication mailed to a Securityholder shall be
mailed to him by first-class mail, postage prepaid, at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.

              Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

              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 equivalent of such
notice. Waivers of notice by Holders of Securities 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.

SECTION 11.03.       COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

              Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company,

<PAGE>
                                      -49-

the Trustee, the Registrar and anyone else shall have the protection of TIA
ss.312(c).

SECTION 11.04.       CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

              Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:

              (1)    an Officers' Certificate stating that, in the opinion of
       the signers, all conditions precedent (including any covenants compliance
       with which constitutes a condition precedent), if any, provided for in
       this Indenture relating to the proposed action have been complied with;
       and

              (2)    an Opinion of Counsel stating that, in the opinion of such
       counsel, all such conditions precedent (including any covenants
       compliance with which constitutes a condition precedent) have been
       complied with.

SECTION 11.05.       STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

              Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture (other
than certificates provided pursuant to Section 4.03) shall include:

              (1)    a statement that the person making such certificate or
       opinion has read such covenant or condition;

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

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

              (4)    a statement as to whether or not, in the opinion of such
       person, such condition or covenant has been complied with.
<PAGE>
                                      -50-

SECTION 11.06.       WHEN TREASURY SECURITIES DISREGARDED.

              In determining whether the Holders of the required aggregate
principal amount of Securities of any series have concurred in any direction,
waiver or consent, Securities of such series owned by the Company or by any
Affiliate of the Company shall be disregarded and treated as not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
of such series which the Trustee actually knows are so owned shall be so
disregarded.

SECTION 11.07.       RULES BY TRUSTEE AND AGENTS.

              The Trustee may make reasonable rules for action by or a meeting
of the Securityholders of all series or any series. The Registrar and Paying
Agent may make reasonable rules for its functions.

SECTION 11.08.       LEGAL HOLIDAYS.

              A "Legal Holiday" is a Saturday, a Sunday, or a day on which
banking institutions in the City of New York, New York or any place of payment
are not required to be open. If a specified date (including a date for giving
notice) is a Legal Holiday, any action to be taken on such date pursuant to this
Indenture or the Securities (including such conversion) may be taken on the next
succeeding day that is not a Legal Holiday, and, to the extent applicable, no
interest, or original issue discount, as the case may be, shall accrue for the
intervening period.

SECTION 11.09.       GOVERNING LAW.

              The internal laws of the State of New York shall govern this
Indenture and the Securities.

SECTION 11.10.       NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

              This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
<PAGE>
                                      -51-

SECTION 11.11.       NO RECOURSE AGAINST OTHERS.

              No past, present or future director, officer, employee or
stockholder, as such, of the Company or the Trustee or any successor of either
thereof shall have any liability for any obligations of the Company or the
Trustee under the Securities or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation and all such
liability is hereby waived and released. Such waiver and release are part of the
consideration for the issue of the Securities.

SECTION 11.12.       SUCCESSORS.

              All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.

SECTION 11.13.       DUPLICATE ORIGINALS.

              The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

SECTION 11.14.       TABLE OF CONTENTS, HEADINGS, ETC.

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

SECTION 11.15.       ACTS OF HOLDERS.

              (a)    Any direction, 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. 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. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 7.01) conclusive in favor of the Trustee, the Company and any Agent, if
made in the manner provided in this Section.
<PAGE>
                                      -52-

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

              (c)    The ownership, principal amount and serial numbers of
outstanding Securities held by any person, and the date of holding the same,
shall be provided by the security register.

              (d)    If the Company shall solicit from the Holders of any
Securities any direction, consent, waiver or other authorization, the Company
may at its option (but is not obligated to), by or pursuant to a resolution of
the Board of Directors, fix in advance a record date for the determination of
Holders of Securities entitled to give such direction, consent, waiver or other
authorization. Notwithstanding TIA ss. 316(c), such record date shall be the
record date specified in or pursuant to such resolution of the Board of
Directors, which shall be a date not earlier than 30 days prior to the first
solicitation of Holders generally in connection therewith and not later than the
date such solicitation is completed. If such a record date is fixed, such
direction, consent, waiver or other authorization may be given before or after
such record date, but only the Holders of Securities of record at the close of
business on such record date shall be deemed to be Holders for the purpose of
determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such direction, consent,
waiver or other authorization, and for that purpose the outstanding Securities
shall be computed as of such record date; provided that no such consent or other
authorization by the Holders shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.

              (e)    Any consent, waiver or other authorization by the Holder of
any Security shall bind such Holder and every future Holder of the same Security
and the Holder of every Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee, any Agent or the

<PAGE>
                                      -53-

Company in reliance thereon, whether or not notation of such action is made upon
such Security.

SECTION 11.16.       ASSIGNMENT.

              The Company shall have the right at all times to assign any to its
rights or obligations under this Indenture to a direct or indirect wholly owned
Subsidiary of the Company; PROVIDED, HOWEVER, that, in the event of any such
assignment, the Company shall remain liable for all such obligations.
<PAGE>
                                      -54-

              IN WITNESS WHEREOF, XL CAPITAL LTD has caused this Indenture to be
duly executed as a deed the day and year first before written.

The common seal of )
XL CAPITAL LTD     )
was hereunto       )
affixed in the     )
presence of        )

   /s/ Brian M. O'Hara
------------------------------------------
Name:  Brian M. O'Hara
Title: President & Chief Executive Officer

Witness:

   /s/ Paul S. Giordano
------------------------------------------
Name:  Paul S. Giordano
Title: Executive Vice President,
       General Counsel & Secretary
<PAGE>
                                      -55-

              IN WITNESS WHEREOF, the undersigned, being duly authorized, has
executed this Indenture as of the date first above written.

                                        U.S. BANK NATIONAL ASSOCIATION

                                        By:    /s/ Arthur L. Blakeslee
                                            ------------------------------
                                            Name:  Arthur L. Blakeslee
                                            Title: Assistant Vice PresidentExhibit 4.13

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

                        XL CAPITAL FINANCE (EUROPE) PLC,

                                    as Issuer

                                 XL CAPITAL LTD,

                                  as Guarantor

                                       to

                         U.S. BANK NATIONAL ASSOCIATION,

                                   as Trustee

                                   ----------

                                    INDENTURE

                          Dated as of January 23, 2003

                                   ----------

                             Senior Debt Securities

================================================================================
<PAGE>

     Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,
dated as of January 23, 2003.

Trust Indenture
   Act Section                                                 Indenture Section
-----------------                                              -----------------
ss.310(a) ......................................................  609
      (b).......................................................  608, 610
      (c).......................................................  Not Applicable
ss.311(a) ......................................................  613
      (b).......................................................  613
      (c).......................................................  Not Applicable
ss.312(a) ......................................................  701, 702(a)
      (b).......................................................  702(b)
      (c).......................................................  702(c)
ss.313(a) ......................................................  703(a)
      (b).......................................................  703(b)
      (c).......................................................  703(b)
      (d).......................................................  703(c)
ss.314(a) ......................................................  704
      (b).......................................................  Not Applicable
      (c).......................................................  102
      (d).......................................................  Not Applicable
      (e).......................................................  102
      (f).......................................................  Not Applicable
ss.315(a) ......................................................  601
      (b).......................................................  602, 703(b)
      (c).......................................................  601(b)
      (d).......................................................  601(c)
      (e).......................................................  514
ss.316(a)(1)....................................................  512, 513
      (b).......................................................  508
      (c).......................................................  104(d)
ss.317(a)(1)....................................................  503
      (a)(2)....................................................  504
      (b).......................................................  1003
ss.318(a) ......................................................  107

NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be a
       part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            PAGE
                                                                            ----

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101.    Definitions....................................................1
SECTION 102.    Compliance Certificates and Opinions...........................8
SECTION 103.    Form of Documents Delivered to Trustee.........................9
SECTION 104.    Acts of Holders...............................................10
SECTION 105.    Notices, Etc., to Trustee, Guarantor and Company..............11
SECTION 106.    Notice to Holders; Waiver.....................................11
SECTION 107.    Conflict with Trust Indenture Act.............................12
SECTION 108.    Effect of Headings and Table of Contents......................12
SECTION 109.    Successors and Assigns........................................12
SECTION 110.    Separability Clause...........................................12
SECTION 111.    Benefits of Indenture.........................................12
SECTION 112.    Governing Law.................................................12
SECTION 113.    Legal Holidays................................................12
SECTION 114.    References to and Judgment Currency...........................13
SECTION 115.    No Security Interest Created..................................13
SECTION 116.    Limitation on Individual Liability............................13
SECTION 117.    Submission to Jurisdiction....................................14
SECTION 118.    Execution of this Indenture...................................15

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201.    Forms Generally...............................................15
SECTION 202.    Form of Trustee's Certificate of Authentication...............15
SECTION 203.    Securities Issuable in the Form of a Global Security..........16
SECTION 204.    Form of Guarantee.............................................18

                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301.    Amount Unlimited; Issuable in Series..........................19

                                      -i-
<PAGE>

                                                                            PAGE
                                                                            ----

SECTION 302.    Denominations.................................................22
SECTION 303.    Execution, Authentication, Delivery and Dating................22
SECTION 304.    Temporary Securities..........................................23
SECTION 305.    Registration, Registration of Transfer and Exchange...........24
SECTION 306.    Mutilated, Destroyed, Lost and Stolen Securities..............25
SECTION 307.    Payment of Interest; Interest Rights Preserved................26
SECTION 308.    Persons Deemed Owners.........................................27
SECTION 309.    Cancellation..................................................27
SECTION 310.    Computation of Interest.......................................28
SECTION 311.    CUSIP and ISIN Numbers........................................28

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401.    Satisfaction and Discharge of Indenture.......................28
SECTION 402.    Application of Trust Funds; Indemnification...................30
SECTION 403.    Defeasance and Discharge of Indenture.........................30
SECTION 404.    Defeasance of Certain Obligations.............................32
SECTION 405.    Reinstatement.................................................33

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501.    Events of Default.............................................34
SECTION 502.    Acceleration of Maturity: Rescission and Annulment............36
SECTION 503.    Collection of Indebtedness and Suits for Enforcement
                  by Trustee..................................................37
SECTION 504.    Trustee May File Proofs of Claim..............................38
SECTION 505.    Trustee May Enforce Claims Without Possession of Securities...38
SECTION 506.    Application of Money Collected................................39
SECTION 507.    Limitation on Suits...........................................39
SECTION 508.    Unconditional Right of Holders to Receive Principal,
                  Premium and Interest........................................40
SECTION 509.    Restoration of Rights and Remedies............................40
SECTION 510.    Rights and Remedies Cumulative................................40
SECTION 511.    Delay or Omission Not Waiver..................................41
SECTION 512.    Control by Holders............................................41
SECTION 513.    Waiver of Past Defaults.......................................41
SECTION 514.    Undertaking for Costs.........................................42
SECTION 515.    Waiver of Stay or Extension Laws..............................42

                                      -ii-
<PAGE>

                                                                            PAGE
                                                                            ----
                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.    Certain Duties and Responsibilities...........................43
SECTION 602.    Notice of Defaults............................................44
SECTION 603.    Certain Rights of Trustee.....................................44
SECTION 604.    Not Responsible for Recitals or Issuance of Securities........45
SECTION 605.    May Hold Securities...........................................46
SECTION 606.    Money Held in Trust...........................................46
SECTION 607.    Compensation and Reimbursement................................46
SECTION 608.    Disqualification; Conflicting Interests.......................47
SECTION 609.    Corporate Trustee Required; Eligibility.......................47
SECTION 610.    Resignation and Removal; Appointment of Successor.............47
SECTION 611.    Acceptance of Appointment by Successor........................49
SECTION 612.    Merger, Conversion, Consolidation or Succession to Business...50
SECTION 613.    Preferential Collection of Claims Against Company.............50

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701.    Company to Furnish Trustee Names and Addresses of Holders.....51
SECTION 702.    Preservation of Information; Communications to Holders........51
SECTION 703.    Reports by Trustee............................................53
SECTION 704.    Reports by Guarantor..........................................53

                                  ARTICLE EIGHT

                              SUCCESSOR CORPORATION

SECTION 801.    When Company or Guarantor May Merge or Transfer Assets........54

                                  ARTICLE NINE

                      AMENDMENTS & SUPPLEMENTAL INDENTURES

SECTION 901.    Amendments or Supplemental Indentures without Consent
                  of Holders..................................................55
SECTION 902.    Amendments or Supplemental Indentures with Consent
                  of Holders..................................................57
SECTION 903.    Execution of Supplemental Indentures..........................58
SECTION 904.    Effect of Supplemental Indentures.............................58

                                     -iii-
<PAGE>

                                                                            PAGE
                                                                            ----

SECTION 905.    Conformity with Trust Indenture Act...........................59
SECTION 906.    Reference in Securities to Supplemental Indentures............59

                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001.   Payment of Principal, Premium and Interest....................59
SECTION 1002.   Maintenance of Office or Agency...............................60
SECTION 1003.   Money for Securities; Payments to Be Held in Trust............60
SECTION 1004.   Corporate Existence...........................................62
SECTION 1005.   Maintenance of Properties.....................................62
SECTION 1006.   Statement by Officers as to Default...........................62
SECTION 1007.   Waiver of Certain Covenants...................................63
SECTION 1008.   Ownership and Business of the Company.........................63
SECTION 1009.   Additional Amounts............................................63

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101.   Applicability of Article......................................65
SECTION 1102.   Election to Redeem; Notice to Trustee.........................65
SECTION 1103.   Selection by Trustee of Securities to Be Redeemed.............66
SECTION 1104.   Notice of Redemption..........................................66
SECTION 1105.   Deposit of Redemption Price...................................67
SECTION 1106.   Securities Payable on Redemption Date.........................67
SECTION 1107.   Securities Redeemed in Part...................................68

                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 1201.   Applicability of Article......................................69
SECTION 1202.   Satisfaction of Sinking Fund Payments with Securities.........69
SECTION 1203.   Redemption of Securities for Sinking Fund.....................69

                                ARTICLE THIRTEEN

                             GUARANTEE OF SECURITIES

SECTION 1301.   Unconditional Guarantee.......................................71
SECTION 1302.   Execution and Delivery of Guarantee...........................72
SECTION 1303.   Obligations of the Guarantor Unconditional....................72

                                      -iv-
<PAGE>

                                                                            PAGE
                                                                            ----

SECTION 1304.   Waivers.......................................................75
SECTION 1305.   Amendment, Etc................................................75

                                       -v-
<PAGE>

              INDENTURE, dated as of January 23, 2003, among XL Capital Finance
(Europe) plc, a public limited company incorporated under the laws of England
and Wales (herein called the "Company" or the "Issuer"), having its principal
office at 35 Basinghall Street, London EC2V 5DB, England, XL Capital Ltd, a
Cayman Islands exempted limited company (herein called the "Guarantor") and U.S.
Bank National Association, a national banking association, as trustee hereunder
(herein called the "Trustee").

                             RECITALS OF THE COMPANY

              The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

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

              The Guarantor, directly or indirectly, owns beneficially 100% of
the issued share capital of the Company.

              The Guarantor has duly authorized the execution and delivery of
this Indenture to provide for the Guarantee of the Securities provided for
herein.

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

              NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101.

               DEFINITIONS.
               ------------

              For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE>
                                      -2-

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

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

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

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

              (5)    all references used herein to the male gender shall include
       the female gender.

              "Act," when used with respect to any Holder, has the meaning
specified in Section 104.

              "Additional Amounts" means any amounts that are required under
this Indenture to be paid to the Holders by the Company or the Guarantor as
described in Section 1009.

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

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

              "Board Resolution" means a copy of a resolution, certified by the
secretary or an assistant secretary of the Company or the Guarantor to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, delivered to the Trustee.
<PAGE>
                                      -3-

              "Business Day" means, with respect to any Securities, any day
other than a Saturday, Sunday or other day in the City of New York or in any
Place of Payment on which banking institutions are authorized by law or
regulation to close.

              "Capital Stock" for any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including preference stock, but excluding any debt securities convertible into
such equity.

              "Certificated Securities" means Securities that are in registered
definitive form.

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

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

              "Company Request" or "Company Order" means a written request or
order signed in the name of the Company or the Guarantor, as the case may be, by
its chairman of the board, a vice chairman, its president, a vice president, its
treasurer, an assistant treasurer, its secretary or an assistant secretary, and
delivered to the Trustee.

              "Corporate Trust Office" means the office of the Trustee at which
at any particular time the trust created by this Indenture shall be
administered, which office, at the time of the execution of this Indenture, is
located at Goodwin Square, 225 Asylum Street, Hartford, CT 06103, Attn:
Corporate Trust Administration (XL Capital Finance (Europe) plc).

              "Defaulted Interest" has the meaning specified in Section 307.

              "Depositary" means, unless otherwise specified by the Company
pursuant to either Section 203 or 301, with respect to Securities of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered under the Securities Exchange Act
of 1934, as amended, or other applicable statute or regulation.

              "Event of Default" has the meaning specified in Section 501.
<PAGE>
                                      -4-

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

              "Guarantee" means the guarantee by the Guarantor pursuant to
Article Thirteen applicable to any Security which is authenticated and delivered
pursuant to this Indenture, which guarantee is endorsed on such Security by the
Guarantor pursuant to Article Thirteen.

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

              "Holder" means a Person in whose name a Security is registered in
the Security Register.

              "Holder Action" has the meaning specified in Section 702(d).

              "Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more amendments or
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 301.

              "Interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

              "Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.

              "Issuer" means the Person named as the "Issuer" 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
"Issuer" shall mean such successor corporation.

              "Maturity," when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal
(including any Additional Amounts or Redemption Price) becomes due and payable
as therein or herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.

              "Officers' Certificate" means a certificate signed by the chairman
of the board, the president, a vice president or a director, and by the
treasurer, an assistant treasurer, the sec-

<PAGE>
                                      -5-

retary or an assistant secretary, of the Company or the Guarantor, as the case
may be, and delivered to the Trustee.

              "Opinion of Counsel" means written opinion of counsel, who may be
counsel for the Company or the Guarantor, as the case may be, and who shall be
acceptable to the Trustee.

              "Ordinary Shares" means the Class A and Class B ordinary shares
(including preference ordinary shares), $0.01 par value per share, of XL Capital
Ltd existing on the date of this Indenture or any other shares of Capital Stock
of XL Capital Ltd into which such ordinary shares shall be reclassified or
changed.

              "Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.

              "Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

              (i)    Securities theretofore cancelled by the Trustee or
       delivered to the Trustee for cancellation;

              (ii)   Securities for whose payment or redemption money or
       evidences of indebtedness in the necessary amount has been theretofore
       deposited with the Trustee or any Paying Agent (other than the Company or
       the Guarantor) in trust or set aside and segregated in trust by the
       Company or the Guarantor (if the Company or the Guarantor shall act as
       Paying Agent) for the Holders of such Securities; PROVIDED that, if such
       Securities are to be redeemed, notice of such redemption has been duly
       given pursuant to this Indenture or provision therefor satisfactory to
       the Trustee has been made; and

              (iii)  Securities which have been paid pursuant to Section 306 or
       in exchange for or in lieu of which other Securities have been
       authenticated and delivered pursuant to this Indenture, other than any
       such Securities in respect of which there shall have been presented to
       the Trustee proof satisfactory to it that such Securities are held by a
       bona fide purchaser in whose hands such Securities are valid obligations
       of the Company;

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or the Guarantor or of such other obligor shall be

<PAGE>
                                      -6-

disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or the
Guarantor or of such other obligor. In case of a dispute as to such right, any
decision by the Trustee shall be full protection to the Trustee. Upon request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Company
to be owned or held by or for the account of any of the above-described persons;
and, subject to Section 601, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purposes of any such determination.

              "Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on behalf
of the Company.

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

              "Place of Payment," when used with respect to the Securities of
any series, means the place or places where the principal of (and premium, if
any) and interest on the Securities of that series are payable as specified as
contemplated by Section 301.

              "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

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

              "Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

              "Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.

<PAGE>
                                      -7-

              "Relevant Date" means, in respect of any payment, the date on
which such payment first becomes due and payable, but if the full amount of the
moneys payable has not been received by the Trustee on or prior to such due
date, it means the first date on which, the full amount of such moneys having
been so received and being available for payment to Holders, notice to that
effect shall have been duly given to the Holders of the Securities.

              "Responsible Officer," when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.

              "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

              "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

              "Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.

              "Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

              "Subsidiary" means, with respect to any Person:

              (1)    any corporation or company a majority of whose Capital
                     Stock with voting power, under ordinary circumstances, to
                     elect directors is, at the date of determination, directly
                     or indirectly, owned by such Person (a "subsidiary"), by
                     one or more subsidiaries of such Person or by such Person
                     and one or more subsidiaries of such Person;

              (2)    a partnership in which such Person or a subsidiary of such
                     Person is, at the date of determination, a general partner
                     of such partnership; or

              (3)    any partnership, limited liability company or other Person
                     in which such Person, a subsidiary of such Person or such
                     Person and one or more subsidiaries of such Person,
                     directly or indirectly, at the date of determination, has
                     (x) at least a majority ownership interest or (y) the power
                     to elect or appoint or direct the election or appointment
                     of the managing partner or member of such Person or, if
                     applicable, a majority of the directors or other governing
                     body of such Person.
<PAGE>
                                      -8-

              "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

              "Trust Indenture Act" means the Trust Indenture Act of 1939 as
amended and in force at the date as of which this instrument was executed,
except as provided in Section 905.

              "UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of New York.

              "U.S. Government Obligations" means securities which are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in the case
of clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of or any other amount with
respect to any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt; PROVIDED that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian with respect to the U.S. Government Obligation or the specific
payment of interest on or principal of or any other amount with respect to such
U.S. Government Obligation evidenced by such depository receipt.

SECTION 102.         COMPLIANCE CERTIFICATES AND OPINIONS.

              Upon any application or request by the Company or the Guarantor to
the Trustee to take any action under any provision of this Indenture, the
Company or the Guarantor, as the case may be, shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and, where appropriate as to matters of law, 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.
<PAGE>
                                      -9-

              Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

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

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

              (3)    a statement that, in the opinion of each such Person, such
       Person 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

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

SECTION 103.         FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

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

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

              Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
<PAGE>
                                      -10-

SECTION 104.         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 or the
Guarantor. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company or the Guarantor, if made in the manner provided in
this section.

              (b)    The fact and date of the execution of any such instrument
or writing, or the authority of the Person executing the same, may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in any reasonable manner which the Trustee deems sufficient.

              (c)    The ownership of Securities shall be proved by the Security
Register.

              (d)    If the Company or the Guarantor shall solicit from the
Holders any request, demand, authorization, direction, notice, consent, waiver
or other Act, the Company or the Guarantor may, at its option, by or pursuant to
a Board Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company or the Guarantor shall have no
obligation to do so. Notwithstanding Trust Indenture Act Section 316(c), such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act maybe given before or after such record date, but only the Holders of record
at the close of business on such record date shall be deemed to be Holders for
the purposes of determining whether Holders of the requisite proportion of
Outstanding Securities shall be computed as of such record date; PROVIDED,
HOWEVER, that no such authorization, agreement or consent by such Holders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.

              (e)    Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in ex-

<PAGE>
                                      -11-

change therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company or the Guarantor in reliance
thereon, whether or not notation of such action is made upon such Security.

SECTION 105.         NOTICES, ETC., TO TRUSTEE, GUARANTOR AND COMPANY.

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

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

              (2)    the Company or the Guarantor by the Trustee or by any
       Holder shall be sufficient for every purpose hereunder (unless otherwise
       herein expressly provided) if in writing and mailed, first-class postage
       prepaid, to the Company addressed to it at the address of its principal
       office specified in the first paragraph of this instrument (or, if to the
       Guarantor, to XL Capital Ltd, XL House, One Bermudiana Road, Hamilton
       HM11, Bermuda, Attn: Paul S. Giordano) or at any other address previously
       furnished in writing to the Trustee by the Company or the Guarantor for
       such purpose.

SECTION 106.         NOTICE TO HOLDERS; WAIVER.

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

              In case by reason of the suspension of regular mail service or by
reason of any other case it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
<PAGE>
                                      -12-

SECTION 107.         CONFLICT WITH TRUST INDENTURE ACT.

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

SECTION 108.         EFFECT OF HEADINGS AND TABLE OF CONTENTS.

              The article and section headings herein and the table of contents
are for convenience only and shall not affect the construction hereof.

SECTION 109.         SUCCESSORS AND ASSIGNS.

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

SECTION 110.         SEPARABILITY CLAUSE.

              In case any provision in this Indenture, the Securities or the
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

SECTION 111.         BENEFITS OF INDENTURE.

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

SECTION 112.         GOVERNING LAW.

              This Indenture, the Securities and the Guarantee shall be governed
by and construed in accordance with the laws of the State of New York.

SECTION 113.         LEGAL HOLIDAYS.

              In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, PROVIDED that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
<PAGE>
                                      -13-

SECTION 114.         REFERENCES TO AND JUDGMENT CURRENCY.

              All references in this Indenture to "dollars" or "$" are to the
currency of the United States of America. Each of the Company and the Guarantor
agrees, to the fullest extent that it may effectively do so under applicable
law, that (a) if for the purpose of obtaining judgment in any court it is
necessary to convert the sum due in respect of the principal of, or premium or
interest, if any, or Additional Amounts on the Securities (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the requisite amount of the Required Currency with the Judgment Currency on
the New York Banking Day preceding the day on which a final unappealable
judgment is given and (b) its obligations under this Indenture to make payments
in the Required Currency (i) shall not be discharged or satisfied by any tender,
or any recovery pursuant to any judgment (whether or not entered in accordance
with clause (a)), in any currency other than the Required Currency, except to
the extent that such tender or recovery shall result in the actual receipt, by
the payee, of the full amount of the Required Currency expressed to be payable
in respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to be closed.

SECTION 115.         NO SECURITY INTEREST CREATED.

              Nothing in this Indenture or in the Securities, express or
implied, shall be construed to constitute a security interest under the UCC or
similar legislation, as now or hereafter enacted and in effect in any
jurisdiction where property of the Company, the Guarantor or its Subsidiaries is
or may be located.

SECTION 116.         LIMITATION ON INDIVIDUAL LIABILITY.

              No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or the Guarantor, either directly or through the Company or the
Guarantor, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators,

<PAGE>
                                      -14-

shareholders, officers or directors, as such, of the Company or the Guarantor,
or any of them, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any Security or implied therefrom; and that any and all
such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, shareholder, officer or director, as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Security.

SECTION 117.         SUBMISSION TO JURISDICTION.

              The Company, the Guarantor and the Trustee agree that any legal
suit, action or proceeding arising out of or relating to this Indenture, and
each of the Company and the Guarantor agrees that any legal suit, action or
proceeding arising out of or relating to the Securities or the Guarantee, may be
instituted in any federal or state court in the Borough of Manhattan, The City
of New York, waives any objection which it may now or hereafter have to the
laying of the venue of any such legal suit, action or proceeding, waives any
immunity from jurisdiction or to service of process in respect of any such suit,
action or proceeding, and irrevocably submits to the jurisdiction of any such
court in any such suit, action or proceeding. Each of the Company, the Trustee
and the Guarantor further submits to the jurisdiction of the courts of its own
corporate domicile in any legal suit, action or proceeding arising out of or
relating to this Indenture, the Securities or the Guarantee. Each of the Company
and the Guarantor hereby designates and appoints CT Corporation System, 111
Eighth Avenue, New York, New York 10011 as its authorized agent upon which
process may be served in any legal suit, action or proceeding arising out of or
relating to this Indenture, the Securities or the Guarantee which may be
instituted in any federal or state court in the Borough of Manhattan, The City
of New York, New York, and agrees that service of process upon such agent, and
written notice of said service to the Company or the Guarantor by the Person
serving the same, shall be deemed in every respect effective service of process
upon the Company (if such notice is given to the Company) or upon the Guarantor
(if such notice is given to the Guarantor) in any such suit, action or
proceeding and further designates its domicile, the domicile of CT Corporation
System specified above and any domicile CT Corporation System may have in the
future as its domicile to receive any notice hereunder (including service of
process). If for any reason CT Corporation System (or any successor agent for
this purpose) shall cease to act as agent for service of process as provided
above, each of the Company and the Guarantor will promptly appoint a successor
agent for this purpose reasonably acceptable to the Trustee. Each of the Company
and the Guarantor agrees to take any and all actions as may be necessary to
maintain such designation and appointment of such agent in full force and
effect.
<PAGE>
                                      -15-

SECTION 118.         EXECUTION OF THIS INDENTURE.

              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.
Signatures may be manual or facsimile.

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201.         FORMS GENERALLY.

              The Securities of each series shall be in substantially the forms
established in one or more indentures supplemental hereto or approved from time
to time by or pursuant to a Board Resolution in accordance with Section 301, in
each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and any indenture
supplemental hereto, 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 securities
regulatory authority or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the secretary or an assistant secretary of each of
the Company and the Guarantor and delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the authentication
and delivery of such Securities.

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

SECTION 202.         FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

              The Trustee's certificate of authentication required by this
article shall be in substantially the form set forth below.

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

                                              U.S. BANK NATIONAL ASSOCIATION,
                                                     as Trustee

                                              By ______________________________"
                                                      Authorized Signatory
<PAGE>
                                      -16-

SECTION 203.         SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.

              (a)    If the Issuer shall establish pursuant to Sections 201 and
301 that the Securities of a particular series are to be issued in whole or in
part in the form of one or more Global Securities, then the Issuer shall execute
(along with an executed Guarantee endorsed thereon) and the Trustee shall, in
accordance with Section 303 and the Company Order delivered to the Trustee
thereunder, authenticate and deliver, such Global Security or Securities
(including the Guarantees thereon), which (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, the
Outstanding Securities of such series to be represented by such Global Security
or Securities, (ii) shall be registered in the name of the Depositary for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee to the Depositary or its custodian or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY (AND THE RELATED GUARANTEE)
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE (I) BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR (II) BY A NOMINEE OF THE DEPOSITARY OR THE DEPOSITARY TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER AND THE GUARANTOR OR
THEIR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

              (b)    Notwithstanding any other provision of this section or of
Section 305, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for individual Securities, a Global
Security may be transferred, in whole but not in part and in the manner provided
in Section 305, only to another nominee of the Depositary for such Global
Security, or to a successor Depositary for such Global Security selected or
approved by the Issuer or to a nominee of such successor Depositary.

              (c)    (i)    If at any time the Depositary for a Global Security
notifies the Issuer that it is unwilling or unable to continue as Depositary for
such Global Security or if at any

<PAGE>
                                      -17-

time the Depositary for the Securities for such series shall no longer be
eligible or in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Issuer shall appoint a
successor Depositary with respect to such Global Security. If a successor
Depositary for such Global Security is not appointed by the Issuer within 90
days after the Issuer receives such notice or becomes aware of such
ineligibility, the Issuer will execute a Company Order for the authentication
and delivery of individual Securities of such series in exchange for such Global
Security, and the Trustee, upon receipt of such Company Order, will authenticate
and deliver individual Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Security in exchange for such Global Security and the Guarantor
shall execute Guarantees thereon.

                     (ii)   If an Event of Default shall have occurred and be
continuing or an event shall have occurred which with the giving of notice or
lapse of time or both, would constitute an Event of Default with respect to the
Securities represented by such Global Security, the Issuer will execute a
Company Order for the authentication and delivery of individual Securities of
such series in exchange for such Global Security, and the Trustee, upon receipt
of such Company Order, will authenticate and deliver individual Securities of
such series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for such
Global Security and the Guarantor shall execute Guarantees thereon.

                     (iii)  The Issuer may at any time and in its sole
discretion determine that the Securities of any series issued or issuable in the
form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series to be so exchanged for such Global Security or
Securities and the Guarantor shall execute Guarantees thereon.

                     (iv)   If specified by the Issuer pursuant to Section 301
with respect to Securities issued or issuable in the form of a Global Security,
the Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the Issuer
and such Depositary. Thereupon the Issuer shall execute, the Guarantor shall
execute Guarantees on and the Trustee shall authenticate and deliver, without
service charge, (1) to each Person specified by such Depositary a new Security
or Securities of the same series of like tenor and terms and of any authorized
denomination of $1,000 and any integral multiple thereof as requested by such
Person in aggregate principal amount equal to and in exchange

<PAGE>
                                      -18-

for such Person's beneficial interest in the Global Security; and (2) to such
Depositary a new Global Security of like tenor and terms and in a denomination
equal to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities delivered to
Holders thereof.

                     (v)    In any exchange provided for in any of the preceding
four paragraphs, the Issuer will execute, the Guarantor shall execute Guarantees
on and the Trustee will authenticate and deliver individual Securities in
definitive registered form in authorized denominations of $1,000 and any
integral multiple thereof. Upon the exchange of a Global Security for individual
Securities, such Global Security shall be cancelled by the Trustee. Securities
issued in exchange for a Global Security pursuant to this section shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Securities to the persons in whose names such Securities are so registered.

SECTION 204.         FORM OF GUARANTEE.

              The form of Guarantee shall be set forth on the Securities
       as follows:

              For value received, XL Capital Ltd hereby unconditionally
       and irrevocably guarantees on an unsecured, unsubordinated basis
       to the holder of this Security the payment of principal of,
       premium, if any, on, interest on, and Additional Amounts, if any,
       in respect of the Security upon which this Guarantee is endorsed
       in the amounts and at the times when due and payable whether by
       declaration thereof, or otherwise, and interest on the overdue
       principal, premium, if any, Additional Amounts, if any, and
       interest of such Security, if lawful, and the payment or
       performance of all other obligations of the Company under the
       Indenture or the Securities, to the holder of such Security and
       the Trustee, all in accordance with and subject to the terms and
       limitations of such Security and Article Thirteen of the
       Indenture. This Guarantee will not become effective until the
       Trustee duly executes the certificate of authentication on this
       Security. This Guarantee shall be governed by and construed in
       accordance with the laws of the State of New York.

Dated:
                                 XL CAPITAL LTD

                                 By: _____________________________
                                     Name:
                                     Title:
<PAGE>
                                      -19-

                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301.         AMOUNT UNLIMITED; ISSUABLE IN SERIES.

              The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

              The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution of each of the Company and the
Guarantor and set forth in a certificate signed by the chairman of the board,
the president, a vice president, a director, the treasurer, an assistant
treasurer, the secretary or assistant secretary of each of the Company and the
Guarantor, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,

              (1)    any limit upon the aggregate principal amount of the
       Securities of the series which may be authenticated and delivered under
       this Indenture (except for Securities authenticated and delivered upon
       registration of transfer of, or in exchange for, or in lieu of, other
       Securities of the series pursuant to Sections 203, 304, 305, 306, 906 or
       1107);

              (2)    the issue price, expressed as a percentage of the aggregate
       principal amount;

              (3)    the date or dates on which the principal of the Securities
       of the series is payable;

              (4)    the rate or rates at which the Securities of the series
       shall bear interest, if any, the date or dates from which such interest
       shall accrue, the Interest Payment Dates on which such interest shall be
       payable and the Regular Record Date for the interest payable on the
       Interest Payment Date;

              (5)    the obligation, if any, of the Company to redeem or
       purchase Securities of the series pursuant to any sinking fund or
       analogous provisions or at the option of a Holder thereof and the period
       or periods within which, the price or prices at which and the terms and
       conditions upon which Securities of the series shall be redeemed or
       purchased, in whole or in part, pursuant to such obligation;

<PAGE>
                                      -20-

              (6)    the period of periods within which, the price or prices or
       ratios at which and the terms and conditions upon which Securities of the
       series may be redeemed, converted or exchanged, in whole or in part;

              (7)    if other than denominations of $1,000 and any integral
       multiple thereof, the denominations in which Securities of the series
       shall be issuable;

              (8)    if other than the full principal amount, the portion of the
       principal amount of Debt Securities of the series which will be payable
       upon declaration of acceleration or provable in bankruptcy;

              (9)    any events of default not set forth in this Indenture;

              (10)   the currency or currencies, including composite currencies,
       in which payment of the principal of (and premium, if any) and interest,
       if any, on such Securities shall be payable (if other than the currency
       of the United States of America), which unless otherwise specified shall
       be the currency of the United States of America as at the time of payment
       is legal tender for payment of public or private debts;

              (11)   if the principal of (and premium, if any), or interest, if
       any, on such Securities are to be payable, at the election of the Company
       or any Holder thereof, in a coin or currency other than that in which
       such Securities are stated to be payable, then the period or periods
       within which, and the terms and conditions upon which, such election may
       be made;

              (12)   whether interest will be payable in cash or additional
       Securities at the Company's or the Holders' option and the terms and
       conditions upon which the election may be made;

              (13)   if such Securities are to be denominated in a currency or
       currencies, including composite currencies, other than the currency of
       the United States of America, the equivalent price in the currency of the
       United States of America for purposes of determining the voting rights of
       Holders of such Securities as Outstanding Securities under this
       Indenture;

              (14)   if the amount of payments of principal of (and premium, if
       any), or portions thereof, or interest, if any, on such Securities may be
       determined with reference to an index, formula or other method based on a
       coin or currency other than that in which such Securities are stated to
       be payable, the manner in which such amounts shall be determined;
<PAGE>
                                      -21-

              (15)   any restrictive covenants or other material terms relating
       to the offered debt securities, which covenants and terms shall not be
       inconsistent with the provisions of this Indenture;

              (16)   whether the Securities of the series shall be issued in
       whole or in part in the form of a Global Security or Securities; the
       terms and conditions, if any, upon which such Global Security or
       Securities may be exchanged in whole or in part for other individual
       Securities; and the Depositary for such Global Security or Securities;

              (17)   any listing of such Securities on any securities exchange;

              (18)   additional or alternative provisions, if any, related to
       defeasance and discharge of the offered debt securities;

              (19)   the applicability of the Guarantee or any other guarantees;

              (20)   if convertible into Ordinary Shares, the terms on which
       such Securities are convertible, including the initial conversion price,
       the conversion period, any events requiring an adjustment of the
       applicable conversion price and any requirements relating to the
       reservation of such Ordinary Shares for purposes of conversion;

              (21)   provisions, if any, granting special rights to the Holders
       of Securities of the series upon the occurrence of such events as may be
       specified;

              (22)   each initial Place of Payment; and

              (23)   any other terms of the series, which terms shall not be
       inconsistent with the provisions of this Indenture.

              All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such officer's certificate, as
described above, or in any such indenture supplemental hereto.

              If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution as set forth above, a
copy of an appropriate record of such action shall be certified by the secretary
or an assistant secretary of the Company and of the Guarantor and delivered to
the Trustee at or prior to the delivery of the officer's certificate setting
forth the terms of the Securities of any series (any one person may sign both
such copy in his capacity as secretary or assistant secretary and such officer's
certificate in his capacity as an officer).
<PAGE>
                                      -22-

SECTION 302.         DENOMINATIONS.

              The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

SECTION 303.         EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

              The Securities shall be executed on behalf of the Company by two
persons who shall be either officers or directors of the Company duly authorized
by the Company (by all requisite corporate actions). The signatures of such
authorized persons on the Securities may be manual or facsimile.

              Securities 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 have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.

              At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, or by one or more indentures supplemental hereto as
provided by Section 901, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel from the Company stating,

              (a)    that such form has been established in conformity with the
       provisions of this Indenture;

              (b)    that such terms have been established in conformity with
       the provisions of this Indenture;

              (c)    that this Indenture and such Securities, when authenticated
       and delivered by the Trustee and issued by the Company in the manner and
       subject to any conditions specified in such Opinion of Counsel, will
       constitute valid and legally binding obligations of the Company,
       enforceable in accordance with their terms, subject to bankruptcy,
       insolvency, fraudulent conveyance, reorganization and other laws of
       general

<PAGE>
                                      -23-

       applicability relating to or affecting the enforcement of creditors'
       rights and to general equity principles;

              (d)    that all laws and requirements in respect of the execution
       and delivery by the Company of the Securities have been complied with;
       and

              (e)    such other matters as the Trustee may reasonably request.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

              Each Security shall be dated the date of its authentication unless
otherwise provided by the terms established and contemplated by Section 301.

              No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.

SECTION 304.         TEMPORARY SECURITIES.

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

              If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations
and the Guarantor shall execute Guarantees thereon. Until so ex-

<PAGE>
                                      -24-

changed the temporary Securities of any series shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities of such
series.

SECTION 305.         REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

              The Company shall cause to be kept at one of its offices or
agencies maintained pursuant to Section 1002 or at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to
Section 203 and to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of Securities.
The Trustee initially is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided. The
Company may act as Security Registrar and may change or appoint a Security
Registrar without prior notice to Holders or to the Trustee.

              Subject to Section 203, upon surrender for registration of
transfer of any Security of any series at the office or agency in a Place of
Payment for that series, the Company shall execute, the Guarantor shall execute
Guarantees on, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal amount
and tenor. In the case of a transfer of part of any Security, the Company shall
execute, the Guarantor shall execute Guarantees on, and the Trustee shall
authenticate and deliver, one or more new Securities of the same series in the
name of the designated transferee or transferees, in respect of the part
transferred, and one or more new Securities of the same series, in respect of
the balance of the old Security not transferred, in the name of the transferor.

              Subject to Section 203, at the option of the Holder, Securities of
any series may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, the Guarantor shall execute Guarantees on and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

              Subject to Section 203, all Securities issued upon any
registration or transfer or exchange of Securities and the Guarantees thereon
shall be valid obligations of the Company and the Guarantor, respectively,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.

              Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompa-

<PAGE>
                                      -25-

nied by a written instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.

              No service charge shall be made for any registration of transfer
or exchange of Securities, 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 Securities, other
than exchanges pursuant to Section 203, 304, 906 or 1107 not involving any
transfer.

              The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption (under Section
1103) and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

SECTION 306.         MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

              If there shall be delivered to the Company, the Guarantor and the
Trustee (i)(A) any mutilated Security or (B) evidence to their satisfaction of
the destruction, loss or theft of any Security and (ii) such security or
indemnity as may be required by them to hold each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company and the Guarantor, if applicable, shall execute and upon its request the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security or in exchange for such mutilated Security, a new Security of
the same series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

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

              Upon the issuance of any new Security 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
expenses (including the fees and expenses of the Trustee) connected therewith.

              Every new Security of any series issued pursuant to this section
in lieu of any destroyed, lost or stolen Security or in exchange for such
mutilated Security, shall constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
enti-

<PAGE>
                                      -26-

tled to all the benefits of this Indenture equally and proportionately with any
and all other Securities of that series and the Guarantee duly issued hereunder.

              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 Securities.

SECTION 307.         PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

              Interest on any Security 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 Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

              Any interest on any Security 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 forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company or the Guarantor, at its
election in each case, as provided in clause (1) or (2) below:

              (1)    The Company or the Guarantor may elect to make payment of
       any Defaulted Interest to the Persons in whose names the Securities of
       such series (or their respective Predecessor Securities) are registered
       at the close of business on a Special Record Date for the payment of such
       Defaulted Interest, which shall be fixed in the following manner. The
       Company or the Guarantor shall notify the Trustee in writing of the
       amount of Defaulted Interest proposed to be paid on each Security of such
       series and the date of the proposed payment, and at the same time the
       Company or the Guarantor shall deposit with the Trustee an amount of
       money equal to the aggregate amount proposed to be paid in respect of
       such Defaulted Interest or shall make arrangements satisfactory to the
       Trustee for such deposit prior to the date of the proposed payment, such
       money when deposited to be held in trust for the benefit of the Persons
       entitled to such Defaulted Interest as in this clause provided. Thereupon
       the Trustee shall fix a Special Record Date for the payment of such
       Defaulted Interest which shall be not more than 15 days and not less than
       10 days prior to the date of the proposed payment and not less than 10
       days after the receipt by the Trustee of the notice of the proposed
       payment. The Trustee shall promptly notify the Company and the Guarantor
       of such Special Record Date and, in the name and at the expense of the
       Company or the Guarantor, 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 Securities of such
       series at his address as it appears in the Security Register, not less
       than 10 days prior to such Special Record Date. Notice of the proposed
       payment of such Defaulted Interest and the Special Record Date therefor
       having been so mailed,

<PAGE>
                                      -27-

       such Defaulted Interest shall be paid to the Persons in whose names the
       Securities of such series (or their respective Predecessor Securities)
       are registered at the close of business on such Special Record Date and
       shall no longer be payable pursuant to the following clause (2).

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

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

SECTION 308.         PERSONS DEEMED OWNERS.

              Subject to Section 203, the Company, the Guarantor, the Trustee
and any agent of the Company, the Guarantor or the Trustee may treat the Person
in whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if any) and (subject
to Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and none of the Company, the Guarantor,
the Trustee or any agent of the Company, the Guarantor or the Trustee shall be
affected by notice to the contrary.

SECTION 309.         CANCELLATION.

              All Securities surrendered for payment, redemption, registration
of transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company or the Guarantor may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company or the Guarantor may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this section,
except as expressly permitted by this Indenture. The Trustee shall destroy
cancelled Securities and deliver a certificate of such destruction to the
Company or the Guarantor.
<PAGE>
                                      -28-

SECTION 310.         COMPUTATION OF INTEREST.

              Except as otherwise specified as contemplated by Section 301 for
the Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year of 12 30-day months.

SECTION 311.         CUSIP AND ISIN NUMBERS.

              The Company in issuing the Securities may use "CUSIP" and "ISIN"
numbers (if then generally in use), and the Trustee shall use CUSIP or ISIN
numbers, as the case may be, in notices of redemption or exchange as a
convenience to Holders and no representation shall be made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of redemption or exchange.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401.         SATISFACTION AND DISCHARGE OF INDENTURE.

              This Indenture shall upon Company Request from the Company and the
Guarantor cease to be of further effect with respect to any series of Securities
(except as to (i) any surviving rights of registration of transfer or exchange
of Securities herein expressly provided for, (ii) rights hereunder of Holders to
receive payments of principal of, and premium, if any, and interest on,
Securities, and other rights, duties and obligations of the Holders as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee, (iii) remaining obligations of the Company to make mandatory sinking
fund payments and (iv) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, at the expense of the Company or the Guarantor,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to any series of Securities, when

              (1)    either

                     (A)    all Securities of such series theretofore
                     authenticated and delivered (other than (i) Securities of
                     such series which have been mutilated, destroyed, lost or
                     stolen and which have been replaced or paid as provided in
                     Section 306 and (ii) Securities of such series for whose
                     payment money has theretofore been deposited in trust or
                     segregated and held in trust by the Company or the
                     Guarantor and thereafter repaid to the

<PAGE>
                                      -29-

                     Company or the Guarantor or discharged from such trust, as
                     provided in Section 1003) have been delivered to the
                     Trustee for cancellation; or

                     (B)    all such Securities not theretofore delivered to the
                     Trustee for cancellation

                            (i)    have become due and payable, or

                            (ii)   will become due and payable at their Stated
                            Maturity within one year, or

                            (iii)  are to be called for redemption within one
                            year under arrangements satisfactory to the Trustee
                            for the giving of notice of redemption by the
                            Trustee in the name, and at the expense, of the
                            Company or the Guarantor,

                     and the Company or the Guarantor, in the case of (i), (ii)
                     or (iii) above, has deposited or caused to be deposited
                     with the Trustee as trust funds in trust for the purpose
                     (i) money in U.S. dollars in an amount (or if the
                     Securities are denominated in any currency other than U.S.
                     dollars, an amount of the applicable currency), or (ii)
                     U.S. Government Obligations which through the payment of
                     interest and principal in respect thereof in accordance
                     with their terms will provide not later than one day before
                     the due date of any payment referred to in clause (A) of
                     this subparagraph money in an amount, or (iii) a
                     combination thereof, sufficient, in the opinion of a
                     nationally recognized firm of independent public
                     accountants expressed in a written certification thereof
                     delivered to the Trustee, (A) to pay and discharge the
                     entire indebtedness on such Securities not theretofore
                     delivered to the Trustee for cancellation, for principal
                     (and premium, if any) and interest to the date of such
                     deposit (in the case of Securities which have become due
                     and payable) or to the Stated Maturity or Redemption Date,
                     as the case may be;

              (2)    if all series of Securities are being discharged, the
Company or the Guarantor has paid or caused to be paid all other sums payable
hereunder by the Company or the Guarantor; and

              (3)    the Company and the Guarantor have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
<PAGE>
                                      -30-

              Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company and the Guarantor to the Trustee under Section
607, and, if money shall have been deposited with the Trustee pursuant to
Subclause (B) of clause (1) of this section, the obligations of the Trustee
under Section 402 and the next to last paragraph of Section 1003, shall survive.

SECTION 402.         APPLICATION OF TRUST FUNDS; INDEMNIFICATION.

              (a)    Subject to the provisions of the next to last paragraph of
Section 1003, all money and U.S. Government Obligations deposited with the
Trustee pursuant to Section 401, all money and U.S. Government Obligations
deposited with the Trustee pursuant to Section 403 or 404 and all money received
by the Trustee in respect of U.S. Government Obligations deposited with the
Trustee pursuant to Section 401, 403 or 404 shall be held in trust and applied
by it, in accordance with the provisions of the Securities and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company or the Guarantor acting as Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money has been deposited with or received by the
Trustee or to make mandatory sinking fund payments or analogous payments as
contemplated by Section 401, 403 or 404, but such money need not be segregated
from other funds except to the extent required by law.

              (b)    The Company or the Guarantor shall pay and shall indemnify
the Trustee against any tax, fee or other charge imposed on or assessed against
U.S. Government Obligations deposited pursuant to Section 401, 403 or 404, or
the interest and principal received in respect of such obligations other than
any payable by or on behalf of Holders.

              (c)    The Trustee shall deliver or pay to the Company or the
Guarantor from time to time upon Company Request from the Company or the
Guarantor, as the case may be, any U.S. Government Obligations or money held by
it as provided in Section 403 or 404 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are then in excess of the amount
thereof which then would have been required to be deposited for the purpose for
which such obligations or money were deposited or received.

SECTION 403.         DEFEASANCE AND DISCHARGE OF INDENTURE.

              The Company and the Guarantor shall be deemed to have paid and
discharged the entire indebtedness on all the Outstanding Securities on the 91st
day after the date of the deposit referred to in subparagraph (1) of this
section, and the provisions of this Indenture, as it relates to such Outstanding
Securities, shall no longer be in effect (and the Trustee, at the expense of the
Company or the Guarantor, shall at Company Request of the Company or the
Guarantor, execute proper instruments acknowledging the same), except as to:
<PAGE>
                                      -31-

              (a)    the rights of Holders of Securities to receive, from the
       trust funds described in subparagraph (1) hereof, (i) payment of the
       principal of (and premium, if any) and each installment of principal of
       (and premium, if any) or interest on the Outstanding Securities on the
       Stated Maturity of such principal or installment of principal or interest
       and (ii) the benefit of any mandatory sinking fund payments applicable to
       the Securities on the day on which such payments are due and payable in
       accordance with the terms of this Indenture and the Securities;

              (b)    the Company's and the Guarantor's obligations with respect
       to such Securities under Sections 304, 305, 306, 1002, 1003 and 1009; and

              (c)    the obligations of the Company and the Guarantor to the
       Trustee under Section 607,

PROVIDED that, the following conditions shall have been satisfied:

              (1)    the Company or the Guarantor has or caused to be
       irrevocably deposited (except as provided in Section 402) with the
       Trustee as trust funds in trust, specifically pledged as security for,
       and dedicated solely to, the benefit of the Holders of the Securities,
       (i) money in U.S. dollars in an amount (or if the Securities are
       denominated in any currency other than U.S. dollars, an amount of the
       applicable currency), or (ii) U.S. Government Obligations which through
       the payment of interest and principal in respect thereof in accordance
       with their terms will provide not later than one day before the due date
       of any payment referred to in clause (A) or (B) of this subparagraph
       money in an amount, or (iii) a combination thereof, sufficient, in the
       opinion of a nationally recognized firm of independent certified public
       accountants expressed in a written certification thereof delivered to the
       Trustee, to pay and discharge (A) the principal of (and premium, if any)
       and each installment of principal of (and premium, if any) and interest
       on the Outstanding Securities on the Stated Maturity of such principal or
       installment of principal or interest or on the applicable Redemption Date
       and (B) any mandatory sinking fund payments applicable to the Securities
       on the day on which such payments are due and payable in accordance with
       the terms of this Indenture and of the Securities;

              (2)    such deposit shall not cause the Trustee with respect to
       the Securities to have a conflicting interest for purposes of the Trust
       Indenture Act with respect to the Securities;

              (3)    such deposit will not result in a breach or violation of,
       or constitute a default under, any applicable laws, this Indenture or any
       other agreement or instrument to which the Company or the Guarantor is a
       party or by which it is bound;
<PAGE>
                                      -32-

              (4)    no Event of Default or event which with notice or lapse of
       time or both would become an Event of Default with respect to the
       Securities shall have occurred and be continuing on the date of such
       deposit after giving effect to such deposit or during the period ending
       on the 91st day after such date and no bankruptcy proceeding with respect
       to the Company or the Guarantor will have occurred and be continuing at
       any time during the period ending on the 91st day after such date;

              (5)    the Company and the Guarantor shall have delivered to the
       Trustee an Opinion of Counsel with no material qualifications to the
       effect that Holders of the Securities will not recognize income, gain or
       loss for United States federal income tax purposes as a result of such
       deposit, defeasance and discharge and will be subject to United States
       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 deposit, defeasance and
       discharge had not occurred, and such Opinion of Counsel must refer to and
       be based upon a letter ruling of the Internal Revenue Service received by
       the Company and the Guarantor, a Revenue Ruling published by the Internal
       Revenue Service or a change in applicable United States federal income
       tax law occurring after the date of the applicable supplemental
       indenture;

              (6)    the Company and the Guarantor shall have delivered to the
       Trustee an Officer's Certificate as to solvency and the absence of any
       intent of preferring the Holders over the other creditors of the Company
       or the Guarantor, as the case may be; and

              (7)    the Company and the Guarantor shall have delivered to the
       Trustee an Officers' Certificate and an Opinion of Counsel, each stating
       that all conditions precedent herein provided for relating to the
       defeasance contemplated by this section have been complied with.

SECTION 404.         DEFEASANCE OF CERTAIN OBLIGATIONS.

              If this section is specified to be applicable to Securities of any
series, the Company may omit to comply with (or elect to have the obligations of
the Guarantor released with respect to) any term, provision or condition set
forth in the sections of this Indenture or such Security specified with respect
to the Securities of that series ("Covenant Defeasance") if:

              (1)    with reference to this section, the Company or the
       Guarantor has deposited or caused to be irrevocably deposited with the
       Trustee as trust funds in trust, specifically pledged as security for,
       and dedicated solely to, the benefit of the Holders of the Securities of
       that series, (i) money in U.S. dollars in an amount (or if the Securities
       are denominated in any currency other than U.S. dollars, an amount of the
       applicable currency), or (ii) U.S. Government Obligations which through
       the payment of interest and principal in respect thereof in accordance
       with their terms will provide not later than

<PAGE>
                                      -33-

       one day before the due date of any payment referred to in clause (A) or
       (B) of this subparagraph money in an amount, or (iii) a combination
       thereof, sufficient, in the opinion of a nationally recognized firm of
       independent public accountants expressed in a written certification
       thereof delivered to the Trustee, to pay and discharge (A) the principal
       of (and premium, if any) and each installment of principal (and premium,
       if any) and interest on the Outstanding Securities of that series on the
       Stated Maturity of such principal or installment of principal or interest
       and (B) any mandatory sinking fund payments or analogous payments
       applicable to Securities of such series on the day on which such payments
       are due and payable in accordance with the terms of the Indenture and of
       such Securities;

              (2)    such deposit shall not cause the Trustee with respect to
       the Securities of that series to have a conflicting interest for purposes
       of the Trust Indenture Act with respect to the Securities of any series;

              (3)    such deposit will not result in a breach or violation of,
       or constitute a default under, this Indenture or any other agreement or
       instrument to which the Company or the Guarantor is a party or by which
       it is bound;

              (4)    the Company and the Guarantor shall have delivered to the
       Trustee an Opinion of Counsel with no material qualifications to the
       effect that Holders of the Securities will not recognize income, gain or
       loss for United States federal income tax purposes as a result of such
       deposit and defeasance of certain obligations and will be subject to
       United States 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 deposit
       and defeasance had not occurred;

              (5)    no Event of Default or event which with notice or lapse of
       time would become an Event of Default with respect to the Securities
       shall have occurred and be continuing on the date of such deposit after
       giving effect to such deposit; and

              (6)    the Company and the Guarantor shall have delivered to the
       Trustee an Officers' Certificate and an Opinion of Counsel, each stating
       that all conditions precedent herein provided for relating to the
       defeasance contemplated by this section have been complied with.

SECTION 405.         REINSTATEMENT.

              If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with this Article 4 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 and the Guarantor's obligations un-

<PAGE>
                                      -34-

der this Indenture, the Securities and the Guarantee shall be revived and
reinstated as though no deposit had occurred pursuant to Section 401, 403 or 404
until such time as the Trustee or Paying Agent is permitted to apply all such
U.S. legal tender or U.S. Government Obligations in accordance with this
article; PROVIDED, HOWEVER, that if the Company or the Guarantor has made any
payment of principal of, premium, if any, on, interest on or Additional Amounts,
if any, on any Securities because of the reinstatement of their obligations, the
Company and the Guarantor shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501.         EVENTS OF DEFAULT.

              "Event of Default" (except as otherwise specified or contemplated
by Section 301 for Securities of any series) wherever used herein with respect
to Securities of any series, means any one of the following events:

              (1)    default in the payment of any interest upon any Security of
       that series when it becomes due and payable, and continuance of such
       default for a period of 60 days; or

              (2)    default in the payment of the principal of (or premium, if
       any, on) any Security of that series at its Maturity; or

              (3)    default in the deposit of any sinking fund payment, when
       and as due by the terms of a Security of that series; or

              (4)    default in the performance, or breach, of any covenant or
       warranty of the Company or the Guarantor in this Indenture, the
       Securities or the Guarantee (other than a covenant or warranty a default
       in whose performance or whose breach is elsewhere in this section
       specifically dealt with or which has expressly been included in this
       Indenture solely for the benefit of series of Securities other than that
       series), and continuance of such for a period of 60 days after there has
       been given by registered or certified mail, to the Company or the
       Guarantor by the Trustee or to the Company, the Guarantor and the Trustee
       by the Holders of at least 25% in principal amount of the

<PAGE>
                                      -35-

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

              (5)    the entry by a court having jurisdiction in the premises of
       (A) a decree or order for relief in respect of the Company or the
       Guarantor in an involuntary case or proceeding under any applicable
       bankruptcy, insolvency, reorganization or other similar law or (B) a
       decree or order adjudging the Company or the Guarantor a bankrupt or
       insolvent, or approving as properly filed a petition seeking
       reorganization, arrangement, adjustment or composition of or in respect
       of the Company or the Guarantor under any applicable law, or appointing a
       custodian, receiver, liquidator, assignee, trustee, sequestrator or other
       similar official of the Company or the Guarantor or of any substantial
       part of its property, or ordering the winding up or liquidation of its
       affairs, and the continuance of any such decree or order for relief or
       any such other decree or order unstayed and in effect for a period of 60
       consecutive days; or

              (6)    the commencement by the Company or the Guarantor of a
       voluntary case or proceeding under any applicable 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 the Company or
       the Guarantor to the entry of a decree or order for relief in respect of
       the Company or the Guarantor in an involuntary case or proceeding under
       any applicable bankruptcy, insolvency, reorganization or other similar
       law or to the commencement of any bankruptcy or insolvency case or
       proceeding against the Company or the Guarantor, or the filing by the
       Company or the Guarantor of a petition or answer or consent seeking
       reorganization or relief under any applicable law, or the consent by the
       Company or the Guarantor 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 the
       Guarantor or of any substantial part of the Company's or the Guarantor's
       property, or the making by the Company or the Guarantor of an assignment
       for the benefit of creditors, or the admission by the Company or the
       Guarantor in writing of its inability to pay its debts generally as they
       become due and its willingness to have a case commenced against it or to
       seek an order for relief under any applicable bankruptcy, insolvency or
       other similar law or the taking of corporate action by the Company or the
       Guarantor in furtherance of any such action;

              (7)    the Guarantee ceases to be in full force and effect or is
       declared to be null and void and unenforceable or is found to be invalid,
       in each case by a court of competent jurisdiction in a final
       non-appealable judgment, or the Guarantor denies its liability under the
       Guarantee (other than by reason of release of the Guarantor in accordance
       with the terms of this Indenture); or
<PAGE>
                                      -36-

              (8)    any other Event of Default expressly provided with respect
       to Securities of that series.

SECTION 502.         ACCELERATION OF MATURITY: RESCISSION AND ANNULMENT.

              If an Event of Default (other than an Event of Default described
in Section 501(5)or 501(6)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if the Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all of the Securities
of that series to be due and payable immediately, by a notice in writing to the
Company and the Guarantor (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.

              In the case of an Event of Default described in Section 501(5)or
501(6), which occurs and is continuing with respect to Securities of any series
at the time Outstanding, then all unpaid principal of and accrued interest on
all such Outstanding Securities of that series shall become immediately due and
payable without any notice or other action on the part of the Trustee or the
Holders of any Securities of such series.

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

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

                     (A)    all overdue interest on all Securities of that
              series,

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

                     (C)    to the extent that payment of such interest is
              lawful, interest upon overdue interest at the rate or rates
              prescribed therefor in such Securities, and
<PAGE>
                                      -37-

                     (D)    all sums paid or advanced by the Trustee and any
              predecessor Trustee hereunder and all sums due the Trustee and any
              predecessor Trustee under Section 607;

       and

              (2)    all Events of Default with respect to Securities of that
       series, other than the non-payment of the principal of Securities of that
       series which have become due solely by such declaration of acceleration,
       have been cured or waived as provided in Section 513.

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

SECTION 503.         COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
                     TRUSTEE.

              The Company and the Guarantor covenant that if

              (1)    default is made in the payment of any interest on any
       Security when such interest becomes due and payable and such default
       continues for a period of 30 days, or

              (2)    default is made in the payment of the principal of (or
       premium, if any, on) any Security at the Maturity thereof,

the Company or the Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including all amounts due the Trustee and any
predecessor Trustee under Section 607.

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

              If any Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the

<PAGE>
                                      -38-

rights of the Holders of Securities of such series by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

SECTION 504.         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 the Guarantor or any other
obligor upon the Securities or the property of the Company or the Guarantor or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company or the Guarantor for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,

              (i)    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
       Securities 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

              (ii)   to collect and receive any moneys or other property payable
       or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

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

SECTION 505.         TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
                     SECURITIES.

              All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the

<PAGE>
                                      -39-

production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.

SECTION 506.         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, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

              FIRST: To the payment of all amounts due the Trustee and each
       predecessor Trustee under Section 607;

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

              THIRD: To the Company.

SECTION 507.         LIMITATION ON SUITS.

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

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

              (2)    the Holders of not less than 25% in principal amount of the
       Outstanding Securities of that series shall have made written request to
       the Trustee to institute proceedings in respect of such Event of Default
       in its own name as Trustee hereunder;

              (3)    such Holder or Holders have offered to the Trustee
       reasonable indemnity against the costs, expenses and liabilities to be
       incurred in compliance with such request;
<PAGE>
                                      -40-

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

              (5)    no direction inconsistent with such written request has
       been given to the Trustee during such 60-day period by the Holders of a
       majority in principal amount of the Outstanding Securities of that
       series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

SECTION 508.         UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
                     PREMIUM AND INTEREST.

              Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security or the Guarantee thereof (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, including under the Guarantee, and such rights shall not be
impaired without the consent of such Holder.

SECTION 509.         RESTORATION OF RIGHTS AND REMEDIES.

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

SECTION 510.         RIGHTS AND REMEDIES CUMULATIVE.

              Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein or in the Guarantee 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

<PAGE>
                                      -41-

given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

SECTION 511.         DELAY OR OMISSION NOT WAIVER.

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

SECTION 512.         CONTROL BY HOLDERS.

              The Holders of a majority in principal amount of the Outstanding
Securities of any series (or if more than one series is affected thereby, of all
series so affected, voting as a single class) shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that

              (1)    such direction shall not be in conflict with any rule of
       law or with this Indenture, expose the Trustee to personal liability or
       be unduly prejudicial to holders not joining therein, and

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

              Nothing in this Indenture shall impair the right of the Trustee to
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.

SECTION 513.         WAIVER OF PAST DEFAULTS.

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

              (1)    in the payment of the principal of (or premium, if any) or
       interest on any Security of such series, or

              (2)    in respect of a covenant or provision hereof which under
       this article cannot be modified or amended without the consent of the
       Holder of each Outstanding Security of such series affected.
<PAGE>
                                      -42-

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

SECTION 514.         UNDERTAKING FOR COSTS.

              All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, 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 Securities on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date). This Section 514 shall be in lieu of Section 315(e)
of the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

SECTION 515.         WAIVER OF STAY OR EXTENSION LAWS.

              Each of the Company and the Guarantor covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
and the Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
<PAGE>
                                      -43-

                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.         CERTAIN DUTIES AND RESPONSIBILITIES.

              (a)    Except during the continuance of an Event of Default with
respect to the Securities of any series,

              (1)    the Trustee undertakes to perform such duties and only such
       duties as are specifically set forth in this Indenture with respect to
       such series, and no implied covenants or obligations shall be read into
       this Indenture against the Trustee; and

              (2)    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 has occurred with respect to
Securities of any series and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture with respect to such series
of Securities, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

              (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

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

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

              (3)    the Trustee shall not be liable with respect to any action
       taken or omitted to be taken by it in good faith in accordance with the
       direction of the Holders of a majority in principal amount of the
       Outstanding Securities of any series, determined as pro-

<PAGE>
                                      -44-

       vided in Section 512, relating to the time, method and place of
       conducting any proceeding for any remedy available to the Trustee, or
       exercising any trust or power conferred upon the Trustee, under this
       Indenture with respect to the Securities of such series; and

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

              (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.

SECTION 602.         NOTICE OF DEFAULTS.

              Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, 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 or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and PROVIDED, FURTHER, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.

SECTION 603.         CERTAIN RIGHTS OF TRUSTEE.

              Subject to the provisions of Section 601:

              (a)    the Trustee may rely and shall be protected in acting or
       refraining from acting upon any Board Resolution, resolution, Officers'
       Certificate, certificate, statement, instrument, Opinion of Counsel,
       opinion, report, notice, request, direction, consent, order, bond,
       debenture, note, other evidence of indebtedness or other paper or
       docu-

<PAGE>
                                      -45-

       ment 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 or the Guarantor
       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 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 it hereunder in good faith and in reliance thereon;

              (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 shall have offered to the Trustee reasonable security or
       indemnity against the costs, expenses and liabilities which might be
       incurred by it in compliance with such request or direction;

              (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, 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;
       and

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

SECTION 604.         NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

              The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee as-

<PAGE>
                                      -46-

sumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.

SECTION 605.         MAY HOLD SECURITIES.

              The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or the Guarantor, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to Sections 608 and
612, may otherwise deal with, and collect obligations owed to it by, the Company
or the Guarantor with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.

SECTION 606.         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 the Guarantor.

SECTION 607.         COMPENSATION AND REIMBURSEMENT.

              The Company and the Guarantor, jointly and severally, agree:

              (1)    to pay to the Trustee from time to time 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);

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

              (3)    to indemnify each of the Trustee and any predecessor
       Trustee for, and to hold it harmless against, any loss, liability or
       expense, arising out of or in connection with the acceptance or
       administration of the trust or trusts hereunder and the performance of
       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, except to the
       extent any such loss, liability or expense is due to its own negligence
       or bad faith.
<PAGE>
                                      -47-

              To ensure the performance of the obligations of the Company or the
Guarantor under this section, the Trustee shall have a senior claim to which the
Securities are hereby made subordinate upon all property and funds held or
collected by the Trustee as such, except property and funds held in trust for
the payment of principal of, premium, if any, or interest on particular
Securities.

SECTION 608.         DISQUALIFICATION; CONFLICTING INTERESTS.

              The Trustee shall comply with the terms of Section 310(b) of the
Trust Indenture Act. The provisions of Section 310 of the Trust Indenture Act
shall apply to the Issuer and the Guarantor, as obligors of the Securities.

SECTION 609.         CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

              There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers having (or, in the case of the
subsidiary of a bank holding company that guarantees the obligations of the
Trustee under this Indenture, such holding company's parent shall have) a
combined capital and surplus of at least $50,000,000 subject to supervision or
examination by Federal or State authority. If such corporation or holding
company parent publishes reports of condition at least annually, pursuant to law
or the requirements of said supervising or examining authority, then for the
purposes of this section, the combined capital and surplus of such corporation
or holding company parent shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
section, it shall resign immediately in the manner and with the effect
hereinafter specified in this article.

SECTION 610.         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 in accordance with the
applicable requirements of Section 611.

              (b)    The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the Company
and the Guarantor. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the first sentence of this subsection may be combined with
the instrument called for by Section 611.
<PAGE>
                                      -48-

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

              (d)    If at any time:

              (1)    the Trustee shall fail to comply with Section 608 after
       written request therefor by the Company, the Guarantor or by any Holder
       who has been a bona fide Holder of a Security for at least six months, or

              (2)    the Trustee shall cease to be eligible under Section 609
       and shall fail to resign after written request therefor by the Company,
       the Guarantor or by any such Holder, or

              (3)    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, (i) the Company or the Guarantor by a Board Resolution
may remove the Trustee with respect to all Securities, or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.

              (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,
with respect to the Securities of one or more series, the Company or the
Guarantor, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company, the Guarantor
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor appointed
by the Company or the Guarantor. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company, the
Guarantor or the Holders and accepted appointment in the manner required by
Section 611, any Holder who

<PAGE>
                                      -49-

has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

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

SECTION 611.         ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

              (a)    In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company, the Guarantor and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company, the Guarantor or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.

              (b)    In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the Guarantor, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and

<PAGE>
                                      -50-

that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company, the Guarantor or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.

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

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

SECTION 612.         MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
                     BUSINESS.

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

SECTION 613.         PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

              If and when the Trustee shall be or become a creditor of the
Company or the Guarantor (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company or the Guarantor (or any such other
obligor). A trustee who has resigned or been removed shall be subject to the
Trust Indenture Act Section 311(a) to the extent provided therein.
<PAGE>
                                      -51-

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701.         COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

              The Company will furnish or cause to be furnished to the Trustee
with respect to the Securities of each series

              (a)    semi-annually, not more than fifteen days after each
       Regular Record Date, or, in the case of any series of Securities on which
       semi-annual interest is not payable, not more than fifteen days after
       such semi-annual dates as may be specified by the Trustee, a list, in
       such form as the Trustee may reasonably require, of the names and
       addresses of the Holders as of such Regular Record Date or such
       semi-annual date, as the case may be, and

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

PROVIDED, HOWEVER, that so long as the Trustee is the Security Registrar, no
such list need be furnished.

SECTION 702.         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 contained in
       the most recent list furnished to the Trustee as provided in Section 701
       and the names and addresses of Holders received by the Trustee in its
       capacity as Security Registrar. The Trustee may destroy any list
       furnished to it as provided in Section 701 upon receipt of a new list so
       furnished.

              (b)    If three or more Holders (herein referred to as
       "applicants") apply in writing to the Trustee, and furnish to the Trustee
       reasonable proof that each such applicant has owned a Security for a
       period of at least six months preceding the date of such application, and
       such application states that the applicants' desire to communicate with
       other Holders with respect to their rights under this Indenture or under
       the Securities and is accompanied by a copy of the form of proxy or other
       communication which such applicants propose to transmit, then the Trustee
       shall, within five Business Days after the receipt of such application,
       at its election, either
<PAGE>
                                      -52-

              (i)    afford such applicants access to the information preserved
       at the time by the Trustee in accordance with Section 702(a), or

              (ii)   inform such applicants as to the approximate number of
       Holders whose names and addresses appear in the information preserved at
       the time by the Trustee in accordance with Section 702(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.

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

              (c)    Every Holder of Securities, by receiving and holding the
same, agrees with the Company, the Guarantor and the Trustee that neither the
Company, the Guarantor nor the Trustee nor any agent of either of them shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with Section 702(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 702(b).

              (d)    Subject to Sections 702(a), 702(b), 702(c) and 601, if the
Company, the Guarantor or any other Person (other than the Trustee) shall desire
to communicate with Holders of Securities to solicit or obtain from them any
proxy, consent, authorization, waiver, approval of a plan of reorganization,
arrangement or readjustment or other action ("Holder Action"), the Trustee shall
have no duty to participate in such communication or solicitation

<PAGE>
                                      -53-

or the processing of responses in any manner except (i) to furnish the rules and
regulations and to perform the functions referred to in Section 104 and (ii) to
receive (A) the instruments evidencing the Holder Action together with (B) the
Officers' Certificate and Opinion of Counsel referred to below. Each of the
Company and the Guarantor hereby covenants that any and all communications and
solicitations distributed by it in connection with any Holder Action will comply
in all material respects with applicable law, including without limitation
applicable law concerning adequacy of disclosure. The Trustee shall have no
responsibility for the accuracy or completeness of any materials circulated to
solicit any Holder Action nor for any related communications nor for the
compliance thereof with applicable law. No Holder Action shall become effective
until the Trustee shall have received from the Company, the Guarantor or other
Person who solicited the Holder Action (1) the instruments evidencing such
Holder Action (2) (x) (in the case of Holder Action solicited by the Company or
the representative of the Company's estate if the Company is the debtor in any
bankruptcy or other insolvency proceeding) an Officers' Certificate and (y) (in
all cases) an Opinion of Counsel, each specifying the Holder Action taken and
stating that such Holder Action has been duly and validly taken in compliance
with this Indenture in all material respects. Such Officers' Certificate, if
any, shall also certify that (after giving effect to such Holder Action) no
Event of Default or event or condition which, with notice or lapse of time or
both, would become an Event of Default has occurred and is continuing or has not
been waived.

              (e)    The Depositary may grant proxies and otherwise authorize
its participants which own the Global Securities to give or take any Act which a
Holder is entitled to take under the Indenture; PROVIDED, HOWEVER, that the
Depositary has delivered a list of such participants to the Trustee.

SECTION 703.         REPORTS BY TRUSTEE.

              (a)    Within 60 days after May 15 of each year commencing with
the first May 15 following the date of this Indenture, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, a brief report dated as of such May 15, to the extent
required by Section 313(a) of the Trust Indenture Act.

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

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

SECTION 704.         REPORTS BY GUARANTOR.

              The Guarantor shall:
<PAGE>
                                      -54-

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

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

                                  ARTICLE EIGHT

                              SUCCESSOR CORPORATION

SECTION 801.         WHEN COMPANY OR GUARANTOR MAY MERGE OR TRANSFER ASSETS.

              The Guarantor shall not, and shall not permit the Company to, in
one or more related transactions, (1) consolidate or amalgamate with or merge
into any other Person or convey, transfer, sell or lease its properties and
assets substantially as an entirety to any Person, or (2) permit any Person to
consolidate or amalgamate with or merge into the Guarantor or the Company, or
(3) permit any Person to convey, transfer, sell or lease that Person's
properties and assets substantially as an entirety to the Guarantor or the
Company, as the case may be, unless:

              (a)    in the case of (1) and (2) above, if the Guarantor or the
       Company, as the case may be, is not the surviving person, such Person is
       a corporation organized and existing under the laws of the United States
       of America, any State thereof or the District of Columbia, the United
       Kingdom, the Cayman Islands, Bermuda or any country which is, on the date
       of the Indenture, a member of the Organization of Economic Cooperation
       and Development and will expressly assume, by supplemental indenture
       sat-

<PAGE>
                                      -55-

       isfactory in form to the Trustee, the due and punctual payment pursuant
       to the Securities, the Indenture and the Guarantee of the principal of,
       any premium and interest on and any Additional Amounts with respect to
       all of the Securities issued thereunder, and the performance of all
       applicable obligations under the Indenture, the Guarantee and the
       Securities issued thereunder; and

              (b)    immediately after giving effect to such transaction, and
       treating any Indebtedness which becomes an obligation of the Company, the
       Guarantor or a designated Subsidiary as a result of such transactions as
       having been incurred by the Company, the Guarantor or such designated
       Subsidiary at the time of such transaction, no Event of Default, and no
       event which, after the giving of notice or lapse of time, or both, would
       become an Event of Default, shall have occurred and be continuing; and

              (c)    each of the Company and the Guarantor have delivered to the
       Trustee an Officers' Certificate and an Opinion of Counsel, each stating
       that such consolidation, merger, conveyance, transfer or lease and, if a
       supplemental indenture is required in connection with such transaction,
       such supplemental indenture comply with this Article and that all
       conditions precedent herein provided for relating to such transaction
       have been complied with.

              Upon any consolidation or amalgamation of the Company or the
Guarantor with, or merger of the Company or the Guarantor into, any other Person
or any conveyance, transfer, sale, lease or other disposition of the properties
and assets of the Company or the Guarantor in accordance with this Article, the
successor shall succeed to, and be substituted for, and may exercise every right
and power of, the Company or the Guarantor, as the case may be, under this
Indenture, the Securities and the Guarantee with the same effect as if such
successor had been named as the Company or the Guarantor, as the case may be,
herein and therein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture, the Guarantee and the Securities.

                                  ARTICLE NINE

                      AMENDMENTS & SUPPLEMENTAL INDENTURES

SECTION 901.         AMENDMENTS OR SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
                     HOLDERS.

              The Company and the Guarantor, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may amend or
supplement this Indenture, the Securities or the Guarantees without the consent
of any Holder, so long as such changes do not materially and adversely affect
the interests of the Holder:
<PAGE>
                                      -56-

              (1)    to cure any ambiguity, omission, defect or inconsistency;

              (2)    to make any modifications or amendments that do not, in the
good faith opinion of the Company's and the Guarantor's Board of Directors and
the Trustee, adversely affect the interests of the Holders in any material
respect;

              (3)    to provide for the assumption of the Company's or the
Guarantor's obligations under this Indenture by a successor upon any merger,
consolidation or asset transfer as permitted by and in compliance with Article
Eight of this Indenture;

              (4)    to provide any security for or additional guarantees of the
Securities;

              (5)    to add Events of Default with respect to the Securities;

              (6)    to add to the Company's or the Guarantor's covenants for
the benefit of the Holders or to surrender any right or power conferred upon the
Company or the Guarantor by this Indenture;

              (7)    to make any change necessary for the registration of the
Securities and the Guarantee under the Securities Act or to comply with the TIA,
or any amendment thereto, or to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the TIA, provided that
such modification or amendment does not, in the good faith opinion of the
Company's and the Guarantor's Board of Directors and the Trustee, adversely
affect the interests of the Holders of the Securities in any material respect;

              (8)    to provide for uncertificated Securities or Guarantees in
addition to or in place of certificated Securities or Guarantees or to provide
for bearer Securities or Guarantees;

              (9)    to add to or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and
with or without interest coupons;

              (10)   to change or eliminate any of the provisions of this
Indenture, PROVIDED that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision;

              (11)   to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or

              (12)   to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or

<PAGE>
                                      -57-

change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(b).

SECTION 902.         AMENDMENTS OR SUPPLEMENTAL INDENTURES WITH CONSENT OF
                     HOLDERS.

              With the written consent of the Holders of not less than a
majority in aggregate principal amount of the Securities at the time Outstanding
of all series affected by such amendment or supplement (taken together as one
class), the Company and the Guarantor, when authorized by Board Resolutions, and
the Trustee, at any time and from time to time, may amend or supplement this
Indenture or the Securities. However, without the consent of each Holder
affected, an amendment to this Indenture or the Securities may not:

              (1)    change the Stated Maturity of the principal of, or any
premium on or any installment of interest with respect to the Securities;

              (2)    reduce the principal amount of, or the rate (or modify the
calculation of such principal amount or rate) of interest on, or any Additional
Amounts with respect to, or any premium payable upon the redemption of, the
Securities;

              (3)    change the currency of payment of principal of or interest
on the Securities;

              (4)    change the redemption provisions, if any, of any Securities
in any manner adverse to the holders of such Securities;

              (5)    impair the right to institute suit for the enforcement of
any payment on or with respect to the Securities;

              (6)    reduce the above-stated percentage of Holders of the
Securities of any series necessary to modify or amend this Indenture;

              (7)    if the Securities are convertible, adversely affect the
right to convert the Securities into Ordinary Shares in accordance with the
provisions of this Indenture;

              (8)    release the Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of this
Indenture;

              (9)    modify or change any provision of this Indenture or the
related definitions affecting the ranking of the Securities or the Guarantee in
a manner which adversely affects the Holders;
<PAGE>
                                      -58-

              (10)   change the obligation to pay Additional Amounts with
respect to any Security; or

              (11)   modify the foregoing requirements or reduce the percentage
of Outstanding Securities necessary to waive any covenant or past default.

              It shall not be necessary for any Act of the Holders under this
Section 902 to approve the particular form of any proposed amendment or
supplemental indenture, but it shall be sufficient if such Act approves the
substance thereof.

              After an amendment or supplemental indenture under this Section
902 becomes effective, the Company and the Guarantor shall mail to each Holder a
notice briefly describing the amendment or supplemental indenture.

              An amendment or supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.

SECTION 903.         EXECUTION OF SUPPLEMENTAL INDENTURES.

              The Trustee shall sign any supplemental indenture authorized
pursuant to this article if the amendment contained therein does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign such supplemental indenture. In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Officers' Certificate
from each of the Company and the Guarantor and an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture.

SECTION 904.         EFFECT OF SUPPLEMENTAL INDENTURES.

              Upon the execution of any supplemental indenture under this
article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
<PAGE>
                                      -59-

SECTION 905.         CONFORMITY WITH TRUST INDENTURE ACT.

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

SECTION 906.         REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

              Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this article may, and shall
if required by the Trustee, 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 Securities of any series so modified as to conform, in the
opinion of the Trustee, the Guarantor and the Company, to any such supplemental
indenture may be prepared and executed by the Company and the Guarantor and be
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001.        PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

              The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture. Payments of principal, premium, if
any, Additional Amounts, if any, and interest in respect of the Securities
represented by a Global Security will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or any
successor Depository. Payments of premium, if any, Additional Amounts, if any,
and interest in respect of a certificated Security may be made at the option of
the Company by wire transfer of immediately available funds to the accounts
specified by registered Holders as of the relevant record dates or, by checks
mailed to the addresses of the registered Holders as of the relevant record
dates or at the specified offices of any Paying Agent and, if the Securities are
listed on the Luxembourg Stock Exchange, our Paying Agent in Luxembourg. Payment
of principal in respect of a certificated Security will only be made against
presentation and, provided that payment is made in full, surrender of the
appropriate certificate at the specified offices of any Paying Agent and, if the
Securities are listed on the Luxembourg Stock Exchange, our Paying Agent in
Luxembourg. The Guarantor covenants that it will, as and when any amounts are
due hereunder or under any Security, duly and punctually pay such amounts as
provided in the Guarantee.
<PAGE>
                                      -60-

SECTION 1002.        MAINTENANCE OF OFFICE OR AGENCY.

              The Company and the Guarantor will maintain in each Place of
Payment for any series of Securities an office or agency where Securities of
that series may be presented or surrendered for payment and may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company or the Guarantor in respect of the Securities of that series
and this Indenture may be served. The Company and the Guarantor hereby initially
appoint the Trustee its office or agency for each of said purposes (and, if the
Securities are listed on the Luxembourg Stock Exchange, the Company and the
Guarantor shall appoint an office or agency in Luxembourg for each of said
purposes). The Company and the Guarantor will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company or the Guarantor shall fail to maintain any
such required 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 Corporate Trust Office of the Trustee, and each of the Company
and the Guarantor hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

              The Company and the Guarantor may also from time to time designate
one or more other offices or agencies where the Securities of one or more series
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company or the Guarantor of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company and the Guarantor will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.

SECTION 1003.        MONEY FOR SECURITIES; PAYMENTS TO BE HELD IN TRUST.

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

              Whenever the Company or the Guarantor shall have one or more
Paying Agents for any series of Securities, it will, on or prior to each due
date of the principal of (and premium, if any) or interest on any Securities of
that series, 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 Persons entitled to such principal, premium or

<PAGE>
                                      -61-

interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.

              The Company or the Guarantor will cause each Paying Agent for any
series of Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this section, that such Paying Agent will:

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

              (2)    give the Trustee notice of any default by the Company (or
       any other obligor upon the Securities of that series including, without
       limitation, the Guarantor) in the making of any payment of principal (and
       premium, if any) or interest on the Securities of that series; and

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

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

              Any money deposited with the Trustee or any Paying Agent, or then
held by the Company or the Guarantor, in trust for the payment of the principal
of (and premium, if any) or interest on any Security of any series and remaining
unclaimed for two 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 or the Guarantor) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look, only to the Company or the Guarantor 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 or the Guarantor as trustee thereof,
shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company or the Guarantor cause to be mailed or published once, in a newspaper
published in the English language, customarily published on each Business Day

<PAGE>
                                      -62-

and of general circulation in the City, County and State of New York, or both
(and, if the Securities are listed on the Luxembourg Stock Exchange, in a
newspaper with general circulation in Luxembourg), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing or publication, any unclaimed
balance of such money then remaining will be repaid to the Company or the
Guarantor.

              The Company shall have no obligation to make payment of principal
of (or premium, if any) or interest on any Security in immediately available
funds, except that if the Company shall have received original payment for
Securities in immediately available funds it shall make available immediately
available funds for payment of the principal of such Securities.

SECTION 1004.        CORPORATE EXISTENCE.

              Subject to Article Eight, each of the Company and the Guarantor
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 and the Guarantor shall not be
required to preserve any such right or franchise if its respective Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company or the Guarantor and that the loss
thereof is not disadvantageous in any material respect to the Holders.

SECTION 1005.        MAINTENANCE OF PROPERTIES.

              Each of the Company and the Guarantor will use its reasonable
efforts to cause all material properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working order
(subject to wear and tear) and supplied with all necessary material equipment
and will use its reasonable efforts to cause to be made all necessary material
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 or the
Guarantor from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company or the
Guarantor, desirable in the conduct of its business and not disadvantageous in
any material respect to the Holders.

SECTION 1006.        STATEMENT BY OFFICERS AS TO DEFAULT.

              The Company and the Guarantor will each deliver to the Trustee,
within 120 days after the end of each fiscal year ending after the date hereof,
a certificate of the principal executive officer, principal financial officer or
principal accounting officer of each of the

<PAGE>
                                      -63-

Company and the Guarantor stating whether or not to the best knowledge of the
signers thereof the Company or the Guarantor is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture,
and if the Company or the Guarantor shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

SECTION 1007.        WAIVER OF CERTAIN COVENANTS.

              The Company or the Guarantor, as the case may be, may omit in any
particular instance to comply with any term, provision or condition set forth in
Section 1006 if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Securities of all series
affected by the omission (taken together as one class) shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the Guarantor and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.

SECTION 1008.        OWNERSHIP AND BUSINESS OF THE COMPANY.

              The Guarantor shall at all times own, directly or indirectly, 100%
of the Capital Stock of the Company. The Company shall not carry on any business
whatsoever other than in connection with the issuance, listing, registration and
exchange of the Securities, lending of the proceeds of the sale of the
Securities to the Guarantor and activities incidental to the foregoing.

SECTION 1009.        ADDITIONAL AMOUNTS.

              All amounts payable (whether in respect of principal, interest or
otherwise) in respect of the Securities or the Guarantee will be made free and
clear of and without withholding or deduction for or on account of any present
or future taxes, duties, levies, assessments or governmental charges of whatever
nature imposed or levied by or on behalf of the United Kingdom or the Cayman
Islands or any political subdivision thereof or any authority or agency therein
or thereof having power to tax, unless the withholding or deduction of such
taxes, duties, levies, assessments or governmental charges is required by law.
In that event, the Company or the Guarantor will, jointly or severally, pay, or
cause to be paid, such Additional Amounts as may be necessary in order that the
net amounts receivable by a Holder after such withholding or deduction shall
equal the respective amounts that would have been receivable by such Holder had
no such withholding or deduction been required, except that no such Additional
Amounts shall be payable in relation to any payment in respect of any of the
Securities or the Guarantee (a) to, or to a third party on behalf of, a Person
who would be able to avoid such withholding or deduction but for a failure to
satisfy any applicable statutory cer-

<PAGE>
                                      -64-

tification, information or documentation requirements concerning the
nationality, residence or identity of such Person or to make a declaration of
non-residence or similar claim for exemption which, in either case, is required
as a precondition to exemption, or is liable for such taxes, duties, levies,
assessments or governmental charges in respect of such Security by reason of his
having some connection with (including, without limitation, being a citizen of,
being incorporated or engaged in a trade or business in, or having a residence
or principal place of business or other presence in) the United Kingdom or the
Cayman Islands other than (i) the mere holding of such Security or (ii) the
receipt of principal, interest, or other amount in respect of such Security; (b)
presented for payment more than 30 days after the Relevant Date, except to the
extent that the relevant Holder would have been entitled to such Additional
Amounts on presenting the same for payment on or before the expiry of such
period of 30 days; (c) on account of any inheritance, gift, estate, personal
property, sales or transfer or similar taxes, duties, levies, assessments or
similar governmental charges; (d) presented for payment in the United Kingdom;
(e) presented for payment by or on behalf of a Holder who would have been able
to avoid such withholding or deduction by presenting the relevant Security or
Securities to another Paying Agent in a Member State of the European Union; or
(f) on account of any taxes, duties, levies, assessments or governmental charges
that are payable otherwise than by withholding from payments in respect of such
Security or the Guarantee.

              If the Guarantor becomes subject generally at any time to any
taxing jurisdiction other than or in addition to the Cayman Islands, references
in this section to the Cayman Islands shall be read and construed as references
to such other jurisdiction(s) and/or to the Cayman Islands.

              If the Company becomes subject generally at any time to any taxing
jurisdiction other than or in addition to the United Kingdom, references in this
section to the United Kingdom shall be read and construed as references to such
other jurisdiction(s) and/or to the United Kingdom.

              Notwithstanding anything herein to the contrary, in the event that
any deduction or withholding for or on account of tax is required to be made, or
is made, in connection with any European Union directive on the taxation of
savings implementing the conclusions of the ECOFIN Council meeting of November
26-27, 2000, or any law implementing or complying with, or introduced in order
to conform to, such directive, no additional amounts shall be payable or paid by
the Company or the Guarantor to any holder in respect of the Securities.

              Any reference in this Indenture to principal, premium or interest
in respect of the Securities or the Guarantee, any redemption amount and any
other amounts in the nature of principal, shall be deemed also to refer to any
Additional Amounts that may be payable under this Indenture, and the express
mention of the payment of Additional Amounts (if

<PAGE>
                                      -65-

applicable) in any provision hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.

              Except as otherwise provided in or pursuant to this Indenture, if
the Securities require the payment of Additional Amounts, at least 10 days prior
to the first Relevant Date with respect to such Securities, and at least 10 days
prior to each Relevant Date if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Company, the
Guarantor or their designee shall furnish to the Trustee, the Registrar and the
Paying Agent an Officers' Certificate instructing the Trustee and such Paying
Agents whether such payment of principal of or interest on the Securities shall
be made to Holders without withholding for or on account of any tax assessment
or other governmental charge described above due to the payment of Additional
Amounts by the Company or the Guarantor. If any such payment of Additional
Amounts shall be required, then such certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders, and
the Company and the Guarantor agree to pay to the Trustee, the Registrar or the
Paying Agent the Additional Amounts required.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101.        APPLICABILITY OF ARTICLE.

              Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this article.

SECTION 1102.        ELECTION TO REDEEM; NOTICE TO TRUSTEE.

              The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company and the
Guarantor shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed, such notice to be accompanied by a written statement
signed by an authorized officer of the Company and the Guarantor stating that no
defaults in the payment of interest or Events of Default with respect to the
Securities of that series have occurred (which have not been waived or cured).
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Se-

<PAGE>
                                      -66-

curities or elsewhere in this Indenture, the Company and the Guarantor shall
furnish the Trustee an Officers' Certificate evidencing compliance with such
restriction.

SECTION 1103.        SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

              If less than all the Securities of any series are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
in its sole discretion shall deem fair and appropriate and which may provide for
the selection or redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.

              The Trustee shall promptly notify the Company and the Guarantor in
writing of the Securities selected for redemption and, in the case of any
Securities 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 Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

SECTION 1104.        NOTICE OF REDEMPTION.

              Notice of redemption shall be given from the Company, the
Guarantor or the Trustee by first-class mail, postage prepaid, mailed not less
than 30 nor more than 60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed, at his address appearing in the Security Register.
Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not such Holder receives the
notice. Failure to give notice by mail, or any defect in the notice to any such
Holder in respect of any Security, shall not affect the validity of the
proceedings for the redemption of any other Security.

              All notices of redemption shall state:

              (1)    the Redemption Date,

              (2)    the Redemption Price and any accrued interest,
<PAGE>
                                      -67-

              (3)    if less than all the Outstanding Securities of any series
       are to be redeemed, the identification (and, in the case of partial
       redemption, the principal amounts) of the particular Securities to be
       redeemed,

              (4)    that on the Redemption Date the Redemption Price and any
       accrued interest will become due and payable upon each such Security to
       be redeemed together with accrued interest thereon and, if applicable,
       that interest thereon will cease to accrue on and after said date,

              (5)    the place or places where such Securities are to be
       surrendered for payment of the Redemption Price and any accrued interest,

              (6)    that the redemption is for a sinking fund, if such is the
       case, and

              (7)    the CUSIP number and, if applicable, the ISIN number, of
       the Securities being redeemed.

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

SECTION 1105.        DEPOSIT OF REDEMPTION PRICE.

              On or prior to any Redemption Date, the Company or the Guarantor
shall deposit with the Trustee or with a Paying Agent (or, if the Company or the
Guarantor is acting as Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money, in funds immediately available on the due
date, sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

SECTION 1106.        SECURITIES PAYABLE ON REDEMPTION DATE.

              Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified together with accrued interest
thereon, and from and after such date (unless the Company or the Guarantor shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest whose Stated
Maturity is on the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, reg-

<PAGE>
                                      -68-

istered as such at the close of business on the relevant Record Dates according
to their terms and the provisions of Section 307.

              If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.

              The Trustee shall not redeem any Securities of any series pursuant
to this article (unless all Outstanding Securities of such series are to be
redeemed) or mail or give any notice of redemption of Securities during the
continuance of an Event of Default hereunder known to the Trustee with respect
to such series, except that, where the mailing of notice of redemption of any
Securities shall theretofore have been made, the Trustee shall redeem or cause
to be redeemed such Securities, provided that it shall have received from the
Company or the Guarantor a sum sufficient for such redemption. Except as
aforesaid, any moneys theretofore or thereafter received by the Trustee shall,
during the continuance of such Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities of
such series. In case such Event of Default shall have been waived as provided in
Section 513 or the default cured on or before the sixtieth day preceding the
Redemption Date, such moneys shall thereafter be applied in accordance with the
provisions of this article.

SECTION 1107.        SECURITIES REDEEMED IN PART.

              Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company, the Guarantor
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Guarantor and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, the Guarantor shall execute Guarantees on and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
<PAGE>
                                      -69-

                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 1201.        APPLICABILITY OF ARTICLE.

              The provisions of this article shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.

              The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

SECTION 1202.        SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

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

SECTION 1203.        REDEMPTION OF SECURITIES FOR SINKING FUND.

              Not less than 60 days prior to each sinking fund payment date for
any series of Securities, the Company (1) will deliver to the Trustee an
Officers' Certificate (A) stating that no defaults in the payment of interest or
Events of Default with respect to Securities of that series have occurred (which
have not been waived or cured), (B) specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of Securities of that
series, (C) stating whether or not the Company intends to exercise its right, if
any, to make an optional sinking fund payment with respect to such series on the
next ensuing sinking fund

<PAGE>
                                      -70-

payment date and, if so, specifying the amount of such optional sinking fund
payment and (D) specifying the portion of such sinking fund payment, 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 Securities of that series
pursuant to Section 1202 and (2) will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities of such series to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 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 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105, 1106 and 1107. Failure of the Company, on
or before any such 60th day, to deliver such Officers' Certificate and
Securities specified in this section, if any, shall not constitute a default but
shall constitute, on and as of such date, the irrevocable election of the
Company (a) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in respect thereof and
(b) that the Company will make no optional sinking fund payment with respect to
Securities of such series as provided in this article.

              The Trustee shall not redeem or cause to be redeemed any Security
of a series with sinking fund moneys or mail any notice of redemption of
Securities of such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the mailing of
notice of redemption of any Securities shall therefore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that it
shall have received from the Company a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur, and any moneys thereafter
paid into the sinking fund, shall, during the continuance of such default or
Event of Default, be deemed to have been collected under Article Five and held
for the payment of all such Securities of such series. In case such Event of
Default shall have been waived as provided in Section 513 or the default cured
on or before the 60th day preceding the sinking fund payment date, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date in
accordance with this section to the redemption of such Securities.
<PAGE>
                                      -71-

                                ARTICLE THIRTEEN

                             GUARANTEE OF SECURITIES

SECTION 1301.        UNCONDITIONAL GUARANTEE.

              Subject to the provisions of this Article Thirteen, the Guarantor
hereby unconditionally guarantees, on an unsecured, unsubordinated basis, to
each Holder of a Security authenticated and delivered by the Trustee and to the
Trustee and its successors, irrespective of the validity and enforceability of
this Indenture, the Securities or the obligations of the Company to the Holders
or the Trustee hereunder or thereunder, that: (a) the principal of (and premium,
if any) and interest on the Securities and any Additional Amounts with respect
thereto, will be duly and punctually paid in full when due, whether at maturity,
by acceleration, call for redemption or otherwise and all obligations of the
Company or the Guarantor to the Holders or the Trustee hereunder or thereunder
(including amounts due the Trustee under Section 607 hereof) or under the
Securities (including fees, expenses or other disbursements) will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Securities
or any of such other obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration, call for redemption, purchase or otherwise
(all such obligations guaranteed by the Guarantor, the "Guaranteed
Obligations"). Failing payment when due of any amount so guaranteed, or failing
performance of any other obligation of the Company to the Holders, for whatever
reason, the Guarantor will be obligated to pay, or to perform or cause the
performance of the same immediately. An Event of Default under this Indenture or
the Securities shall constitute an event of default under this Guarantee, and
shall entitle the Holders of Securities or the Trustee to accelerate the
obligations of the Guarantor hereunder in the same manner and to the same extent
as the obligations of the Company.

              The Guarantor agrees to pay any and all fees and expenses
(including reasonable attorney's fees and expenses) incurred by the Trustee or
the Holders in enforcing any rights under this Article Thirteen with respect to
the Guarantor.

              Without limiting the generality of the foregoing, this Guarantee
guarantees, to the extent provided herein, the payment of all amounts that
constitute part of the Guaranteed Obligations and would be owed by the Company
under this Indenture or the Securities but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.
<PAGE>
                                      -72-

              No stockholder, officer, director, employee or incorporator, past,
present or future, of the Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator

SECTION 1302.        EXECUTION AND DELIVERY OF GUARANTEE.

              The Guarantee to be endorsed on the Securities pursuant to Section
204 shall be deemed to include the terms of the Guarantee set forth in this
Article Thirteen. The Guarantor hereby agrees to execute the Guarantee in the
form established pursuant to Section 204 to be endorsed on each Security
authenticated and delivered by the Trustee.

              The Guarantee shall be executed on behalf of the Guarantor by an
Officer of the Guarantor. The signature of such Officer on the Guarantee may be
manual or facsimile.

              A Guarantee bearing the manual or facsimile signature of an
individual who was at any time the proper officer of the Guarantor shall bind
the Guarantor, notwithstanding that such individual has ceased to hold such
office prior to the authentication and delivery of the Security on which the
Guarantee is endorsed or did not hold such office at the date of the Guarantee.

              The delivery of any Security by the Trustee after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
endorsed thereon on behalf of the respective Guarantor. The Guarantor hereby
agrees that the Guarantee set forth in this Article Thirteen and in Section 204
shall remain in full force and effect notwithstanding any failure to endorse a
Guarantee on any Security.

SECTION 1303.        OBLIGATIONS OF THE GUARANTOR UNCONDITIONAL.

              Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in any Security is intended to or shall impair, as between the
Guarantor and the Holders and the Trustee, the obligation of the Guarantor,
which is absolute and unconditional, to pay to the Holders and the Trustee the
principal of (and premium, if any), and interest and Additional Amounts, if any,
on the Securities (and to the Trustee amounts due under Section 607) as and when
the same shall become due and payable in accordance with the provisions of this
Guarantee, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture. Without limiting the generality of the foregoing,
it is agreed that the occurrence of any one or more of the following shall not
affect the liability of the Guarantor hereunder:

              (a)    the lack of validity, regularity or enforceability of this
Indenture or the Securities with respect to the Company or any agreement or
instrument relating thereto;
<PAGE>
                                      -73-

              (b)    any change in the time, manner or place of payment of, or
in any other term of any of the Securities, or any other amendment or waiver of
or any consent to departure from this Indenture;

              (c)    any amendment or modification of or deletion from or
addition or supplement to or other change in the Guarantee, the Indenture or the
Securities or any other instrument or agreement applicable to any of the parties
to the Guarantee, the Indenture or the Securities;

              (d)    any furnishing or acceptance of any security or any
guarantee or other liability of any Subsidiary or any other party, or any
release of any security or any guarantee or other liability of any Subsidiary or
any other party, for the Guaranteed Obligations, or the failure of any security
or any guarantee or other liability of any Subsidiary or any other party or the
failure of any Person to perfect any interest in any collateral;

              (e)    any failure, omission or delay on the part of the Company
to conform or comply with any term of the Indenture or the Securities or any
other instrument or agreement referred to in paragraph (a) above, including,
without limitation, failure to give notice to the Guarantor or the Trustee of
the occurrence of an Event of Default;

              (f)    any waiver of the payment, performance or observance of any
of the obligations, conditions, covenants or agreements contained in the
Guarantee, the Indenture or the Securities, or any other waiver, consent,
extension indulgence, compromise settlement release or other action or inaction
under or in respect of the Guarantee, the Indenture or the Securities or any
other instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company or any exercise or non-exercise of any
right, remedy, power or privilege under or in respect of any such instrument or
agreement or any such obligation or liability;

              (g)    any failure, omission or delay on the part of the Trustee
or any Holder of Securities to enforce, assert, exercise or continue exercising
any right, power or remedy conferred on it in the Guarantee or the Indenture, or
any such failure, omission or delay on the part of the Trustee or any Holder of
Securities in connection with the Guarantee, the Indenture or the Securities, or
any other action on the part of the Trustee or any Holder of Securities;

              (h)    the assignment of any right, title or interest of the
Trustee or any Holder in this Indenture or the Securities to any other Person;

              (i)    any voluntary or involuntary bankruptcy, insolvency,
suspension of payments, reorganizations, arrangement, readjustment, assignment
for the benefit of creditors, receivership, liquidation or similar proceedings
with respect to the Company, the Guarantor or any other Person or any of their
respective properties or creditors, or any action taken by any

<PAGE>
                                      -74-

trustee, receiver or similar officer or by any court in any such proceeding;

              (j)    any limitation on the liability or obligations of the
Company or any other Person under the Guarantee, the Indenture or the
Securities, or any partial discharge, cancellation or unenforceability of the
Guarantee, the Indenture or the Securities or any other agreement or instrument
referred to in paragraph (c) above or any term hereof, to the extent not
mutually agreed upon by the parties hereto;

              (k)    any merger or consolidation of the Company or the Guarantor
into or with any other corporation or any sale, lease or transfer of any of the
assets of the Company or the Guarantor to any other Person;

              (l)    any change in the ownership of any shares of Capital Stock
of the Guarantor, or any change in the corporate relationship between the
Company and the Guarantor, or any termination of such relationship, or any
change in the corporate existence, structure, or ownership of the Company;

              (m)    any release or discharge, by operation of law, of the
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in the Guarantee, the Indenture or the Securities;

              (n)    any action, failure, omission or delay on the part of the
Trustee or any Holder of Securities that may impede any Guarantor from acquiring
or subrogating such Holders or Trustee's rights or benefits; or

              (o)    any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether foreseen or
unforeseen, and any other circumstance that might otherwise constitute a legal
defense or discharge of the liabilities of the Guarantor or that might otherwise
limit recourse against the Guarantor; it being the intent of the Guarantor that
its obligations hereunder shall not be discharged except by payment of all
amounts owing pursuant to this Indenture or the Securities.

              The Guarantee shall continue to be effective or be reinstated, as
the case may be, if at any time any payment or performance with respect to any
of the Securities is rescinded or must otherwise be returned by the Trustee, any
Holder or any other Person upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, all as though such payment or performance had not been
made or occurred. In the event that any payment or any part thereof is rescinded
or must otherwise be returned, the Securities shall be reinstated and deemed
reduced only by such amount paid and not so rescinded or returned. The
obligations of the Guarantor under the Guarantee shall not be subject to
reduction, termination or other impairment by any set-off, recoupment,
counterclaim or defense or for any other reason.
<PAGE>
                                      -75-

SECTION 1304.        WAIVERS.

              The Guarantor hereby irrevocably waives, to the extent permitted
by applicable law:

              (a)    promptness, demand for payment, diligence, presentment,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and the Guarantee;

              (b)    any requirement that the Trustee, any Holder or any other
Person protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right, sue or take any action against the Company or any
other Person, or obtain any relief pursuant to this Indenture or pursue any
other available remedy prior to making a claim against the Guarantor hereunder;

              (c)    all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Indenture or the Securities;

              (d)    filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the Indebtedness
evidenced thereby and all demands whatsoever;

              (e)    any defense arising by reason of any claim or defense based
upon an election of remedies by the Trustee or any Holder that in any manner
impairs, reduces, releases or otherwise adversely affects its subrogation,
contribution or reimbursement rights or other rights to proceed against the
Company or any other Person;

              (f)    any right to which it may be entitled to have the assets of
the Company first be used as payment of the Company's or the Guarantor's
obligations hereunder prior to any amounts being claimed from or paid by the
Guarantor hereunder; or

              (g)    any duty on the part of the Trustee or any Holder to
disclose to the Guarantor any matter, fact or thing relating to the business,
operation or condition of the Company and its assets now known or hereafter
known by the Trustee or such Holder.

SECTION 1305.        AMENDMENT, ETC.

              No amendment, modification or waiver of any provision of this
Indenture relating to the Guarantor or consent to any departure by the Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by the Guarantor and the Trustee.
<PAGE>

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

                                       XL CAPITAL FINANCE (EUROPE) PLC

                                          By:     /s/ Fiona E. Luck
                                               ---------------------------------
                                               Name:  Fiona E. Luck
                                               Title: Director

                                          By:     /s/ Jerry de St. Paer
                                               ---------------------------------
                                               Name:  Jerry de St. Paer
                                               Title: Director

Witnessed in the presence of:

By:     /s/ Paul S. Giordano
     ------------------------------------------
     Name:  Paul S. Giordano
     Title: Secretary

Dated:

                                          U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                          By:    /s/ Arthur L. Blakeslee
                                              ------------------------------
                                              Name:  Arthur L. Blakeslee
                                              Title: Assistant Vice President

<PAGE>

              IN WITNESS WHEREOF, XL CAPITAL LTD, as Guarantor, has caused this
Indenture to be duly executed as a deed the day and year first before written.

The common seal of )
XL CAPITAL LTD     )
was hereunto       )
affixed in the     )
presence of        )

By:     /s/ Brian M. O'Hara
     ------------------------------------------
     Name:  Brian M. O'Hara
     Title: President & Chief Executive Officer

Witness:

By:     /s/ Paul S. Giordano
     ----------------------------------
     Name:  Paul S. Giordano
     Title: Executive Vice President,
            General Counsel & Secretary

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