Document:

<PAGE>

                                                                     Exhibit 4.3

                            DOMINION RESOURCES, INC.
                                     Issuer

                                       TO

                            THE CHASE MANHATTAN BANK
                                    Trustee

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

                          Third Supplemental Indenture

                            Dated as of July 1, 2000

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

                                  $400,000,000

                       2000 Series C 7.600% Senior Notes,

                               due July 15, 2003
<PAGE>

                               TABLE OF CONTENTS/1/

                                   ARTICLE I
                       2000 SERIES C 7.600% SENIOR NOTES
<TABLE>
<CAPTION>

<S>                  <C>                                                  <C>
     SECTION 101.    Establishment.......................................  2
     SECTION 102.    Definitions.........................................  2
     SECTION 103.    Payment of Principal and Interest...................  2
     SECTION 104.    Denominations.......................................  2
     SECTION 105.    Global Securities...................................  2
     SECTION 106.    Redemption..........................................  2
     SECTION 107.    Sinking Fund........................................  2
     SECTION 108.    Additional Interest.................................  2
     SECTION 109.    Paying Agent........................................  2
     SECTION 110.    Limitation on Liens.................................  2

                                   ARTICLE II
                            MISCELLANEOUS PROVISIONS

     SECTION 201.    Recitals by Company.................................  2
     SECTION 202.    Ratification and Incorporation of Original Indenture  2
     SECTION 203.    Executed in Counterparts............................  2
     SECTION 204.    Assignment..........................................  2

</TABLE>

________________________
     /1/ This Table of Contents does not constitute part of the Indenture or
have any bearing upon the interpretation of any of its terms and provisions.
<PAGE>

     THIS THIRD SUPPLEMENTAL INDENTURE is made as of the first day of July,
2000, by and between DOMINION RESOURCES, INC., a Virginia corporation, having
its principal office at 120 Tredegar Street, Richmond, Virginia 23219 (the
"Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as
Trustee (herein called the "Trustee").

                              W I T N E S S E T H:

     WHEREAS, the Company has heretofore entered into a Senior Indenture, dated
as of June 1, 2000 (the "Original Indenture") and a First Supplemental Indenture
dated as of June 1, 2000 (the "First Supplemental Indenture"), with the Trustee;

     WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as supplemented by the First Supplemental Indenture,
a Second Supplemental Indenture dated as of the date hereof, and this Third
Supplemental Indenture, is herein called the "Indenture";

     WHEREAS, under the Original Indenture, a new series of Securities may at
any time be established in accordance with the provisions of the Original
Indenture and the terms of such series may be described by a supplemental
indenture executed by the Company and the Trustee;

     WHEREAS, the Company proposes to create under the Indenture a series of
Securities;

     WHEREAS, additional Securities of other series hereafter established,
except as may be limited in the Original Indenture as at the time supplemented
and modified, may be issued from time to time pursuant to the Indenture as at
the time supplemented and modified; and

     WHEREAS, all conditions necessary to authorize the execution and delivery
of this Third Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.

     NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

                                   ARTICLE I

                       2000 SERIES C 7.600% SENIOR NOTES

SECTION 101.      Establishment. There is hereby established a new series of
                  -------------
Securities to be issued under the Indenture, to be designated as the Company's
2000 Series C 7.600% Senior Notes, due July 15, 2003 (the "Series C Senior
Notes").

     There are to be initially authenticated and delivered $400,000,000
principal amount of Series C Senior Notes.  Additional Series C Senior Notes
without limitation as to amount, and without the consent of the Holders of the
then Outstanding Series C Senior Notes, may also be authenticated and delivered
in the manner provided in Section 303 of the Original Indenture.
<PAGE>

Any such additional Series C Senior Notes will have the same interest rate,
maturity and other terms as those initially issued. Further Series C Senior
Notes may be also authenticated and delivered as provided by Sections 304, 305,
306, 905 or 1107 of the Original Indenture.

     The Series C Senior Notes shall be issued in definitive fully registered
form without coupons, in substantially the form set out in Exhibit A hereto.
                                                           ---------
The entire initially issued principal amount of the Series C Senior Notes shall
initially be evidenced by one or more certificates issued to Cede & Co., as
nominee for The Depository Trust Company.

     The form of the Trustee's Certificate of Authentication for the Series C
Senior Notes shall be in substantially the form set forth in Exhibit B hereto.
                                                             ---------

     Each Series C Senior Note shall be dated the date of authentication thereof
and shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.

SECTION 102.  Definitions.
              -----------

   The following defined terms used herein shall, unless the context otherwise
requires, have the meanings specified below.  Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the
Original Indenture.

      "Adjusted Treasury Rate" means, with respect to any Redemption Date: (i)
the yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month); or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.

     "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a
day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office is closed for business.

     "Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Series C Senior Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Series C Senior Notes ("Remaining Life").

                                       2
<PAGE>

     "Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.

     "Independent Investment Banker" means any of Banc of America Securities
LLC, Chase Securities Inc. or Lehman Brothers Inc. and their respective
successors as selected by the Company, or if all of such firms are unwilling or
unable to serve as such, an independent investment and banking institution of
national standing appointed by the Company.

     "Interest Payment Dates" means January 15 and July 15 of each year,
commencing on January 15, 2001.

     "Lien" means any mortgage, lien, pledge, security interest or other
encumbrance of any kind.

     "Material Subsidiary" means a Subsidiary of the Company whose total assets
(as determined in accordance with GAAP) represent at least 20% of the total
assets of the Company on a consolidated basis; provided, however, that in no
event shall Dominion Capital, Inc. be included as a Material Subsidiary.

     "Original Issue Date" means July 13, 2000.

     "Outstanding", when used with respect to the Series C Senior Notes, means,
as of the date of determination, all Series C Senior Notes, theretofore
authenticated and delivered under the Indenture, except:

          (i) Series C Senior Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;

          (ii) Series C Senior Notes for whose payment at Maturity the necessary
amount of money or money's worth has been theretofore deposited (other than
pursuant to Section 402) with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Series C
Senior Notes.

          (iii)  Series C Senior Notes with respect to which the Company has
effected defeasance or covenant defeasance has been effected pursuant to Section
402 of the Original Indenture; and

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

                                       3
<PAGE>

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Series C Senior Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or are
present at a meeting of Holders of Series C Senior Notes for quorum purposes,
Series C Senior Notes owned by the Company or any other obligor upon the Series
C Senior Notes or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making any such determination or
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Series C Senior Notes which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded.  Series C Senior Notes so owned
which shall have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee (A) the pledgee's
right so to act with respect to such Series C Senior Notes and (B) that the
pledgee is not the Company or any other obligor upon the Series C Senior Notes
or an Affiliate of the Company or such other obligor.

     "Principal Property" means any plant or facility of the Company located in
the United States that in the opinion of the Board of Directors or management of
the Company is of material importance to the business conducted by the Company
and its consolidated Subsidiaries taken as whole.

      "Reference Treasury Dealer" means:  (i) each of Banc of America Securities
LLC, Chase Securities Inc. and Lehman Brothers Inc., and their respective
successors; provided that, if any of the foregoing ceases to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute another Primary Treasury Dealer; and (ii) up to two
other Primary Treasury Dealers selected by the Company.

      "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date.

     "Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the 15th calendar day preceding such Interest Payment
Date.

     "Stated Maturity" means July 15, 2003.

SECTION 103.    Payment of Principal and Interest. The principal of the Series C
Senior Notes shall be due at the Stated Maturity (unless earlier redeemed). The
unpaid principal amount of the Series C Senior Notes shall bear interest at the
rate of 7.600% per annum until paid or duly provided for, such interest to
accrue from the Original Issue Date or from the most recent Interest Payment
Date to which interest has been paid or duly provided for. Interest shall be
paid semi-annually in arrears on each Interest Payment Date to the Person in
whose name the Series C Senior Notes are registered on the Regular Record Date
for such Interest Payment Date; provided that interest payable at the Stated
Maturity of principal or on a Redemption Date as provided herein will be paid to
the Person to whom principal is payable. Any such interest that is not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holders

                                       4
<PAGE>

on such Regular Record Date and may either be paid to the Person or Persons in
whose name the Series C Senior Notes are registered at the close of business on
a Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee (in accordance with Section 307 of the Original Indenture), notice
whereof shall be given to Holders of the Series C Senior Notes not less than ten
(10) days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange,
if any, on which the Series C Senior Notes may be listed, and upon such notice
as may be required by any such exchange, all as more fully provided in the
Original Indenture.

     Payments of interest on the Series C Senior Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series C Senior Notes shall be computed and paid on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series C Senior Notes is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or payment in respect of
any such delay), in each case with the same force and effect as if made on the
date the payment was originally payable.

     Payment of the principal and interest on the Series C Senior Notes shall be
made at the office of the Paying Agent in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, with any such payment that is due at the Stated
Maturity of any Series C Senior Notes or on a Redemption Date being made upon
surrender of such Series C Senior Notes to the Paying Agent. Payments of
interest (including interest on any Interest Payment Date) will be made, subject
to such surrender where applicable, at the option of the Company, (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer at such place and to
such account at a banking institution in the United States as may be designated
in writing to the Trustee at least sixteen (16) days prior to the date for
payment by the Person entitled thereto.  In the event that any date on which
principal and interest is payable on the Series C Senior Notes is not a Business
Day, then payment of the principal and interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or payment in respect of any such delay), in each case with the same force and
effect as if made on the date the payment was originally payable.

SECTION 104.  Denominations.
              -------------
    The Series C Senior Notes may be issued in denominations of $1,000, or any
integral multiple thereof.

SECTION 105.  Global Securities . The Series C Senior Notes will be issued
initially in the form of one or more Global Securities registered in the name of
the Depositary (which shall be The Depository Trust Company) or its nominee.
Except under the limited circumstances described below, Series C Senior Notes
represented by such Global Securities will not be exchangeable for, and will not
otherwise be issuable as, Series C Senior Notes in definitive form. The Global
Securities described above may not be transferred except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or to a successor Depositary or its nominee.

                                       5
<PAGE>

     Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series C Senior Note shall be exchangeable,
except for another Global Security of like denomination and tenor to be
registered in the name of the Depositary or its nominee or to a successor
Depositary or its nominee or except as described below. The rights of Holders of
such Global Security shall be exercised only through the Depositary.

     A Global Security shall be exchangeable for Series C Senior Notes
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a Depositary for such Global Security and no successor Depositary
shall have been appointed by the Company within 90 days of receipt by the
Company of such notification, or if at any time the Depositary ceases to be a
clearing agency registered under the Exchange Act at a time when the Depositary
is required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Company within 90 days after it
becomes aware of such cessation, or (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable.  Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series C Senior Notes registered in such names as the
Depositary shall direct.

     SECTION 106.  Redemption.  The Series C Senior Notes are redeemable, in
                   ----------
whole or in part, at any time, and at the option of the Company, at a Redemption
Price equal to the greater of:

      (i)  100% of the principal amount of Series C Senior Notes then
Outstanding to be so redeemed, or

      (ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued as of the Redemption Date) discounted to the Redemption Date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus ten basis points, as calculated by an
Independent Investment Banker,

     plus, in either of the above cases, accrued and unpaid interest thereon to
the Redemption Date.

     Unless the Company defaults in the payment of the Redemption Price, on and
after the Redemption Date, interest will cease to accrue on the Series C Senior
Notes or portions thereof called for redemption.

     The Adjusted Treasury Rate shall be calculated on the third Business Day
preceding the Redemption Date.

     In the event of the redemption of the Series C Senior Notes in part only, a
new Series C Senior Note or Notes for the unredeemed portion will be issued in
the name or names of the Holders thereof upon surrender thereof.

                                       6
<PAGE>

     Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.

     SECTION 107.  Sinking Fund  The Series C Senior Notes shall not have a
                   ------------
 sinking fund.

     SECTION 108.  Additional Interest Any principal of and installment of
                   -------------------
interest on the Series C Senior Notes that is overdue shall bear interest at the
rate of 7.600% (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand.

     SECTION 109.  Paying Agent.  The Trustee shall initially serve as Paying
                   ------------
Agent with respect to the Series C Senior Notes, with the Place of Payment
initially being the Corporate Trust Office of the Trustee.

     SECTION 110.  Limitation on Liens.  The Company will not, while any of the
                   -------------------
Series C Senior Notes remain Outstanding, create, or suffer to be created or to
exist, any Lien upon any Principal Property of the Company or upon any shares of
stock of any Material Subsidiary of the Company, whether such Principal Property
is, or shares of stock are, now owned or hereafter acquired, to secure any
indebtedness for borrowed money of the Company, unless it shall make effective
provision whereby the Series C Senior Notes then Outstanding shall be secured by
such Lien equally and ratably with any and all indebtedness for borrowed money
thereby secured so long as any such indebtedness shall be so secured; provided,
however, that nothing in this Section shall be construed to prevent the Company
from creating, or from suffering to be created or to exist, any Liens, or any
agreements, with respect to:

     (1)  purchase money mortgages, or other purchase money liens, pledges,
          security interests or encumbrances of any kind upon property hereafter
          acquired by the Company, or Liens of any kind existing on any property
          or any shares of stock at the time of the acquisition thereof
          (including Liens which exist on any property or any shares of stock of
          a Person which is consolidated with or merged with or into the Company
          or which transfers or leases all or substantially all of its
          properties to the Company), or conditional sales agreements or other
          title retention agreements and leases in the nature of title retention
          agreements with respect to any property hereafter acquired; provided,
          however, that no such Lien shall extend to or cover any other property
          of the Company;

     (2)  Liens upon any property of the Company or any shares of stock of any
          Material Subsidiary of the Company existing as of the date of the
          initial issuance of the Series C Senior Notes or upon the shares of
          stock of any corporation, which Liens existed at the time such
          corporation became a Material Subsidiary of the Company; liens for
          taxes or assessments or other governmental charges or levies; pledges
          to secure other governmental charges or levies; pledges or deposits to
          secure obligations under worker's compensation laws, unemployment
          insurance and other social security legislation, including liens of
          judgments thereunder

                                       7
<PAGE>

          which are not currently dischargeable; pledges or deposits to secure
          performance in connection with bids, tenders, contracts (other than
          contracts for the payment of money) or leases to which the Company is
          a party; pledges or deposits to secure public or statutory obligations
          of the Company; builders', materialmen's, mechanics', carriers',
          warehousemen's, workers', repairmen's, operators', landlords' or other
          like liens in the ordinary course of business, or deposits to obtain
          the release of such liens; pledges or deposits to secure, or in lieu
          of, surety, stay, appeal, indemnity, customs, performance or
          return-of-money bonds; other pledges or deposits for similar purposes
          in the ordinary course of business; liens created by or resulting from
          any litigation or proceeding which at the time is being contested in
          good faith by appropriate proceedings; liens incurred in connection
          with the issuance of bankers' acceptances and lines of credit,
          bankers' liens or rights of offset and any security given in the
          ordinary course of business to banks or others to secure any
          indebtedness payable on demand or maturing within 12 months of the
          date that such indebtedness is originally incurred; liens incurred in
          connection with repurchase, swap or other similar agreements
          (including, without limitation, commodity price, currency exchange and
          interest rate protection agreements); leases made, or existing on
          property acquired, in the ordinary course of business; liens securing
          industrial revenue or pollution control bonds; liens, pledges,
          security interests or other encumbrances on any property arising in
          connection with any defeasance, covenant defeasance or in-substance
          defeasance of indebtedness of the Company, including the Series C
          Senior Notes; liens created in connection with, and created to secure,
          a non-recourse obligation; zoning restrictions, easements, licenses,
          rights-of-way, restrictions on the use of property or minor
          irregularities in title thereto, which do not, in the opinion of the
          Company, materially impair the use of such property in the operation
          of the business of the Company or the value of such property for the
          purpose of such business;

     (3)  Liens in favor of the United States, any foreign country or any
          department, agency or instrumentality or political subdivision of any
          such jurisdiction, to secure partial, progress, advance or other
          payments pursuant to any contract or statute or to secure any
          indebtedness incurred for the purpose of financing all or any part of
          the purchase price or the cost of constructing or improving the
          property subject to such mortgages, including, without limitation,
          mortgages to secure indebtedness of the pollution control or
          industrial revenue bond type;

     (4)  indebtedness which may be issued by the Company in connection with a
          consolidation or merger of the Company or any Material Subsidiary of
          the Company with or into any other Person (which may be an Affiliate
          of the Company or any Material Subsidiary of the Company) in exchange
          for or otherwise in substitution for secured indebtedness of such
          Person ("Third Party Debt") which by its terms (i) is secured by a
          mortgage on all or a portion of the property of such Person, (ii)
          prohibits secured indebtedness from being incurred by such Person,
          unless the Third Party Debt shall be secured equally and ratably with
          such secured indebtedness or (iii) prohibits secured indebtedness from
          being incurred by such Person;

                                       8
<PAGE>

     (5)  indebtedness of any Person which is required to be assumed by the
          Company in connection with a consolidation or merger of such Person,
          with respect to which any property of the Company is subjected to a
          Lien;

     (6)  Liens of any kind upon any property acquired, constructed, developed
          or improved by the Company (whether alone or in association with
          others) after the date of the initial issuance of the Series C Senior
          Notes which are created prior to, at the time of, or within 18 months
          after such acquisition (or in the case of property constructed,
          developed or improved, after the completion of such construction,
          development or improvement and commencement of full commercial
          operation of such property, whichever is later) to secure or provide
          for the payment of any part of the purchase price or cost thereof;
          provided that in the case of such construction, development or
          improvement the Liens shall not apply to any property theretofore
          owned by the Company other than theretofore unimproved real property;

     (7)  Liens in favor of the Company, one or more Material Subsidiaries of
          the Company, one or more wholly-owned Subsidiaries of the Company or
          any of the foregoing in combination;

     (8)  the replacement, extension or renewal (or successive replacements,
          extensions or renewals), as a whole or in part, of any Lien, or of any
          agreement, referred to above in clauses (1) through (7) inclusive, or
          the replacement, extension or renewal (not exceeding the principal
          amount of indebtedness secured thereby together with any premium,
          interest, fee or expense payable in connection with any such
          replacement, extension or renewal) of the indebtedness secured
          thereby; provided that such replacement, extension or renewal is
          limited to all or a part of the same property that secured the Lien
          replaced, extended or renewed (plus improvements thereon or additions
          or accessions thereto); or

     (9)  any other Lien not excepted by the foregoing clauses (1) through (8);
          provided that immediately after the creation or assumption of such
          Lien, the aggregate principal amount of indebtedness for borrowed
          money of the Company secured by all Liens created or assumed under the
          provisions of this clause (9) shall not exceed an amount equal to 10%
          of the common shareholders' equity of the Company, as shown on its
          consolidated balance sheet for the accounting period occurring
          immediately prior to the creation or assumption of such Lien.

     This Section 110 has been included in this Third Supplemental Indenture
expressly and solely for the benefit of the Series C Senior Notes and shall be
subject to covenant defeasance pursuant to Section 402(3) of the Original
Indenture.

                                       9
<PAGE>

                                  ARTICLE II
                           MISCELLANEOUS PROVISIONS

     SECTION 201.  Recitals by Company. The recitals in this Third Supplemental
                   -------------------
Indenture are made by the Company only and not by the Trustee, and all of the
provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of the Series C Senior Notes and of this Third Supplemental Indenture as
fully and with like effect as if set forth herein in full.

     SECTION 202.  Ratification and Incorporation of Original Indenture.  As
                   ----------------------------------------------------
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Third Supplemental Indenture
shall be read, taken and construed as one and the same instrument.

     SECTION 203.  Executed in Counterparts.  This Supplemental Indenture may be
                   ------------------------
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.

     SECTION 204.  Assignment.  The Company shall have the right at all times to
                   ----------
assign any of its rights or obligations under the Indenture with respect to the
Series C Senior Notes to a direct or indirect wholly-owned subsidiary of the
Company; provided that, in the event of any such assignment, the Company shall
remain primarily liable for the performance of all such obligations. The
Indenture may also be assigned by the Company in connection with a transaction
described in Article Eight of the Original Indenture.

                                       10
<PAGE>

     IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officer, all as of the day
and year first above written.

                                       DOMINION RESOURCES, INC.

                                        By:___________________________________

                                        Name:_________________________________

                                        Title:________________________________

                                        THE CHASE MANHATTAN BANK, as Trustee

                                        By:____________________________________

                                        Name:__________________________________

                                        Title:_________________________________

                                       11
<PAGE>

                                   EXHIBIT A

                                    FORM OF
                       2000 SERIES C 7.600% SENIOR NOTE,
                               DUE JULY 15, 2003

     [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO [CEDE & CO.], ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, [CEDE & CO.,] HAS AN INTEREST HEREIN.]**

     [THIS SERIES C SENIOR NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF.  THIS SERIES C SENIOR NOTE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SERIES C SENIOR
NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH  DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.]/**/

                         ============================
                           DOMINION RESOURCES, INC.
                         ============================

                                $_____________
                       2000 SERIES C 7.600% SENIOR NOTE,
                               DUE JULY 15, 2003

No. ___                                                CUSIP No. ___

     Dominion Resources, Inc., a corporation duly organized and existing under
the laws of Virginia (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [Cede & Co.] **, or registered assigns (the
"Holder"), the principal sum of ____________ Dollars ($_____) on July 15, 2003
and to pay interest thereon from July 13, 2000 or from the most recent Interest

-----------------------------
** Insert in Global Securities.
<PAGE>

Payment Date to which interest has been paid or duly provided for, semi-annually
on January 15 and July 15 in each year, commencing on January 15, 2001, at the
rate of 7.600% per annum, until the principal hereof is paid or made available
for payment, provided that any principal, and any such installment of interest,
that is overdue shall bear interest at the rate of 7.600% per annum (to the
extent that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Series C
Senior Note (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the
fifteenth calendar day (whether or not a Business Day) next preceding such
Interest Payment Date; provided that interest payable at the Stated Maturity of
principal or on a Redemption Date will be paid to the Person to whom principal
is payable.  Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Series C Senior Note (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Series C Senior Notes not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Series C Senior Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.

     Payment of the principal of and any such interest on this Series C Senior
Note will be made at the office of the Paying Agent, in the Borough of
Manhattan, City and State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, with any such payment that is due at the Stated
Maturity of any Series C Senior Note or on a Redemption Date being made upon
surrender of such Series C Senior Note to such office or agency; provided,
however, that at the option of the Company payment of interest, subject to such
surrender where applicable, may be made (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least sixteen (16) days prior to the date for payment by the Person entitled
thereto.

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

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

                                       2
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:                                       Dominion Resources, Inc.

                                             By: ______________________________

                                                 Name: ________________________

                                                 Title: _______________________

                       [REVERSE OF SERIES C SENIOR NOTE]

     This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of June 1, 2000, as supplemented by a First
Supplemental Indenture dated as of June 1, 2000, a Second Supplemental Indenture
dated as of July 1, 2000 and a Third Supplemental Indenture dated as of July 1,
2000 (as amended or supplemented from time to time, herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.  This
Security is one of the series designated on the face hereof (the "Series C
Senior Notes") which is unlimited in aggregate principal amount.

     The Series C Senior Notes are redeemable, in whole or in part, at any time,
in the manner and with the effect provided in the Indenture.

     If an Event of Default with respect to Series C Senior Notes shall occur
and be continuing, the principal of the Series C Senior Notes may be declared
due and payable in the manner and with the effect provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected.  The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive certain past defaults under
the Indenture and their consequences.  Any such consent or waiver by the Holder
of this Series C Senior Note shall be conclusive and binding upon such

                                       3
<PAGE>

Holder and upon all future Holders of this Series C Senior Note and of any
Series C Senior Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Series C Senior Note.

     As provided in and subject to the provisions of the Indenture, the Holder
of this Series C Senior Note shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or
trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Series C Senior Notes, the Holders of not less than a
majority in principal amount of the Series C Senior Notes at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in principal amount of Series C Senior Notes at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding for 60 days after receipt of such notice, request
and offer of indemnity.  The foregoing shall not apply to any suit instituted by
the Holder of this Series C Senior Note for the enforcement of any payment of
principal hereof or premium, if any, or interest hereon on or after the
respective due dates expressed or provided for herein.

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

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Series C Senior Note is registrable in the Security
Register, upon surrender of this Series C Senior Note for registration of
transfer at the office or agency of the Company in any place where the principal
of, premium, if any, and interest on this Series C Senior Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Series C Senior Notes and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

     The Series C Senior Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.  As
provided in the Indenture and subject to certain limitations therein set forth,
Series C Senior Notes are exchangeable for a like aggregate principal amount of
Series C Senior Notes having the same Stated Maturity and of like tenor of any
authorized denominations as requested by the Holder upon surrender of the Series
C Senior Note or Series C Senior Notes to be exchanged at the office or agency
of the Company.

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

                                       4
<PAGE>

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

     All terms used in this Series C Senior Note that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                                       5
<PAGE>

                                 ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM --                 as tenants in common

TEN ENT --                 as tenants by the entireties

JT TEN --                  as joint tenants with rights of survivorship and not
                           as tenants in common

UNIF GIFT MIN ACT --       __________________________________________ Custodian
                           for
                           (Cust)

                           __________________________________________
                           (Minor)

                           Under Uniform Gifts to Minors Act of

                           __________________________________________
                           (State)

Additional abbreviations may also be used though not on the above list.
______________________________________________________________

     FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
____________________ (please insert Social Security or other identifying number
of assignee).

______________________________________________________________
______________________________________________________________
______________________________________________________________

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE

the within Series C Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing

______________________________________________________________
______________________________________________________________
______________________________________________________________

                                       6
<PAGE>

______________________________________________________________
______________________________________________________________
______________________________________________________________

agent to transfer said Series C Senior Note on the books of the Company, with
full power of substitution in the premises.

Dated: __________________ __, ____

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

NOTICE:  The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.

                                       7
<PAGE>

                                   EXHIBIT B
                         CERTIFICATE OF AUTHENTICATION

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

                                             THE CHASE MANHATTAN BANK,
                                             as Trustee

                                             By: _____________________________
                                                 Authorized Officer

                                       8<PAGE>

                                                                    Exhibit 10.1

SpeechWorks International, Inc. has omitted from this Exhibit 10.1 portions of
the Agreement for which SpeechWorks International, Inc. has requested
confidential treatment from the Securities and Exchange Commission. The portions
of the Agreement for which confidential treatment has been requested have been
filed separately with the Securities and Exchange Commission.

                     MASSACHUSETTS INSTITUTE OF TECHNOLOGY

                         APPLIED LANGUAGE TECHNOLOGIES

                                LICENSE AGREEMENT

                     (NONEXCLUSIVE FOR UNPATENTED SOFTWARE)

                                 August 3, 1994

                                       -i-

<PAGE>

                                TABLE OF CONTENTS

WITNESSETH ................................................................... 1
DEFINITIONS .................................................................. 2
GRANT ........................................................................ 3
DUE DILIGENCE ................................................................ 3
ROYALTIES .................................................................... 4
REPORTS AND RECORDS .......................................................... 4
COPYRIGHT .................................................................... 5
DELIVERY OF MATERIALS ........................................................ 6
INFRINGEMENT ................................................................. 6
PRODUCT LIABILITY ............................................................ 6
EXPORT CONTROLS .............................................................. 7
NON-USE OF NAMES ............................................................. 8
ASSIGNMENT ................................................................... 8
DISPUTE RESOLUTION ........................................................... 8
TERMINATION .................................................................. 9
PAYMENTS, NOTICES AND COMMUNICATIONS .........................................10
MISCELLANEOUS PROVISIONS .....................................................10
APPENDIX A ...................................................................12

                                      -ii-

<PAGE>

                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY

                          APPLIED LANGUAGE TECHNOLOGIES

                                    AGREEMENT

      This Agreement is made and entered into this 4th day of August , 1994 (the
"Effective Date") by and between MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 77 Massachusetts Avenue,
Cambridge, Massachusetts 02139, U.S.A. (hereinafter referred to as "M.I.T."),
and APPLIED LANGUAGE TECHNOLOGIES, a corporation duly organized under the laws
of Massachusetts and having its principal office at One Kendall Square, Suite
2200 Cambridge, Massachusetts 02139 (hereinafter referred to as "LICENSEE").

                                   WITNESSETH

      WHEREAS, M.I.T. is the owner of certain right, title and interest in the
PROGRAM (as later defined herein) subject only to a royalty-free, nonexclusive
license rights of the United States Government pursuant to Title 35 United
States Code Sections 200 through 204 and has the right to grant licenses
thereunder;

      WHEREAS, M.I.T. desires to have the PROGRAM developed and commercialized
to benefit the public and is willing to grant a license thereunder;

      WHEREAS, LICENSEE has represented to M.I.T. that LICENSEE shall commit
itself to a thorough, vigorous and diligent program of exploiting the PROGRAM so
that public utilization shall result therefrom; and

      WHEREAS, LICENSEE desires to obtain a license under the PROGRAM upon the
terms and conditions hereinafter set forth.

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

                                      -1-
<PAGE>

                                 1 - DEFINITIONS

      For the purposes of this Agreement, the following words and phrases shall
have the following meanings:

      1.1 "LICENSEE" shall include a related company of Applied Language
Technologies.

      1.2 "PROGRAM" shall mean the computer software and related documentation
as described in Appendix A.

      1.3 "DERIVATIVE" shall mean LICENSEE-created computer software which
includes, or is based in whole or in part on, the PROGRAM, including, but not
limited to, translations of the PROGRAM to other foreign or computer languages,
adaptation of the PROGRAM to other hardware platforms, abridgments,
condensations, revisions, and software incorporating all or any part of the
PROGRAM which may also include LICENSEE-created modification, enhancements or
other software. LICENSEE shall be entitled to establish all proprietary rights
for itself in the intellectual property represented by DERIVATIVES, whether in
the nature of trade secrets, copyrights, patents or other rights, subject to
COPYRIGHT(s); provided, however, LICENSEE shall promptly notify M.I.T. of
LICENSEE-originated bug fixes to the PROGRAM, which shall be owned by M.I.T. Any
copyright registration by LICENSEE for DERIVATIVES shall give full attribution
to M.I.T.'s COPYRIGHT(s).

      1.4 "LICENSED PRODUCT" shall mean the PROGRAM and/or any and all
DERIVATIVES.

      1.5 "END-USER" shall mean a customer authorized to use a single copy or
multiple copies of the LICENSED PRODUCT for internal purposes only and not for
further distribution.

      1.6 "COPYRIGHT(s)" shall mean M.I.T.'s copyrights in the PROGRAM.

      1.7 "INTELLECTUAL PROPERTY RIGHTS" shall mean the COPYRIGHT(s).

      1.8 "NET SALES" shall mean LICENSEE's and its SUBLICENSEES' billings for
LICENSED PRODUCTS produced hereunder, including license maintenance fees and
leases, but excluding any billings associated with funded development or
consulting contracts, less the sum of the following:

            a.    sales, tariff duties and/or use taxes directly imposed and
                  with reference to particular sales;

            b.    outbound transportation prepaid or allowed;

            c.    amounts allowed or credited on returns;

            d.    commissions; and

                                      -2-
<PAGE>

            e.    uncollectible amounts

      LICENSED PRODUCTS shall be considered "sold" when billed out or invoiced.

      1.9 "TERRITORY" shall mean worldwide.

      1.10 "FIELD OF USE" shall mean all fields.

                                    2 - GRANT

      2.1 M.I.T. hereby grants to LICENSEE the following rights and licenses in
the TERRITORY for the FIELD OF USE:

            a.    to use and reproduce the PROGRAM;

            b.    to create DERIVATIVES; and

            c.    to lease and sublicense LICENSED PRODUCTS to END-USERS through
                  the normal channels of distribution.

      2.2 The license granted hereunder shall be nonexclusive and shall extend
to the end of the term for which the COPYRIGHT(s) are issued, unless sooner
terminated as hereinafter provided.

      2.3 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United
States shall be manufactured substantially in the United States.

      2.4 The license granted hereunder shall not be construed to confer any
rights upon LICENSEE by implications estoppel or otherwise as to any
intellectual property not specifically licensed herein.

                                3 - DUE DILIGENCE

      3.1 LICENSEE shall use its best efforts to bring one or more LICENSED
PRODUCT(S) to market through thorough, vigorous and diligent efforts and to
continue active, diligent marketing efforts for one or more LICENSED PRODUCT(S)
throughout the life of this Agreement.

      3.2 In addition, LICENSEE shall adhere to the following milestones:

            a.    LICENSEE shall deliver to M.I.T., on or before September 1,
                  1994, a business plan showing the amount of money, number and
                  kind of personnel and time budgeted and planned for each phase
                  of development of the LICENSED PRODUCTS and shall provide
                  similar reports to M.I.T. on or before January 31 of each
                  year.

            b.    LICENSEE shall make a first commercial sale of a LICENSED
                  PRODUCT on or before [                ].

            c.    LICENSEE shall make NET SALES according to the following
                  schedule:

                  [    ]                               $[       ]

                                      -3-
<PAGE>

                  [       ]                           $[         ];

                  [       ]                           $[         ].

      3.3 LICENSEE's failure to perform in accordance with Articles 3.1 and 3.2
above shall be grounds for M.I.T. to terminate this Agreement pursuant to
Article 14.3 hereof.

                                  4 - ROYALTIES

      4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay royalties to M.I.T. in the manner hereinafter provided to the end of
the term of the COPYRIGHT(s) or until this Agreement shall be terminated:

            a.    Running Royalties in an amount equal to [ ] Percent ([  ]%) of
                  the first $[ ] of NET SALES, [ ] Percent ([  ]%) of the next
                  $[ ] of NET SALES, One Percent ([ ]%) of the next $[     ]
                  of NET SALES, and [                ] Percent ([   ]%) of all
                  NET SALES in excess of $[     ] If LICENSED PRODUCTS shall
                  be distributed for a discounted price substantially lower than
                  customary in the trade or distributed at no cost to affiliates
                  or otherwise, other than demonstration, evaluation or "Not for
                  Resale" software units, the royalty due shall be based on the
                  customary amount billed for such LICENSED PRODUCTS.

      4.2 All payments due hereunder shall be paid in full, without deduction of
taxes or other fees which may be imposed by any government and which shall be
paid by LICENSEE.

      4.3 Royalty payments shall be paid in United States dollars in Cambridge,
Massachusetts, or at such other place as M.I.T. may reasonably designate
consistent with the laws and regulations controlling in any foreign country. If
any currency conversion shall be required in connection with the payment of
royalties hereunder, such conversion shall be made by using the exchange rate
prevailing at the Chase Manhattan Bank (N.A.) on the last business day of the
calendar quarterly reporting period to which such royalty payments relate.

                             5 - REPORTS AND RECORDS

      5.1 LICENSEE shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose of showing the
amounts payable to M.I.T. hereunder. Said books of account shall be kept at
LICENSEE's principal place of business or the principal place of business of the
appropriate division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times for three (3) years
following the end of the calendar year to which they pertain, to the inspection
of M.I.T. or its agents for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement. Should such
inspection lead to the discovery of a greater than ten percent

                                      -4-
<PAGE>

(10%) discrepancy in reporting to M.I.T.'s detriment, LICENSEE agrees to pay the
full cost of such inspection.

      5.2 Before the first commercial sale of a LICENSED PRODUCT, LICENSEE shall
submit the reports due under Article 3.2(a) on January 31 of each year. After
the first commercial sale of a LICENSED PRODUCT, LICENSEE, within sixty (60)
days after March 31, June 30, September 30 and December 31, of each year, shall
deliver to M.I.T. true and accurate reports, giving such particulars of the
business conducted by LICENSEE and its SUBLICENSEES during the preceding
three-month period under this Agreement as shall be pertinent to a royalty
accounting hereunder. These shall include at least the following:

            a.    descriptions of LICENSED PRODUCTS and current price lists for
                  such;

            b.    number of LICENSED PRODUCTS distributed, leased and/or
                  sublicensed by or for LICENSEE;

            c.    total billings for LICENSED PRODUCTS distributed by LICENSEE;

            d.    accounting for NET SALES, noting the deductions applicable as
                  provided in Article 1.8;

            e.    Running Royalties due under Article 4.1(a); and

            f.    total royalties due.

      5.3 With each such report submitted, LICENSEE shall pay to M.I.T. the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.

      5.4 On or before the ninetieth (90th) day following the close of
LICENSEE's fiscal year, LICENSEE shall provide M.I.T. with LICENSEE's certified
financial statements for the preceding fiscal year including, at a minimum, a
Balance Sheet and an Operating Statement.

      5.5 The royalty payments set forth in this Agreement shall, if overdue,
bear interest until payment at a per annum rate two percent (2%) above the prime
rate in effect at the Chase Manhattan Bank (N.A.) on the due date. The payment
of such interest shall not foreclose M.I.T. from exercising any other rights it
may have as a consequence of the lateness of any payment.

                                  6 - COPYRIGHT

      LICENSEE acknowledges that title to the INTELLECTUAL PROPERTY RIGHTS shall
remain with M.I.T. and that any copies of the LICENSED PRODUCTS and related
documentation, or portions thereof, made by LICENSEE hereunder, shall include an
M.I.T. copyright notice thereon in either of the following forms: "Copyright
199__, Massachusetts Institute of Technology. All rights Reserved." or
"(C)199__, M.I.T. All Rights Reserved." The notice shall be affixed to all
copies or portions thereof in such manner and location as to give

                                      -5-
<PAGE>

reasonable notice of M.I.T.'s claim of copyright. LICENSEE shall at all times
hereafter protect the INTELLECTUAL PROPERTY RIGHTS, and all related technical
information, data and materials supplied by M.I.T., from transfer using measures
at least as strong as those used by LICENSEE in protecting its own proprietary
software.

                            7 - DELIVERY OF MATERIALS

      7.1 Upon execution of this Agreement, M.I.T. shall deliver to LICENSEE one
(1) copy of the PROGRAM and related documentation, if any.

      7.2 LICENSEE accepts the above materials on an "as is" basis. Accordingly,
M.I.T. shall not be required to load the PROGRAM onto LICENSEE's machines; test
for proper operation, perform any debugging; make any corrections; provide
maintenance; provide any updates, enhanced capabilities, or new features; or
assist in the understanding or use of the PROGRAM at any time. M.I.T. may, in
its sole discretion, at the request of LICENSEE provide on-site installation
assistance so long as LICENSEE shall bear the cost of all M.I.T.'s related
expenses.

                                8 - INFRINGEMENT

      8.1 LICENSEE shall inform M.I.T. promptly in writing of any alleged
infringement of the INTELLECTUAL PROPERTY RIGHTS by a third party and of any
available evidence thereof.

      8.2 During the term of this Agreement, M.I.T. shall have the right, but
shall not be obligated, to prosecute at its own expense all infringements of the
INTELLECTUAL PROPERTY RIGHTS and, in furtherance of such right, LICENSEE hereby
agrees that M.I.T. may include LICENSEE as a party plaintiff in any such suit,
without expense to LICENSEE. The total cost of any such infringement action
commenced or defended solely by M.I.T. shall be borne by M.I.T. and M.I.T. shall
keep any recovery or damages for past infringement derived therefrom.

                              9 - PRODUCT LIABILITY

      9.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold M.I.T., its trustees, directors,
officers, employees and affiliates, harmless against all claims, proceedings,
demands and liabilities of any kind whatsoever, including legal expenses and
reasonable attorneys' fees, arising out of the death of or injury to any person
or persons or out of any damage to property, or resulting from the productions
manufacture, sale, use, lease, consumption or advertisement of the LICENSED
PRODUCT(s) or arising from any obligation of LICENSEE hereunder, excepting only
claims that the INTELLECTUAL PROPERTY RIGHTS infringe third party intellectual
property.

                                      -6-
<PAGE>

      9.2 Prior to the first commercial sale of LICENSED PRODUCT, LICENSEE shall
obtain and carry in full force and effect commercial, general liability
insurance which shall protect LICENSEE and M.I.T. with respect to events covered
by Article 9.1 above. Such insurance shall be written by a reputable insurance
company authorized to do business in the Commonwealth of Massachusetts, shall
list M.I.T. as an additional named insured thereunder, shall be endorsed to
include product liability coverage and shall require thirty (30) days written
notice to be given to M.I.T. prior to any cancellation or material change
thereof. The limits of such insurance shall not be less than One Million Dollars
($1,000,000) per occurrence with an aggregate of Three Million Dollars
($3,000,000) for personal injury or death, and One Million Dollars ($1,000,000)
per occurrence with an aggregate of Three Million Dollars ($3,000,000) for
property damage. LICENSEE shall provide M.I.T. with Certificates of Insurance
evidencing the same.

      9.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T., ITS
TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS
AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
VALIDITY OF INTELLECTUAL PROPERTY RIGHTS, ISSUED OR PENDING, AND THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS AGREEMENT
SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY M.I.T. THAT THE
PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE
PATENT RIGHTS OF ANY THIRD PARTY. IN NO EVENT SHALL M.I.T., ITS TRUSTEES,
DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO
PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER M.I.T. SHALL BE ADVISED, SHALL
HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY.
FURTHERMORE, M.I.T. EXTENDS NO WARRANTIES OF ANY KIND AS TO PROGRAM CONFORMITY
WITH WHATEVER USER MANUALS OR OTHER LITERATURE MAY BE ISSUED FROM TIME TO TIME.

                              10 - EXPORT CONTROLS

      It is understood that M.I.T. is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United

                                      -7-
<PAGE>

States export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export
data or commodities to certain foreign countries without prior approval of such
agency. M.I.T. neither represents that a license shall not be required nor that,
if required, it shall be issued.

                              11 - NON-USE OF NAMES

      LICENSEE shall not use the names or trademarks of the Massachusetts
Institute of Technology or Lincoln Laboratory, nor any adaptation thereof, nor
the names of any of their employees, in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., or said employee,
in each case, except that LICENSEE may state that it is licensed by M.I.T. under
the INTELLECTUAL PROPERTY RIGHTS.

                                 12 - ASSIGNMENT

      This Agreement may not be assigned, except in the case of sale or transfer
of a substantial portion of the business of LICENSEE, to which this Agreement
relates. Such exception must include the prior written consent of M.I.T., which
shall not be unreasonably withheld, and the assignee or transferee must agree in
writing to M.I.T. to be bound by the terms and conditions hereof prior to such
assignment and transfer.

                             13 - DISPUTE RESOLUTION

      13.1 Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction, or
other equitable relief to preserve the status quo or prevent irreparable harm,
any and all claims, disputes or controversies arising under, out of, or in
connection with the Agreement, including any dispute relating to INTELLECTUAL
PROPERTY infringement, which the parties shall be unable to resolve within sixty
(60) days shall be mediated in good faith. The party raising such dispute shall
promptly advise the other party of such claim, dispute or controversy in a
writing which describes in reasonable detail the nature of such dispute. By not
later than five (5) business days after the recipient has received such notice
of dispute, each party shall have selected for itself a representative who shall
have the authority to bind such party, and shall additionally have advised the
other party in writing of the name and title of such representative. By not
later than ten (10) business days after the date of such notice of dispute, the
party against whom the dispute shall be raised shall select a mediation firm in
the Boston area, and such representatives shall schedule a date with such firm
for a mediation hearing. The parties shall enter into good faith mediation and
shall share the costs equally. If the representatives of the parties have not
been able to resolve the dispute within fifteen (15) business

                                      -8-
<PAGE>

days after such mediation hearing, the parties shall have the right to pursue
any other remedies legally available to resolve such dispute in either the
Courts of the Commonwealth of Massachusetts or in the United States District
Court for the District of Massachusetts, to whose jurisdiction for such purposes
M.I.T. and LICENSEE each hereby irrevocably consents and submits.

      13.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.

                                14 - TERMINATION

      14.1 If LICENSEE shall cease to carry on its business with respect to the
rights granted in this Agreement, this Agreement shall terminate upon notice by
M.I.T.

      14.2 Should LICENSEE fail to make any payment whatsoever due and payable
to M.I.T. hereunder, M.I.T. shall have the right to terminate this Agreement
effective on sixty (60) days' notice, unless LICENSEE shall make all such
payments to M.I.T. within said sixty (60) day period. Upon the expiration of the
sixty (60) day period, if LICENSEE shall not have made all such payments to
M.I.T., the rights, privileges and license granted hereunder shall automatically
terminate.

      14.3 Upon any material breach or default of this Agreement by LICENSEE
(including, but not limited to, breach or default under Article 3.3), other than
those occurrences set out in Articles 14.1 and 14.2 hereinabove, which shall
always take precedence in that order over any material breach or default
referred to in this Article 14.3, M.I.T. shall have the right to terminate this
Agreement and the rights, privileges and license granted hereunder effective on
ninety (90) days' notice to LICENSEE. Such termination shall become
automatically effective unless LICENSEE shall have cured any such material
breach or default prior to the expiration of the ninety (90) day period.

      14.4 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months' notice to M.I.T., and upon payment of all amounts due M.I.T.
through the effective date of the termination.

      14.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination; and Articles 1, 6, 9, 10, 11,
14.5, 14.6 and 16 shall survive any such termination. LICENSEE thereof may,
however, after the effective date of such termination, sell all LICENSED
PRODUCTS in inventory, provided that LICENSEE shall pay to M.I.T. the Running
Royalties thereon as required by Article 4 of this Agreement and shall submit
the reports required by Article 5 hereof.

      14.6 Upon termination of this Agreement for any reason:

                                      -9-
<PAGE>

of the law, such invalidity or unenforceability shall not in any way affect the
validity or enforceability of the remaining provisions hereof.

      16.4 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.

      IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.

MASSACHUSETTS INSTITUTE OF                     APPLIED LANGUAGE
TECHNOLOGY                                     TECHNOLOGIES

By /s/ Lita L. Nelsen                          By /s/ Michael S. Phillips
  -----------------------------------------      -------------------------

Name LITA L. NELSEN                            Name Michael S. Phillips
    ---------------------------------------        -----------------------

Title DIRECTOR, TECHNOLOGY LICENSING OFFICE    Title VP of Engineering
     --------------------------------------         ----------------------

Date Aug. 8, 1994                              Date August 4, 1994
    ---------------------------------------        -----------------------

                                      -11-
<PAGE>

                                   APPENDIX A

                             DESCRIPTION OF PROGRAM

ITEM 1

M.I.T. Case No. [     ]
Title: [     ]
By:    [     ]

      As described in the paper presented at the [     ].

      As described in the paper presented at the [     ].

      As described in the paper presented at the [     ].

      As described in the paper presented at the [     ].

ITEM 2

M.I.T. Case No. [     ]
Title  [     ]
By     [     ]

As described in the paper presented at the [     ].

As described in the paper published in Computational Linguistics, Vol. 18, No.
1, pages 61-86, March 1992, "TINA: A Natural Language System for Spoken Language
Applications" by S. Seneff.

                                      -12-
<PAGE>

As described in the paper presented at the [     ].

ITEM 3

Title: [     ]

As described in the paper presented at the [     ].

As described in the paper presented at the [     ].

As described in the paper presented at the [     ].

As described in the paper presented at the [     ].

                                      -13-
<PAGE>

                     FIRST AMENDMENT TO LICENSING AGREEMENT

This First Amendment to Licensing Agreement ("Amendment") is entered into this
11th day of August, 1995 by and between MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 77 Massachusetts Avenue,
Cambridge, Massachusetts 02139, U.S.A. (hereinafter referred to as "M.I.T."),
and Applied Language Technologies, Inc., a corporation duly organized and
existing under the laws of Massachusetts and having its principal office at 215
First St., Cambridge, MA 02142 (hereinafter referred to as "ALTech"), and
Applied Language Technologies, Inc.. a wholly owned subsidiary of ALTech and a
corporation duly organized under the laws of Delaware (hereinafter referred to
as "ALTech Delaware").

                                  WITNESSETH

WHEREAS, the parties have previously entered into a Licensing Agreement dated
August 3, 1994 (the "Agreement") pursuant to which M.I.T. licensed certain
rights to ALTech and ALTech agreed to pay certain royalties;

WHEREAS, ALTech desires to merge itself into ALTech Delaware for the purposes of
securing financing;

WHEREAS, ALTech and M.I.T. desire to amend the Agreement in order to assign the
Agreement to ALTech Delaware and make certain other changes to facilitate
consummation of ALTech's financing;

NOW, THEREFORE, the parties hereto agree as follows:

FIRST: M.I.T. hereby consents to allow ALTech to assign, and ALTech hereby
assigns, all of ALTech's rights, title and interests under the Agreement to
ALTech Delaware.

SECOND: ALTech Delaware hereby accepts such assignment and undertakes all of
ALTech's obligations under the Agreement.

THIRD: Article 3.2 of the Agreement shall be amended in its entirety to read as
follows:

            3.2. In addition. LICENSEE shall adhere to the following milestones:

            a. LICENSEE shall make NET SALES according to the following
            schedule:

                    [     ]                           [     ]

                    [     ]                           [     ]

                    [     ]                           [     ]
<PAGE>

FOURTH: Article 3.3 of the Agreement shall be amended in its entirety to read as
follows:
      3.3 LICENSEE's failure to perform in accordance with Article 3.2 above
      shall be grounds for M.I.T. to terminate this Agreement pursuant to
      Article 14.3 hereof; provided, however, that in any year in which LICENSEE
      has not met its minimum NET SALES requirements, as stated in Article 3.2,
      M.I.T. may not terminate this Agreement if LICENSEE shall have paid to
      M.I.T. for such year a [     ] equal to the [     ], calculated in
      accordance with Article 4.1, which would have been payable had LICENSEE
      achieved such minimum NET SALES (i.e. $[    ] in [    ], $[    ] in
      [     ], $[     ] in [     ], etc.). The following shall be credited
      against the [     ] for a year:
            (a) all [     ] actually paid with respect to such year,
            plus,
            (b) the amount of any. [     ] paid for previous years
            which exceeded the [     ] payable with respect to the
            minimum [     ] milestones set forth in Article 3.2 for such
            previous year(s) and which were not previously credited against the
            [     ] for a previous year, plus
            (c) any cash "makeup" payments made by LICENSEE to M.I.T. with
            respect to such year's [     ].
      The [     ] shall have been paid to MIT on or before sixty (60)
      days after December 31 of the year for which it is being determined.

FIFTH: Article 12 of the Agreement shall be amended in its entirety to read as
follows:
      This Agreement may not be assigned without the prior, written permission
      of M.I.T., except in the case of sale, merger, or other transfer of a
      substantial portion of the business of LICENSEE, to which this Agreement
      relates, or except in the case of a merger or other transaction in which
      the shareholders who owned at least 50% of LICENSEE prior to such merger
      or other transaction, own at least 50% of the surviving entity immediately
      following such merger or other transaction. Any assignee or transferee
      must agree in writing to M.I.T. to be bound by the terms and conditions
      hereof prior to such assignment and transfer.
<PAGE>

IN WITNESS WHEREOF, the parties have duly executed this Amendment on the day and
year set forth below.

MASSACHUSETTS INSTITUTE OF                     ALTech
TECHNOLOGY

By /s/ John T. Preston                         By /s/ William O. Farrell
  -----------------------------------------      -------------------------

Name JOHN T. PRESTON                           Name WM. O. FARRELL
    ---------------------------------------        -----------------------

Title DIRECTOR OF TECHNOLOGY DEVELOPMENT       Title Pres.
     --------------------------------------         ----------------------

Date 8-15-95                                   Date 8/15/95
    ---------------------------------------        -----------------------

                                               ALTech Delaware

                                               By /s/ William O. Farrell
                                                 -------------------------

                                               Name WM. O. FARRELL
                                                   -----------------------

                                               Title Pres.
                                                    ----------------------

                                               Date 8/15/95
                                                   -----------------------
<PAGE>

                                SECOND AMENDMENT

      This Amendment is entered into this 15th day of July, 1996 by and between
the MASSACHUSETTS INSTITUTE OF TECHNOLOGY, having its principal office at 77
Massachusetts Avenue, Cambridge, Massachusetts 02139, U.S.A. (hereinafter
referred to as "M.I.T.") and Applied Language Technologies, Inc. having its
principal office at 215 First St., Cambridge MA 02142 U.S.A. (hereinafter
referred to as "LICENSEE").

WHEREAS M.I.T. and LICENSEE entered into a Licensing Agreement dated August 3,
1994 ("the Agreements"), and the Agreement was amended August 12, 1995; and

WHEREAS M.I.T. and LICENSEE wish to change the terms of the Agreement to reflect
the present business conditions.

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

            Article 3.2 (as amended by the First Amendment) of the Agreement
            shall be amended in its entirety to read as follows:

            3.2. In addition, LICENSEE shall adhere to the following milestones:

            a. LICENSEE shall make NET SALES according to the following
            schedule:

            [     ]                              $[     ]

            [     ]                              $[     ]

            [     ]                              $[     ]

            [     ]                              $[     ]

            [     ]                              $[     ]
<PAGE>

      IN WITNESS WHEREOF, the parties have duly executed this Amendment on the
day and year set forth below.

MASSACHUSETTS INSTITUTE OF           Applied Language Technologies, Inc.
TECHNOLOGY

By /s/ Lita Nelsen                   By /s/ William O. Farrell
  -------------------------------      -------------------------

Name                                 Name William O. Farrell
    -----------------------------        -----------------------

Title                                Title CEO
     ----------------------------         ----------------------

Date 8/1/96                          Date 8/6/96
    -----------------------------        -----------------------

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