Document:

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                            STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the 28th day of March, 2000 by and among 1st ATLANTIC GUARANTY CORPORATION, a
Maryland corporation ("Buyer"), SBM CERTIFICATE COMPANY, a Minnesota corporation
(the "Company"), and ARM FINANCIAL GROUP, INC., a Delaware corporation (the
"Shareholder"), which is the sole shareholder of the Company.

                                   WITNESSETH:

     WHEREAS, Shareholder owns all of the issued and outstanding shares of
capital stock of the Company and Shareholder desires to sell and convey to
Buyer, and Buyer desires to purchase from Shareholder, all of the outstanding
capital stock of the Company;

     NOW, THEREFORE, for and in consideration of the premises and of the mutual
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and upon the terms and subject to the conditions
hereinafter set forth, the parties do hereby agree as follows:

                                   ARTICLE I.

                                PURCHASE AND SALE

     1.1  PURCHASE OF STOCK; MINIMUM SHAREHOLDERS' EQUITY.

          (a) On the Closing Date (as defined in paragraph 7.1 below), Buyer
agrees to purchase from Shareholder, and Shareholder agrees to sell to Buyer,
all of the issued and outstanding shares of common stock, par value $1.00 per
share, of the Company (the "Company Shares") owned by Shareholder for a total
cash Consideration of SIX HUNDRED FIFTY THOUSAND and 00/100 DOLLARS
($650,000.00), less the amount, if any, of reduction of Consideration provided
in Section 5.8 hereof (the "Purchase Price"). Immediately prior to the Closing,
the Company shall dividend to Shareholder an amount equal to Net Shareholders'
Equity (as defined below) LESS (i) $250,000.00 and (ii) estimated "deferred
acquisition costs", net of income taxes ("DAC") as of the Closing Date (the
"Dividend"); said dividend to be in the form of (1) a transfer in kind of the
securities listed in SCHEDULE 1.1(a) (the "Securities") and (2) to the extent
the market value of the Securities as of March 3l, 2000 is less than the
Approximate Shareholders' Equity (as defined below), an amount equal to such
shortfall in immediately available funds.

          (b) "Net Shareholders' Equity" shall mean the shareholders' equity of
the Company, prepared in accordance with generally accepted accounting
principles consistently applied ("GAAP") as of the Closing Date if the Closing
Date is a month end, or if the Closing Date is not a month end, then the
previous month end shareholders' equity.

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         (c) [RESERVED]

         (d) For purposes of the Dividend to be paid, Shareholder will provide
Buyer at least 15 days prior to the Closing Date with a reasonable estimate of
shareholders' equity, net of estimated deferred acquisition costs, as of the
Closing Date, and Company shall dividend, for purposes of Section 1.1(a)
above, an amount equal to estimated shareholders' equity, net of estimated DAC,
less TWO Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) (the
"Approximate Shareholders' Equity"). On or before sixty (60) days following the
Closing Date, Shareholder will provide Buyer with a final balance sheet,
prepared in accordance with GAAP, reflecting actual Shareholders' Equity as of
the Closing Date if the Closing Date is a month end, or if the Closing Date is
not a month end, then as of the previous month end (the "Final Balance Sheet").
If the actual Shareholders' Equity less actual DAC minus Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000.00) (collectively, "Final Shareholders'
Equity) is less than the Approximate Shareholders' Equity, then Buyer shall have
the right to collect from the Escrow Consideration (as defined below) an amount
equal to the Approximate Shareholders' Equity minus the Final Shareholders'
Equity. If the Final Shareholders' Equity is more than the Approximate
Shareholders' Equity, then Buyer, within five (5) business days shall transfer
to Shareholder, in immediately available funds, an amount equal to Final
Shareholders' Equity minus Approximate Shareholders' Equity.

         (e) Upon delivery by Shareholder to Buyer of the Final Balance Sheet,
Shareholder and Company shall settle the intercompany accounts and transactions
consistent with past practices. To the extent such settlement provides a net
amount owed by Shareholder to Company, Buyer shall be distributed such net
amount owed out of the Escrow Consideration. To the extent such settlement
provides a net amount owed by Company to Shareholder, Buyer and/or Company shall
pay to Shareholder, within five (5) business days, such net amount in
immediately available funds.

     1.2 ESCROW CONSIDERATION. An amount equal to the Purchase Price less Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) (the "Escrow
Consideration") shall be placed in escrow pursuant to the provisions of
Paragraph 5.9 hereof to be held for a period of 18 months as security for
indemnification obligations of Shareholder under this Agreement.

     1.3 DEPOSIT. Buyer has posted a purchase price deposit in the amount of
$100,000.00 (the "Deposit") with DuFour & Kohlhoss, Chartered ("Escrow Agent")
which shall be applied to the payment of the Escrow Consideration at Closing.
Shareholder has received evidence of the Deposit from the Escrow Agent.

                                  ARTICLE II.

              REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
                                   SHAREHOLDER

     (A) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER

     Each of the Company and the Shareholder, jointly and severally, represent
and warrant that

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all of the following representations and warranties with respect to the Company
and its business and operations set forth in this Article II are true and
correct in all material respects on the date hereof and will be true and correct
in all material respects at the time of the Closing.

     2.1 AUTHORIZATION. Subject to the entry and effectiveness of the order of
the Bankruptcy Court in substantially the form of EXHIBIT "A" hereto (the
"Section 363/365 Order"), this Agreement has been duly executed and delivered
by the Company and the Shareholder and constitutes the valid and binding
obligation of each such party, enforceable against each such party in accordance
with its terms.

     2.2 ORGANIZATION, EXISTENCE AND GOOD STANDING OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota with all requisite power to
carry on its business as now being conducted. Set forth on SCHEDULE 2.2 is a
list of the jurisdictions in which the Company is qualified or licensed to do
business as a foreign corporation. True, complete and correct copies of (i)
the Articles of Incorporation of the Company and (ii) the By-laws of the
Company are attached hereto on SCHEDULE 2.2, (the "Charter Documents"). The
minute books of the Company have been made available to Buyer and, except as
set forth on SCHEDULE 2.2, are correct and complete in all material respects.

     2.3 CAPITAL STOCK OF THE COMPANY.

          (a) The Company's authorized capital stock consists of one million
          (1,000,000) shares of common stock, $1.00 par value per share, of
          which two hundred fifty thousand (250,000) shares are issued and
          outstanding, all of which are owned of record by Shareholder. All of
          the Company Shares have been validly issued and are fully paid and
          nonassessable and no holder thereof is entitled to any preemptive
          rights (except any statutory preemptive rights, which the Shareholder
          hereby waives). There are no outstanding conversion or exchange
          rights, subscriptions, options, warrants or other arrangements or
          commitments obligating the Company to issue any shares of capital
          stock or other securities or to purchase, redeem or otherwise acquire
          any shares of capital stock or other securities, or to pay any
          dividend or make any distribution in respect thereof.

          (b) The Shareholder (i) owns of record and beneficially and has good
          and marketable title to the Company Shares, free and clear of any and
          all liens, mortgages, security interests, encumbrances, pledges,
          charges, adverse claims, options, buy-sell agreements, right of first
          refusal agreements, property settlement agreements, rights or
          restrictions of any character whatsoever other than standard state and
          federal securities law private offering legends and restrictions
          (collectively, "Liens"), and (ii) has the right to vote the Company
          Shares on any matters as to which any shares of the Company common
          stock are entitled to be voted under the laws of the State of
          Minnesota and the Company's Charter Documents, free of any right of
          any other person.

     2.4 SUBSIDIARIES. The Company does not presently own, of record or
beneficially, or control directly or indirectly, 80% or more of the (i) capital
stock, securities convertible into capital stock or (ii) other equity or
membership interest in any corporation, association or business entity nor is
the Company, directly or indirectly, a participant in any joint venture or
partnership.

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     2.5 FINANCIAL STATEMENTS.

          (a) The Company has previously furnished to Buyer the balance sheet of
          the Company as of December 31, 1999 and the related statements of
          operations, shareholder equity and cash flows for the three (3) fiscal
          years then ended, as audited by Ernst & Young, certified public
          accountants (collectively, the "Financial Statements"). The Financial
          Statements present fairly the financial position and results of
          operations of the Company as of the indicated dates and for the
          indicated periods and have been prepared in accordance with GAAP
          except as disclosed on SCHEDULE 2.5.

          (b) Except to the extent reflected in the December 31, 1999 balance
          sheet included in the Financial Statements or as disclosed on SCHEDULE
          2.5, the Company has no liabilities or obligations required to be
          reflected in the Financial Statements (or the notes thereto) in
          accordance with GAAP other than liabilities incurred in the ordinary
          course of business, consistent with past practice, subsequent to
          December 31, 1999.

     2.6 PERMITS AND INTANGIBLES. The Company holds all material licenses,
franchises, permits and other governmental authorizations necessary to conduct
its business as it is currently conducted (the "Material Permits").

     2.7 TAX MATTERS.

               The Company has filed all income tax returns required to be filed
          by the Company and all returns, reports and forms of other Taxes (as
          defined below) required to be filed by the Company and has paid or
          provided for all Taxes shown to be due on such returns and all such
          returns are correct and complete in all material respects. Except as
          set forth on SCHEDULE 2.7, (i) no action or proceeding for the
          assessment or collection of any Taxes is pending against the Company
          and no notice of any claim for Taxes, whether pending or threatened,
          has been received; (ii) no deficiency, assessment or other formal
          claim for any Taxes has been asserted or made against the Company that
          has not been fully paid or finally settled; and (iii) no issue has
          been formally raised by any taxing authority in connection with an
          audit or examination of any return of Taxes. No federal, state or
          foreign income tax returns of the Company have been examined, and
          there are no outstanding agreements or waivers extending the
          applicable statutory periods of limitation for such Taxes for any
          period. All Taxes that the Company has been required to collect or
          withhold have been duly withheld or collected and, to the extent
          required, have been paid to the proper taxing authority. For purposes
          of this Agreement, "Taxes" shall mean all taxes, charges, fees, levies
          or other assessments including, without limitation, income, excise,
          property, withholding, sales and franchise taxes, imposed by the
          United States, or any state, county, local or foreign government or
          subdivision or agency thereof, and including any interest, penalties
          or additions attributable thereto.

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2.8  ASSETS AND PROPERTIES.

     (a)  REAL PROPERTY. The Company does not own or hold any interest in real
          property.

     (b)  REAL PROPERTY LEASES. The Company is not a party to any lease of any
          real property.

2.9  [RESERVED]

   2.10 CONTRACTS. Set forth on SCHEDULE 2.10 is a listing of all material
contracts, agreements, arrangements and commitments (whether oral or written)
to which the Company is a party or by which its assets or business are bound
(other than the contracts represented by its outstanding Face Amount
Certificates).

   2.11 NO VIOLATIONS. Subject to the entry and effectiveness of the Section
363/365 Order, neither the execution, delivery and performance of this
Agreement by the Company and the Shareholder nor the consummation of the
transactions contemplated hereby will (i) violate any provision of any
Charter Document, or (ii) violate, in any material respect, any statute,
rule, regulation, order or decree of any public body or authority by which
the Company or the Shareholder or its respective properties or assets are
bound.

   2.12 CONSENTS. Except as set forth in SCHEDULE 2.12, and upon entry of
the Section 363/365 Order, no consent, approval, notice to, registration or
filing with, authorization or order of, any court or governmental authority,
under any contract or other agreement or commitment to which the Company or
Shareholder is a party or by which its respective assets are bound, is
required as a result of or in connection with the execution or delivery of
this Agreement, and the other agreements and documents to be executed by the
Company and Shareholder or the consummation by the Company and Shareholder of
the transactions contemplated hereby.

   2.13 LITIGATION AND RELATED MATTERS. Set forth on SCHEDULE 2.13 is a list
of all actions, suits, proceedings, investigations or grievances pending
against the Company or, to the best knowledge of the Company and the
Shareholder, threatened against the Company, the business or any property or
rights of the Company, at law or in equity, before or by any arbitration
board or panel, court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign ("Agencies"). None of the actions, suits, proceedings or
investigations listed on SCHEDULE 2.13 would, if adversely determined (i)
have a material adverse effect on the Company or (ii) affect the right or
ability of the Company to carry on its business substantially as now
conducted. The Company is not subject to any continuing court or Agency
order, writ, injunction or decree applicable specifically to its business,
operations or assets or its employees, nor is the Company in default with
respect to any order, writ, injunction or decree of any court or Agency with
respect to its assets, business, operations or employees. SCHEDULE 2.13 lists
all actions, suits or proceedings filed by or against the Company since
December 31, 1997. The

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Company has not during the last two (2) years been required to make any
indemnification payment as a result of any actual or alleged act or omission of
the Company or any person under its control.

   2.14 COMPLIANCE WITH LAWS. (a) The Company is in compliance with all
applicable laws, regulations (including federal, state and local procurement
regulations), orders, judgments and decrees except where the failure to so
comply would not have a material adverse effect on the Company or its business.

       (b) The Company is a registered Investment Company under the Investment
Company Act of 1940, as amended (the "1940 Act") and is in compliance with all
provisions of the 1940 Act and the rules promulgated thereunder as applicable to
issuers of a "face amount certificate" as that term is defined in the 1940 Act,
except where the failure to so comply would not have a material adverse effect
on the Company or its business.

       (c) The Company publicly offers and sells face amount certificates
which are registered under the Securities Act of 1933, as amended (the "1933
Act"). Currently the only registration statement maintained by the Company
under the 1933 Act is its Form S-1 Registration Statement No. 33-38066 (the
"Registration Statement") with respect to its Series 503 Certificates. The
Registration Statement, including the Prospectus which is a part thereof,
does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein not misleading. There are no stop order or similar
proceedings pending or threatened against the Company with respect to the
Registration Statement.

       (d) The Company has filed all periodic reports required to be filed by
it under the Securities Exchange Act of 1934, as amended (the "1934 Act") and
the rules promulgated thereunder, except where the failure to so comply would
not have a material adverse effect on the Company or its business.

       (e) The Company is in compliance with all state securities laws
applicable to the offer and sale of its face amount certificates, except
where the failure to so comply would not have a material adverse effect on
the Company or its business.

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   2.15 YEAR 2000 REPROGRAMMING. Except as disclosed in writing to Buyer,
none of the (A) computer software, computer firmware, computer hardware
(whether general or special purpose) or other similar or related items of
automated, computerized or software systems and (B) equipment containing
embedded microchips (including systems and equipment supplied by others) used
or relied on by the Company in the conduct of its business has malfunctioned
or, based on the Company's reasonable inquiry is expected to malfunction,
cease to function, generate incorrect data or produce incorrect results when
processing, providing or receiving date-related data from, into and between
the year 1999 and earlier, and the year 2000 and thereafter, or date-related
data in connection with any valid data in the twentieth and twenty-first
centuries.

   2.16 EMPLOYEES AND EMPLOYEE BENEFIT PLANS. The Company has no employees or
employee benefit Plans.

   2.17 OFFICERS AND DIRECTORS. Set forth on SCHEDULE 2.17 is a list of the
current officers and directors of the Company.

   2.18 BANK ACCOUNTS AND POWERS OF ATTORNEY. SCHEDULE 2.18 sets forth each
bank, savings institution and other financial institution with which the
Company has an account or safe deposit box, letter of credit, line of credit
or other financial agreement, arrangement or obligation and the names of all
persons authorized to draw thereon or to have access thereto. Each person
holding a power of attorney or similar grant of authority on behalf of the
Company is identified on SCHEDULE 2.18. Except as disclosed on SCHEDULE 2.18,
(i) the Company has not given any revocable or irrevocable powers of attorney
to any person, firm, corporation or organization relating to its business for
any purpose whatsoever, and (ii) the Company has canceled any and all credit,
debit, gas and other cards issued to or otherwise payable by the Company
effective prior to the Closing and all amounts due thereunder have been fully
paid and discharged. SCHEDULE 2.18 identifies all agreements with First
National Bank of Minneapolis regarding custodial accounts or other custodial
arrangements.

   2.19 DISCLOSURE. All written agreements, lists, schedules, instruments,
exhibits, documents, certificates, reports, statements and other writings
furnished to Buyer pursuant hereto or in connection with this Agreement or
the transactions contemplated hereby are and will be complete and accurate in
all material respects. No representation or warranty by the Shareholder and
the Company contained in this Agreement, in the schedules attached hereto or
in any certificate furnished or to be furnished by the Shareholder or the
Company to Buyer in connection herewith or pursuant hereto contains or will
contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary in order to make any statement contained
herein or therein not misleading. There is no fact known to the Shareholder
that has specific application to the Shareholder or the Company (other than
general economic or industry conditions) and that materially adversely
affects or, as far as the Shareholder can reasonably foresee, materially
threatens, the assets, business, prospects, financial condition, or results
of operations of the Company that has not been set forth in

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this Agreement or any schedule hereto.

     (B)  REPRESENTATION AND WARRANTY OF SHAREHOLDER

     The Shareholder represents and warrants that the representation and
warranty in Section 2.20 is true and correct in all material respects as of the
date hereof, and will be true and correct in all material respects at the time
of the Closing.

   2.20 ABSENCE OF CLAIMS AGAINST THE COMPANY. The Shareholder does not have
any claims against the Company other than as disclosed herein, including
without limitation, final settlement of intercompany accounts and
transactions consistent with past practices.

                                  ARTICLE III.

                     REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Company and Shareholder that all of the
following representations and warranties with respect to Buyer are true and
correct as of the date hereof, and will be true and correct in all material
respects at the time of the Closing in all material respects.

   3.1 ORGANIZATION and AUTHORIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland
with all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Buyer has
all requisite corporate power, capacity and authority to execute and deliver
this Agreement and all other agreements and documents contemplated hereby.
The execution and delivery of this Agreement and such other agreements and
documents by Buyer and the consummation by Buyer of the transactions
contemplated hereby have been duly authorized by Buyer and no other corporate
action on the part of Buyer is necessary to authorize the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Buyer and is the legal valid and binding obligation of Buyer, enforceable in
accordance with its terms.

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     3.2 NO VIOLATIONS. The execution and delivery of this Agreement and the
other agreements and documents contemplated hereby by Buyer and the consummation
of the transactions contemplated hereby will not (a) violate any provision of
the articles of incorporation or bylaws of Buyer (b) violate any statute, rule,
regulation, order or decree of any public body or authority by which Buyer or
its properties or assets are bound, or (c) result in a violation or breach of,
or constitute a default under or result in the creation of any encumbrance upon,
or create any rights of termination, cancellation or acceleration in any person
with respect to any agreement, contract, indenture, mortgage or instrument to
which Buyer is a party or any of its properties or assets is bound.

     3.3 CONSENTS. No consent, approval or other authorization of any
governmental authority or third party is required as a result of or in
connection with the execution and delivery of this Agreement and the other
agreements and documents to be executed by Buyer or the consummation by Buyer of
the transactions contemplated hereby.

     3.4 FINANCIAL STATEMENTS. Buyer has previously furnished to Shareholder the
balance sheet of Buyer as of September 30, 1998 and September 30, 1999 and the
related statements of operations, shareholder's equity and cash flows for the
fiscal years then ended (collectively, the "Buyer Financial Statements"). The
Buyer Financial Statements present fairly the financial position and results of
operations of Buyer as of the indicated dates and for the indicated periods and
have been prepared in accordance with GAAP except as disclosed on SCHEDULE 3.4.

     3.5 FINANCING. As of the Closing, Buyer will have, sufficient funds to
consummate the transactions contemplated hereby, including, without limitation,
payment of the Purchased Price.

                                  ARTICLE IV.
                            COVENANTS OF THE PARTIES

     4.1 COURSE OF CONDUCT BY THE COMPANY. From the date hereof through and
until the Closing Date, except as approved in writing by Buyer or as
otherwise permitted or contemplated by this Agreement, the Company's business
shall be conducted only in the ordinary course of business consistent with
past practice, and the Shareholder shall cause the Company to comply with the
following covenants:

          (a) ARTICLES OF INCORPORATION; BYLAWS. The Company shall not make any
     material change to its Charter Documents.

          (b) RELATIONS WITH SUPPLIERS, CUSTOMERS, ETC. The Company will use
     commercially reasonable efforts to preserve its relationships with its
     material suppliers, customers and others having material business dealings
     with it and shall not change or modify or commit to change or modify any
     terms offered to customers.

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          c) INCURRENCE OF DEBT. The Company will not voluntarily incur or
     assume, whether directly or by way of guaranty or otherwise, any material
     obligation or liability, except obligations and liabilities incurred in the
     ordinary course of business, consistent with past practice.

          (d) LIENS. The Company will not mortgage, pledge, encumber, create or
     allow any Liens not existing on the date hereof upon any of its properties
     or assets, tangible or intangible, except Liens created in the ordinary
     course of business, consistent with past practice.

          (e) DISPOSITION OF ASSETS. The Company will not sell, transfer or
     otherwise dispose of any of its assets, except in the ordinary course of
     business, consistent with past practice or as otherwise provided in this
     Agreement. The Company will not cancel or forgive any debts or claims
     except or in the ordinary course of business, consistent with past
     practice, except as otherwise provided in this Agreement.

          (f) MATERIAL TRANSACTIONS. The Company will not enter into any other
     agreement, course of action or transaction material to it, except in the
     ordinary course of business, consistent with past practice.

          (g) STOCK ISSUANCE: REDEMPTIONS: REORGANIZATIONS. The Company shall
     not (i) issue, grant or dispose of, or make any agreement, arrangement or
     commitment obligating the Company to issue, grant or dispose of any
     capital shares or other securities of the Company, (ii) redeem or acquire,
     or make any agreement, arrangement or commitment obligating the Company to
     redeem or acquire, any shares of capital stock or other securities of the
     Company, or (iii) authorize or effect or make any agreement, arrangement
     or commitment obligating the Company to effect, any reorganization,
     recapitalization or split-up of such capital stock of the Company.

     4.2 INVESTIGATIONS. The Company shall provide Buyer and its representatives
and agents such access to the books and records of the Company and furnish to
Buyer such financial and operating data and other information with respect to
the businesses and properties of the Company as it may reasonably request from
time to time, and permit Buyer and its representatives and agents to make such
inspections of the Company's real and personal properties as they may reasonably
request. The Shareholder shall promptly arrange for Buyer and its
representatives and agents to meet with such directors, officers, employees and
agents of the Company as reasonably requested.

     4.3 RECORDS PERTAINING TO THE COMPANY

          (a) TURNOVER OF RECORDS. At the Closing, the Shareholder will deliver
     or cause to be delivered to the Company any and all records applicable to
     the Company (i) in the possession of the Shareholder, and (ii) of which the
     Company does not already have copies.

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     (b) ACCESS TO RECORDS. The Shareholder shall allow Buyer and its
representatives access to all business records and files of the Shareholder that
pertain in part to the Company, during normal working hours at the principal
place(s) of business of the Shareholder, or at any location where such records
are stored, and the Company shall have the right, at its own expense, to make
copies of any such records and files.

     (c) ASSISTANCE WITH RECORDS. From and after the Closing Date, the
Shareholder shall make available to Buyer, upon written request, to the extent
reasonably available (i) personnel of the Shareholder to assist Buyer in
locating and obtaining records and files maintained by the Shareholder, and (ii)
any personnel of Shareholder, whose assistance or participation is reasonably
required by Buyer in anticipation of, or preparation for, any existing or future
third party actions, Tax or other matters in which the Company or any of its
past, present or future Affiliates is involved and which relate to the business
of the Company.

     (d) RECORDS PRIOR TO CLOSING. Commencing on the effective date of this
Agreement, Shareholder shall provide Buyer with all current records in
electronic or other form appropriate for loading into Buyer's system and
Buyer's personnel shall, at Buyer's cost and expense, be permitted to assist
the Company in the servicing of its assets and accounts for purposes of
familiarization and transition. Such records shall be held in strict confidence
and shall be promptly returned to Shareholder or the Company in the event this
Agreement is terminated prior to Closing for any reason.

4.4   PREPARATION AND FILING OF TAX RETURNS.

     (a) Shareholder shall prepare or cause to be prepared and file or cause to
be filed all federal and state income Tax returns for all taxable periods of
the Company ending on or prior to the Closing Date. Such Tax returns shall be
prepared on a basis consistent with past practice. Shareholder shall be
responsible for the payment of all taxes attributable to such Tax returns. Buyer
shall prepare or cause to be prepared and file or cause to be filed all Tax
returns of the Company for taxable periods which begin before the Closing Date
and end after the Closing Date. The Buyer shall be responsible for the payment
of all amounts due on such Tax returns. Shareholder shall pay Buyer within
thirty (30) days after the date on which Taxes are paid, with respect to such
periods, an amount equal to the portion of such Taxes which relates to the
portion of such taxable period ending on the Closing Date to the extent such
Taxes are not reflected in the reserve for tax liability set forth on the
Financial Statements. Buyer shall prepare or cause to be prepared and file or
cause to be filed all Tax returns of the Company for taxable periods which begin
on or after the Closing Date. Buyer shall be responsible for the payment of all
amounts due on such Tax returns. For purposes of this Section, in the case of
any Taxes that are imposed on a periodic basis and are payable for a taxable
period that includes (but does not end on) the Closing Date, the portion of such
Tax which relates to the portion of such taxable period ending on the Closing
Date shall (x)

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     in the case of any Taxes other than Taxes based upon or related to income
     or receipts, be deemed to be the amount of such Tax for the entire taxable
     period multiplied by a fraction the numerator of which is the number of
     days in the taxable period ending on the Closing Date and the denominator
     of which is the number of days in the entire taxable period, and (y) in the
     case of any Tax based upon or related to income or receipts be deemed equal
     to the amount which would be payable if the relevant taxable period ended
     on the Closing Date. Any credits relating to a taxable period that begins
     before and ends after the Closing Date shall be taken into account as
     though the relevant taxable period ended on the Closing Date. All
     determinations necessary to give effect to the foregoing allocations shall
     be made in a manner consistent with the prior practice of the Company.
     Shareholder and Buyer shall cooperate fully, as and to the extent
     reasonably requested by the other party, in connection with the filing of
     Tax returns pursuant to this Section.

          (b) The Shareholder shall have responsibility for the conduct of
     any audit of the Company for any taxable period ending on or prior to
     the Closing Date; PROVIDED, HOWEVER, that in the event that the
     Shareholder receives notice of a claim from the IRS or any other taxing
     authority the Shareholder shall promptly, but in any event within five
     (5) business days, notify Buyer of such claim and of any action taken or
     proposed to be taken. In the event Buyer wishes to participate in such
     audit it may do so at its own cost and expense. Notwithstanding any
     indication in this Agreement to the contrary, the Shareholder shall not
     agree to an adjustment in a federal or state income tax audit, appeals
     procedure or judicial proceeding that will adversely impact the Company
     in tax periods after the Closing Date without the prior written consent
     of Buyer, which consent shall not be unreasonably withheld.

          (c) All tax attributes of the Company as of the Closing Date
     computed on a separate company basis shall remain with the Company after
     the Closing.

          (d) Unless provided for in the Final Balance Sheet, any Tax refunds,
     that are received by Buyer or Company, and any amounts credited against
     Tax to which Buyer or Company become entitled, that relate to tax periods
     or portions thereof ending on or before the Closing Date shall be for the
     account of Shareholder, without setoff, counterclaim, or right of
     recoupment, and Buyer shall pay over to Shareholder any such refund or the
     amount of any such credit within fifteen (15) days after receipt or
     entitlement thereto.

     4.5 1940 ACT APPLICATION.

     Shareholder shall prepare or cause to be prepared and file or cause to be
filed with the Securities and Exchange Commission on behalf of the Company, and
such other applicants as are necessary or appropriate, an application for an
order issued pursuant to Section 28(c) of the 1940 Act permitting the Company,
or any successor company, to engage the services of such custodians as the
Company may select, in addition to its current custodian, subject to their
respective

                                       12

<PAGE>

qualification as required by Section 28(c).

     4.6 POST CLOSING CAPITALIZATION.
     Buyer covenants and agrees that, immediately following the Closing,
Buyer shall contribute sufficient capital to Company to cause Company to
comply with any and all applicable laws, rules and regulations.

                                   ARTICLE V
                                   ---------
                       CONDITIONS TO OBLIGATIONS OF BUYER

     The obligation of Buyer to purchase the Company Shares, and to cause the
other transactions contemplated hereby to occur at the Closing, shall be
subject to the satisfaction of each of the following conditions at or prior
to the Closing:

     5.1 REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
the Company and the Shareholder contained in this Agreement and in any
Schedule or other disclosure in writing from the Company or the Shareholder
shall be true and correct in all material respects when made, and shall be
true and correct in all material respects on and as of the Closing Date.

     5.2 COVENANTS OF THE SHAREHOLDER AND THE COMPANY. All of the terms,
covenants, conditions and agreements herein on the part of the Shareholder
and the Company to be complied with or performed on or before the Closing
Date shall have been fully complied with and performed.

     5.3 CERTIFICATE OF THE COMPANY AND THE SHAREHOLDER. There shall be
delivered to Buyer a certificate dated the Closing Date and signed by an
officer of the Company and by the Shareholder to the effect set forth in
SECTIONS 5.1 and 5.2, which certificate shall have the effect of a
representation and warranty made by the Company and the Shareholder on and as
of the Closing Date.

     5.4 ABSENCE OF LITIGATION. No inquiry, action, suit or proceeding shall
have been asserted, threatened or instituted (i) in which it is sought to
restrain or prohibit the carrying out of the transactions contemplated by
this Agreement or to challenge the validity of such transactions or any part
thereof, (ii) which could, if adversely determined, have a material adverse
effect on the Company or (iii) as a result of which, in the reasonable
judgment of Buyer, Buyer would be deprived of the material benefits of the
ownership of the Company Shares.

     5.5 CONSENTS AND APPROVALS. All material authorizations, consents,
approvals, waivers and releases, if any, necessary for the Shareholder and the
Company to consummate the transactions contemplated hereby shall have been
obtained and copies thereof shall be delivered to Buyer. The

                                       13

<PAGE>

Section 363/365 Order shall have been entered in substantially the form
attached hereto.

     5.6 CERTIFICATES. The Company and the Shareholder shall have delivered
to Buyer (i) certificates of the appropriate governmental authorities, dated
as of a date not more than twenty (20) days prior to the Closing Date,
attesting to the existence and good standing of the Company in the State of
Minnesota and qualification as a foreign corporation in the state of
Kentucky; (ii) a copy, certified by the Secretary of State of the State of
Minnesota as of a date not more than twenty (20) days prior to the Closing
Date, of the Articles of Incorporation and all amendments thereto of the
Company; (iii) a copy certified by the Secretary of the Company, dated the
Closing Date, of the Bylaws of the Company; and (iv) certificates, dated the
Closing Date, of the Secretary of the Company, relating to the incumbency and
corporate proceedings in connection with the consummation of the transactions
contemplated hereby.

     5.7 [RESERVED]

     5.8 ACCOUNT VALUE. The Account Value of the face amount certificates of
the Company shall not be less than $28,000,000.00. If the Account Value is
less than $28,000,000 but $26,000,000 or more, the Purchase Price shall be
reduced by $50,000. If the Account Value is less than $26,000,000 but
$24,000,000 or more, the Purchase Price shall be reduced by another $50,000.
If the Account Value is less than $24,000,000 but $22,000,000 or more, the
Purchase Price shall be reduced by another $50,000. If the Account Value is
less than $22,000,000 Buyer shall have the option either to proceed to
Closing and receive another $50,000 reduction of the Purchase Price, or to
terminate this Agreement by delivery of written notice of termination to the
Shareholder and the Company, whereupon this Agreement shall become null and
void, Buyer shall become entitled to a refund of the Deposit and all parties
shall be relieved of all obligations hereunder.

     5.9 ESCROW AGREEMENT. The Shareholder shall have executed and delivered an
escrow agreement (the "Escrow Agreement") in the form of EXHIBIT B hereto to be
by and among Buyer, the Shareholder and the escrow agent (the "Escrow Agent")
and the Escrow Consideration shall have been paid to Escrow Agent to be held as
security for the post closing obligations and liabilities of Shareholder under
this Agreement.

     5.10 SHAREHOLDER'S RELEASE. The Shareholder shall have executed and
delivered to Buyer immediately prior to the Closing Date an instrument dated
the Closing Date in the form of EXHIBIT "C" hereto (the "Shareholder's
Release") releasing the Company from any and all claims of the Shareholder
against the Company and obligations of the Company to the Shareholder.

     5.11 OPINION OF COUNSEL. Buyer shall have received an opinion of counsel
to the Shareholder and the Company, dated the Closing Date substantially in
the form attached hereto as EXHIBIT "E". (the "Legal Opinion").

                                       14

<PAGE>

     5.12 [RESERVED]

     5.13 NO TRANSFERS TO AFFILIATES. Except as otherwise expressly
contemplated by this Agreement, the Company shall not have distributed or
transferred any of its assets or properties, or made any payments, to or for
the benefit of any of its affiliates.

     5.14 [RESERVED]

     5.15 No condition shall exist that was not disclosed in writing to Buyer
prior to the date hereof that would have a material adverse effect on the
business of the Company.

     5.15 NONCOMPETITION AGREEMENT. The Shareholder shall have executed and
delivered to Buyer a noncompetition agreement in the form attached hereto as
Exhibit "D" (The "Noncompetition Agreement").

     5.16 TERMINATION OF RELATED PARTY AGREEMENTS. All existing agreements
between the Company and the Shareholder and all existing bonus and incentive
plans and arrangements of the Company shall have been canceled or terminated.

     5.17 STOCK CERTIFICATES. the Shareholder shall have tendered certificates
representing the Company Shares, duly endorsed in blank or accompanied by
appropriate stock powers, in proper form for transfer, with all transfer taxes
paid.

     5.18 RESIGNATIONS OF DIRECTORS AND OFFICERS. Buyer shall have received the
resignations of each of the directors and officers of the Company, effective as
of the Closing.

                                  ARTICLE VI.

                  CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER

     The obligations of the Shareholder to sell the Company Shares and to cause
the other transactions contemplated hereby to occur at the Closing shall be
subject, except as the Shareholder may waive in writing, to the satisfaction of
each of the following conditions at or prior to the Closing:

     6.1 REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
Buyer contained in this Agreement and in any Schedule or other disclosure in
writing from Buyer shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though such representation and warranty had been
made on and as of the Closing Date.

     6.2 COVENANTS OF BUYER. All of the terms, covenants, conditions and
agreements herein on

                                       15

<PAGE>

the part of Buyer to be complied with or performed on or before the Closing Date
shall have been fully complied with and performed.

     6.3 ABSENCE OF LITIGATION. No inquiry, action, suit or proceeding shall
have been asserted, threatened or instituted in which it is sought to restrain
or prohibit the carrying out of the transactions contemplated by this Agreement
or to challenge the validity of such transactions or any part thereof.

     6.4 CERTIFICATES. Buyer shall have delivered to the Shareholder (i) a
certificate of the appropriate governmental authority, dated as of a date not
more than twenty (20) days prior to the Closing Date, attesting to the
existence and good standing of Buyer in the State of Maryland; (ii) copies,
certified by the Secretary of the State of its incorporation as of a date not
more than twenty (20) days prior to the Closing Date, of the articles of
incorporation and all amendments thereto of Buyer; (iii) copies, certified by
the Secretary of Buyer, dated the Closing Date, of the bylaws of Buyer; and
(iv) certificates, dated the Closing Date, of the Secretary of Buyer relating
to the incumbency and corporate proceedings in connection with the
consummation of the transactions contemplated hereby.

     6.5 TRANSFER OF FUNDS. Buyer shall have delivered to Shareholder and
Escrow Agent the amounts of cash set forth in SECTION 7.3 to be delivered at
Closing.

     6.6 CERTIFICATE OF BUYER. There shall be delivered to Shareholder a
certificate dated as of the Closing Date and signed by an officer of Buyer to
the effect set forth in SECTIONS 6.1 and 6.2 which certificate shall have the
effect of a representation and warranty made by Buyer on and as of the Closing
Date.

     6.7 ENTRY OF THE SECTION 363/365 ORDER. The Bankruptcy Court shall have
entered the Section 363/365 Order.

     6.8 DIVIDEND. The Dividend shall have been received by the Shareholder.

                                  ARTICLE VII.
                                     CLOSING

     7.1 CLOSING. Unless this Agreement is first terminated as provided in
SECTION 8.1, and subject to the satisfaction or waiver of all the conditions
set forth in ARTICLES V and VI, the closing of the transactions contemplated
hereby (The "Closing") shall take place at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison, in New York, New York, or by telecopy with
originals of all materials to follow upon the agreement of the parties, or
such other place as is agreed to by Buyer and Shareholder, on April 15, 2000
(but effective for accounting purposes as of March 31,2000), or such other
date (and effective date) as the parties may agree upon in writing (the
"Closing Date").

                                       16
<PAGE>

     7.2  DELIVERY OF THE COMPANY SHARES. At the Closing, Shareholder shall
deliver or cause to be delivered to Buyer the stock certificate(s) evidencing
all of the Company Shares owned by Shareholder, duly endorsed or accompanied by
duly executed stock powers assigning the Company Shares to Buyer and otherwise
in good form for transfer.

     7.3  PAYMENT OF CASH TO SHAREHOLDER AND ESCROW AGENT. At the Closing,
Buyer shall deliver, by wire transfer of immediately available funds, to (i)
Escrow Agent, under the Escrow Agreement referred to in Section 5.9 and
attached hereto as EXHIBIT B, the Escrow Consideration; and (ii) to
Shareholder, Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00).

                                 ARTICLE VIII.

                          TERMINATION PRIOR TO CLOSING

     8.1  TERMINATION.

          (a) This Agreement may be terminated and abandoned at any time prior
          to the Closing:

               (i) By the written mutual consent of Buyer and Shareholder;

               (ii) By Buyer on the Closing Date if any of the conditions set
               forth in ARTICLE V shall not have been fulfilled on or prior to
               the Closing Date;

               (iii) By Shareholder on the Closing Date if any of the conditions
               set forth in ARTICLE VI shall not have been fulfilled on or prior
               to the Closing Date;

          (b) Any termination pursuant to this Article VIII shall be without
          prejudice to the terminating party's rights and remedies under this
          Agreement by reason of any violation of this Agreement occurring prior
          to such termination. Notwithstanding the foregoing, it is expressly
          agreed that Buyer's sole remedy for any breach by Company or
          Shareholder of this Agreement, or any of the representations or
          warranties contained herein, shall be collection against the Escrow
          Consideration. Once the Escrow Consideration is depleted, Buyer shall
          have no other remedy, at equity or law, against Shareholder and/or the
          Company, and Shareholder and the Company shall each be deemed to be
          released from any and all further claims by Buyer. In the event of a
          termination pursuant to this Article VIII, each party shall bear its
          own costs and expenses incurred with respect to the transactions
          contemplated hereby. In the event Buyer terminates or materially
          violates this Agreement, Shareholder shall be entitled to the damages
          set forth in SECTION 10.13 below.

                                 ARTICLE IX.

                                       17
<PAGE>

                                INDEMNIFICATION

     9.1  BUYER'S LOSSES.

          (a) Shareholder agrees to indemnify and hold harmless Buyer and its
          directors, officers, employees, representatives, agents and attorneys
          from, against and in respect of any and all Buyer's Losses (as defined
          below) suffered, sustained, incurred or required to be paid by any of
          them by reason of (i) except as set forth in Section 10.10, any
          material liability arising from or based upon the operation of the
          Company through the Closing Date; (ii) any material failure by the
          Shareholder to observe or perform its covenants and agreements set
          forth in this Agreement or in any other agreement or document executed
          by it in connection with the transactions contemplated hereby; or
          (iii) any material liability arising from or based upon the engagement
          by the Company or the Shareholder of any broker or agent.

          (b) "Buyer's Losses" shall mean all damages (including, without
          limitation, amounts paid in settlement with the Shareholder's consent,
          which consent may not be unreasonably withheld), losses, obligations,
          liabilities, claims, deficiencies, costs and expenses (including,
          without limitation, reasonable attorneys' fees), penalties, fines,
          interest and monetary sanctions, including, without limitation,
          reasonable attorneys' fees and costs incurred to comply with
          injunctions and other court and Agency orders, and other costs and
          expenses incident to any suit, action, investigation, claim or
          proceeding or to establish or enforce the rights of Buyer or such
          other persons to indemnification hereunder.

     9.2  SHAREHOLDER LOSSES.

          (a) Buyer agrees to indemnify and hold harmless the Shareholder and
          its directors, officers, employees, representatives, agents and
          attorneys, from, against and in respect of any and all Shareholder
          Losses (as defined below) suffered, sustained, incurred or required to
          be paid by Shareholder by reason of (i) except as set forth in Section
          10.10, any material failure by Buyer to observe or perform its
          covenants and agreements set forth in this Agreement or any other
          agreement or document executed by it in connection with the
          transactions contemplated hereby; (ii) any material liability for
          claims arising from or based upon the operation of the Company
          subsequent to the Closing Date; or (iii) any material liability
          arising from or based on the engagement by Buyer of any broker or
          agent.

                                       18
<PAGE>

          (b) "Shareholder Losses" shall mean all damages (including, without
          limitation, amounts paid in settlement with the consent of Buyer,
          which consent may not be unreasonably withheld), losses, obligations,
          liabilities, claims, deficiencies, costs and expenses (including,
          without limitation, reasonable attorneys' fees), penalties, fines,
          interest and monetary sanctions, including, without limitation,
          reasonable attorneys' fees and costs incurred to comply with
          injunctions and other court and Agency orders, and other costs and
          expenses incident to any suit, action, investigation, claim or
          proceeding or to establish or enforce the right of the Shareholder or
          such other persons to indemnification hereunder.

     9.3  (RESERVED]

     9.4  NOTICE OF LOSS. Except to the extent set forth in the next sentence, a
party to the Agreement will not have any liability under the indemnity
provisions of this Agreement with respect to a particular matter unless a notice
setting forth in reasonable detail the breach or other matter which is asserted
has been given by the party seeking indemnification (the "Indemnified Party") to
the indemnifying party (the "Indemnifying Party") and, in addition, if such
matter arises out of a suit, action, investigation, proceeding or claim, such
notice is given promptly, but in any event within thirty (30) days after the
Indemnified Party is given notice of the claim or the commencement of the suit,
action, investigation or proceeding. Notwithstanding the preceding sentence,
failure of the Indemnified Party to give notice hereunder shall not release the
Indemnifying Party from its obligations under this ARTICLE IX except to the
extent the Indemnifying Party is actually prejudiced by such failure to give
notice.

     9.5  RIGHT TO DEFEND. Upon receipt of notice of any suit, action,
investigation, claim or proceeding for which indemnification might be claimed by
an Indemnified Party, the Indemnified Party shall have the option of electing to
defend, contest or otherwise protect against such suit, action, investigation,
claim or proceeding, with the costs and expenses of such defense to be borne by
the Indemnifying Party, and the Indemnifying Party must cooperate in any such
defense or other action. The Indemnifying Party shall have the right, but not
the obligation, to participate at its own expense in a defense thereof by
counsel of its own choosing, but the Indemnified Party shall be entitled to
control the defense unless otherwise determined by the Indemnified Party or if
the Indemnified Party fails to assume defense of the matter. In the event the
Indemnified Party shall fail to defend, contest or otherwise protect in a timely
manner against any such suit, action, investigation, claim or proceeding, the
Indemnifying Party shall defend, contest or otherwise protect against the same
and make any compromise or settlement thereof, and shall pay all costs thereof,
including, without limitation, reasonable attorneys' fees, disbursements and
all amounts paid as a result of such suit, action, investigation, claim or
proceeding or the compromise or settlement thereof; provided, however, that the
Indemnifying Party must send a written notice to the Indemnified Party of any
such proposed settlement or compromise, which settlement or compromise the
Indemnified Party may reject, in its reasonable judgment, within thirty (30)
days of receipt of such notice. Failure to reject

                                       19
<PAGE>

such notice within such thirty (30) day period shall be deemed an acceptance of
such settlement or compromise. The Indemnified Party shall have the right to
effect a settlement or compromise over the objection of the Indemnifying Party;
provided, that if the Indemnifying Party has assumed the defense from the
Indemnified Party upon the election of the Indemnified Party, the Indemnified
Party waives any right to indemnity therefor. If the Indemnifying Party
undertakes the defense of such matters upon the election of the Indemnified
Party, the Indemnified Party shall not, so long as the Indemnifying Party does
not abandon the defense thereof, be entitled to recover from the Indemnifying
Party any legal or other expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof other than the reasonable costs of
investigation undertaken by the Indemnified Party with the prior written consent
of the Indemnifying Party.

     9.6  COOPERATION. Each of Buyer, Shareholder and the Company, and each of
their affiliates, successors and assigns, shall cooperate, to the extent
possible, with each other in the defense of any suit, action, investigation,
proceeding or claim by a third party and, during normal business hours, shall
afford each other, to the extent possible, reasonable access to their books and
records and employees relating to such suit, action, investigation, proceeding
or claim and shall furnish each other all such further information that they
have the right and power to furnish as may reasonably be necessary to defend
such suit, action, investigation, proceeding or claim.

     9.7  COLLECTION OF DAMAGES BY BUYER. Notwithstanding anything contained
herein to the contrary, it is expressly agreed that Buyer's sole remedy
pursuant to this Agreement shall be collection against the Escrow Consideration.
Once the Escrow Consideration is depleted, Buyer shall have no other remedy, at
equity or law, against Shareholder, and Shareholder shall be deemed to be
released from any and all further claims by Buyer.

                                   ARTICLE X.

                                  MISCELLANEOUS

     10.1 ENTIRE AGREEMENT. This Agreement (including the exhibits and schedules
hereto) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof, and no party shall be liable or bound to the other
in any manner by any representations or warranties not set forth herein.

     10.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. This Agreement may not be assigned
by any party hereto (by operation of law or otherwise) without the prior written
consent of all other parties hereto.

     10.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each

                                       20
<PAGE>

of which shall for all purposes be deemed to be an original and all of which
shall constitute the same instrument.

     10.4 HEADINGS. The headings of the articles and sections of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction hereof.

     10.5 CONSTRUCTION. As used in this Agreement, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular article, section, paragraph or other
subdivision.

     10.6 MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof, and this Agreement may be modified or amended by a written
instrument executed by Buyer, the Company and the Shareholder. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by all of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver or any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     10.7 SCHEDULES, ETC. All exhibits and schedules annexed hereto are
expressly made a part of this Agreement as though fully set forth herein.

     10.8 NOTICES. All notices of communication required or permitted hereunder
shall be in writing and may be given by (a) depositing the same in United States
mail, addressed to the party to be notified, postage prepaid and registered or
certified with return receipt request, (b) delivering the same in person to an
officer or attorney of such party, (c) telecopying the same with electronic
confirmation of receipt.

                         (i)   If to Buyer, addressed to:

                         1st Atlantic Guaranty Corporation

                         7920 Norfolk Avenue 11th Floor

                         Bethesda MD 20814

                         ATTENTION: John J. Lawbaugh

                         (ii)   If to the Shareholder, addressed to:

                         ARM Financial Group., Inc.
                         515 West Market Street
                         Louisville, KY 40202

                                       21

<PAGE>

                           ATTENTION: General Counsel

     With copy to:

                           Walker, Truesdell, Radick & Associates
                           380 Lexington Avenue Suite 1514
                           New York, New York 10168
                           ATTENTION: Hobart G. Truesdell

                           or to such other address or counsel as any party
hereto shall specify pursuant to this Section from time to time.

     10.9 GOVERNING LAW: CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO
EXPRESSLY CONSENT AND AGREE THAT ANY DISPUTE, CONTROVERSY, LEGAL ACTION OR OTHER
PROCEEDING THAT ARISES UNDER, RESULTS FROM, CONCERNS OR RELATES TO THIS
AGREEMENT SHALL BE BROUGHT IN THE FEDERAL AND STATE COURTS IN AND OF THE STATE
OF NEW YORK AND ACKNOWLEDGE THAT THEY WILL ACCEPT SERVICE OF PROCESS BY
REGISTERED OR CERTIFIED MAIL OR THE EQUIVALENT DIRECTED TO THEIR LAST KNOWN
ADDRESS AS DETERMINED BY THE OTHER PARTY IN ACCORDANCE WITH THIS AGREEMENT OR BY
WHATEVER OTHER MEANS ARE PERMITTED BY SUCH COURTS.

     10.10 TERMINATION OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained herein shall terminate at and as of the Closing.

     10.11 EXPENSES. the Company and the Shareholder, on the one hand, and
Buyer, on the other hand, shall be solely responsible for their respective costs
and expenses incurred in connection with the transactions contemplated hereby.

     10.12 NUMBER AND GENDER OF WORDS. Whenever the singular number is used, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.

     10.13 LIQUIDATED DAMAGES. In the event Buyer fails to close as required
hereunder, the sole remedy of Seller and the Company shall be forfeiture of the
Deposit as fixed and liquidated damages.

     10.14 FURTHER ASSURANCES. From time to time after the Closing, at the
request of any other party but at the expense of the requesting party, Buyer,
the Company or the Shareholder, as the case may

                                       22

<PAGE>

be, will execute and deliver any such other instruments of conveyance,
assignment and transfer, and take such other action as the other party may
reasonably request in order to consummate or evidence the transactions
contemplated hereby.

     10.15 BROKERS AND AGENTS. Each party represents and warrants that it has
employed no broker or agent in connection with this transaction and agrees to
indemnify and hold harmless the other parties against all loss, cost, damages or
expense arising out of claims for fees or commissions of brokers employed or
alleged to have been employed by such indemnifying party.

                                   ARTICLE XI
                               BANKRUPTCY APPROVAL

     Shareholder has filed a voluntary petition for relief under chapter 11 of
the Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware IN RE: ARM FINANCIAL GROUP, INC. Case No. 99-4430 (Judge Walsh) (the
"Bankruptcy Proceeding"). Shareholder shall seek to have the transactions
contemplated hereby approved by the Bankruptcy Court. If for any reason such
approval has not been obtained by May 31, 2000, Buyer may terminate this
Agreement by delivery of written notice of termination whereupon Buyer shall be
entitled to a refund of the Deposit and this Agreement shall become null and
void. Buyer acknowledges and agrees that Shareholder is required to and shall
seek higher or better offers for the Common Shares until such time as the
Section 363/365 Order is entered.

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.

     BUYER:

     1ST ATLANTIC GUARANTY CORPORATION

     By: /s/John Lawbaugh
        --------------------------

                                       23

<PAGE>

     COMPANY:

     SBM CERTIFICATE COMPANY

     By: /s/Kevin L. Howard, Secretary
        --------------------------------

     SHAREHOLDER:

     ARM FINANCIAL GROUP, INC.

     By: /s/Barry Radick
        --------------------------
        Walker, Truesdell, Radick and Associates, Inc.
        Restructuring Agent

                         LIST OF SCHEDULES AND EXHIBITS

EXHIBIT A Form of Section 363/365 Order of Bankruptcy Court

EXHIBIT B Escrow Agreement

EXHIBIT C Form of Shareholder Release

EXHIBIT D Form of Non Competition Agreement

EXHIBIT E Form of Legal Opinion

                                   SCHEDULES
                                   ---------

                                       24

<PAGE>

1.1(a) Securities

2.2    Existence and Good Standing

2.5    Financial Statements

2.7    Tax Matters

2.10   Contracts

2.12   Consents

2.13   Litigation

2.17   Officers and Directors

2.18   Bank Accounts

3.4    Buyer Financial Statements

                                       25<PAGE>

                                                                     Exhibit 4.1

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

                             ENERGY EAST CORPORATION
                                       and

                            THE CHASE MANHATTAN BANK,
                                   AS TRUSTEE

                                    INDENTURE
                        Dated as of ______________, 2000

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

                                 Debt Securities

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

<PAGE>
                                TABLE OF CONTENTS

                                        ----------

                                                                          Page
                                                                          ----
RECITALS OF THE COMPANY.....................................................1

ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.........1

SECTION 101. Definitions....................................................1
      Act...................................................................2
      Affiliate.............................................................2
      Authenticating Agent..................................................2
      Board of Directors....................................................2
      Board Resolution......................................................2
      Business Day..........................................................2
      Commission............................................................2
      Company...............................................................3
      Company Order or Company Request......................................3
      Corporate Trust Office................................................3
      corporation...........................................................3
      Defaulted Interest....................................................3
      Depositary............................................................3
      Discharged............................................................3
      Event of Default......................................................3
      Exchange Act..........................................................4
      Global Security.......................................................4
      Holder................................................................4
      Indebtedness..........................................................4
      Indenture.............................................................4
      Indexed Security......................................................5
      interest..............................................................5
      Interest Payment Date.................................................5
      Lien..................................................................5
      Maturity..............................................................5
      Officers' Certificate.................................................5
      Opinion of Counsel....................................................5
      Original Issue Discount Security......................................6
      Outstanding...........................................................6
      Paying Agent..........................................................7
      Periodic Offering.....................................................7
      Person................................................................7
      Place of Payment......................................................7
      Predecessor Security..................................................7
      Redemption Date.......................................................7
      Redemption Price......................................................7
      Regular Record Date...................................................7
      Repayment Price.......................................................8
      Responsible Officer...................................................8
      Security..............................................................8
      Security Register and Security Registrar..............................8
      Special Record Date...................................................8

                                       i
<PAGE>
                                                                          Page
                                                                          ----
      Stated Maturity.......................................................8
      Subsidiary............................................................8
      Tranche...............................................................8
      Trustee...............................................................9
      Trust Indenture Act...................................................9
      U.S. Government Obligations...........................................9
      Vice President........................................................9

SECTION 102. Compliance Certificates and Opinions...........................9

SECTION 103. Form of Documents Delivered to Trustee........................10

SECTION 104. Acts of Holders...............................................10

SECTION 105. Notices, Etc., to Trustee and Company.........................12

SECTION 106. Notice to Holders; Waiver.....................................13

SECTION 107. Conflict with Trust Indenture Act.............................13

SECTION 108. Effect of Headings and Table of Contents......................13

SECTION 109. Successors and Assigns........................................13

SECTION 110. Separability Clause...........................................13

SECTION 111. Benefits of Indenture.........................................14

SECTION 112. Governing Law.................................................14

SECTION 113. Legal Holidays................................................14

ARTICLE TWO  SECURITY FORMS................................................14

SECTION 201. Forms Generally...............................................14

SECTION 202. Form of Face of Security......................................15

SECTION 203. Form of Reverse of Security...................................17

SECTION 204. Form of Trustee's Certificate of Authentication...............21

ARTICLE THREE THE SECURITIES...............................................21

SECTION 301. Amount Unlimited; Issuable in Series..........................21

SECTION 302. Denominations.................................................25

SECTION 303. Execution, Authentication, Delivery and Dating................25

SECTION 304. Temporary Securities..........................................27

                                       ii
<PAGE>

SECTION 305. Registration, Registration of Transfer and Exchange...........27

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..............28

SECTION 307. Payment of Interest; Interest Rights Preserved................29

SECTION 308. Persons Deemed Owners.........................................30

SECTION 309. Cancellation..................................................31

SECTION 310. Computation of Interest.......................................31

SECTION 311. Global Securities.............................................31

SECTION 312. Periodic Offering of Securities...............................32

SECTION 313. CUSIP Numbers.................................................33

ARTICLE FOUR SATISFACTION AND DISCHARGE....................................33

SECTION 401. Satisfaction and Discharge of Indenture.......................33

SECTION 402. Application of Trust Money....................................34

SECTION 403. Satisfaction, Discharge and Defeasance of Securities of
              any Series...................................................35

ARTICLE FIVE REMEDIES......................................................37

SECTION 501. Events of Default.............................................37

SECTION 502. Acceleration of Maturity; Rescission and Annulment............38

SECTION 503. Collection of Indebtedness and Suits for Enforcement
              by Trustee...................................................39

SECTION 504. Trustee May File Proofs of Claim..............................40

SECTION 505. Trustee May Enforce Claims Without Possession of Securities...41

SECTION 506. Application of Money Collected................................41

SECTION 507. Limitation on Suits...........................................42

SECTION 508. Unconditional Right of Holders to Receive Principal,
              Premium and Interest.........................................42

SECTION 509. Restoration of Rights and Remedies............................42

SECTION 510. Rights and Remedies Cumulative................................43

SECTION 511. Delay or Omission Not Waiver..................................43

SECTION 512. Control by Holders............................................43

                                       iii
<PAGE>

SECTION 513. Waiver of Past Defaults.......................................43

SECTION 514. Undertaking for Costs.........................................44

SECTION 515. Waiver of Stay or Extension Laws..............................44

ARTICLE SIX  THE TRUSTEE...................................................45

SECTION 601. Certain Duties and Responsibilities...........................45

SECTION 602. Notice of Defaults............................................46

SECTION 603. Certain Rights of Trustee.....................................46

SECTION 604. Not Responsible for Recitals or Issuance of Securities........47

SECTION 605. May Hold Securities...........................................48

SECTION 606. Money Held in Trust...........................................48

SECTION 607. Compensation and Reimbursement................................48

SECTION 608. Conflicting Interests.........................................48

SECTION 609. Corporate Trustee Required; Eligibility.......................49

SECTION 610. Resignation and Removal; Appointment of Successor Trustee.....49

SECTION 611. Acceptance of Appointment by Successor........................50

SECTION 612. Merger, Conversion, Consolidation or Succession to Business...51

SECTION 613. Preferential Collection of Claims Against Company.............52

SECTION 614. Authenticating Agents.........................................52

ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............53

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.....53

SECTION 702. Preservation of Information; Communications to Holders........54

SECTION 703. Reports by Trustee............................................55

SECTION 704. Reports by Company............................................56

ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, SALE OR TRANSFER..........57

SECTION 801. Company May Consolidate, etc., Only on Certain Terms..........57

SECTION 802. Successor Person to be Substituted............................57

                                       iv
<PAGE>
ARTICLE NINE SUPPLEMENTAL INDENTURES.......................................58

SECTION 901. Supplemental Indentures without Consent of Holders............58

SECTION 902. Supplemental Indentures with Consent of Holders...............59

SECTION 903. Execution of Supplemental Indentures..........................60

SECTION 904. Effect of Supplemental Indentures.............................60

SECTION 905. Conformity with Trust Indenture Act...........................60

SECTION 906. Reference in Securities to Supplemental Indentures............60

ARTICLE TEN  COVENANTS.....................................................61

SECTION 1001. Payment of Principal, Premium and Interest...................61

SECTION 1002. Maintenance of Office or Agency..............................61

SECTION 1003. Money for Securities Payments to Be Held in Trust............61

SECTION 1004. Corporate Existence..........................................63

SECTION 1005. Maintenance of Properties....................................63

SECTION 1006. Maintenance of Insurance.....................................63

SECTION 1007. Limitation on Secured Debt...................................63

SECTION 1008. Statement by Officers as to Default..........................65

SECTION 1009. Defeasance of Certain Obligations............................65

SECTION 1010. Waiver of Certain Covenants..................................67

SECTION 1011. Further Assurances...........................................67

ARTICLE ELEVEN  REDEMPTION OF SECURITIES...................................67

SECTION 1101. Applicability of Article.....................................67

SECTION 1102. Election to Redeem; Notice to Trustee........................67

SECTION 1103. Selection by Trustee of Securities to Be Redeemed............68

SECTION 1104. Notice of Redemption.........................................68

SECTION 1105. Deposit of Redemption Price..................................69

SECTION 1106. Securities Payable on Redemption Date........................70

                                       v
<PAGE>

SECTION 1107. Securities Redeemed in Part..................................70

ARTICLE TWELVE SINKING FUNDS...............................................70

SECTION 1201. Applicability of Article.....................................70

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities........71

SECTION 1203. Redemption of Securities for Sinking Fund....................71

ARTICLE THIRTEEN MISCELLANEOUS.............................................72

SECTION 1301. Counterparts.................................................72

TESTIMONIUM................................................................73

SIGNATURE AND SEALS........................................................73

                                       vi
<PAGE>

            INDENTURE, dated as of __________, 2000, between ENERGY EAST
CORPORATION, a corporation duly organized and existing under the laws of the
State of New York (the "Company"), having its principal office at One Canterbury
Green, Stamford, Connecticut 06904 and THE CHASE MANHATTAN BANK, a New York
banking corporation, as Trustee (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 certain of its
unsecured senior debentures, notes or other evidences of indebtedness (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.

            NOW, THEREFORE, THIS INDENTURE WITNESSETH:

            For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined herein) 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:

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

            (ii) 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;

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

<PAGE>

            (iv) 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.

            The following terms have the following meanings:

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

            "Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For 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.

            "Authenticating Agent" means any Person authorized by the Trustee to
authenticate and deliver Securities of one or more series on behalf of the
Trustee pursuant to Section 614 hereof.

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

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

            "Business Day", when used with respect to any Place of Payment,
means a day other than (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in that Place of Payment are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee is closed for business.

            "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, 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.

                                        2
<PAGE>

            "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 Order" or "Company Request" means, respectively, a written
order or request signed in the name of the Company by its Chairman, any
Vice-Chairman, its President, any Executive or Senior Vice President or any Vice
President, and by its Treasurer or any Assistant Treasurer, its Controller, its
Assistant Controller, 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 its corporate trust business is principally administered,
which at the date hereof is 450 West 33rd Street, New York, New York 10001,
Attention: Capital Markets Fiduciary Services.

            "corporation" means a corporation, association, company, joint-stock
company or business trust.

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

            "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 301 hereof, which must be a clearing agency registered under the
Exchange Act, and, if so provided pursuant to Section 301 hereof with respect to
the Securities of a series, any successor to such Person. If at any time there
is more than one such Person, "Depositary" shall mean, with respect to any
series of Securities, the qualifying entity which has been appointed with
respect to the Securities of that series.

            "Discharged" means, with respect to the Securities of any series,
the discharge of the entire Indebtedness represented by, and obligations of the
Company under, the Securities of such series and the satisfaction of all the
obligations of the Company under this Indenture relating to the Securities of
such series, except (A) the rights of Holders of the Securities of such series
to receive, from the trust fund described in Section 403 hereof, payment of the
principal of and interest and premium, if any, on the Securities of such series
when such payments are due, (B) the Company's obligations with respect to the
Securities of such series with respect to registration, transfer, exchange and
maintenance of a Place of Payment, (C) the rights, powers, trusts, duties,
protections and immunities of the Trustee under this Indenture, and (D) the
other rights and obligations set forth in Section 403(a) through (d) hereof.

            "Event of Default" has the meaning specified in Section 501 hereof.

                                       3
<PAGE>

            "Exchange Act" means the Securities Exchange Act of 1934, as amended
and any statute successor thereto, in each case as amended from time to time.

            "Global Security" means a Security evidencing all or part of a
series of Securities, issued to the Depositary or a nominee thereof for such
series in accordance with Section 301(16).

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

            "Indebtedness" means, with respect to any Person (without
duplication), (a) any liability of such Person (1) for borrowed money or under
any reimbursement obligation relating to a letter of credit, financial bond or
similar instrument or agreement, (2) evidenced by a bond, note, debenture or
similar instrument or agreement (including a purchase money obligation) given in
connection with the acquisition of any business, properties or assets of any
kind (other than a trade payable or a current liability arising in the ordinary
course of business or a performance bond or similar obligation), or (3) for the
payment of money relating to any obligations under any capital lease of real or
personal property; (b) any liability of others described in the preceding clause
(a) that the Person has guaranteed or that is otherwise its legal liability to
the extent of 20% of the principal amount of Indebtedness so guaranteed or that
is otherwise its legal liability until such time as the guarantor shall be
obligated to make any payment in respect of such guaranty or legal liability;
and (c) any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (a) and (b)
above. For the purpose of determining any particular amount of Indebtedness
under this definition, guarantees of (or obligations with respect to letters of
credit or financial bonds supporting) Indebtedness otherwise included in the
determination of such amount shall not be included.

            "Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301. If at any time
more than one Person is acting as Trustee under this instrument due to the
appointment of one or more separate Trustees for any one or more separate series
of Securities pursuant to Section 610, "Indenture" shall mean, with respect to
such series of Securities for which any such Person is Trustee, this instrument
as originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series of
Securities for which such Person is Trustee established as contemplated by
Section 301, exclusive, however, of any provisions or terms which relate solely
to other series of Securities for which such Person is not Trustee, regardless
of when such terms or provisions were adopted, and exclusive of any provisions
or terms

                                       4
<PAGE>

adopted by means of one or more indentures supplemental hereto executed
and delivered after such Person had become such Trustee but to which such
Person, as such Trustee, was not a party.

            "Indexed Security " means any Security as to which the amount of
payments of principal, premium, if any, and/or interest, if any, due thereon is
determined with reference to the rate of exchange between the currency or
currency unit in which the Security is denominated and any other specified
currency or currency unit, to the relationship between two or more currencies or
currency units, to the price of one or more specified securities or commodities,
to one or more securities or commodities exchange indices or other indices or by
other similar methods or formulas, all as specified in accordance with 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.

            "Lien" means any lien, deed of trust, pledge or security interest of
any kind or nature whatsoever.

            "Maturity", when used with respect to any Security, means the date
on which the principal of or an installment of principal of such Security
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 Company's
Chairman, any Vice-Chairman, its President, any Executive or Senior Vice
President, any Vice President, and by its Treasurer, any Assistant Treasurer,
its Controller, its Assistant Controller, its Secretary or an Assistant
Secretary, and delivered to the Trustee. One of the officers signing the
Officers' Certificate given pursuant to Section 1008 shall be the principal
executive, financial or accounting officer of the Company.

            "Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel to the Company, or may be other counsel reasonably
acceptable to the Trustee.

                                       5
<PAGE>

            "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
hereof.

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

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

                  (ii) Securities, or portions thereof, for whose payment or
      redemption money or U.S. Governmental Obligations (to the extent provided
      in Article Four) in the necessary amount has been theretofore deposited
      with the Trustee or any Paying Agent (other than the Company) in trust or
      set aside and segregated in trust by the Company (if the Company acts as
      its own Paying Agent) for the Holders of such Securities; provided that,
      if such Securities are to be redeemed, notice of such redemption has been
      duly given pursuant to this Indenture or provision therefor satisfactory
      to the Trustee has been made; and

                  (iii) Securities as to which Defeasance has been effected
      pursuant to Section 403; and

                  (iv) Securities which have been paid pursuant to Section 306
      hereof 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 or not the Holders of the
requisite principal amount of the Outstanding Securities have given, made or
taken any request, demand, authorization, direction, notice, consent, waiver or
other action hereunder, (a) the principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable as of the date of
such determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 hereof, (b) if, as of such date, the principal amount
payable at the Stated Maturity of a Security is not determinable, the principal
amount of such Security which shall be deemed to be Outstanding shall be the
amount as specified or determined as contemplated by Section 301(24), (c) the
principal amount of a Security denominated in one or more foreign currencies or
currency units which shall be deemed to be Outstanding as of any date shall be
the U.S. dollar equivalent, determined as of such date in the manner provided as
contemplated by Section 301(9), of the principal amount of such Security (or, in
the case of a Security described in clause (a) or (b) above, of the amount
determined as provided in such clause), and (d) Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned as described in (d) above which have been
pledged in good faith may be regarded as Outstanding if the pledgee

                                       6
<PAGE>

certifies to 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 of such other obligor.

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

            "Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest (or formula for determining the rate or
rates of interest), if any, thereon, the Stated Maturity or Maturities thereof
and the redemption provisions, if any, with respect thereto, are to be
determined by the Company upon the issuance of such Securities.

            "Person" means any individual, corporation, partnership, limited
liability company, joint venture, 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, if any, on the Securities of that series are payable as specified
in or as contemplated by Section 301 hereof.

            "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 hereof 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 in whole or in part, 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, exclusive of accrued and unpaid interest.

            "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 hereof.

                                       7
<PAGE>

            "Repayment Price", when used with respect to any Security to be
repaid at the option of the Holder, means the price specified in such Security
or pursuant to this Indenture at which it is to be repaid pursuant to such
Security.

            "Responsible Officer", when used with respect to the Trustee, means
the Chairman of the Board, the President or any other officer or assistant
officer of the Trustee assigned by the Trustee to administer corporate trust
matters.

            "Security" has the meaning stated in the first recital of this
Indenture and more particularly means any Security authenticated and delivered
under this Indenture; provided, however, that if at any time there is more than
one Person acting as Trustee under this Indenture, "Security" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly mean any
Security authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee.

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

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

            "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 date on which the principal or installment of principal
of such Security or interest is due and payable.

            "Subsidiary" means, with respect to any Person, another Person, an
amount of the voting securities or other voting ownership or voting partnership
interests of which sufficient to elect at least a majority of its board of
directors or other governing body (or, if there are not such voting interests,
50% or more of the equity interest of which) is owned directly or indirectly by
such first Person.

            "Tranche" means a group of Securities which (a) are of the same
series and (b) have identical terms except as to principal amount, date of
issuance and/or interest rate.

                                       8
<PAGE>

            "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, 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 in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended, "Trust Indenture
Act" shall mean, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

            "U.S. Government Obligations" means (i) direct obligations of the
United States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is unconditionally
guaranteed by the United States, and (ii) bonds, debentures, notes or other
evidences of indebtedness issued by any of the following federal agencies:
Federal Bank for Cooperatives, Federal National Mortgage Association;
Export-Import Banks of the United States; Federal Land Banks; Federal
Intermediate Credit Banks; Federal Home Loan Banks, the Government National
Mortgage Association and the Federal Home Loan Mortgage Association; and shall
also include in each case 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 any such U.S. Government Obligation held
by such custodian for the account of a holder of a 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 in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.

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

SECTION 102. Compliance Certificates and Opinions.

            Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee (a) 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 (b) 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.

                                       9
<PAGE>

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

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

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

            (iii) a statement that, in the opinion of each such individual, he
      or she 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

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

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

SECTION 104. Acts of Holders.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced

                                       10
<PAGE>

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 hereof) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section 104.

            Without limiting the generality of the foregoing, unless otherwise
established in or pursuant to a Board Resolution or set forth or determined in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, pursuant to Section 301 hereof, a Holder, including a Depositary that is
a Holder of a Global Security, may make, give or take, by a proxy, or proxies,
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to be made,
given or taken by Holders, and a Depositary that is a Holder of a Global
Security may provide its proxy or proxies to the beneficial owners of interests
in any such Global Security through such Depositary's standing instructions and
customary practices.

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

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

            (e) The Company may set any day as the record date for the purpose
of determining the Holders of Outstanding Securities of any series entitled to
make any request or demand, or give any authorization, direction, notice,
consent or waiver, or take any other action, provided or permitted by this
Indenture to be made, given or taken by Holders of Securities of such series.

            With regard to any record date set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to take
relevant action, whether or not such Holders remain Holders after such record
date. With regard to any action that may be taken hereunder only by Holders of a
requisite principal amount of Outstanding Securities of any series (or their
duly appointed agents) and for which a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration date after which no
such action purported to be taken by any Holder shall be effective hereunder
unless taken on or prior to such expiration date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents). On or prior to any expiration date set
pursuant to this paragraph, the Company may, on one or more occasions at its
option,

                                       11
<PAGE>

extend such expiration date to any later date. Nothing in this paragraph
shall prevent any Holder (or any duly appointed agent thereof) from taking, at
any time, any action contrary to or different from, any action previously taken,
or purported to have been taken, hereunder by such Holder, in which event the
Company may set a record date in respect thereof pursuant to this paragraph.
Notwithstanding the foregoing or the Trust Indenture Act, the Company shall not
set a record date for, and the provisions of this paragraph shall not apply with
respect to, any action to be taken by Holders pursuant to Section 501, 502 or
512 hereof.

            Upon receipt by a Responsible Officer of the Trustee of actual
notice of any default described in Section 501 hereof, any declaration of
acceleration, or any rescission and annulment of any such declaration, pursuant
to Section 502 hereof or of any direction in accordance with Section 512 hereof,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding Securities of the
series entitled to join in such notice, declaration, or rescission and
annulment, or direction, as the case may be, which record date shall be the
close of business on the day the Trustee actually receives such notice,
declaration, rescission and annulment or direction, as the case may be. The
Holders of Outstanding Securities of such series on such record date (or their
duly appointed agent), and only such Persons, shall be entitled to join in such
notice, declaration, rescission and annulment, or direction, as the case may be,
whether or not such Holders remain Holders after such record date; provided
that, unless such notice, declaration, rescission and annulment, or direction,
as the case may be, shall have become effective by virtue of Holders of the
requisite principal amount of Outstanding Securities of such series on such
record date (or their duly appointed agents) having joined therein on or prior
to the 90th day after such record date, such notice of default, declaration, or
rescission and annulment or direction given or made by the Holders, as the case
may be, shall automatically and without any action by any Person be canceled and
of no further effect. Nothing in this paragraph shall prevent a Holder (or a
duly appointed agent thereof) from giving, before or after the expiration of
such 90-day period, a notice of default, a declaration of acceleration, a
rescission and annulment of a declaration of acceleration or a direction in
accordance with Section 512 hereof, contrary to or different from, or, after the
expiration of such period, identical to, a previously given notice, declaration,
rescission and annulment, or direction, as the case may be, that has been
canceled pursuant to the proviso to the preceding sentence, in which event a new
record date in respect thereof shall be set pursuant to this paragraph.

SECTION 105. Notices, Etc., to Trustee and Company.

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

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

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

                                       12
<PAGE>

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 cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 107. Conflict with Trust Indenture Act.

            If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, such provision
of the Trust Indenture Act shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.

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 the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

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

                                       13
<PAGE>

SECTION 111. Benefits of Indenture.

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

SECTION 112. Governing Law.

            This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law except Section 5-1401 of the New York General
Obligations Law.

SECTION 113. Legal Holidays.

            In any case where any Interest Payment Date, Redemption Date, Stated
Maturity or date of repayment at the option of a Holder 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, if any,
or principal (and premium, if any) need not be made on such date at such Place
of Payment, 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,
Redemption Date, at the Stated Maturity or on the date of repayment, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date, Stated Maturity or date of repayment, as the case
may be.

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201. Forms Generally.

            The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor 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 the Company, and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 hereof for the
authentication and delivery of such Securities.

            The Trustee's certificate of authentication shall be in
substantially the form set forth in this Article.

                                       14
<PAGE>

            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 Face of Security.

            [If the Security is to be a Global Security, insert - This Security
is a Global Security within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary. This
Security is exchangeable for Securities registered in the name of a Person other
than the Depositary or its nominee only in the limited circumstances described
in the Indenture, and no transfer of this Security (other than a transfer of
this Security as a whole by the Depositary to a nominee of the Depositary or by
a nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.

            Unless this Global Security is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any definitive Security is issued in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]

                             ENERGY EAST CORPORATION
                             [Title of the Security]

CUSIP No. __________                                   $__________________
No. ________________

            ENERGY EAST CORPORATION, a corporation duly organized and existing
under the laws of the State of New York (the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ___________________________________, or
registered assigns, the principal sum of ________________________ Dollars on
_________________________________ [If the Security is to bear interest prior to
Maturity, insert - , and to pay interest thereon from ________, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on ____________ and ___________ in each year, commencing
________, at the rate per annum provided in the title hereof, until the
principal hereof is paid or made available for payment [If applicable, insert -
, and, subject to the terms of the Indenture, at the rate per annum provided in
the title hereof on any overdue principal and premium and (to the extent that
the payment of such interest shall be legally enforceable) on any overdue
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the _______ or ________ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close

                                       15
<PAGE>

of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.]

            [If the Security is not to bear interest prior to Maturity, insert -
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of [yield to maturity]% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such principal
has been made or duly provided for. Interest on any overdue principal or premium
shall be payable on demand. Any such interest on any overdue principal or
premium that is not so paid on demand shall bear interest at the rate of [yield
to maturity]% per annum (to the extent that the payment of such interest shall
be legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided for,
and such interest shall also be payable on demand.]

            Payment of the principal of (and premium, if any) and interest, if
any, on this Security will be made at the office or agency of the Company
maintained for that purpose in ________, in [such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts - or state other currency] [If this Security is not a
Global Security, insert - ; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register] [If this
Security is a Global Security, insert applicable manner of payment].

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

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

                                       16
<PAGE>

            IN WITNESS WHEREOF, Energy East Corporation has caused this
instrument to be duly executed under its corporate seal.

Dated:
                              ENERGY EAST CORPORATION
                              By______________________________________
                                [Name]
                                [Title]

[If more than one
officer is to sign -          By______________________________________
                                [Name]
                                [Title]]

Attest:

By:_________________________
     [Name]
     [Title]

SECTION 203. Form of Reverse of Security.

                             ENERGY EAST CORPORATION
                             [Title of the Security]

            This Security is one of a duly authorized issue of securities of the
Company (the "Securities"), issued and to be issued in one or more series under
an Indenture, dated as of __________, 2000, as amended and supplemented from
time to time (the "Indenture"), between the Company and The Chase Manhattan
Bank, a New York banking corporation, as Trustee (the "Trustee", which term
includes any successor trustee under the Indenture), as to which the Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [, limited in
aggregate principal amount to $________].

            [If applicable, insert - This Security is not subject to redemption
prior to maturity.] [If applicable, insert - The Securities of this series are
subject to redemption upon not less than 30 or more than 60 days' notice by mail
to the Holders of such Securities at their addresses in the Security Register
for such series, [if applicable, insert - (1) on __________ in any year
commencing with the year ____ and ending with the year ____ through operation of
the sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)] at any time [on or after ___________, 19__], as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount):

                                       17
<PAGE>

            If redeemed [on or before _____________, ___%, and if redeemed]
during the 12-month period beginning ___________, of the years indicated:

             Year    Redemption Price   Year      Redemption Price

and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert - (whether
through operation of the sinking fund or otherwise)] with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

            [If applicable, insert - Notwithstanding the foregoing, the Company
may not, prior to _________, redeem any Securities of this series as
contemplated by [Clause (2) of] the preceding paragraph as a part of, or in
anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than ___% per annum.]

            [If applicable insert - The sinking fund for this series provides
for the redemption on _________ in each year beginning with the year ____ and
ending with the year ____ of [not less than] __________ [("mandatory sinking
fund") and, at the option of the Company, not more than __________] aggregate
principal amount of Securities of this series. [Securities of this series
acquired or redeemed by the Company otherwise than through [mandatory] sinking
fund payments may be credited against subsequent [mandatory] sinking fund
payments otherwise required to be made in the order in which they become due.]]

            [In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]

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

            [If the Security is not an Original Issue Discount Security, insert
- If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]

            [If the Security is an Original Issue Discount Security, insert - If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series (the
"Acceleration Amount") may be declared due and payable in the manner and with
the effect provided in the Indenture. In case of a declaration of acceleration
on or before ________, __ and on _____________ in any year, the Acceleration

                                       18
<PAGE>

Amount per ______ principal amount at Stated Maturity of the Securities shall be
equal to the amount set forth in respect of such date below:

                                     Acceleration Amount per
                                      ____________ principal
               Date of declaration  amount at Stated Maturity

and in case of a declaration of acceleration on any other date, the
Acceleration Amount shall be equal to the Acceleration Amount as of the next
preceding date set forth in the table above, plus accrued original issue
discount (computed in accordance with the method used for calculating the
amount of original issue discount that accrues for Federal income tax
purposes) from such next preceding date to the date of declaration at the
yield to maturity. For the purpose of this computation the yield to maturity
is ___%. Upon payment (i) of the Acceleration Amount so declared due and
payable and (ii) of interest on any overdue principal and overdue interest
(in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Company's obligations in respect of the
payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]

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

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

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

                                       19
<PAGE>

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

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of [If this Security is a Global Security,
insert - a Security of the series of which this Security is a part] [If this
Security is not a Global Security, insert - this Security] is registrable in the
Security Register, upon surrender of this Security for registration of transfer
at the office or agency of the Company in any place where the principal of (and
premium, if any) and interest, if any, on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

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

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

            Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

            This Security shall be governed by and construed in accordance with
the laws of the State of New York without regard to principals of conflict of
law except Section 5-1401 of the New York General Obligations Law.

            All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

                                       20
<PAGE>

SECTION 204. Form of Trustee's Certificate of Authentication.

            The Trustee's Certificate of Authentication shall be in the
following form:

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

                                  The Chase Manhattan Bank
                                   as Trustee

                                   By_________________________________
                                     Authorized Officer

                                  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. All Securities of
each series under this Indenture shall in all respects be equally and ratably
entitled to the benefits hereof with respect to such series without preference,
priority or distinction on account of the actual time of the authentication and
delivery or Stated Maturity of the Securities of such series.

            The Securities may be issued in one or more series. Each series of
Securities shall be created either by or pursuant to a Board Resolution or by or
pursuant to an indenture supplemental hereto. There may also be established in
or pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or pursuant to a
supplemental indenture prior to the issuance of Securities of each such series,
provision for all or any of the following:

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

            (2) 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 304, 305, 306, 906, or 1107
      hereof and except for any Securities which, pursuant to Section 303
      hereof, are deemed never to have been authenticated and delivered
      hereunder);

            (3) the Person or Persons (without specific identification) to whom
      any interest on the Securities of the series, or any Tranche thereof,
      shall be payable, if other than the Person in whose name the Security (or
      one or more Predecessor Securities) is registered at the close of business
      on the regular Record Date for such interest;

                                       21
<PAGE>

            (4) the date or dates on which the principal of the Securities of
      the series, or any Tranche thereof, is payable or the method by which such
      date or dates shall be determined, by reference to an index or other fact
      or event ascertainable outside of this Indenture or otherwise (without
      regard to any provisions for redemption, prepayment, acceleration,
      purchase or extension);

            (5) the rate or rates at which the Securities of the series, or any
      Tranche thereof, shall bear interest, if any (including the rate or rates
      at which overdue principal shall bear interest, if different from the rate
      or rates at which such Securities shall bear interest prior to maturity,
      and, if applicable, the rate or rates at which overdue premium or interest
      shall bear interest, if any), or any formulary or other method or other
      means by which such rate or rates shall be determined, by reference to an
      index or other fact or event ascertainable outside of this Indenture or
      otherwise, 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 any Interest Payment Date
      and the basis for computation of interest, if other than as provided in
      Section 310;

            (6) the place or places, if any, in addition to or in place of the
      office or agency of the Company in The City of New York, State of New York
      or the principal corporate trust office of the Trustee or its successors
      in trust under the Indenture, which, at the date hereof, is located at 450
      West 33rd Street, New York, New York 10001, Attention: Capital Markets
      Fiduciary Services, at which or methods by which (i) the principal of and
      premium, if any, and interest, if any, on Securities of such series, or
      any Tranche thereof, shall be payable, (ii) registration of transfer of
      Securities of such series, or any Tranche thereof, may be effected, (iii)
      exchanges of Securities of such series, or any Tranche thereof, may be
      effected and (iv) notices and demands to or upon the Company in respect of
      the Securities of such series, or any Tranche thereof, and this Indenture
      may be served;

            (7) the period or periods within which, or the date or dates on
      which, the price or prices at which and the terms and conditions upon
      which Securities of the series, or any Tranche thereof, may be redeemed,
      in whole or in part, at the option of the Company and any restrictions on
      such redemptions, including but not limited to a restriction on a partial
      redemption by the Company of the Securities of any series, or any Tranche
      thereof, resulting in delisting of such Securities from any national
      exchange;

            (8) the obligation or obligations, if any, of the Company to redeem,
      repay or purchase Securities of the series, or any Tranche thereof,
      pursuant to any sinking fund or other mandatory redemption provisions or
      at the option of a Holder thereof, and the period or periods within which,
      or the date or dates on which, the price or prices at which and the terms
      and conditions upon which Securities of the series shall be redeemed,
      repaid or purchased, in whole or in part, pursuant to such obligation, and
      applicable exceptions to the requirements of Section 1104 in the case of
      mandatory redemption or redemption at the option of the Holder;

            (9) if other than such coin or currency of the United States of
      America as at the time of payment is legal tender for payment of public or
      private debts, the coin or currency, including composite currencies, in
      which payment of the principal of (and premium, if any) and interest, if
      any, on the Securities, or any Tranche thereof, of the series shall be
      payable, and the manner of determining the equivalent thereof in the
      currency of the United States for any purpose, including for purposes of
      the definition of "Outstanding" in Section 101;

                                       22
<PAGE>

            (10) if other than the principal amount thereof, the portion of the
      principal amount of Securities of the series, or any Tranche thereof,
      which shall be payable upon declaration of acceleration of the Maturity
      thereof pursuant to Section 502 hereof;

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

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

            (13) if the amount of payments of principal of (and premium, if any)
      or interest, if any, on the Securities of the series, or any Tranche
      thereof, may be determined with reference to an index or other fact or
      event ascertainable outside this Indenture, the manner in which such
      amounts shall be determined, to the extent not established pursuant to
      subsection (5) of this paragraph;

            (14) if the principal of (and premium, if any) or interest on the
      Securities of the series, or any Tranche thereof, are to be payable, or
      are to be payable at the election of the Company or a Holder thereof, in
      securities or other property, the type and amount of such securities or
      other property, or the formulary or other method or other means by which
      such amount shall be determined, and the period or periods within which,
      and the terms and conditions upon which, any such election may be made;

            (15) any Events of Default, in addition to those specified in
      Section 501, with respect to the Securities of such series, whether
      Section 1007 is applicable to the Securities of such series and any
      covenants of the Company for the benefit of the Holders of the Securities
      of such series, or any Tranche thereof, in addition to those set forth in
      Article Ten;

            (16) if the Securities of the series, or any Tranche thereof, shall
      be issued in whole or in part in the form of one or more Global
      Securities, (i) whether beneficial owners of interests in any such Global
      Security may exchange such interests for Securities of such series of like
      tenor and of authorized form and denomination and the circumstances under
      which any such changes may occur, if other than in the manner provided in
      Section 311 hereof, (ii) the Depositary for such Global Security or
      Securities and (iii) any and all other matters incidental to such
      Securities;

            (17) the terms, if any, pursuant to which the Securities of such
      series, or any Tranche thereof, may be converted into or exchanged for
      shares of capital stock or other securities of the Company or any other
      Person;

            (18) if other than as set forth in Articles Four or Ten, provisions
      for the satisfaction and discharge of this Indenture or Discharge of the
      indebtedness or the defeasance of certain covenants, with respect to the
      Securities of the series, or any Tranche thereof;

            (19) if the Securities of the series, or any Tranche thereof, do not
      bear interest or do not pay semi-annual interest, the applicable dates for
      purposes of Section 701;

                                       23
<PAGE>

            (20) if the Securities of the series, or any Tranche thereof, are
      issuable as Indexed Securities, the manner in which the amount of payments
      of principal, premium, if any, and interest, if any, on that series will
      be determined;

            (21) to the extent not established pursuant to subsection (16) of
      this paragraph, any limitations on the rights of the Holders of the
      Securities of such series, or any Tranche thereof, to transfer or exchange
      such Securities or to obtain the registration of transfer thereof; and if
      a service charge will be made for the registration of transfer or exchange
      of Securities of such series, or any Tranche thereof, the amount or terms
      thereof;

            (22) any exceptions to Section 113, or variation in the definition
      of Business Day, with respect to the Securities of such series, or any
      Tranche thereof;

            (23) any collateral security, assurance or guarantee for the
      Securities of such series;

            (24) if the principal amount payable at the Stated Maturity of any
      Securities of the series will not be determinable as of any one or more
      dates prior to the Stated Maturity, the amount which shall be deemed to be
      the principal amount of such Securities as of any such date for any
      purpose thereunder or hereunder, including the principal amount thereof
      which shall be due and payable upon any Maturity other than the Stated
      Maturity or which shall be deemed to be Outstanding as of any date prior
      to the Stated Maturity (or, in any such case, the manner in which such
      amount deemed to be the principal amount shall be determined);

            (25) any other terms of the series, or any Tranche thereof (which
      terms shall not be inconsistent with the provisions of this Indenture),
      including, without limitation, any terms required for or appropriate to
      (i) establishing one or more series of medium-term notes to be issued in a
      Periodic Offering or (ii) providing for the remarketing of the Securities
      of such series.

            All Securities of any one series (other than Securities offered in a
Periodic Offering) shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution
referred to above and set forth in the Officers' Certificate referred to above
or in any such indenture supplemental hereto.

            If any of the terms of the series, including the form of Security of
such series, are 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 or other authorized officer of the Company, and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 hereof for the authentication and delivery of such
series of Securities.

            With respect to Securities of a series offered in a Periodic
Offering, such Board Resolution and Officers' Certificate or supplemental
indenture 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 Company Order or that such terms shall be
determined by the Company or its agents in accordance with other procedures
specified in a Company Order as contemplated by the third paragraph of Section
303.

                                       24
<PAGE>

            Unless otherwise provided, a series may be reopened, without the
consent of the Holders, for increases in the aggregate principal amount of such
series of Securities and issuances of additional Securities of such series or
for the establishment of additional terms with respect to the Securities of such
series.

SECTION 302. Denominations.

            The Securities of each series shall be issuable in registered form
without coupons, except as otherwise expressly provided in a supplemental
indenture hereto, in such denominations as shall be specified as contemplated by
Section 301 hereof. 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 its
Chairman, any Vice Chairman, its President, any Executive or Senior Vice
President, or one of its Vice Presidents under its corporate seal (if any),
reproduced thereon (which may be facsimile) attested by its Secretary or one of
its Assistant Secretaries. The Securities of any series shall be executed by
such additional officer, if any, as shall be specified pursuant to Section 301
hereof. The signature of any of these officers 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 therein have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such office at the date of authentication 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, or, in the case of Securities
offered in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents, promptly
confirmed in writing by the Company) acceptable to the Trustee as may be
specified from time to time by a Company Order for the specific terms of the
Securities being so offered, together with (i) a Company Order for the
authentication and delivery of such Securities, (ii) an Officers' Certificate
stating that (x) the Company is not, and upon the authentication by the Trustee
of the series of Securities, will not be in default under any of the terms or
covenants contained in the Indenture, and (y) all conditions that must be met by
the Company to issue Securities under the Indenture have been met, 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 hereof, 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 hereof) shall be fully protected in relying upon, an Opinion of Counsel
stating,

            (a) if the form of such Securities has been established by or
      pursuant to Board Resolution as permitted by Section 201 hereof, that such
      form has been established in conformity with the provisions of this
      Indenture;

                                       25
<PAGE>

            (b) if the terms of such Securities have been established by or
      pursuant to Board Resolution as permitted by Section 301 hereof, that such
      terms have been established in conformity with the provisions of this
      Indenture;

            (c) 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 constitute valid and
      legally binding obligations of the Company, enforceable in accordance with
      their terms, except as may be limited by bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance or transfer or other
      similar laws relating to or affecting the rights of creditors generally
      and except as the enforceability thereof is subject to the application of
      general principles of equity (regardless of whether considered in a
      proceeding in equity or at law), including, without limitation, (i) the
      possible unavailability of specific performance, injunctive relief or any
      other equitable remedy and (ii) concepts of materiality, reasonableness,
      good faith and fair dealing;

provided, however, that, with respect to Securities of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of Securities of such
series, and in such case the opinions described in Clauses (b) and (c) above may
state, respectively, that:

            (i) if the terms of such Securities are to be established pursuant
      to a Company Order or pursuant to such procedures as may be specified from
      time to time by a Company Order, all as contemplated by a Board Resolution
      or action taken pursuant thereto, such terms will have been duly
      authorized by the Company and established in conformity with the
      provisions of this Indenture; and

            (ii) that such Securities, when completed by appropriate insertions
      and executed and delivered by the Company to the Trustee in accordance
      with this Indenture, authenticated and delivered by the Trustee in
      accordance with this Indenture, and issued and delivered by the Company
      and paid for, all in accordance with any agreement of the Company relating
      to the offering, issuance and sale of such Securities, will be duly issued
      under this Indenture and will constitute the legal, valid and binding
      obligations of the Company, enforceable in accordance with their terms,
      subject to bankruptcy, insolvency, reorganization and other similar laws
      of general applicability relating to or affecting generally the
      enforcement of creditors' rights, to general equitable principles and to
      such other qualifications as such counsel shall conclude do not materially
      affect the rights of Holders of such Securities and any coupons.

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,
protections or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.

            Notwithstanding the provisions of Section 301 hereof and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Board Resolution,
the Officers' Certificate, or an indenture supplemental hereto otherwise
required pursuant to Sections 201 and 301 hereof or the Company Order, the
Officers' Certificate and the Opinion of Counsel otherwise required pursuant to
such preceding paragraph at or prior to the time of authentication of each
Security

                                       26
<PAGE>

of such series if such documents are delivered at or prior to the time
of authentication upon original issuance of the first Security of such series to
be issued.

            Each Security shall be dated the date of its authentication.

            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 of an authorized officer, 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. Notwithstanding the
foregoing, if any Security shall have been 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 309 hereof
together with a written statement (which need not comply with Section 102 hereof
and need not be accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be 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 officer or 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 and of like tenor of
authorized denominations. Until so exchanged 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 the Corporate Trust Office of
the Trustee a register (the register maintained in such office or in any other
office or agency of the Company in a Place of Payment being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.

                                       27
<PAGE>

            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, 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.

            At the option of the Holder, any Security or Securities of any
series, other than a Global Security, 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, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.

            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.

            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 accompanied 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 to the Holder 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 Sections 304, 906 or 1107 hereof 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 hereof 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.

            The provisions of this Section 305 are, with respect to any Global
Security, subject to Section 311 hereof.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

            If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

            If there shall be delivered to the Company and the Trustee (i)
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 save 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

                                       28
<PAGE>

a bona fide purchaser, the Company shall execute and upon its request the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen 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 306, 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 306
in lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen 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 that series duly issued hereunder.

            The provisions of this Section 306 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, at its election in each
case, as provided in Clause (1) or (2) below:

            (1) The Company 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 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 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

                                       29
<PAGE>

      notice of the proposed payment. The Trustee shall promptly notify the
      Company of such Special Record Date and, in the name and at the expense of
      the Company, shall cause notice of the proposed payment of such Defaulted
      Interest and the Special Record Date therefor to be mailed, first-class
      postage prepaid, to each Holder of 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, 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 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 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 307, each
Security 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.

            Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder of a Security as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any) and (subject to Section
307 hereof) interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary. All such payments so made to any such Holder, or upon
such Holder's order, shall be valid, and, to the extent of the sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Security.

            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 may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such Global Security for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made by a
Depositary on account of beneficial ownership interests of a Global Security or
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests. Notwithstanding the foregoing, nothing herein shall impair,
as between a Depositary and such holders of beneficial interests, the operation
of customary practices governing the exercise of the rights of the Depositary as
holder of any Security.

                                       30
<PAGE>

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 canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section 309, except as expressly permitted by this Indenture.
All canceled Securities held by the Trustee shall be disposed of as directed by
a Company Order, provided that the Trustee shall not be required to destroy
canceled Securities.

SECTION 310. Computation of Interest.

            Except as otherwise specified as contemplated by Section 301 hereof
for Securities of any series, interest, if any, on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 311. Global Securities.

            If the Company establishes pursuant to Section 301 hereof that the
Securities of a particular series are to be issued in the form of a Global
Security, then the Company shall execute and the Trustee shall, in accordance
with Section 303 hereof, authenticate and deliver, a Global Security or
Securities which (i) shall represent, and shall be denominated in an aggregate
amount equal to the aggregate principal amount of, all or a part of the
Outstanding Securities of such series, (ii) shall be registered in the name of
the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect:

            "This Security is a Global Security within the meaning of the
      Indenture hereinafter referred to and is registered in the name of a
      Depositary or a nominee of a Depositary. This Security is exchangeable for
      Securities registered in the name of a person other than the Depositary or
      its nominee only in the limited circumstances described in the Indenture,
      and no transfer of this Security (other than a transfer of this Security
      as a whole by the Depositary to a nominee of the Depositary or by a
      nominee of the Depositary to the Depositary or another nominee of the
      Depositary) may be registered except in limited circumstances.

            Unless this Global Security is presented by an authorized
      representative of the Depositary to the Company or its agent for
      registration of transfer, exchange or payment, and any definitive Security
      is issued in the name of [Cede & Co.] or in such other name as is
      requested by an authorized representative of the Depositary (and any
      payment is made to [Cede & Co.] or to such other entity as is requested by
      an authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR
      OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
      inasmuch as the registered owner hereof, [Cede & Co.], has an interest
      herein."

                                       31
<PAGE>

            Notwithstanding the provisions of Section 305 hereof, the Global
Security of a series may be transferred, in whole but not in part and in the
manner provided in Section 305 hereof, only to the Depositary, another nominee
of the Depositary for such series, or to a successor Depositary for such series
selected or approved by the Company or to a nominee of such successor
Depositary.

            If (i) at any time the Depositary for a series of Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered or in good standing under the Exchange Act, or other applicable
statute or regulation and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be or (ii) there shall have
occurred and be continuing after any applicable grace periods an Event of
Default with respect to the Securities for a series, then in each such case,
this Section 311 shall no longer be applicable to the Securities of such series
and the Company will execute, and subject to Section 305 hereof, the Trustee
will authenticate and deliver Securities of such series in definitive registered
form without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Securities of such series in
exchange for such Global Securities. In addition, the Company may at any time
determine that the Securities of any series shall no longer be represented by
Global Securities and that the provisions of this Section 311 shall no longer
apply to the Securities of such series. In such event the Company will execute
and subject to Section 305 hereof, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
deliver Securities of such series in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Securities of such series in exchange for such
Global Securities. Upon the exchange of the Global Securities for such
Securities in definitive registered form without coupons, in authorized
denominations, the Global Securities shall be canceled by the Trustee. Such
Securities in definitive registered form issued in exchange for the Global
Securities pursuant to this Section 311, shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to the instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver Securities to the Depositary for delivery to
the persons in whose names such Securities are so registered.

SECTION 312. Periodic Offering of Securities.

            Notwithstanding any contrary provision herein, if all Securities of
a series are not to be originally issued at one time, it shall not be necessary
for the Company to deliver to the Trustee an Officers' Certificate, Board
Resolution, supplemental indenture, Opinion of Counsel or Company Order
otherwise required pursuant to Sections 201, 301 and 303 at or prior to the time
of authentication of each Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon
original issuance of the first Security of such series to be issued; provided
that any subsequent request by the Company to the Trustee to authenticate
Securities of such series upon original issuance shall constitute a
representation and warranty by the Company and its counsel that as of the date
of such request, the statements made in the Officers' Certificate and opinions
made in the Opinion of Counsel delivered pursuant to Section 102 and 303,
respectively, shall be true and correct as if made on such date.

            An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the

                                       32
<PAGE>

Trustee or its agent on original issue from time to time upon the written order
of a person or persons designated in such Officers' Certificate, supplemental
indenture or Board Resolution (any such telephonic instructions to be confirmed
promptly in writing by such person or persons) and that such person or persons
are authorized to determine, consistent with such Officers' Certificate,
supplemental indenture or Board Resolution, such terms and conditions of said
Securities as are specified in such Officers' Certificate, supplemental
indenture or Board Resolution.

SECTION 313. 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 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 FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

            This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

            (1) either (A) all Securities of that series theretofore
      authenticated and delivered (other than (x) Securities which have been
      destroyed, lost or stolen and which have been replaced or paid as provided
      in Section 306 hereof and (y) Securities for whose payment money has
      theretofore been deposited in trust or segregated and held in trust by the
      Company and thereafter repaid to the Company or discharged from such
      trust, as provided in Section 1003 hereof) have been delivered to the
      Trustee for cancellation; or

            (B) all such Securities of that series 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

                                       33
<PAGE>

                  (iv) are deemed paid and discharged pursuant to Section 403
            hereof, as applicable,

      and the Company, in the case of (i), (ii), (iii) or (iv) of clause (B)
      above, has deposited or caused to be deposited with the Trustee as trust
      funds in trust for the purpose an amount of (a) money in the currency or
      units of currency in which such Securities are payable, or (b) in the case
      of (ii) or (iii) of clause (B) above and (except as provided in an
      indenture supplemental hereto) if no Securities of the affected series
      Outstanding are subject to repurchase at the option of Holders and if such
      Securities are payable in U.S. Dollars (I) 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
      Stated Maturity or Redemption Date, as the case may be, money in an amount
      which is, upon the basis of a report of a nationally recognized firm of
      independent certified public accountants expressed in a written
      certification thereof delivered to the Trustee, or (II) a combination of
      money or U.S. Government Obligations as provided in (I) above, in each
      case, sufficient 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, if any, 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) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company; and

            (3) the Company has 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.

            Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607 hereof, the
obligations of the Trustee to any Authenticating Agent under Section 614 hereof
and, if money or U.S. Government Obligations shall have been deposited with the
Trustee pursuant to subclause (B) of clause (1) of this Section 401 or if money
or U.S. Government Obligations shall have been deposited with or received by the
Trustee pursuant to Section 403 hereof, the obligations of the Trustee under
Section 402 hereof and the last paragraph of Section 1003 hereof shall survive.

SECTION 402. Application of Trust Money.

            (a) Subject to the provisions of the last paragraph of Section 1003
hereof, all money or U.S. Government Obligations deposited with the Trustee
pursuant to Sections 401, 403 or 1009 hereof and all money received by the
Trustee in respect of U.S. Government Obligations deposited with the Trustee
pursuant to Sections 401, 403 or 1009 hereof, shall be held in trust and applied
by it, in accordance with the provisions of the Securities and this Indenture,
to the payment, to the persons entitled thereto, of the principal (and premium,
if any) and interest, if any, 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 Sections 401, 403 or 1009 hereof.

            (b) The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against U.S. Government
Obligations deposited

                                       34
<PAGE>

pursuant to Sections 401, 403 or 1009 hereof 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 from time to
time upon Company Request any U.S. Government Obligations or money held by it as
provided in Sections 401, 403 or 1009 hereof which, in the opinion of a
nationally recognized firm of independent certified 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 U.S. Government Obligations or money was deposited or
received. This provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations held under this Indenture.

SECTION 403. Satisfaction, Discharge and Defeasance of Securities of any Series.

            The Company shall be deemed to have paid and Discharged the entire
Indebtedness on all the Outstanding Securities of any series on the 91st day
after the date of the deposit referred to in subparagraph (1) hereof, and the
provisions of this Indenture, as it relates to such Outstanding Securities of
such series, shall no longer be in effect (and the Trustee, at the expense of
the Company, shall at Company Request execute proper instruments acknowledging
the same), except as to:

            (a) the rights of Holders of Securities of such series 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, if any, on the Outstanding
      Securities of such series on the Stated Maturity of such principal or
      installment of principal or interest or to and including the Redemption
      Date irrevocably designated by the Company pursuant to subparagraph (5)
      hereof and (ii) the benefit of any mandatory sinking fund payments
      applicable to the Securities of such series on the day of which such
      payments are due and payable in accordance with the terms of this
      Indenture and the Securities of such series;

            (b) the Company's obligations with respect to such Securities of
      such series under Sections 305, 306, 1002 and 1003 hereof and if the
      Company shall have irrevocably designated a Redemption Date pursuant to
      subparagraph (5) hereof, Sections 1101, 1104 and 1106 hereof as they apply
      to such Redemption Date;

            (c) the Company's obligations with respect to the Trustee under
      Section 607 hereof; and

            (d) the rights, powers, trust and immunities of the Trustee
      hereunder and the duties of the Trustee under Section 402 hereof and, if
      the Company shall have irrevocably designated a Redemption Date pursuant
      to subparagraph (5) hereof, Article Eleven and the duty of the Trustee to
      authenticate Securities of such series on registration of transfer or
      exchange;

provided that, the following conditions shall have been satisfied:

            (1) the Company has deposited or caused to be irrevocably deposited
      (except as provided in Section 402(c) hereof and the last paragraph of
      Section 1003 hereof) 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 such series, (i) money, in the

                                       35
<PAGE>

      currency or units of currency in which such Securities are payable, in an
      amount, or (ii) (except as provided in a supplemental indenture or Board
      Resolution with respect to such series) if Securities of such series are
      not subject to repurchase at the option of Holders and if such Securities
      are payable in U.S. Dollars, (A) 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 (x) or (y) of this subparagraph (1)
      money in an amount or (B) a combination thereof, in each case sufficient,
      in the report of a nationally recognized firm of independent certified
      public accountants expressed in a written certification thereof delivered
      to the Trustee, to pay and discharge, and which the Trustee shall be
      instructed to apply to pay and discharge, (x) the principal of (and
      premium, if any) and each installment of principal (and premium, if any)
      and interest, if any, on the Outstanding Securities of such series on the
      Stated Maturity of such principal or installment of principal or interest
      or to and including the Redemption Date irrevocably designated by the
      Company pursuant to subparagraph (5) hereof and (y) any mandatory sinking
      fund payments applicable to the Securities of such series on the day on
      which such payments are due and payable in accordance with the terms of
      this Indenture and of the Securities of such series;

            (2) the Company has delivered to the Trustee an Opinion of Counsel
      to the effect that such provision would not cause any Outstanding
      Securities of such series then listed on any national securities exchange
      to be delisted as a result thereof;

            (3) no Event of Default or event which with notice or lapse of time
      would become an Event of Default (including by reason of such deposit)
      with respect to the Securities of such series shall have occurred and be
      continuing on the date of such deposit;

            (4) the Company has delivered to the Trustee an unqualified opinion,
      in form and substance reasonably acceptable to the Trustee, of independent
      counsel of national standing selected by the Company and satisfactory to
      the Trustee to the effect that (i) Holders of the Securities will not
      recognize income, gain or loss for Federal income tax purposes as a result
      of the deposit, defeasance and discharge, which opinion shall be based on
      a change in law or a ruling by the U.S. Internal Revenue Service and (ii)
      the defeasance trust is not, or is registered as, an investment company
      under the Investment Company Act of 1940;

            (5) if the Company has deposited or caused to be deposited money or
      U.S. Government Obligations to pay or discharge the principal of (and
      premium, if any) and interest, if any, on the Outstanding Securities of a
      series to and including a Redemption Date on which all of the Outstanding
      Securities of such series are to be redeemed, such Redemption Date shall
      be irrevocably designated by a Board Resolution delivered to the Trustee
      on or prior to the date of deposit of such money or U.S. Government
      Obligations, and such Board Resolution shall be accompanied by an
      irrevocable Company Request that the Trustee give notice of such
      redemption in the name and at the expense of the Company not less than 30
      nor more than 60 days prior to such Redemption Date in accordance with
      Section 1104 hereof; and

            (6) the Company has 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 the Securities have been complied with.

                                       36
<PAGE>

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501. Events of Default.

            "Event of Default", wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body) unless it is either inapplicable to a particular series (to the extent
expressly provided in the form of Security for such series) or it is
specifically deleted or modified in the Board Resolution (or action pursuant
thereto), Officers' Certificate or supplemental indenture under which such
series of Securities is issued or has been deleted or modified in an indenture
supplemental hereto:

            (a) 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 30 days; or

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

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

            (d) default in the performance, or breach, of any covenant or
      warranty or obligation of the Company in this Indenture (other than a
      covenant or warranty a default in whose performance or whose breach is
      elsewhere in this Section 501 specifically dealt with or which has
      expressly been included in this Indenture solely for the benefit of any
      series of Securities other than that series), and continuance of such
      default or breach for a period of 60 days after there has been given, by
      registered or certified mail, to the Company by the Trustee or to the
      Company and the Trustee by the Holders of at least 25% in aggregate
      principal amount of the Outstanding Securities of that series 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

            (e) default occurs under any bond, note, debenture or other
      instrument evidencing any indebtedness for money borrowed by the Company
      (including a default with respect to any other series of debt securities
      issued under the indenture), or under any mortgage, indenture or other
      instrument under which there may be issued or by which there may be
      secured or evidenced any indebtedness for money borrowed by the Company
      (or the payment of which is guaranteed by the Company), whether such
      indebtedness or guarantee exists on the date of this Indenture or is
      issued or entered into following the date of this Indenture, if:

            (i) either

                  (A) such default results from the failure to pay any such
            indebtedness when due; or

                                       37
<PAGE>

                  (B) as a result of such default the maturity of such
            indebtedness has been accelerated prior to its expressed maturity;
            and

            (ii) the principal amount of such indebtedness, together with the
            principal amount of any other such indebtedness in default for
            failure to pay any such indebtedness when due or the maturity of
            which has been so accelerated, aggregates at least $40 million; or

            (f) the entry by a court having jurisdiction in the premises of (A)
      a decree or order for relief in respect of the Company in an involuntary
      case or proceeding under any applicable Federal or State bankruptcy,
      insolvency or other similar law or (B) a decree or order appointing a
      custodian, receiver, liquidator, assignee, trustee, sequestrator or other
      similar official of the Company or of any substantial part of its
      property, or ordering the winding up or liquidation of its affairs, and
      the continuance of any such decree or order for relief or any such other
      decree or order unstayed and in effect for a period of 60 consecutive
      days; or

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

            (h) any other Event of Default provided in the supplemental
      indenture or provided in or pursuant to the Board Resolution under which
      such series of Securities is issued or in the form of Security for such
      series.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

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

            If an Event of Default described in paragraph (f) or (g) of Section
501 hereof occurs and is continuing, then and in every such case, the principal
amount (or, if any Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Securities shall, without any notice to the Company or any other

                                       38
<PAGE>

act on the part of the Trustee or any Holder of the Securities, become and be
immediately due and payable.

            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 a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

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

                  (A) all overdue interest, if any, 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 any overdue interest at the rate or rates prescribed
            therefor in such Securities, and

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

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

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

            For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

            The Company covenants that if (a) 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 (b) default is made in the payment
of the principal of (or premium, if any, on) any Security at the Maturity
thereof, then the Company will, upon written 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, if
any, 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

                                       39
<PAGE>

therefor in such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

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

            If 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 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.

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

            (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 any other amounts due the
Trustee under Section 607 hereof.

            No provision of this Indenture 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.

                                       40
<PAGE>

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 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 with respect to the Securities of the series in
respect of which such money was collected 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 under Section
      607 hereof;

            SECOND: In case the principal and premium, if any, of the Securities
      of such series in respect of which moneys have been collected shall not
      have become and be then due and payable, to the payment of interest, if
      any, on the Securities of such series in default in the order of the
      maturity of the installments of such interest, with interest (to the
      extent that such interest has been collected by the Trustee and to the
      extent permitted by law) upon the overdue installments of interest at the
      rate prescribed therefor in such Securities, such payments to be made
      ratably to the Persons entitled thereto, without discrimination or
      preference;

            THIRD: In case the principal or premium, if any, of the Securities
      of such series in respect of which moneys have been collected shall have
      become and shall be then due and payable, to the payment of the whole
      amount then owing and unpaid upon all the Securities of such series for
      principal and premium, if any, and interest, if any, with interest upon
      the overdue principal and premium, if any, and (to the extent that such
      interest has been collected by the Trustee and to the extent permitted by
      law) upon overdue installments of interest at the rate prescribed therefor
      in the Securities of such series; and in case such moneys shall be
      insufficient to pay in full the whole amount so due and unpaid upon the
      Securities of such series, then to the payment of such principal and any
      premium and interest, without preference or priority of principal over
      interest, or of interest over principal or premium, or of any installment
      of interest over any other installment of interest, or of any Security of
      such series over any other Security of such series, ratably to the
      aggregate of such principal and any premium and accrued and unpaid
      interest; and

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

                                       41
<PAGE>

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 a Responsible
      Officer of the Trustee of a continuing Event of Default with respect to
      the Securities of that series;

            (2) the Holders of not less than 33% 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 satisfactory to it against the costs, expenses and liabilities
      to be incurred in compliance with such request;

            (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 hereof) interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption or
repayment at the option of the Holder, on the Redemption Date or the repayment
date, respectively) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.

SECTION 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 and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and

                                       42
<PAGE>

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

SECTION 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 an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.

SECTION 512. Control by Holders.

            The Holders of a majority in principal amount of the Outstanding
Securities of any series 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,

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

            (3) the Trustee shall not determine that the action so directed
      would be unjustly prejudicial to Holders not taking part in such action,
      and

            (4) subject to the provisions of Section 601, the Trustee shall have
      the right to decline to follow any such direction if the Trustee in good
      faith shall, by a Responsible Officer or Officers of the Trustee,
      determine that the proceeding so directed would involve the Trustee in
      personal liability.

SECTION 513. Waiver of Past Defaults.

            The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of all series with respect to which any
default under the Indenture shall

                                       43
<PAGE>

have occurred and be continuing (voting as one class) may, on behalf of the
Holders of all Securities of all such series waive any past default under the
Indenture and its consequences, except a default

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

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

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

SECTION 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 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 514 shall not apply 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, if any, on any
Security on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption or repayment at the option of the
Holder, on or after the Redemption Date or the Repayment Date, respectively).

SECTION 515. Waiver of Stay or Extension Laws.

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

                                       44
<PAGE>

                                   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, 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 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 and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's 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 601;

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

                  (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 provided in
            Section 512 hereof, 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.

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<PAGE>

            (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 601. The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and it shall not be answerable for
other than its own negligent action, its own negligent failure to act or its own
willful misconduct.

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, if any, 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 determine 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(d) hereof 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 602, 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 hereof:

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

            (b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order or as otherwise
expressly provided herein 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
deems 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,
conclusively rely upon an Officers' Certificate;

            (d) the Trustee may consult with counsel of its selection 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;

                                       46
<PAGE>

            (e) the Trustee shall be under no obligation to expend or risk its
own funds or to exercise, at the request or direction of any of the Holders, any
of the rights or powers vested in it by this Indenture 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
upon reasonable request to examine the books, records and premises of the
Company, personally or by agent or attorney;

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

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

            (i) 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 from the Company or any Holder, and such notice references the
Securities and this Indenture; and

            (j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act 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 neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof. The Trustee
shall not be responsible for doing or performing any thing or act which the
Company shall have covenanted to do or perform, or for any compliance with any
covenant by the Company, nor shall the Trustee be bound to ascertain or inquire
as to the performance of any covenant, condition or agreement by the Company,
but it may require full information and advice in regard to any of the
foregoing.

                                       47
<PAGE>

SECTION 605. May Hold Securities.

            The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613 hereof, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, 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.

SECTION 607. Compensation and Reimbursement.

            The Company agrees

            (1) to pay to the Trustee from time to time such compensation as is
      agreed upon in writing, or, if no such agreement exists, 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 the
      Trustee upon its request for all reasonable expenses, disbursements and
      advances incurred or made by the Trustee in accordance with any provision
      of this Indenture (including the reasonable compensation and the expenses
      and disbursements of its agents and counsel, except any such expense,
      disbursement or advance as may be attributable to its negligence or bad
      faith; and

            (3) to indemnify the Trustee for, and to hold it harmless against,
      any loss, liability or expense incurred without negligence or bad faith on
      its part, arising out of or in connection with the acceptance or
      administration of the trust or trusts 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.

            (4) as security for the performance of the obligations of the
      Company under this Section, the Trustee shall have a lien prior to the
      Securities upon all property and funds held or collected by the Trustee as
      such under this Indenture, except funds held in trust for the payment of
      principal of, premium, if any, or interest, if any, on particular
      Securities.

SECTION 608. Conflicting Interests.

            The Trustee for the Securities of any series issued hereunder shall
be subject to the provisions of Section 310(b) of the Trust Indenture Act during
the period of time provided for therein. In determining whether the Trustee has
a conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded for

                                       48
<PAGE>

purposes of the conflicting interest provisions of such Section 310(b) the
Securities of every other series issued under this Indenture. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the Trust
Indenture Act.

SECTION 609. Corporate Trustee Required; Eligibility.

            There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under the Trust Indenture Act and which shall have a
combined capital and surplus of at least $50,000,000. If the Trustee does not
have an office in The City of New York, the Trustee may appoint an agent in The
City of New York reasonably acceptable to the Company to conduct any activities
which the Trustee may be required under this Indenture to conduct in The City of
New York. If the Trustee does not have an office in The City of New York or has
not appointed an agent in The City of New York, the Trustee shall be a
participant in The Depository Trust Company and FAST distribution systems. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of a Federal, State, or District of Columbia
supervising or examining authority, then for the purposes of this Section 609,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 609, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

SECTION 610. Resignation and Removal; Appointment of Successor Trustee.

            (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 hereof.

            (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, specifying the day upon which the resignation is to take effect. If the
instrument of acceptance by a successor Trustee required by Section 611 hereof
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.

            (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 and to
the Company.

            (d) If at any time:

                  (1) the Trustee shall fail to comply with Section 310(b) of
            the Trust Indenture Act pursuant to Section 608 hereof with respect
            to any series of Securities after written request therefor by the
            Company or by any Holder who has been a bona fide Holder of a
            Security for at least six months, or

                                       49
<PAGE>

                  (2) the Trustee shall cease to be eligible under Section 609
            hereof and shall fail to resign after written request therefor by
            the Company 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 by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514 hereof,
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, 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 hereof. 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 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 hereof, become the successor Trustee with respect to the Securities of such
series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611 hereof, any Holder who 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 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 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

                                       50
<PAGE>

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

            (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (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 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 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 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 611, 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, 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

                                       51
<PAGE>

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 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 any such other obligor).

SECTION 614. Authenticating Agents.

            From time to time the Trustee, in its sole discretion, may appoint
one or more Authenticating Agents with respect to one or more series of
Securities with power to act on the Trustee's behalf and subject to its
direction in the authentication and delivery of Securities of such series or in
connection with transfers and exchanges under Sections 304, 305, 306, 906, and
1107 hereof as fully to all intents and purposes as though the Authenticating
Agent had been expressly authorized by those Sections of this Indenture to
authenticate and deliver Securities of such series. For all purposes of this
Indenture, the authentication and delivery of Securities by an Authenticating
Agent pursuant to this Section 614 shall be deemed to be authentication and
delivery of such Securities "by the Trustee". Each such Authenticating Agent
must at all times be a corporation organized and doing business under the laws
of the United States, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
Federal, State or District of Columbia authority. If such corporation publishes
reports of condition at least annually pursuant to law or the requirements of
such authority, then for the purposes of this Section 614 the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 614, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 614.

            Any corporation into which any Authenticating Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation or to which any Authenticating Agent shall be a party, or any
corporation succeeding to the corporate trust business of any Authenticating
Agent, shall be the successor of the Authenticating Agent hereunder, if such
successor corporation is otherwise eligible under this Section 614, without the
execution or filing of any paper or any further act on the part of the parties
hereto or the Authenticating Agent or such successor corporation.

            An Authenticating Agent may resign at any time by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Trustee. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible under this Section 614, the
Trustee may appoint a successor Authenticating Agent and shall mail notice of
such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, as the names and addresses of such
Holders appear on the Security Register. Any successor Authenticating Agent,
upon acceptance of its appointment hereunder, shall become vested with all the
rights, powers and duties of its predecessor

                                       52
<PAGE>

hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 614.

            The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 614, and the
Trustee shall be entitled to be reimbursed for such payments pursuant to Section
607 hereof.

            If an appointment with respect to one or more series of Securities
is made pursuant to this Section 614, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:

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

                              The Chase Manhattan Bank,
                              as Trustee

                              By:__________________________________
                                 as Authenticating Agent

                              By:__________________________________
                                 Authorized Signatory

                                  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 later than 15 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 15 days after such semi-annual
      dates as may be specified pursuant to Section 301(19) or 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 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 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 if and so long as the Trustee is Security Registrar for
any series of Securities, no such list shall be required to be furnished with
respect to any such series.

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<PAGE>

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 hereof 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 hereof 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

            (i) afford such applicants access to the information preserved at
      the time by the Trustee in accordance with Section 702(a) hereof, 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) hereof, 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) hereof 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 and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b) hereof, regardless of the source from which
such information was derived, and that the Trustee shall not be held

                                       54
<PAGE>

accountable by reason of mailing any material pursuant to a request made under
Section 702(b) hereof.

SECTION 703. Reports by Trustee.

            (a) Within 60 days after the first May 15 which occurs not less than
60 days following the first date of issuance of Securities of any series under
this Indenture and within 60 days after May 15 in every year thereafter, 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 with
respect to any of the following events which may have occurred within the
previous 12 months (but if no such event has occurred within such period no
report need be transmitted):

            (1) any change to its eligibility under Section 609 hereof and its
      qualifications under Section 608 hereof;

            (2) the creation of or any material change to a relationship
      specified in paragraphs (1) through (10) of Section 310(b) of the Trust
      Indenture Act;

            (3) the character and amount of any advances (and if the Trustee
      elects so to state, the circumstances surrounding the making thereof) made
      by the Trustee (as such) which remain unpaid on the date of such report,
      and for the reimbursement of which it claims or may claim a lien or
      charge, prior to that of the Securities, on any property or funds held or
      collected by it as Trustee, except that the Trustee shall not be required
      (but may elect) to report such advances if such advances so remaining
      unpaid aggregate not more than 1/2 of 1% of the principal amount of the
      Securities Outstanding on the date of such report;

            (4) any change to the amount, interest rate and maturity date of all
      other Indebtedness owing by the Company (or by any other obligor on the
      Securities) to the Trustee in its individual capacity, on the date of such
      report, with a brief description of any property held as collateral
      security therefor, except an Indebtedness based upon a creditor
      relationship arising in any manner described in Sections 613(b)(2), (3),
      (4) or (6) hereof;

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

            (6) any release, or release and substitution, of property subject to
      the lien of this Indenture, if any (and the consideration therefor, if
      any) which it has not previously reported;

            (7) any additional issue of Securities which the Trustee has not
      previously reported; and

            (8) any action taken by the Trustee in the performance of its duties
      hereunder which it has not previously reported and which in its opinion
      materially affects the Securities, except action in respect of a default,
      notice of which has been or is to be withheld by the Trustee in accordance
      with Section 602 hereof.

            (b) The Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, a brief report with respect
to (1) the release, or

                                       55
<PAGE>

release and substitution, of property subject to the lien of this Indenture (and
the consideration therefor, if any) unless the fair value of such property, is
less than 10% of the principal amount of Securities outstanding at the time of
such release, or release and substitution, and (2) the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the date of
the last report transmitted pursuant to Subsection (a) of this Section 703 (or
if no such report has yet been so transmitted, since the date of execution of
this instrument) for the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities, on property or funds held or collected
by it as Trustee and which it has not previously reported pursuant to this
Subsection, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate 10%
or less of the principal amount of the Securities Outstanding at such time, such
report to be transmitted within 90 days after such time.

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

SECTION 704. Reports by Company.

            The Company shall:

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

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

            (3) transmit by mail to all Holders, as their names and addresses
      appear in the Security Register, within 30 days after the filing thereof
      with the Trustee, such summaries of any information, documents and reports
      required to be filed by the Company pursuant to paragraphs (1) and (2) of
      this Section 704 as may be required by rules and regulations prescribed
      from time to time by the Commission.

            Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive

                                       56
<PAGE>

notice of any information contained therein or determinable from information
contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates and the statements delivered to it pursuant to Section 1008).

                                 ARTICLE EIGHT

                   CONSOLIDATION, MERGER, CONVEYANCE, SALE OR TRANSFER

SECTION 801. Company May Consolidate, etc., Only on Certain Terms.

             Unless otherwise provided in an indenture supplemental hereto, the
Company shall not consolidate with or merge into any other Person or convey,
sell or otherwise transfer its properties and assets substantially as an
entirety to any Person, unless:

            (1) the Person formed by such consolidation or into which the
      Company is merged or the Person which acquires by conveyance, sale or
      transfer the properties and assets of the Company substantially as an
      entirety is a Person (other than a natural person) organized and existing
      under the laws of the United States of America, any State thereof or the
      District of Columbia, and shall expressly assume by an indenture
      supplemental hereto, executed and delivered to the Trustee, in form
      satisfactory to the Trustee, the due and punctual payment of the principal
      of (and premium, if any) and interest, if any, on all the Outstanding
      Securities and the performance of every covenant of this Indenture on the
      part of the Company to be performed or observed;

            (2) immediately after giving effect to such transaction, no Event of
      Default with respect to any series of Securities, and no event which,
      after notice or lapse of time or both would become an Event of Default
      with respect to any series of Securities, shall have happened and be
      continuing; and

            (3) the Company has delivered to the Trustee for each series of
      Securities an Officers' Certificate and an Opinion of Counsel, each
      stating that such consolidation, merger, conveyance or transfer and such
      supplemental indenture comply with this Article and that all conditions
      precedent herein provided for relating to such transaction have been
      complied with.

SECTION 802. Successor Person to be Substituted.

            Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, sale or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
801 hereof, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, sale or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.

                                       57
<PAGE>

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures without Consent of Holders.

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

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

            (2) 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, or the
      surrender of such rights or powers, 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;

            (3) to add any additional Events of Default;

            (4) 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, or to facilitate the issuance of
      Securities in uncertificated form, or to permit or facilitate the issuance
      of extendible or remarketed Securities;

            (5) to change or eliminate any of the provisions of this Indenture,
      provided that any such change or elimination shall become effective only
      as to the Securities of any series created by such supplemental indenture
      and Securities of any series subsequently created to which such change or
      elimination is made applicable by the subsequent supplemental indenture
      creating such series;

            (6) to secure the Securities;

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

            (8) 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 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) hereof;

            (9) to provide for any rights of the Holders of Securities of any
      series to require the repurchase of Securities of such series by the
      Company;

            (10) to cure any ambiguity or defect, to correct or supplement any
      provision herein which may be defective or inconsistent with any other
      provision herein, or to

                                       58
<PAGE>

      make any other provisions with respect to matters or questions arising
      under this Indenture or the Securities or make any other changes herein or
      therein, provided such action shall not adversely affect the interests of
      the Holders of Securities of any series in any material respect;

            (11) to add to this Indenture such provisions as may be expressly
      permitted by the Trust Indenture Act, excluding, however, the provisions
      referred to in Section 316(a)(2) of the Trust Indenture Act as in effect
      at the date as of which this instrument was executed or any corresponding
      provision in any similar Federal statute hereafter enacted; or

            (12) to modify, alter, amend or supplement this Indenture in any
      other respect which is not materially adverse to Holders, which does not
      involve a change described in clauses (1), (2) or (3) of Section 902
      hereof.

SECTION 902. Supplemental Indentures with Consent of Holders.

            With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of all series affected
by such supplemental indenture (voting as one class), by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,

            (1) change the Stated Maturity of the principal of, or any
      installment of principal of or interest, if any, on, any Security, or
      reduce the principal amount thereof or the rate of interest thereon or any
      premium payable upon the redemption thereof, or reduce the amount of the
      principal of an Original Issue Discount Security that would be due and
      payable upon a declaration of acceleration of the Maturity thereof
      pursuant to Section 502 hereof, or change any Place of Payment where, or
      the coin or currency in which, any Security or any premium or the interest
      thereon is payable, or impair the right to institute suit for the
      enforcement of any such payment on or after the Stated Maturity thereof
      (or, in the case of redemption or repayment at the option of the Holder,
      on or after the Redemption Date or repayment date, respectively),

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

            (3) modify any of the provisions of this Section 902 or Section 513
      hereof, except to increase any such percentage or to provide that certain
      other provisions of this Indenture cannot be modified or waived without
      the consent of the Holder of each Outstanding Security affected thereby,
      provided, however, that this clause shall not be deemed to require the
      consent of any Holder with respect to changes in the references

                                       59
<PAGE>

      to "the Trustee" and concomitant changes in this Section 902, or the
      deletion of this proviso, in accordance with the requirements of Sections
      611(b) and 901(8) hereof.

A 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.

            It shall not be necessary under this Section 902 that the particular
form of any proposed supplemental indenture be approved by an Act, provided that
the substance of such proposed supplemental indenture shall have been approved.

SECTION 903. Execution of Supplemental Indentures.

            In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601 hereof) shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate, each stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

SECTION 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.

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 so
determines, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

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<PAGE>

                                   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, if any, on the Securities of that series in accordance
with the terms of the Securities of such series and this Indenture.

SECTION 1002. Maintenance of Office or Agency.

            The Company 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, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company 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 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, in such event, the Trustee shall act as the
Company's agent to receive all such presentations, surrenders, notices and
demands.

            The Company 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 of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company 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 at any time acts 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, if any, 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, if any, 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 has one or more Paying Agents for any series of
Securities, it will, no later than 11:00 a.m., New York time, on or prior to
each due date of the principal of (and premium, if any) or interest, if any, on
any Securities of that series, deposit with a Paying Agent a sum in immediately
available funds 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

                                       61
<PAGE>

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

            The Company will cause each Paying Agent 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 1003, that such Paying Agent will:

            (1) hold all sums held by it for the payment of the principal of
      (and premium, if any) or interest, if any, 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) in the making of any
      payment of principal (and premium, if any) or interest, if any, 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 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 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.

            The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf and as agent of the Company where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company may at any time and from time to time authorize one
or more Persons to act as Paying Agent or as such agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.

            Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest, if any, 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) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the written request and expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the Borough of Manhattan, The
City of New York, 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 publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

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SECTION 1004. Corporate Existence.

            Except as otherwise permitted under Article Eight, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and will use its best efforts to do or cause
to be done all things necessary to preserve and keep in full force and effect
its rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.

SECTION 1005. Maintenance of Properties.

            The Company will cause all tangible properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 1005 shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary.

SECTION 1006. Maintenance of Insurance.

            The Company will maintain, and will cause each of its Subsidiaries
to maintain, with insurers the Company reasonably believes to be financially
sound and reputable, insurance deemed adequate by the Company with respect to
its properties and business and the properties and business of its Subsidiaries
against loss or damage of the kinds customarily insured against by corporations
in the same or similar business. Such insurance may be subject to co-insurance,
deductibility or similar clauses which, in effect, result in self-insurance of
certain losses, provided that such self-insurance is in accord with the
practices of corporations in the same or similar business and adequate insurance
reserves are maintained in connection with such self-insurance.

SECTION 1007. Limitation on Secured Debt.

            If, as contemplated by Section 301(15), this covenant is made
applicable to the Securities of a particular series, as long as any of the
Securities of that series shall remain Outstanding, the Company shall not
create, issue, incur or assume any Secured Debt without the consent of the
Holders of a majority in principal amount of the Outstanding Securities of
all series for which this covenant is specified to be applicable, considered
as one class (all such Securities being hereinafter called the "Benefitted
Securities").

            The provisions of the first paragraph of this Section shall not
prohibit the creation, issuance, incurrence or assumption of any Secured Debt if
either:

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            (A) the Company shall make effective provision whereby all
            Benefitted Securities then Outstanding shall be secured equally and
            ratably with such Secured Debt; or

            (B) the Company shall deliver to the Trustee bonds, notes or other
            evidences of indebtedness secured by the Lien which secures such
            Secured Debt, such obligations and all payments thereon to be
            held in trust by the Trustee for the benefit of the Benefitted
            Securities (hereafter called "Secured Obligations") (I) in an
            aggregate principal amount equal to the aggregate principal amount
            of the Benefitted Securities then Outstanding, (II) maturing (or
            being subject to mandatory redemption) on such dates and in such
            principal amounts that, at each Stated Maturity of the Outstanding
            Benefitted Securities, there shall mature (or be redeemed) Secured
            Obligations equal in principal amount to the Benefitted Securities
            then to mature and (III) containing, in addition to any mandatory
            redemption provisions contained therein pursuant to clause (II)
            above, mandatory redemption provisions correlative to the
            provisions, if any, for the mandatory redemption (pursuant to a
            sinking fund or otherwise) of the Benefitted Securities or for the
            redemption thereof at the option of the Holder, as well as a
            provision for mandatory redemption upon an acceleration of the
            maturity of all Outstanding Benefitted Securities following an Event
            of Default (such mandatory redemption to be rescinded upon the
            rescission of such acceleration); it being expressly understood that
            such Secured Obligations (X) may, but need not, bear interest, (Y)
            may, but need not, contain provisions for the redemption thereof at
            the option of the issuer, any such redemption to be made at a
            redemption price or prices not less than the principal amount
            thereof and (Z) shall be held by the Trustee for the benefit of the
            Holders of all Benefitted Securities from time to time Outstanding
            subject to such terms and conditions relating to surrender to the
            Company, transfer restrictions, voting, application of payments of
            principal and interest and other matters as shall be set forth in an
            indenture supplemental hereto specifically providing for the
            delivery to the Trustee of such Secured Obligations.

            If the Company shall elect either of the alternatives described in
clauses (A) and (B) above, the Company shall deliver to the Trustee:

            (i) an indenture supplemental hereto (I) together with appropriate
            inter-creditor arrangements, if any, whereby all Benefitted
            Securities then Outstanding shall be secured by the Lien referred to
            in the preceding paragraph equally and ratably with all other
            indebtedness secured by such Lien or (II) providing for the delivery
            to the Trustee of Secured Obligations;

            (ii) an Officers' Certificate (I) stating that, to the knowledge of
            the signers, (1) no Event of Default has occurred and is continuing
            and (2) no event has occurred and is continuing which entitles the
            secured party under such Lien to accelerate the maturity of the
            indebtedness outstanding thereunder and (II) stating the aggregate
            principal amount of indebtedness issuable, and then proposed to be
            issued, under and secured by such Lien;

            (iii) an Opinion of Counsel (I) if the Benefitted Securities then
            Outstanding are to be secured by such Lien, to the effect that all
            such Securities then Outstanding are entitled to the benefit of such
            Lien equally and ratably with all other indebtedness outstanding
            under such Lien or (II) if Secured Obligations are to be delivered
            to the Trustee, to the effect that such Secured Obligations have
            been duly issued under such Lien and constitute valid obligations,
            entitled to the

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<PAGE>

            benefit of such Lien equally and ratably with all other indebtedness
            then outstanding under such Lien.

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

            "Debt" means (A) indebtedness for borrowed money evidenced by a
bond, debenture, note or other written instrument or agreement by which the
Company is obligated to repay such borrowed money and (B) any guaranty by the
Company of any such indebtedness of another Person.

            "Secured Debt" means Debt created, issued, incurred or assumed by
the Company which is secured by a Lien upon any shares of stock of any
Significant Subsidiary of the Company, as defined in Regulation S-X of the
rules and regulations under the Securities Act of 1933, as amended, whether
owned at the date of the initial authentication and delivery of the
Securities, or thereafter acquired.

SECTION 1008. Statement by Officers as to Default.

            The Company will deliver to the Trustee on or before May 15 in each
year, a certificate of the Company's principal executive officer, principal
financial officer or principal accounting officer stating that in the course of
the performance by such signer of his duties as an officer of the Company he
would normally have knowledge of any default by the Company in the performance
and observance of any of the covenants or conditions contained in the Indenture,
stating whether or not he has knowledge of any such default and, if so,
specifying each such default of which such signer has knowledge and the nature
thereof.

SECTION 1009. Defeasance of Certain Obligations.

            The Company may omit to comply with any term, provision or condition
set forth in Section 801 or in Sections 1004 to 1007, inclusive, hereof with
respect to the Securities of any series, provided that the following conditions
shall have been satisfied:

            (1) the Company has deposited or caused to be irrevocably deposited
      (except as provided in Section 402(c) hereof and the last paragraph of
      Section 1003 hereof) with the Trustee (specifying that each deposit is
      pursuant to this Section 1009) as trust funds in trust, specifically
      pledged as security for, and dedicated solely to, the benefit of the
      Holders of the Securities of such series, (i) money in the currency or
      units of currency in which such Securities are payable in an amount, or
      (ii) (except as provided in a supplemental indenture with respect to such
      series) if Securities of such series are not subject to repurchase at the
      option of Holders and if such Securities are payable in U.S. Dollars, (A)
      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 (x) or (y) of this subparagraph (1) money in an amount, or (B) a
      combination thereof, in each case sufficient, in the report of a
      nationally recognized firm of independent certified public accountants
      expressed in a written certification thereof delivered to the Trustee, to
      pay and discharge, and which the Trustee shall be instructed to apply to
      pay and discharge, (x) the principal of (and premium, if any) and each
      installment of principal (and premium, if any) and interest, if any, on
      the Outstanding Securities of such series on the Stated

                                       65
<PAGE>

      Maturity of such principal or installment of principal or interest or to
      and including the Redemption Date irrevocably designated by the Company
      pursuant to subparagraph (4) of this Section 1009 and (y) any mandatory
      sinking fund payments applicable to the Securities of such series on the
      day on which payments are due and payable in accordance with the terms of
      the Indenture and of the Securities of such series;

            (2) no Event of Default or event which with notice or lapse of time
      would become an Event of Default (including by reason of such deposit)
      with respect to the Securities of such series shall have occurred and be
      continuing on the date of such deposit;

            (3) the Company shall have delivered to the Trustee an Opinion of
      Counsel to the effect (i) that Holders of the Securities of such series
      will not recognize income, gain, loss or expense for Federal income tax
      purposes as a result of such deposit and defeasance of certain obligations
      and will take into account all items of income, gain, loss or expense with
      respect to the Securities at the same time and in the same manner as if
      such deposit and defeasance had not taken place; (ii) that such provision
      would not cause any outstanding Securities of such series then listed on
      any national securities exchange to be delisted as a result thereof; and
      (iii) that the defeasance trust is not, or is registered as, an investment
      company under the Investment Company Act of 1940;

            (4) if the Company has deposited or caused to be deposited money or
      U.S. Government Obligations to pay or discharge the principal of (and
      premium, if any) and interest, if any, on the Outstanding Securities of a
      series to and including a Redemption Date on which all of the Outstanding
      Securities of such series are to be redeemed, such Redemption Date shall
      be irrevocably designated by a Board Resolution delivered to the Trustee
      on or prior to the date of deposit of such money or U.S. Government
      Obligations, and such Board Resolution shall be accompanied by an
      irrevocable Company Request that the Trustee give notice of such
      redemption in the name and at the expense of the Company not less than 30
      nor more than 60 days prior to such Redemption Date in accordance with
      Section 1104 hereof; and

            (5) the Company has 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 the Securities have been complied with.

            Upon the Company's exercise of its option to have this Section
applied to the Securities of any series, (1) the Company shall be released from
its obligations under Sections 801 and Sections 1004 through 1007, inclusive,
and (2) the occurrence of any event specified in Section 501(d) (with respect to
any of Section 801 and Sections 1004 through 1007, inclusive) shall be deemed
not to be or result in an Event of Default, in each case with respect to such
Securities as provided in this Section on and after the date the conditions set
forth above are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, Covenant Defeasance means that, with respect to such Securities, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such specified Section (to the
extent so specified in the case of Section 501(d)), whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision herein or in
any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby.

            Notwithstanding anything herein to the contrary, no Covenant
Defeasance shall release any successor Person referred to in Article Eight from
its obligations to assume the

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obligations of the Company under Section 607 as a condition to the consummation
of any transaction contemplated by Section 801.

SECTION 1010. Waiver of Certain Covenants.

            The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 801 or in Sections 1004 to
1007, inclusive, hereof, with respect to the Securities of any series if before
the time for such compliance the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect. Notwithstanding
anything herein to the contrary, no waiver pursuant to this Section shall
release any successor Person referred to in Article Eight from its obligations
to assume the obligations of the Company under Section 607 as a condition to the
consummation of any transaction contemplated by Section 801.

SECTION 1011. Further Assurances.

            The Company shall, at its own cost and expense, execute and deliver
to the Trustee all such other documents, instruments and agreements and do all
such other acts and things as may be reasonably required, in the opinion of the
Trustee, to enable the Trustee to exercise and enforce its rights under this
Indenture and under the documents, instruments and agreements required under
this Indenture and to carry out the intent of this Indenture.

                                 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 hereof for Securities of any
series) in accordance with this Article Eleven.

SECTION 1102. Election to Redeem; Notice to Trustee.

            The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities and evidenced by an Officers' Certificate. In
case of any redemption at the election of the Company of less than all the
Securities of any series, the Company shall, at least 60 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. In the case of
any redemption of Securities prior to

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<PAGE>

the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, or pursuant to an election by
the Company which is subject to a condition specified 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 or
condition.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

            If any Securities of any series are to be redeemed (unless all the
Securities of such series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Security), 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 shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal amount of Securities of such series, provided that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), 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 and specified tenor not previously called
for redemption in accordance with the previous sentence.

            The Trustee shall promptly notify the Company 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.

            The provisions of the preceding two paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denominations) for such Security.

            Securities shall be excluded from eligibility for selection for
redemption if they are identified by registration and certificate number in a
written statement signed by an authorized officer of the Company and delivered
to the Security Registrar at least 60 days prior to the Redemption Date as being
owned of record and beneficially by, and not pledged or hypothecated by either
(a) the Company or (b) an entity specifically identified in such written
statement which is an Affiliate of the Company.

            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 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.

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            All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price,

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

            (4) that on the Redemption Date the Redemption Price will become due
      and payable upon each such Security to be redeemed 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,

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

            (7) CUSIP numbers, if any.

            Unless otherwise specified with respect to any Securities in
      accordance with Section 301, with respect to any redemption of Securities
      at the election of the Company, unless, upon the giving of notice of such
      redemption, defeasance shall have been effected with respect to such
      Securities pursuant to Sections 401 and 403, such notice may state that
      such redemption shall be conditional upon the receipt by the Trustee or
      the Paying Agent(s) for such Securities, on or prior to the date fixed for
      such redemption, of money sufficient to pay the principal of and any
      premium and interest on such Securities and that if such money shall not
      have been so received such notice shall be of no force and effect and the
      Company shall not be required to redeem such Securities. In the event that
      such notice of redemption contains such a condition and such money is not
      so received, the redemption shall not be made and within a reasonable time
      thereafter notice shall be given, in the manner in which the notice of
      redemption was given, that such money was not so received and such
      redemption was not required to be made, and the Trustee or Paying Agent(s)
      for the Securities otherwise to have been redeemed shall promptly return
      to the Holders thereof any such Securities which had been surrendered for
      payment of such redemption.

            Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of redemption as aforesaid,
shall be given by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company. Subject to the preceding paragraph,
any such notice of redemption shall be irrevocable.

SECTION 1105. Deposit of Redemption Price.

            On or prior to 11:00 A.M., New York time, on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as

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<PAGE>

its own Paying Agent, segregate and hold in trust as
provided in Section 1003 hereof) an amount of money 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 (to the extent that such amounts are not already on deposit at such
time in accordance with the provisions of Sections 401, 403 or 1009 hereof).

SECTION 1106. Securities Payable on Redemption Date.

            Notice of redemption having been given as aforesaid (subject to the
second paragraph of Section 1104), the Securities so to be redeemed shall, on
the Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued and unpaid 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 and unpaid interest to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307 hereof.

            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.

SECTION 1107. Securities Redeemed in Part.

            Any Security (including any Global Security) which is to be redeemed
only in part shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Security Registrar 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 and tenor, 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; provided,
that if a Global Security is so surrendered, the new Global Security shall be in
a denomination equal to the unredeemed portion of the principal of the Global
Security so surrendered.

                                 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 hereof for Securities of such series.

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            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 hereof. 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.

            In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Company may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 309 hereof, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this Section
1202, or (c) receive credit for Securities of such series (not previously so
credited) redeemed by the Company through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited shall
be received or credited by the Trustee at the sinking fund Redemption Price
specified in such Securities.

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 will deliver to the Trustee an Officers'
Certificate specifying (a) the amount of the next ensuing sinking fund payment
for that series pursuant to the terms of that series, (b) 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 payment
date and, if so, the amount of such optional sinking fund payment, and (c) the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202 hereof and the basis for such
credit, and will also deliver to the Trustee any Securities to be so delivered.
Such written statement shall be irrevocable and upon its receipt by the Trustee
the Company shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Company, on or before any such 60th
day, to deliver such written statement and Securities specified in this
paragraph, if any, shall not constitute a default but shall constitute, on and
as of such date, the irrevocable election of the Company (i) 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 therefor and (ii) that the Company
will make no optional sinking fund payment with respect to such series as
provided in this Section 1203.

             Not less than 30 days before each such sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 hereof 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 hereof.

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<PAGE>

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
hereof.

            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 with respect to Securities of that series or an
Event of Default with respect to the Securities of that 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 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. In
case such Event of Default shall have been waived as provided in Section 513
hereof or the default or Event of 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
1203 to the redemption of such Securities.

                                ARTICLE THIRTEEN

                                  MISCELLANEOUS

SECTION 1301. Counterparts.

            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.

                                       72
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                        ENERGY EAST CORPORATION

                                        By  ___________________
                                          Name:
                                          Title:

Attest:

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

                                        THE CHASE MANHATTAN BANK,
                                        as Trustee

                                        By  _______________
                                         Name:
                                         Title:

Attest:

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

                                       73
<PAGE>

STATE OF ________)
                        : ss.:
COUNTY OF _______)

            On the ___ day of ______ , 2000, before me personally came ________,
to me known, who, being by me duly sworn, did depose and say that [he/she] is
the ________ of Energy East Corporation, one of the corporations described in
and which executed the foregoing instrument; that [he/she] knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that [he/she] signed [his/her] name thereto by like authority.

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

STATE OF NEW YORK )
                        : ss.:
COUNTY OF NEW YORK)

            On the _____ day of ______, 2000, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
[he/she] is a __________ of The Chase Manhattan Bank, a New York banking
corporation, one of the corporations described in and which executed the
foregoing instrument; that [he/she] knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that [he/she]
signed [his/her] name thereto by like authority.

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

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