Document:

<PAGE>

                                                                     EXHIBIT 4.6

                                 ANTHEM, INC.

                           ________________________

                     as Collateral Agent, Custodial Agent

                          and Securities Intermediary

                                      AND

                           ________________________

                          as Purchase Contract Agent

                               PLEDGE AGREEMENT

                            Dated as of _____, 2001
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                                    <C>
ARTICLE I       DEFINITIONS..........................................................................   2

SECTION 1.1     Definitions..........................................................................   2

ARTICLE II      PLEDGE; CONTROL AND PERFECTION.......................................................   4

SECTION 2.1     The Pledge...........................................................................   4
SECTION 2.2     Control and Perfection...............................................................   5

ARTICLE III     PAYMENTS ON PLEDGED COLLATERAL.......................................................   7

SECTION 3.1     Payments.............................................................................   7
SECTION 3.2     Application of Payments..............................................................   8

ARTICLE IV      SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES.........................   9

SECTION 4.1     Collateral Substitution and the Creation of Stripped Units...........................   9
SECTION 4.2     Collateral Substitution and the Re-Creation of Normal Units..........................   9
SECTION 4.3     Termination Event....................................................................  10
SECTION 4.4     Early Settlement; Merger Early Settlement............................................  11
SECTION 4.5     Remarketing; Application of Proceeds; Settlement.....................................  11

ARTICLE V       VOTING RIGHTS--DEBENTURES............................................................  14

SECTION 5.1     Exercise by Purchase Contract Agent..................................................  14

ARTICLE VI      RIGHTS AND REMEDIES..................................................................  14

SECTION 6.1     Rights and Remedies of the Collateral Agent..........................................  14
SECTION 6.2     Substitutions........................................................................  15

ARTICLE VII     REPRESENTATIONS AND WARRANTIES; COVENANTS............................................  16

SECTION 7.1     Representations and Warranties.......................................................  16
SECTION 7.2     Covenants............................................................................  16

ARTICLE VIII    THE COLLATERAL AGENT.................................................................  17

SECTION 8.1     Appointment, Powers and Immunities...................................................  17
SECTION 8.2     Instructions of the Company..........................................................  18
SECTION 8.3     Reliance.............................................................................  19
</TABLE>

                                       i
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<TABLE>
<S>                                                                                                    <C>
SECTION 8.4     Rights in Other Capacities...........................................................  19
SECTION 8.5     Non-Reliance on Collateral Agent.....................................................  19
SECTION 8.6     Compensation and Indemnity...........................................................  20
SECTION 8.7     Failure to Act.......................................................................  20
SECTION 8.8     Resignation..........................................................................  21
SECTION 8.9     Right to Appoint Agent or Advisor....................................................  22
SECTION 8.10    Survival.............................................................................  22
SECTION 8.11    Exculpation..........................................................................  22

ARTICLE IX      AMENDMENT............................................................................  23

SECTION 9.1     Amendment Without Consent of Holders.................................................  23
SECTION 9.2     Amendment with Consent of Holders....................................................  23
SECTION 9.3     Execution of Amendments..............................................................  24
SECTION 9.4     Effect of Amendments.................................................................  24
SECTION 9.5     Reference to Amendments..............................................................  24

ARTICLE X       MISCELLANEOUS........................................................................  25

SECTION 10.1    No Waiver............................................................................  25
SECTION 10.2    GOVERNING LAW........................................................................  25
SECTION 10.3    Notices..............................................................................  25
SECTION 10.4    Successors and Assigns...............................................................  26
SECTION 10.5    Counterparts.........................................................................  26
SECTION 10.6    Severability.........................................................................  26
SECTION 10.7    Expenses, Etc........................................................................  26
SECTION 10.8    Security Interest Absolute...........................................................  27
SECTION 10.9    Waiver of Jury Trial.................................................................  27
</TABLE>

EXHIBIT A      Instruction from Purchase Contract Agent to Collateral Agent

EXHIBIT B      Instruction to Purchase Contract Agent

EXHIBIT C      Instruction to Custodial Agent Regarding Remarketing

EXHIBIT D      Instruction to Custodial Agent Regarding Withdrawal from
               Remarketing

                                       ii
<PAGE>

                               PLEDGE AGREEMENT

         PLEDGE AGREEMENT, dated as of ___, 2001 (this "Agreement"), among
Anthem, Inc., an Indiana corporation (the "Company"), ________________________,
[a ____________ banking corporation], not individually but solely as collateral
agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and ________________________, [a ____________
banking corporation], not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as defined herein).

                                   RECITALS

         WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $50 per Unit, all of which will initially be Normal Units.

         WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract
and (b) either beneficial ownership of (i) a Debenture or (ii) following the
remarketing of the Debentures in accordance with the Purchase Contract Agreement
and the Remarketing Agreement, the appropriate Treasury Consideration.

         WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a holder of Normal Units may separate the Debentures or the
appropriate Treasury Consideration, as applicable, from the related Purchase
Contracts by substituting for such Debentures or the appropriate Treasury
Consideration, as the case may be, Treasury Securities that will pay in the
aggregate an amount equal to the aggregate Stated Amount of such Normal Units.
Upon such separation, the Normal Units will become Stripped Units. Each Stripped
Unit will be comprised of (a) a Purchase Contract and (b) a 1/20 undivided
beneficial interest in a Treasury Security.

         WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders, from time to time, of the Units have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debentures, any
Treasury Consideration and any Treasury Securities delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof.
<PAGE>

         NOW, THEREFORE, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

          SECTION 1.1    Definitions.

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

          (a)  capitalized terms used but not defined herein are used as defined
     in the Purchase Contract Agreement;

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

          (c)  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 or other subdivision.

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

          "Code" has the meaning specified in Section 6.1 hereof.

          "Collateral" has the meaning specified in Section 2.1 hereof.

          "Collateral Account" means the securities account (number ___ )
maintained at ________________________ in the name "________________________, as
Purchase Contract Agent on behalf of the holders of certain securities of
Anthem, Inc., Collateral Account subject to the security interest of _________,
as Collateral Agent, for the benefit of Anthem, Inc., as pledgee" and any
successor account.

          "Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.

          "Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.

                                      -2-
<PAGE>

          "Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.

          "Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

          "Pledge" has the meaning specified in Section 2.1 hereof.

          "Pledged Debentures" has the meaning specified in Section 2.1 hereof.

          "Pledged Treasury Consideration" has the meaning specified in Section
2.1 hereof.

          "Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.

          "Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.

          "Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.

          "Purchase Contract Agreement" has the meaning specified in the
Recitals.

          "Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.

          "Security Entitlement" has the meaning set forth in Section 8-102(a)
(17) of the Code.

          "Separate Debentures" means any Debentures that are not Pledged
Debentures.

          "TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

          "Transfer" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:

          (i)  in the case of Collateral consisting of securities which cannot
     be delivered by book-entry or which the parties agree are to be delivered
     in physical form, delivery in appropriate physical form to the recipient
     accompanied by any duly executed instruments of transfer, assignments in
     blank, transfer tax stamps and any other documents necessary to constitute
     a legally valid transfer to the recipient;

                                      -3-
<PAGE>

          (ii) in the case of Collateral consisting of securities maintained in
     book-entry form by causing a "securities intermediary" (as defined in
     Section 8-102(a)(14) of the Code) to (a) credit a "security entitlement"
     (as defined in Section 8-102(a)(17) of the Code) with respect to such
     securities to a "securities account" (as defined in Section 8-501(a) of the
     Code) maintained by or on behalf of the recipient and (b) to issue a
     confirmation to the recipient with respect to such credit. In the case of
     Collateral to be delivered to the Collateral Agent, the securities
     intermediary shall be the Securities Intermediary and the securities
     account shall be the Collateral Account. In addition, any Transfer of
     Treasury Securities and Treasury Consideration hereunder shall be made in
     accordance with the TRADES Regulations and other applicable law.

                                  ARTICLE II

                        PLEDGE; CONTROL AND PERFECTION

     SECTION 2.1    The Pledge.

     (a)    The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of the
Purchase Contract Agent and such Holders in:

     (i)    (A) the Debentures, Treasury Consideration and Treasury Securities
            constituting a part of the Units, (B) any Treasury Securities
            delivered in exchange for any Debentures or Treasury Consideration,
            as applicable, in accordance with Section 4.1 hereof, and (C) any
            Debentures or Treasury Consideration, as applicable, delivered in
            exchange for any Treasury Securities in accordance with Section 4.2
            hereof, in each case that have been Transferred to or otherwise
            received by the Collateral Agent and not released by the Collateral
            Agent to such Holders under the provisions of this Agreement;

     (ii)   the Collateral Account and all securities, financial assets,
            security entitlements, cash and other property credited thereto and
            all Security Entitlements related thereto; and

     (iii)  all Proceeds of the foregoing (all of the foregoing, collectively,
            the "Collateral").

     (b)    Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Units, shall cause the

                                      -4-
<PAGE>

Debentures comprising a part of the Normal Units to be Transferred to the
Collateral Agent for the benefit of the Company.

     (c)  The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debentures (or the Debentures that are delivered pursuant to
Section 6.2 hereof), Treasury Consideration or Treasury Securities subject to
the Pledge, excluding any Debentures, Treasury Consideration or Treasury
Securities released from the Pledge as provided in Sections 4.1 and 4.2 hereof,
respectively, are hereinafter referred to as "Pledged Debentures," "Pledged
Treasury Consideration" or the "Pledged Treasury Securities," respectively.
Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from
time to time shall have full beneficial ownership of the Collateral. For
purposes of perfecting the Pledge under applicable law, including, to the extent
applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and
in effect in any applicable jurisdiction, the Collateral Agent shall be the
agent of the Company as provided herein. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Debentures or any other securities held in physical
form in its name.

     (d)  Except as may be required in order to release Debentures or Treasury
Consideration, as applicable, in connection with a Holder's election to convert
its investment from a Normal Unit to a Stripped Unit, or except as otherwise
required to release Debentures as specified herein, neither the Collateral
Agent, the Custodial Agent nor the Securities Intermediary shall relinquish
physical possession of any certificate evidencing a Debenture prior to the
termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Debentures evidenced thereby from the Pledge, the
Securities Intermediary shall use its best efforts to obtain physical possession
of a replacement certificate evidencing any Debentures remaining subject to the
Pledge hereunder registered to it or endorsed in blank within fifteen days of
the date it relinquished possession. The Securities Intermediary shall promptly
notify the Company and the Collateral Agent of the Securities Intermediary's
failure to obtain possession of any such replacement certificate as required
hereby.

     SECTION 2.2    Control and Perfection.

     (a)  In connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver upon the written direction of the Company with
respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect to any thereof. In the event the Securities
Intermediary receives from the Holders or the Purchase Contract Agent
entitlement

                                      -5-
<PAGE>

orders which conflict with entitlement orders received from the Collateral
Agent, the Securities Intermediary shall follow the entitlement orders received
from the Collateral Agent. Such instructions and entitlement orders may, without
limitation, direct the Securities Intermediary to transfer, redeem, assign, or
otherwise deliver the Debentures, the Treasury Consideration, the Treasury
Securities, and any Security Entitlements with respect thereto or sell,
liquidate or dispose of such assets through a broker designated by the Company,
and to pay and deliver any income, proceeds or other funds derived therefrom to
the Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as agent of the
Company, to, upon written direction of the Company, itself issue instructions
and entitlement orders, and to otherwise take action, with respect to the
Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect thereto, pursuant to the terms and provisions hereof,
all without the necessity of obtaining the further consent of the Purchase
Contract Agent or any of the Holders. The Collateral Agent shall be the agent of
the Company and shall act as directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent shall issue
entitlement orders to the Securities Intermediary when and as directed in
writing by the Company.

     (b)    The Securities Intermediary hereby confirms and agrees that:

     (i)    all securities or other property underlying any financial assets
            credited to the Collateral Account shall be registered in the name
            of the Securities Intermediary, or its nominee, indorsed to the
            Securities Intermediary, or its nominee, or in blank or credited to
            another Collateral Account maintained in the name of the Securities
            Intermediary and in no case will any financial asset credited to the
            Collateral Account be registered in the name of the Purchase
            Contract Agent, the Collateral Agent, the Company or any Holder,
            payable to the order of, or specially indorsed to, the Purchase
            Contract Agent, the Collateral Agent, the Company or any Holder
            except to the extent the foregoing have been specially indorsed to
            the Securities Intermediary or in blank;

     (ii)   all property delivered to the Securities Intermediary pursuant to
            this Pledge Agreement (including, without limitation, any
            Debentures, the Treasury Consideration or Treasury Securities) will
            be promptly credited to the Collateral Account;

     (iii)  the Collateral Account is an account to which financial assets are
            or may be credited, and the Securities Intermediary shall, subject
            to the terms of this Agreement, treat the Purchase Contract Agent as
            entitled to exercise the rights of any financial asset credited to
            the Collateral Account;

     (iv)   the Securities Intermediary has not entered into, and until the
            termination of this Agreement will not enter into, any agreement
            with any other person

                                      -6-
<PAGE>

          relating to the Collateral Account and/or any financial assets
          credited thereto pursuant to which it has agreed to comply with
          entitlement orders (as defined in Section 8-102(a)(8) of the Code) of
          such other person; and

     (v)  the Securities Intermediary has not entered into, and until the
          termination of this Agreement will not enter into, any agreement with
          the Company, the Collateral Agent or the Purchase Contract Agent
          purporting to limit or condition the obligation of the Securities
          Intermediary to comply with entitlement orders as set forth in this
          Section 2.2 hereof.

     (c)  The Securities Intermediary hereby agrees that each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.

     (d)  In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.

     (e)  The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such power-
of-attorney shall not be deemed to require of the Collateral Agent any specific
duties or obligations not otherwise assumed by the Collateral Agent hereunder.
Notwithstanding the foregoing, in no event shall the Collateral Agent or
Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any Security Interest hereunder.

                                  ARTICLE III

                        PAYMENTS ON PLEDGED COLLATERAL

     SECTION 3.1    Payments.

     So long as the Purchase Contract Agent is the registered owner of the
Pledged Debentures or Pledged Treasury Consideration, it shall receive all
payments thereon. If the Pledged Debentures are reregistered, such that the
Collateral Agent becomes the registered holder, all payments of the principal
of, or interest on, the Pledged Debentures and all payments of the principal of,
or cash distributions on, any Pledged Treasury Consideration or Pledged Treasury
Securities, that are received by the Collateral Agent and that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:

                                      -7-
<PAGE>

     (i)    in the case of (A) quarterly cash distributions on Normal Units
            which include Pledged Debentures or Pledged Treasury Consideration
            and (B) any payments with respect to any Debentures or Treasury
            Consideration, as the case may be, that have been released from the
            Pledge pursuant to Section 4.3 hereof, to the Purchase Contract
            Agent, for the benefit of the relevant Holders of the Normal Units,
            to the account designated by the Purchase Contract Agent for such
            purpose, no later than 10:00 a.m., New York City time, on the
            Business Day such payment is received by the Collateral Agent
            (provided that in the event such payment is received by the
            Collateral Agent on a day that is not a Business Day or after 9:00
            a.m., New York City time, on a Business Day, then such payment shall
            be made no later than 9:30 a.m., New York City time, on the next
            succeeding Business Day);

     (ii)   in the case of any payments with respect to any Treasury Securities
            that have been released from the Pledge pursuant to Section 4.3
            hereof, to the Holders of the Stripped Units to the accounts
            designated by them in writing for such purpose no later than 2:00
            p.m., New York City time, on the Business Day such payment is
            received by the Collateral Agent (provided that in the event such
            payment is received by the Collateral Agent on a day that is not a
            Business Day or after 10 a.m., New York City time, on a Business
            Day, then such payment shall be made no later than 10:30 a.m., New
            York City time, on the next succeeding Business Day); and

     (iii)  in the case of payments in respect of any Pledged Debentures,
            Pledged Treasury Consideration or Pledged Treasury Securities, to be
            paid upon settlement of such Holder's obligations to purchase Common
            Stock under the Purchase Contract, to the Company on the Stock
            Purchase Date in accordance with the procedure set forth in Section
            4.5(a) or 4.5(b) hereof, in full satisfaction of the respective
            obligations of the Holders under the related Purchase Contracts.

     SECTION 3.2    Application of Payments.

     All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of principal on account of any
Debenture or Treasury Consideration, as applicable, that, at the time of such
payment, is a Pledged Debenture or Pledged Treasury Consideration, as the case
may be, or a Holder of a Stripped Unit shall receive any payments of principal
on account of any Treasury Securities that, at the time of such payment, are
Pledged Treasury Securities, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company (and
promptly deliver the same over to the Company) for application to the
obligations of

                                      -8-
<PAGE>

the Holders under the related Purchase Contracts, and the Holders shall acquire
no right, title or interest in any such payments of principal so received.

                                  ARTICLE IV

         SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES

     SECTION 4.1    Collateral Substitution and the Creation of Stripped Units.

     At any time on or prior to the second Business Day immediately preceding
the Stock Purchase Date, a Holder of Normal Units shall have the right to
substitute Treasury Securities for the Pledged Debentures or Pledged Treasury
Consideration, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 20 Normal Units, or after a remarketing of the Debentures pursuant to the
Purchase Contract Agreement, in integral multiples of Normal Units such that
Treasury Securities to be deposited and the applicable Treasury Consideration to
be released are in integral multiples of $1,000, by (a) Transferring to the
Collateral Agent Treasury Securities having an aggregate principal amount equal
to the aggregate Stated Amount of such Normal Units and (b) delivering such
Normal Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the principal amount, the maturities
and the CUSIP numbers of the Treasury Securities Transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Debentures or Pledged Treasury
Consideration, as the case may be, related to such Normal Units, whereupon the
Purchase Contract Agent shall promptly give such instruction to the Collateral
Agent in the form provided in Exhibit A. Upon receipt of Treasury Securities
from a Holder of Normal Units and the related instruction from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Debentures or
Pledged Treasury Consideration, as the case may be, and shall promptly Transfer
such Pledged Debentures or Pledged Treasury Consideration, as the case may be,
free and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent. All items Transferred and/or substituted by any Holder
pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement
shall be Transferred and/or substituted free and clear of all liens, claims and
encumbrances.

     SECTION 4.2    Collateral Substitution and the Re-Creation of Normal Units.

     At any time on or prior to the second Business Day immediately preceding
the Stock Purchase Date, a Holder of Stripped Units shall have the right to
reestablish Normal Units (a) consisting of the Purchase Contracts and Debentures
in integral multiples of 20 Normal Units, or (b) after a remarketing of the
Debentures pursuant to the Purchase Contract Agreement, consisting of the
Purchase Contracts and the appropriate Treasury Consideration (identified and
calculated by reference to the Treasury

                                      -9-
<PAGE>

Consideration then comprising Normal Units) in integral multiples of Stripped
Units such that the Treasury Consideration to be deposited and the Treasury
Securities to be released are in integral multiples of $1,000, by (x)
Transferring to the Collateral Agent Debentures or the appropriate Treasury
Consideration, as the case may be, then comprising such number of Normal Units
as is equal to such Stripped Units and (y) delivering such Stripped Units to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has
transferred Debentures or Treasury Consideration to the Collateral Agent
pursuant to clause (a) above and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Stripped Units, whereupon the Purchase Contract Agent
shall give such instruction to the Collateral Agent in the form provided in
Exhibit A. Upon receipt of the Debentures or the appropriate Treasury
Consideration, as the case may be, from such Holder and the instruction from the
Purchase Contract Agent, the Collateral Agent shall release the Pledged Treasury
Securities and shall promptly Transfer such Treasury Securities, free and clear
of any lien, pledge or security interest created hereby, to the Purchase
Contract Agent.

     SECTION 4.3    Termination Event.

     (a)  Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Debentures or Pledged Treasury
Consideration, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Normal Units and
the Stripped Units, respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.

     (b)  If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Debentures, Pledged Treasury Consideration or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall

     (i)  use its best efforts to obtain an opinion of a nationally recognized
          law firm reasonably acceptable to the Collateral Agent to the effect
          that, as a result of the Company's being the debtor in such a
          bankruptcy case, the Collateral Agent will not be prohibited from
          releasing or Transferring the Collateral as provided in this Section
          4.3, and shall deliver such opinion to the Collateral Agent within ten
          days after the occurrence of such Termination Event, and if (y) the
          Purchase Contract Agent shall be unable to obtain such opinion within
          ten days after the occurrence of such Termination Event or (z) the
          Collateral Agent shall continue, after delivery of such opinion, to
          refuse to effectuate the release and Transfer of all Pledged
          Debentures,Pledged Treasury Consideration or Pledged

                                      -10-
<PAGE>

          Treasury Securities, as the case may be, as provided in this Section
          4.3, then the Purchase Contract Agent shall within fifteen days after
          the occurrence of such Termination Event commence an action or
          proceeding in the court with jurisdiction of the Company's case under
          the Bankruptcy Code seeking an order requiring the Collateral Agent to
          effectuate the release and transfer of all Pledged Debentures, Pledged
          Treasury Consideration or Pledged Treasury Securities, as the case may
          be, as provided by this Section 4.3 or

     (ii) commence an action or proceeding like that described in subsection
          (i)(z) hereof within ten days after the occurrence of such Termination
          Event.

     SECTION 4.4    Early Settlement; Merger Early Settlement.

     Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement
or Merger Early Settlement of their respective obligations under the Purchase
Contracts forming a part of such Units in accordance with the terms of the
Purchase Contracts and the Purchase Contract Agreement (setting forth the number
of such Purchase Contracts as to which such Holders have elected to effect Early
Settlement or Merger Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts or Merger Early Settlement
Amounts, as the case may be, pursuant to the terms of the Purchase Contracts and
the Purchase Contract Agreement and that all conditions to such Early Settlement
or Merger Early Settlement, as the case may be, have been satisfied, then the
Collateral Agent shall release from the Pledge (a) Pledged Debentures or Pledged
Treasury Consideration, as the case may be, in the case of a Holder of Normal
Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped
Units, relating to such Purchase Contracts as to which such Holders have elected
to effect Early Settlement or Merger Early Settlement, and shall Transfer all
such Pledged Debentures, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created hereby, to
the Purchase Contract Agent for the benefit of the Holders.

     SECTION 4.5    Remarketing; Application of Proceeds; Settlement.

     (a)  Pursuant to the Purchase Contract Agreement, the Purchase Contract
Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, the Remarketing Agent and the Collateral Agent of the aggregate number
of Debentures comprising part of Normal Units to be remarketed. The Collateral
Agent shall, by 10:00 a.m., New York City time, on the Business Day immediately
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, without any instruction from Holders of Normal Units, deliver (i) the
Pledged Debentures to be remarketed to the Remarketing Agent for remarketing and
(ii) the remaining Pledged

                                      -11-
<PAGE>

Debentures to the Purchase Contract Agent for distribution to the Holders that
have elected not to participate in the remarketing in accordance with the
Purchase Contract Agreement. The Remarketing Agent will deliver the Agent-
purchased Treasury Consideration (as defined in the Purchase Contract Agreement)
purchased from the proceeds of the remarketing to the Purchase Contract Agent,
which shall thereupon deliver such Agent-purchased Treasury Consideration to the
Collateral Agent. Upon receipt of the Agent-purchased Treasury Consideration
from the Purchase Contract Agent following a successful remarketing, the
Collateral Agent, for the benefit of the Company, shall thereupon apply such
Treasury Consideration to secure such Holders' obligations under the Purchase
Contracts. On the Stock Purchase Date, the Collateral Agent shall apply that
portion of the payments received in respect of the Pledged Treasury
Consideration equal to the aggregate Stated Amount of the related Normal Units
to satisfy in full the obligations of such Holders of Normal Units to pay the
Purchase Price under the related Purchase Contracts. The remaining portion of
such Proceeds, if any, shall be distributed by the Collateral Agent to the
Purchase Contract Agent for payment to such Holders.

     (b)  Within three Business Days following a Failed Remarketing, the
Debentures delivered to the Remarketing Agent and the Purchase Contract Agent
pursuant to Section 4.5(a) shall be returned to the Collateral Agent, together
with written notice from the Remarketing Agent of the Failed Remarketing. The
Collateral Agent, for the benefit of the Company, shall thereupon apply such
Debentures to secure the Normal Units Holders' obligations under the Purchase
Contracts. The Remarketing Agent may make one or more attempts to remarket the
Debentures in accordance with the procedures set forth in the Purchase Contract
Agreement and the Remarketing Agreement between the Remarketing Date and the
Stock Purchase Date, provided that the requirements of Section 5.4(b)(ii) of the
Purchase Contract Agreement have been met. If by 4:00 p.m., New York City time,
on the Business Day immediately preceding the Stock Purchase Date the
Remarketing Agent has failed to remarket the Debentures at 100.5% of the
Remarketing Value (as described in the Purchase Contract Agreement), the Last
Failed Remarketing shall be deemed to have occurred. In this case, the
Remarketing Agent shall advise the Collateral Agent in writing that it cannot
remarket the related Pledged Debentures of such Holders of Normal Units. The
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, retain or dispose of the Pledged Debentures in accordance with
applicable law and satisfy in full, from any such disposition or retention, such
Holders' obligations to pay the Purchase Price for the Common Stock; provided,
that if upon a Failed Remarketing, the Collateral Agent exercises such rights
for the benefit of the Company with respect to such Debentures, any accrued and
unpaid interest on such Debentures will become payable by the Company to the
Purchase Contract Agent for payment to the Holder of the Normal Units to which
such Debentures relate in accordance with the Purchase Contract Agreement.

     (c)  In the event a Holder of Stripped Units has not made an Early
Settlement or Merger Early Settlement of the Purchase Contracts underlying its
Stripped Units, such Holder shall be deemed to have elected to pay for the
shares of Common Stock to be

                                      -12-
<PAGE>

issued under such Purchase Contracts from the payments received in respect of
the related Pledged Treasury Securities. Without receiving any instruction from
any such Holder of Stripped Units, the Collateral Agent shall apply such
payments to the settlement of such Purchase Contracts on the Stock Purchase
Date. In the event the payments received in respect of the related Pledged
Treasury Securities are in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall distribute
such excess, when received, to the Purchase Contract Agent for the benefit of
the Holders.

     (d)  Pursuant to the Remarketing Agreement, on or prior to the fourth
Business Day preceding the Remarketing Date, but no earlier than the Payment
Date immediately preceding the Remarketing Date, holders of Separate Debentures
may elect to have their Separate Debentures remarketed by delivering their
Separate Debentures, together with a notice of such election, substantially in
the form of Exhibit C hereto, to the Custodial Agent. On the third Business Day
prior to the Remarketing Date, by 10 a.m. New York City time, the Custodial
Agent shall notify the Remarketing Agent of the number of such Separate
Debentures to be remarketed. The Custodial Agent will hold such Separate
Debentures in an account separate from the Collateral Account. A holder of
Separate Debentures electing to have its Separate Debentures remarketed will
also have the right to withdraw such election by written notice to the Custodial
Agent, substantially in the form of Exhibit D hereto, on or prior to the
Business Day immediately preceding the Remarketing Date and any Subsequent
Remarketing Date, upon which notice the Custodial Agent will return such
Separate Debentures to such holder. On the Business Day immediately preceding
the Remarketing Date and any Subsequent Remarketing Date, the Custodial Agent
will deliver to the Remarketing Agent for remarketing all Separate Debentures
delivered to the Custodial Agent pursuant to this Section 4.5(c) and not
withdrawn pursuant to the terms hereof prior to such date. The portion of the
proceeds from such remarketing equal to the amount calculated in respect of such
Separate Debentures as set forth in Section 5.4(b) of the Purchase Contract
Agreement will automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of such Separate Debentures. In
addition, after deducting as the remarketing fee an amount not exceeding 25
basis points (.25%) of the total proceeds of such remarketing, the Remarketing
Agent will remit to the Custodial Agent the remaining portion of the proceeds,
if any, for the benefit of such holders. If, despite using its reasonable best
efforts, the Remarketing Agent advises the Custodial Agent in writing that there
has been a Failed Remarketing, the Remarketing Agent will promptly return such
Debentures to the Custodial Agent for redelivery to such holders.

                                      -13-
<PAGE>

                                  ARTICLE V

                          VOTING RIGHTS -- DEBENTURES

     SECTION 5.1    Exercise by Purchase Contract Agent.

     The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged
Debentures or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Debentures; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Debentures, including notice of any meeting at which holders of
Debentures are entitled to vote or solicitation of consents, waivers or proxies
of holders of Debentures, the Collateral Agent shall use reasonable efforts to
send promptly to the Purchase Contract Agent such notice or communication, and
as soon as reasonably practicable after receipt of a written request therefor
from the Purchase Contract Agent, execute and deliver to the Purchase Contract
Agent such proxies and other instruments in respect of such Pledged Debentures
(in form and substance satisfactory to the Collateral Agent) as are prepared by
the Purchase Contract Agent with respect to the Pledged Debentures.

                                  ARTICLE VI

                              RIGHTS AND REMEDIES

     SECTION 6.1    Rights and Remedies of the Collateral Agent.

     (a)  In addition to the rights and remedies available at law or in equity,
after an event of default hereunder, the Collateral Agent shall have all of the
rights and remedies with respect to the Collateral of a secured party under the
Uniform Commercial Code (or any successor thereto) as in effect in the State of
New York from time to time (the "Code") (whether or not the Code is in effect in
the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the foregoing, such remedies
may include, to the extent permitted by applicable law, (i) retention of the
Pledged Debentures or other Collateral in full satisfaction of the Holders'
obligations under the Purchase Contracts or

                                      -14-
<PAGE>

(ii) sale of the Pledged Debentures or other Collateral in one or more public or
private sales at the written direction of the Company.

     (b)  Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of any Pledged Treasury Consideration
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Units of which such Pledged Treasury
Consideration or Pledged Treasury Securities, as applicable, is a part under the
related Purchase Contracts, the inability to make such payments shall constitute
an event of default hereunder and the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Securities or such Pledged
Treasury Consideration, as applicable, and such obligations of such Holder, any
and all of the rights and remedies available to a secured party under the Code
and the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.

     (c)  Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of,
or interest on, the Pledged Debentures, or (ii) the principal amount of the
Pledged Treasury Consideration or Pledged Treasury Securities, subject, in each
case, to the provisions of Article III, and as otherwise granted herein.

     (d)  The Purchase Contract Agent, individually and as attorney-in-fact for
each Holder of Units, agrees that, from time to time, upon the written request
of the Company or the Collateral Agent (acting upon the written request of the
Company), the Purchase Contract Agent or such Holder shall execute and deliver
such further documents and do such other acts and things as the Company or the
Collateral Agent (acting upon the written request of the Company) may reasonably
request in order to maintain the Pledge, and the perfection and priority
thereof, and to confirm the rights of the Collateral Agent hereunder. The
Purchase Contract Agent shall have no liability to any Holder for executing any
documents or taking any such acts requested by the Company or the Collateral
Agent (acting upon the written request of the Company) hereunder, except for
liability for its own negligent act, its own negligent failure to act, its bad
faith or its own willful misconduct.

     SECTION 6.2    Substitutions.

     Whenever a Holder has the right to substitute Treasury Securities,
Debentures or Treasury Consideration, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.

                                      -15-
<PAGE>

                                  ARTICLE VII

                   REPRESENTATIONS AND WARRANTIES; COVENANTS

     SECTION 7.1    Representations and Warranties.

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:

     (a)  such Holder has the power to grant a security interest in and lien on
the Collateral;

     (b)  such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1;

     (c)  upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2); and

     (d)  the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Section 2.1 or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.

     SECTION 7.2    Covenants.

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:

     (a)  neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other

                                      -16-
<PAGE>

security interest whatsoever over the Collateral or any part of it other than
pursuant to this Agreement; and

     (b)    neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Units.

                                 ARTICLE VIII

                             THE COLLATERAL AGENT

     SECTION 8.1    Appointment, Powers and Immunities.

     (a)    The Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary:

     (i)    shall have no duties or responsibilities except those expressly set
            forth in this Agreement and no implied covenants or obligations
            shall be inferred from this Agreement against any of them, nor shall
            any of them be bound by the provisions of any agreement by any party
            hereto beyond the specific terms hereof;

     (ii)   shall not be responsible for any recitals contained in this
            Agreement, or in any certificate or other document referred to or
            provided for in, or received by it under, this Agreement, the Units
            or the Purchase Contract Agreement, or for the value, validity,
            effectiveness, genuineness, enforceability or sufficiency of this
            Agreement (other than as against the Collateral Agent), the Units or
            the Purchase Contract Agreement or any other document referred to or
            provided for herein or therein or for any failure by the Company or
            any other Person (except the Collateral Agent, the Custodial Agent
            or the Securities Intermediary, as the case may be) to perform any
            of its obligations hereunder or thereunder or for the perfection,
            priority or, except as expressly required hereby, existence,
            validity, perfection or maintenance of any security interest created
            hereunder;

     (iii)  shall not be required to initiate or conduct any litigation or
            collection proceedings hereunder (except in the case of the
            Collateral Agent, pursuant to directions furnished under Section
            8.2, subject to Section 8.6);

     (iv)   shall not be responsible for any action taken or omitted to be taken
            by it hereunder or under any other document or instrument referred
            to or

                                      -17-
<PAGE>

          provided for herein or in connection herewith or therewith, except
          for its own negligence, bad faith or willful misconduct; and

     (v)  shall not be required to advise any party as to selling or retaining,
          or taking or refraining from taking any action with respect to, the
          Units or other property deposited hereunder.

Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

     (b)  No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the value of
the Collateral or for any special, indirect, individual, consequential damages
or lost profits or loss of business, arising in connection with this Agreement.
Notwithstanding the foregoing, the Collateral Agent, the Custodial Agent, the
Purchase Contract Agent and Securities Intermediary, each in its individual
capacity, hereby waive any right of setoff, bankers lien, liens or perfection
rights as securities intermediary or any counterclaim with respect to any of the
Collateral.

     (c)  The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral
Agent, Custodial Agent and Securities Intermediary shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; wars; civil or military disturbances; sabotage;
epidemics; riots; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications service; accidents; labor disputes;
acts of civil or military authority; governmental actions; or inability to
obtain labor, material, equipment or transportation.

     SECTION 8.2    Instructions of the Company.

     The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each

                                      -18-
<PAGE>

receive indemnity reasonably satisfactory to it as provided herein. Nothing in
this Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.

     SECTION 8.3    Reliance.

     Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled conclusively to rely upon any certification, order,
judgment, opinion, notice or other communication (including, without limitation,
any thereof by telephone or facsimile) reasonably believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons (without being required to determine the correctness of any fact
stated therein), and upon advice and statements of legal counsel and other
experts selected by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be. As to any matters not expressly provided for
by this Agreement, the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall in all cases be fully protected in acting, or in refraining
from acting, hereunder in accordance with instructions given by the Company in
accordance with this Agreement.

     SECTION 8.4    Rights in Other Capacities.

     The Collateral Agent, the Custodial Agent and the Securities Intermediary
and their affiliates may (without having to account therefor to the Company)
accept deposits from, lend money to, make their investments in and generally
engage in any kind of banking, trust or other business with the Purchase
Contract Agent, any Holder of Units and any holder of Separate Debentures (and
any of their respective subsidiaries or affiliates) as if it were not acting as
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent, any Holder of Units or any holder of Separate
Debentures without having to account for the same to the Company; provided that
each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent covenants and agrees with the Company that it shall not accept, receive or
permit there to be created in favor of itself (and waives any right of set-off
or banker's lien with respect to) and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
not be commingled with any other assets of any such Person.

     SECTION 8.5    Non-Reliance on Collateral Agent.

     None of the Securities Intermediary, the Custodial Agent or the Collateral
Agent shall be required to keep itself informed as to the performance or
observance by the Purchase Contract Agent or any Holder of Units of this
Agreement, the Purchase Contract Agreement, the Units or any other document
referred to or provided for herein

                                      -19-
<PAGE>

or therein or to inspect the properties or books of the Purchase Contract Agent
or any Holder of Units. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information concerning
the affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Units or any holder of Separate Debentures (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.

     SECTION 8.6    Compensation and Indemnity.

     The Company agrees:

     (a)  to pay each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by each
of them hereunder and

     (b)  to indemnify the Collateral Agent, the Custodial Agent and the
Securities Intermediary for, and to hold each of them harmless from and against,
any loss, liability or reasonable out-of-pocket expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of its powers and duties under
this Agreement, including the reasonable out-of-pocket costs and expenses
(including reasonable fees and expenses of counsel) of defending itself against
any claim or liability in connection with the exercise or performance of such
powers and duties or collecting such amounts. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each promptly notify the
Company of any third party claim which may give rise to the indemnity hereunder
and give the Company the opportunity to participate in the defense of such claim
with counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent shall
not be unreasonably withheld.

     SECTION 8.7    Failure to Act.

     In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent, at
its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent, Custodial Agent nor
the Securities Intermediary shall be or become liable in any way to any of the
parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent, Custodial Agent and the
Securities Intermediary shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by

                                      -20-
<PAGE>

agreement between the conflicting parties as evidenced in a writing, reasonably
satisfactory to the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, or (ii) the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, shall have received
security or an indemnity reasonably satisfactory to the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, sufficient
to save the Collateral Agent, Custodial Agent or the Securities Intermediary, as
the case may be, harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent, Custodial Agent or
the Securities Intermediary, as the case may be, may incur by reason of its
acting without bad faith, willful misconduct or negligence. The Collateral
Agent, Custodial Agent or the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent, Custodial Agent or the Securities Intermediary, as the case
may be, may deem necessary. Notwithstanding anything contained herein to the
contrary, neither the Collateral Agent, Custodial Agent nor the Securities
Intermediary shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.

         SECTION 8.8 Resignation.

         Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as provided below, (a) the
Collateral Agent, Custodial Agent and the Securities Intermediary may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Units, (b) the Collateral Agent,
Custodial Agent and the Securities Intermediary may be removed at any time by
the Company and (c) if the Collateral Agent, Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent, Custodial Agent or the Securities Intermediary
may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or such removal, then the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, may at the Company's expense petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. Each of the Collateral
Agent, Custodial Agent and the Securities Intermediary shall be a bank which has
an office in New York, New York with a combined capital and surplus of at least
$50,000,000. Upon the acceptance of any

                                      -21-
<PAGE>

appointment as Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, hereunder by a successor Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, such successor shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, and the retiring Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, shall take all appropriate action
to transfer any money and property held by it hereunder (including the
Collateral) to such successor. The retiring Collateral Agent, Custodial Agent or
Securities Intermediary shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent, Custodial Agent or Securities
Intermediary hereunder. After any retiring Collateral Agent's, Custodial Agent's
or Securities Intermediary's resignation hereunder as Collateral Agent,
Custodial Agent or Securities Intermediary, the provisions of this Section 8.8
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent, Custodial
Agent or Securities Intermediary. Any resignation or removal of the Collateral
Agent hereunder shall be deemed for all purposes of this Agreement as the
simultaneous resignation or removal of the Custodial Agent and the Securities
Intermediary hereunder.

         SECTION 8.9   Right to Appoint Agent or Advisor.

         The Collateral Agent shall have the right to appoint agents or advisors
in connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith. The appointment of agents
(other than legal counsel) pursuant to this Section 8.9 shall be subject to
prior consent of the Company, which consent shall not be unreasonably withheld.

         SECTION 8.10  Survival.

         The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.

         SECTION 8.11  Exculpation.

         Anything in this Agreement to the contrary notwithstanding, in no event
shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to negligence, bad faith or
willful misconduct on the part of the Collateral Agent, the Custodial Agent or
the Securities Intermediary.

                                      -22-
<PAGE>

                                  ARTICLE IX

                                   Amendment

         SECTION 9.1  Amendment Without Consent of Holders.

         Without the consent of any Holders or the holders of any Separate
Debentures, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:

         (i)      to evidence the succession of another Person to the Company,
                  and the assumption by any such successor of the covenants of
                  the Company; or

         (ii)     to add to the covenants of the Company for the benefit of the
                  Holders, or to surrender any right or power herein conferred
                  upon the Company so long as such covenants or such surrender
                  do not adversely affect the validity, perfection or priority
                  of the security interests granted or created hereunder; or

         (iii)    to evidence and provide for the acceptance of appointment
                  hereunder by a successor Collateral Agent, Securities
                  Intermediary or Purchase Contract Agent; or

         (iv)     to cure any ambiguity, to correct or supplement any provisions
                  herein which may be inconsistent with any other such
                  provisions herein, or to make any other provisions with
                  respect to such matters or questions arising under this
                  Agreement, provided such action shall not adversely affect the
                  interests of the Holders.

         SECTION 9.2  Amendment with Consent of Holders.

         With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, when duly authorized, the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the Units; provided,
however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Unit adversely affected thereby,

         (i)  change the amount or type of Collateral underlying a Unit (except
              for the rights of holders of Normal Units to substitute the
              Treasury Securities for the Pledged Debentures or the Pledged
              Treasury Consideration, as the case

                                      -23-
<PAGE>

              may be, or the rights of Holders of Stripped Units to substitute
              Debentures or the appropriate Treasury Consideration, as
              applicable, for the Pledged Treasury Securities), impair the right
              of the Holder of any Unit to receive distributions on the
              underlying Collateral or otherwise adversely affect the Holder's
              rights in or to such Collateral; or

     (ii)     otherwise effect any action that would require the consent of the
              Holder of each Outstanding Unit affected thereby pursuant to the
              Purchase Contract Agreement if such action were effected by an
              agreement supplemental thereto; or

     (iii)    reduce the percentage of Purchase Contracts the consent of whose
              Holders is required for any such amendment.

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

     SECTION 9.3  Execution of Amendments.

     In executing any amendment permitted by this Section, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent
shall receive and (subject to Section 6.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied and, in the case of an
amendment pursuant to Section 9.1, that such amendment does not adversely affect
the validity, perfection or priority of the security interests granted or
created hereunder.

     SECTION 9.4  Effect of Amendments.

     Upon the execution of any amendment under this Article IX, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.

     SECTION 9.5  Reference to Amendments.

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent and the Collateral Agent as to
any matter provided for in such amendment. If the Company shall so determine,
new Certificates so modified as to

                                      -24-
<PAGE>

conform, in the opinion of the Collateral Agent, the Purchase Contract Agent and
the Company, to any such amendment may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent in accordance with the Purchase Contract Agreement in
exchange for outstanding Certificates.

                                   ARTICLE X

                                 MISCELLANEOUS

         SECTION 10.1  No Waiver.

         No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by any party hereto or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.

         SECTION 10.2  GOVERNING LAW.

         THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS
OF LAWS. Without limiting the foregoing, the above choice of law is expressly
agreed to by the Securities Intermediary, the Collateral Agent, the Custodial
Agent and the Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, in connection with the establishment and
maintenance of the Collateral Account, which law, for purposes of the Code,
shall be deemed to be the law governing all security entitlements related
thereto. In addition, such parties agree that, for purposes of the Code, New
York shall be the Securities Intermediary's jurisdiction. The Company, the
Collateral Agent and the Holders from time to time of the Units, acting through
the Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent and the Holders from time to time of the Units, acting through the
Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.

         SECTION 10.3  Notices.

         Unless otherwise stated herein, all notices, requests, consents and
other communications provided for herein (including, without limitation, any
modifications of,

                                      -25-
<PAGE>

or waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be designated by such
party in a notice to the other parties. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
personally delivered or, in the case of a mailed notice or notice transmitted by
telecopier, upon receipt, in each case given or addressed as aforesaid.

         SECTION 10.4  Successors and Assigns.

         This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Units, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.

         SECTION 10.5  Counterparts.

         This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.

          SECTION 10.6 Severability.

         If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

         SECTION 10.7  Expenses, Etc.

         The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:

         (a) all reasonable out-of-pocket costs and all reasonable expenses of
the Collateral Agent, the Custodial Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent, the Custodial Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;

                                      -26-
<PAGE>

     (b) all reasonable costs and expenses of the Collateral Agent (including,
without limitation, reasonable fees and expenses of counsel) in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Units to satisfy its obligations under the Purchase
Contracts forming a part of the Units and (ii) the enforcement of this Section
10.7; and

     (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.

     SECTION 10.8  Security Interest Absolute.

     All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:

     (a) any lack of validity or enforceability of any provision of the Purchase
Contracts or the Units or any other agreement or instrument relating thereto;

     (b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Units under the related Purchase Contracts, or any other amendment or
waiver of any term of, or any consent to any departure from any requirement of,
the Purchase Contract Agreement or any Purchase Contract or any other agreement
or instrument relating thereto; or

     (c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.

     SECTION 10.9 Waiver of Jury Trial.

     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                      -27-
<PAGE>

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

                                     ANTHEM, INC.

                                     By:________________________________________
                                        Name:
                                        Title:

                                     Address for Notices:

                                     Anthem, Inc.
                                     120 Monument Circle
                                     Indianapolis, Indiana 46204
                                     Attention:  ____________
                                     Telecopy: (317) ___-____

                                     ______________________, as
                                     Purchase Contract Agent and as
                                     attorney-in-fact of the Holders
                                     from time to time of the
                                     Units

                                     By:________________________________________
                                        Name:
                                        Title:

                                     Address for Notices:

                                     _________________________
                                     _________________________
                                     _________________________
                                     Attention:  ____________________
                                     Telecopy:   ____________________

                                     ____________, as Collateral Agent,
                                     Custodial Agent and Securities Intermediary

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

                                      -28-
<PAGE>

                                     Address for Notices:

                                     _____________________________
                                     _____________________________
                                     _____________________________
                                     Attention: __________________
                                     Telecopy:  __________________

                                      -29-
<PAGE>

                                   EXHIBIT A

                      INSTRUCTION FROM PURCHASE CONTRACT
                           AGENT TO COLLATERAL AGENT

____________________________
____________________________
____________________________
Attention: _________________

              Re:   Equity Security Units of Anthem, Inc. (the "Company")
                    ----------------------------------------------------

         We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of ___, 2001, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$_____
aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______
aggregate principal amount of Debentures or $_____ aggregate principal amount of
Treasury Consideration (CUSIP No. _____)] in exchange for the related [Pledged
Debentures or Pledged Treasury Consideration] [Pledged Treasury Securities] held
by you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Debentures or the
Treasury Consideration] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Debentures or
Pledged Treasury Consideration], to release the [Debentures or the Treasury
Consideration] [Treasury Securities] related to such [Normal Units] [Stripped
Units] to us in accordance with the Holder's instructions. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

Date:  _____________________

                                      By: ______________________
                                          Name:
                                          Title:

                                      A-1
<PAGE>

Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or Treasury Consideration] for the [Pledged
Debentures or the Pledged Treasury Consideration] [Pledged Treasury Securities]:

Name:                                   Social Security or other Taxpayer
                                        Identification Number, if any:
Address:

                                      A-2
<PAGE>

                                   EXHIBIT B

                    INSTRUCTION TO PURCHASE CONTRACT AGENT

____________________________
____________________________
____________________________
Attention: _________________

                  Re:  Equity Security Units of Anthem, Inc. (the "Company")
                       -----------------------------------------------------

         The undersigned Holder hereby notifies you that it has delivered to
_________, as Collateral Agent, [$_______ aggregate principal amount of Treasury
Securities (CUSIP No. _____)] [$_______ aggregate principal amount of Debentures
or $_____ principal amount of Treasury Consideration (CUSIP No. _____)] in
exchange for the related [Pledged Debentures or Pledged Treasury Consideration]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated_________, 2001 (the "Pledge
Agreement"), between you, the Company and the Collateral Agent. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to release to you
on behalf of the undersigned Holder the [Pledged Debentures or the Pledged
Treasury Consideration] [Pledged Treasury Securities] related to such [Normal
Units] [Stripped Units]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.

Date:  ___________________           Signature:_______________________________

                                     Signature Guarantee:  ___________________

Please print name and address of Registered Holder:

Name:                                       Social Security or other Taxpayer
                                            Identification Number, if any:
Address:

                                      B-1
<PAGE>

                                   EXHIBIT C

             INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

_____________________________
_____________________________
_____________________________
Attention: __________________

                Re:  Debentures of Anthem, Inc. (the "Company")
                     ------------------------------------------

         The undersigned hereby notifies you in accordance with Section 4.5(c)
of the Pledge Agreement, dated as of ___, 2001 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and ___________________, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Normal Units and Stripped Units from time to
time, that the undersigned elects to deliver $__________ aggregate principal
amount of Debentures for delivery to the Remarketing Agent on the fourth
Business Day immediately preceding the Remarketing Date or any Subsequent
Remarketing Date for remarketing pursuant to Section 4.5(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Debentures tendered hereby.

         The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of Failed Remarketing, upon receipt of the Debentures tendered herewith
from the Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."

         With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Debentures tendered hereby and that the undersigned is the record
owner of any Debentures tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Debentures
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms

                                      C-1
<PAGE>

and conditions of Section 4.5(c) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.

Date:  _______________
                                            Signature:__________________________

                                            Signature Guarantee:

Name:                                       Social Security or other Taxpayer
                                            Identification Number, if any:

Address:

A.  PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

Name(s):  ________________________________
          (Please Print)

Address:  ________________________________
          (Please Print)

          (Zip Code)

(Tax Identification or Social Security Number):

                                      C-2
<PAGE>

B.  DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.

Name(s):  ________________________________
          (Please Print)

Address:  ________________________________
          (Please Print)

          (Zip Code)

(Tax Identification or Social Security Number):

In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party:                                 DTC Account Number:

                                      C-3
<PAGE>

                                   EXHIBIT D

                   INSTRUCTION TO CUSTODIAL AGENT REGARDING
                          WITHDRAWAL FROM REMARKETING

_____________________________
_____________________________
_____________________________
Attention: __________________

                Re:  Debentures of Anthem, Inc. (the "Company")
                     ------------------------------------------

         The undersigned hereby notifies you in accordance with Section 4.5(c)
of the Pledge Agreement, dated as of ___, 2001 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and _____________________, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Normal Units and Stripped Units from time to
time, that the undersigned elects to withdraw the $_____ aggregate principal
amount of Debentures delivered to the Custodial Agent on ___________, 2004 for
remarketing pursuant to Section 4.5(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Debentures to the undersigned in accordance
with the undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.5(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.

Date: _______________
                                            Signature:__________________________

                                            Signature Guarantee:

Name:                                       Social Security or other Taxpayer
                                            Identification Number, if any:

Address:

                                      D-1
<PAGE>

A.  DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.

Name(s):  ________________________________
          (Please Print)

Address:  ________________________________
          (Please Print)

          (Zip Code)

(Tax Identification or Social Security Number):

In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party:                                  DTC Account Number:

                                      D-2<PAGE>
                                                                 EXHIBIT 10.11.4

                                 AMENDMENT NO. 5
                                       TO
                         POOLING AND SERVICING AGREEMENT

         This AMENDMENT NO. 5 (this "AMENDMENT"), dated as of September 4, 2001,
to the POOLING AND SERVICING AGREEMENT, dated as of February 12, 1997 (the
"POOLING AND SERVICING AGREEMENT"), as amended by Amendment No. 1, dated as of
May 30, 1997, Amendment No. 2, dated as of October 29, 1997, Amendment No. 3,
dated as of January 13, 1998, and Amendment No. 4, dated as of March 30, 2001
(the Pooling and Servicing Agreement as amended is hereinafter referred to as
the "AGREEMENT") by and among PIER 1 FUNDING, L.L.C., a Delaware limited
liability company (f/k/a Pier 1 Funding, Inc., a Delaware corporation), as
transferor (hereinafter, together with its successors and assigns, in such
capacity, referred to as the "TRANSFEROR"), PIER 1 IMPORTS (U.S.), INC., as
servicer (hereinafter, together with its successors and assigns, in such
capacity, referred to as the "Servicer"), and Wells Fargo Bank Minnesota,
NATIONAL ASSOCIATION (successor to The Chase Manhattan Bank, successor by merger
to Chase Bank of Texas National Association, f/k/a Texas Commerce Bank, National
Association, and hereinafter, together with its successors and assigns, in such
capacity, referred to as the "TRUSTEE").

                                   WITNESSETH:

         WHEREAS, the Transferor, Servicer and Trustee have entered into the
Agreement and desire to amend further the Agreement as hereinafter provided;

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the parties hereto agree as follows:

         SECTION 1. Defined Terms.

         "Effective Date" shall mean September 4, 2001.

         Unless otherwise defined herein, the terms used herein shall have the
meanings assigned to such terms in, or incorporated by reference into, the
Agreement.

         SECTION 2. Amendments to the Agreement.

         This Agreement is hereby amended, effective on the Effective Date, as
follows:

                  a. Section 1.1 of the Agreement shall be amended by deleting
the definitions of "Cash Equivalent," "Credit Card Agreement," "Credit Card
Originator," and "Receivables Purchase Agreement" in their entirety and by
replacing such defined terms with the following:

                  "Cash Equivalent" shall mean book-entry securities, negotiable
         instruments or securities represented by instruments in bearer or
         registered form which evidence, the maturity dates of which shall not
         be later than the expected distribution dates of the funds:

<PAGE>

         (i)      direct obligations of, and obligations fully guaranteed as to
                  timely payment of principal and interest by, the United States
                  of America, or any agency or instrumentality of the United
                  States of America the obligations of which are backed by the
                  full faith and Credit of the United States of America;

         (ii)     demand deposits, time deposits or certificates of deposit
                  (having original maturities of no more than 365 days) of
                  depository institutions or trust companies incorporated under
                  the laws of the United States of America or any state thereof
                  (or domestic branches of foreign banks), having a combined
                  capital and surplus of at least $100,000,000, and subject to
                  supervision and examination by federal and/or state banking or
                  depository institution authorities; provided that at the time
                  of the Trust's investment or contractual commitment to invest
                  therein, the short-term debt obligations of such depository
                  institution or trust company shall have the highest short-term
                  credit ratings available from both Moody's and Standard &
                  Poor's;

         (iii)    commercial paper (including both non-interest bearing discount
                  obligations and interest-bearing obligations) payable on
                  demand or on a specified date not more than 270 days after the
                  date of issuance thereof having the highest unsecured
                  short-term credit ratings from both Moody's and Standard &
                  Poor's, at the time of such investment;

         (iv)     demand deposits, time deposits and certificates of deposit
                  which are fully insured by the FDIC, with a Person the
                  commercial paper of which has the highest short-term credit
                  ratings available from both Moody's and Standard & Poor's;

         (v)      notes or bankers' acceptances (having maturities of no more
                  than 365 days) issued by any depository institution or trust
                  company referred to in (ii) above;

         (vi)     time deposits, other than as referred to in clause (iv) above,
                  with a Person the commercial paper of which has the highest
                  short-term credit ratings available from both Moody's and
                  Standard & Poor's;

         (vii)    investments in money market funds which have a credit rating
                  from both Moody's and Standard & Poor's in its highest
                  investment category and which shall invest only in Cash
                  Equivalents described in clauses (i) through (vi) of this
                  definition; provided, however, that any such investments would
                  not cause the Trust to become an "investment company" within
                  the meaning of the Investment Company Act;

         (viii)   repurchase obligations with respect to and collateralized by
                  any security described in clause (i) above entered into with a
                  depository institution or trust company (acting as principal)
                  of the type described in clause (ii) above; provided that the
                  Trustee has taken delivery of such security;

<PAGE>

         (ix)     any other relatively risk-free investments (excluding options)
                  approved in writing by each Rating Agency which would not
                  cause the Trust to become an "investment company" within the
                  meaning of the Investment Company Act.

         The Trustee may purchase from or sell to itself or an affiliate on
arm's-length terms, as principal or agent, the Cash Equivalents as listed above.
All Cash Equivalents shall be made in the name of the Trustee for the benefit of
the Certificateholders.

                  "Credit Card Agreement" shall mean the agreements between the
         Credit Card Originator of a "Pier 1 Charge Account" and "Cargo Charge
         Account" (as each such term is defined in its respective agreement),
         which owns such accounts and the related Obligor, governing the terms
         and conditions of such accounts, as such agreements may be amended,
         modified or otherwise changed from time to time and as distributed
         (including any amendments and revisions thereto) to such Obligors. An
         example of a Credit Card Agreement is attached as Exhibit F.

                  "Credit Card Originator" shall mean Pier 1 National Bank, a
         national banking association, and its successors and assigns and/or any
         other originator of Accounts.

                  "Receivables Purchase Agreement" shall mean (i) the
         Receivables Purchase Agreement, dated as of February 12, 1997, between
         Pier 1 and the Transferor, as may be amended, supplemented or otherwise
         modified, and (ii) any receivables purchase agreement between a
         transferor of the Accounts other than Pier 1 and the Transferor,
         substantially in the form of the receivables purchase agreement
         referred to in clause (i) above.

                  b. Section 1.1 of the Agreement shall be amended by inserting
the following defined terms in the applicable alphabetical order:

                  "Cargo" shall mean New Cargo Furniture, Inc., a Delaware
         corporation and Affiliate of Pier 1.

                  "Pier 1 National Bank" shall mean Pier 1 National Bank, a
         national banking association and Affiliate of Pier 1.

                  "Standard & Poor's" shall mean Standard & Poor's, a division
         of the McGraw-Hill Companies.

                  c. Section 1.1 of the Agreement shall be amended by deleting
the first sentence of each of the following definitions in its entirety and
replacing such sentence with the following:

                  "Account" shall mean an open end credit card account
         established pursuant to a "Pier 1 Charge Account" or "Cargo Charge
         Account" (as each such term is defined in its respective Credit Card
         Agreement), owned by the Credit Card Originator and specifically
         including each Initial Account, each Automatic Additional Account and
         each Supplemental Account, but shall exclude any Account all the
         Receivables in which are either reassigned or assigned to the
         Transferor or its designee or the Servicer in

<PAGE>

         accordance with the terms of this Agreement and any inactive Accounts
         which in accordance with the Credit Card Guidelines have been removed
         from the active computer records of the Credit Card Originator.

                  "Eligible Account" shall mean an open end credit card account
         established pursuant to a "Pier 1 Charge Account" or "Cargo Charge
         Account" (as each such term is defined in its respective Credit Card
         Agreement), owned by the Credit Card Originator which as of the Trust
         Cut-Off Date with respect to an Initial Account, on the date of
         creation thereof with respect to an Automatic Additional Account, or as
         of the related Addition Cut-Off Date with respect to a Supplemental
         Account, (a) payable in United States dollars, (b) has not been
         identified by the Credit Card Originator in its computer files as an
         account as to which the Credit Card Originator or the Servicer has any
         confirmed record of either (I) any fraud-related activity by the
         Obligor on such account, (II) any involvement of such account in a
         voluntary or involuntary bankruptcy proceeding, or (III) lost or stolen
         credit cards related to such account, (c) which has not been sold or
         pledged to any other party and which does not have Receivables which
         have been sold or pledged to any other party, (d) which was created in
         accordance with the credit and collection policies of the Credit Card
         Originator at the time of creation of such account or the Receivables
         in which each Rating Agency permits to be added automatically to the
         Trust, (e) the Receivables in which the Credit Card Originator has not
         charged off in its customary and usual manner for charging off
         Receivables in such Accounts as of the Closing Date (or, with respect
         to Supplemental Accounts as of the Addition Date and with respect to
         Automatic Additional Accounts, as of the date the Receivables of such
         Accounts are designated for inclusion in the Trust unless such Account
         is subsequently reinstated) and (f) which is not an Automatic
         Additional Account designated by the Transferor to be included as an
         Account after the Aggregate Addition Limit has been exceeded (unless
         the Rating Agencies shall have consented to the inclusion of such
         Automatic Additional Account as an Eligible Account).

                  d. Section 2.1 of the Agreement shall be amended by deleting
the last paragraph thereof in its entirety and by replacing it with the
following:

                  The Transferor hereby grants and transfers to the Trust, for
         the benefit of the Certificateholders, a security interest in all of
         the Transferor's right, title and interest in, to and under the
         Receivables and all other Trust Assets, to secure a loan in an amount
         equal to the unpaid principal amount of the Investor Certificates
         issued hereunder or to be issued pursuant to this Agreement, all
         interest accrued thereon and all other amount accrued or payable with
         respect thereto hereunder or under the applicable Supplement, and
         agrees that this Agreement shall constitute a security agreement under
         applicable law.

                  e. Section 3.4(b)(i) of the Agreement shall be amended by
deleting it in its entirety and by replacing it with the following:

                           (i) On each Business Day the Servicer shall prepare a
         completed Daily Report in a form which shall be mutually agreed upon by
         the Trustee or its agent, the Servicer and any other Person specified
         in any Supplement.

<PAGE>

                  f. Section 3.4(b)(ii) of the Agreement shall be amended by
deleting the parenthetical in lines 2 and 3 of this Section in its entirety.

                  g. Section 3.6(a) of the Agreement shall be amended by
deleting it in its entirety and by replacing it with the following:

                           Section 3.6. Servicing Report of Independent Public
         Accountants; Copies of Reports Available. (a) On or before the 120th
         day following the end of every second Transferor Fiscal Year (i.e.,
         twenty-four (24) month period), beginning with the Transferor Fiscal
         Year ending in calendar year 2000, the Servicer shall cause a firm of
         nationally recognized independent public accountants (who may also
         render other services to the Servicer or the Transferor) to furnish a
         report (addressed to the Trustee) to the Trustee and the Servicer to
         the effect that they have applied certain procedures agreed upon with
         the Servicer and examined certain documents relating to the servicing
         of Accounts under this Agreement and each Supplement and that, on the
         basis of such agreed upon procedures, such firm is of the opinion that
         the Servicer's assertion regarding the effectiveness of the internal
         control structure in effect on the date of such statement is fairly
         presented, or if the Servicer shall cause such report to be prepared
         during each Transferor Fiscal Year, then the Servicer shall deliver a
         report to the Trustee within thirty (30) days of receiving it. Such
         report shall set forth the agreed upon procedures performed. Any
         findings or exceptions, except for such exceptions believed to be
         immaterial as a result of the performance of such procedures, shall be
         set forth in such report. A copy of such report shall be delivered to
         each Investor Certificateholder by the Servicer and to each Enhancement
         Provider, if any, entitled thereto pursuant to the relevant Supplement.
         Notwithstanding anything in this Section 3.6(a) to the contrary, the
         Trustee shall, upon reasonable request to Servicer and no more than
         once each Transferor Fiscal Year, be entitled to examine the internal
         control structure and any documents related thereto in order to verify
         the Servicer's assertion regarding its effectiveness.

                  h. Section 9.1(a) of the Agreement shall be amended by
deleting it in its entirety and replacing it with the following:

                  (a) Pier 1, the Transferor, Pier 1 National Bank or any Holder
         of the Exchangeable Transferor Certificate shall fail generally to, or
         admit in writing its inability to, pay its debts as they become due or
         make an assignment for the benefit of its creditors; or a proceeding
         shall have been instituted in a court having jurisdiction in the
         premises seeking a decree or order for relief in respect of Pier 1, the
         Transferor, Pier 1 National Bank or any Holder of the Exchangeable
         Transferor Certificate in an involuntary case under any debtor Relief
         Law, or for the appointment of a receiver, liquidator, assignee,
         trustee, custodian, sequestrator, conservator or other similar official
         of such Person or for any substantial part of its property, or for the
         winding-up or liquidation, dissolution, reorganization or readjustment
         of its affairs or similar relief and, if instituted against the
         Transferor or any Holder of the Exchangeable Transferor Certificate
         (other than Pier 1 or Pier 1 National Bank), any such proceeding shall
         continue undismissed or unstayed and in effect, for a period of sixty
         (60) consecutive days, or any of the actions sought in such proceeding
         shall occur; or the commencement by Pier 1, the Transferor, Pier 1
         National Bank or any Holder of the Exchangeable Transferor Certificate,
         of a voluntary case under any Debtor Relief Law, or such Person
         seeking, consenting or acquiescing to the entry of an order for relief
         in an involuntary case under any Debtor Relief Law, or seeking,
         consenting or acquiescing to the

<PAGE>

         appointment of or taking possession by a receiver, liquidator,
         assignee, trustee, custodian, sequestrator, conservator or other
         similar official of such Person or for any substantial part of its
         property, or any general assignment for the benefit of creditors; or
         such Person or any Subsidiary of such Person shall have taken any
         corporate action in furtherance of any of the foregoing actions (any
         such event, an "Insolvency Event");

                  i. Section 10.1 of the Agreement shall be amended by deleting
the first five (5) lines of the fifth paragraph following subsection (d),
beginning with the word "then" and ending with the word "Servicer" before the
parenthetical in the fifth line, and replacing such material with the following:

                  . . . then, in the event of any Servicer Default, so long as
         the Servicer Default shall not have been remedied, either the Trustee
         at the direction of the Holders of Investor Certificates evidencing
         more than 50% of the aggregate unpaid principal amount of all Investor
         Certificates or such Holders themselves, by notice given to the
         Servicer (. . . .

         SECTION 3. Execution in Counterparts.

         This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Amendment.

         SECTION 4. Consents; Binding Effect.

         The execution and delivery by the Transferor, the Servicer and the
Trustee of this Amendment shall constitute the written consent of each of them,
as required by Section 13.1 of the Agreement, to this Amendment.

         On the Effective Date, this Amendment shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
assigns.

         SECTION 5. Governing Law.

         This Amendment shall be governed by and construed in accordance with
the laws of the State of New York.

         SECTION 6.  Severability of Provisions.

         Any provision of this Amendment which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceabilty without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

         SECTION 7. Captions.

         The captions in this Amendment are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.

<PAGE>

         SECTION 8. Agreement to Remain in Full Force and Effect.

         Except as amended hereby, the Agreement shall remain in full force and
effect and is hereby ratified, adopted and confirmed in all respects. This
Amendment shall be deemed to be an amendment to the Agreement. All references in
the Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
like import, and all references to the Agreement in any other agreement or
document shall be deemed to refer to the Agreement as amended hereby.

         IN WITNESS WHEROF, the parties hereto have caused this Amendment to be
executed as of the Effective Date.

                  TRANSFEROR:               PIER 1 FUNDING, L.L.C.,
                                            a Delaware limited liability company

                                                By:  /s/ J. RODNEY LAWRENCE
                                                    ---------------------------
                                                    J. Rodney Lawrence,
                                                    Senior Vice President

                  SERVICER:                 PIER 1 IMPORTS (U.S.), INC.,
                                            a Delaware corporation

                                            By:  /s/ J. RODNEY LAWRENCE
                                                --------------------------------
                                                J. Rodney Lawrence, Senior Vice
                                                President

                  TRUSTEE:                  WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION, as Trustee

                                            By:  /s/ SUE DIGNAN
                                                --------------------------------
                                                Sue Dignan
                                                Corporate Trust Officer

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