Document:

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as January 1, 2005 between Osmotics Pharma, Inc. a Colorado corporation with its principal offices at 1444 Wazee Street, Denver, Colorado and Peter M. Elias, M.D. of San Francisco, California("Executive").

RECITALS

A.   The Company is in the business of discovering, developing and commercializing prescription products for dermatology, oncology and infectious diseases.  The Company, in its business, develops and uses certain Confidential Information (as defined in Paragraph 8(b) below).  Such Confidential Information will necessarily be communicated to or acquired by Executive by virtue of his employment with the Company, and the Company has spent time, effort and money to develop such Confidential Information and to promote and increase its goodwill; and

B.   The Company desires to retain the services of, and employ, Executive on its own behalf and on behalf of its affiliated companies for the period provided in this Agreement and, in so doing, to protect its Confidential Information and goodwill, and Executive is willing to accept employment by the Company on an exclusive basis for such period, upon the terms and conditions hereinafter set forth.

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

	
1.
	
Employment.  Subject to the terms and conditions of this Agreement, the Company agrees to employ Executive, and Executive agrees to accept employment from, and remain in the employ of, the Company for the period stated in Paragraph 3 hereof.

	
2.
	
Position and Responsibilities.  During the period of his employment hereunder, Executive agrees to serve the Company, and the Company shall employ Executive, as its Chief Scientific Officer. As Chief Scientific Officer, Executive shall be responsible for: (a) assisting management in the development of new products and the reformulation of existing products; (b) advising management on its clinical trial strategies and assisting in the recruitment of investigators; (c) developing clinical trial protocols; (d) attending scientific conferences and presenting data related to the Company's products; (e) evaluating the scientific merits of new technologies or products that the Company may seek to develop; and (f) such additional duties and responsibilities consistent with the position of Chief Scientific Officer as may reasonably be assigned to Executive.

	
3.
	
Term and Duties.

 

  
	 	
a)
	
Term of Employment.  The period of Executive's employment under this Agreement shall be deemed to have commenced on the date of this Agreement and shall continue until May 1, 2006 and may continue thereafter from year to year upon mutual consent of the parties.

	 	
(b)
	
Duties.  During the period of his employment hereunder and except for illness, reasonable vacation periods, and reasonable leaves of absence, Executive shall devote his best efforts and at least 50% of his time during normal business hours, attention, skill and efforts to the business and affairs of the Company and its affiliated companies, as such business and affairs now exist and as they may be hereafter changed or added to, under and pursuant to the general direction of the Board of Directors of the Company (the "Board"). The Company shall retain full direction and control of the means and methods by which Executive performs the services for which he is employed hereunder. Unless and until otherwise mutually agreed to between the Company and Executive, Executive shall not be required to relocate to Denver, Colorado and may maintain a residence in the location of his choice. Executive shall be provided with suitable administrative support and support personnel customary in the industry.  

	
4.
	
Compensation and Reimbursement of Expenses; Other Benefits.

	 	
(a)
	
Compensation. 

	 	 	
(1)
	
Regular Compensation. During the period of his employment hereunder, Executive shall be paid a salary, in monthly or semi-monthly installments (in accordance with the Company's normal payroll practices for senior executive officers), at the rate of Ninety Thousand Dollars ($90,000.00) per year, or such higher salary as may be from time to time approved by the Board (or any duly authorized Committee thereof) (any such higher salary so approved to be thereafter the minimum salary payable to Executive during the remainder of the term hereof), plus such additional incentive compensation, if any, as may be awarded to him yearly by the Board (or any duly authorized Committee thereof). 

	 	
(b)
	
Reimbursement of Expenses.  The Company shall pay or reimburse Executive, in accordance with its normal policies and practices, for all reasonable travel and other expenses incurred by Executive in performing his obligations hereunder. The Company further agrees to furnish Executive with such assistance and accommodations as shall be suitable to the character of Executive's position with the Company and adequate for the performance of his duties hereunder.

	 	
(c)
	
Other Benefits.  During the period of his employment hereunder Executive shall be entitled to receive all other benefits of employment generally available to other members of the Company's management and those benefits for which key executives are or shall become eligible, when and as he becomes eligible therefor, including without limitation, life insurance benefits, short and long-term disability plans, deferred compensation plans, and participation in the Company's Bonus Plan and any Stock Option plans. The Company agrees that none of such benefits shall be altered in any manner or in such a way as to reduce any then existing entitlement of Executive thereunder. Notwithstanding the foregoing, it is specifically agreed to by the parties that Executive shall obtain and pay for his own health insurance.

	 	
(d)
	
Executive shall be entitled to annual vacation of 2 weeks.

	
5.
	
Stock Options. As an inducement to enter into this Agreement, Executive will be granted on or about January 1, 2005, a non-qualified stock option to purchase One Hundred Fifty Thousand (150,000) shares of the Company's common stock, at a per share exercise price of One Dollar per share ($1.00).  These options shall vest 100% upon grant. 

	
6.
	
Assignment of Patent Rights to inventions. 

	 	
In the event that Executive develops any inventions while in the Company's employ, Executive agrees to promptly disclose such invention to Company, assist in the development of such invention and assign the rights to such invention to the Company. 

	
7.
	
Benefits Payable Upon Disability or Death.

	 	
(a)
	
Disability Benefits.  If, during the term of this Agreement, Executive shall be prevented from properly performing services hereunder by reason of his illness or other physical or mental incapacity, the Company shall continue to pay Executive his then current salary hereunder during the period of such disability; or, if less, for a period of (12) calendar months, at which time the Company's obligations hereunder shall cease and terminate.

	 	
(b)
	
Death Benefits.  In the event of the death of Executive during the term of this Agreement, Executive's salary payable hereunder shall continue to be paid to Executive's surviving spouse, or if there is no spouse surviving, then to Executive's designee or representative (as the case may be) through the six-month period following the end of the calendar month in which Executive's death occurs. Thereafter, all of the Company's obligations hereunder shall cease and terminate.

	 	
(c)
	
Other Plans.  The provisions of this Paragraph 7 shall not affect any rights of Executive's heirs, administrators, executors, legatees, beneficiaries or assigns under the Company's Profit-Sharing Investment Plan, ESBP, Restricted Stock and Stock Option Plan (or any other similar plan or arrangement), any stock purchase plan or any other employee benefit plan of the Company, and any such rights shall be governed by the terms of the respective plans.

	
8.
	
Obligations of Executive During and After Employment.

	 	
(a)
	
Noncompetition. During the Employment Period and until the 12-month anniversary of the Executive's Date of Termination if the Executive's employment is terminated by the Company for Cause or the Executive terminates employment without Good Reason, the Executive shall not engage in or become associated with any Competitive Activity. For purposes of this Section 8(a), a "Competitive Activity" shall mean any business or other endeavor that engages in any country in which the Company has significant business operations to a significant degree in a business that directly competes with all or any substantial part of the Company's business. The Executive shall be considered to have become "associated with a Competitive Activity" if he becomes involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, or in any other capacity calling for the rendition of the Executive's personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity and his involvement relates to a significant extent to the Competitive Activity of such entity; provided, however, that the Executive shall not be prohibited from (a) owning less than one percent (1%) of any publicly traded corporation, whether or not such corporation is in competition with the Company; (b) serving as a director of a corporation or other entity the primary business of which is not a Competitive Activity or (c) serving as a consultant to other non-competitive companies provided however that such consulting activities, in total, do not exceed 25% of normal work hours. If, at any time, the provisions of this Section 8(a) shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 8(a) shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Executive agrees that this Section 8(a) as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.

	 	
(b)
	
Unauthorized Use of Confidential Information.  Executive acknowledges and agrees that (i) during the course of his employment Executive will have produced and/or have access to Confidential Information (as defined in subparagraph (c) hereof), of the Company and its affiliated companies, and (ii) the unauthorized use or sale of any of such confidential or proprietary information at any time would harm the Company and would constitute unfair competition with the Company. Executive promises and agrees not to engage in any unfair competition with the Company either during or after the term of this Agreement. Therefore, during and subsequent to his employment by the Company and its affiliated companies, Executive agrees to hold in confidence and not, directly or indirectly, disclose, use, copy or make lists of any such information, except to the extent expressly authorized by the Company in writing or as required by law. All records, files, drawings, documents, equipment, and the like, or copies thereof, relating to the Company's business, or the business of any of its affiliated companies, which Executive shall prepare, use, or come into contact with, shall be and remain the sole property of the Company, and shall not be removed (except to allow Executive to perform his responsibilities hereunder while traveling for business purposes or otherwise working away from his office) from the Company's or the affiliated company's premises without its prior written consent, and shall be promptly returned to the Company upon termination of employment with the Company and its affiliated companies. This paragraph 8(b) shall survive the termination or expiration of this Agreement.

	 	
(c)
	
Confidential Information Defined.  For purposes of this Agreement,"Confidential Information" means all information (whether reduced to written, electronic, magnetic or other tangible form) acquired in any way by Executive during the course of his employment with the Company or any of its affiliated companies concerning the products, projects, activities, business or affairs of the Company and its affiliated companies, or the Company's or any of its affiliated company's customers, including, without limitation, (i) all information concerning trade secrets of the Company and its affiliated companies, including computer programs, system documentation, special hardware, product hardware, related software development, manuals, formulae, processes, methods, machines, compositions, ideas, improvements or inventions of the Company and its affiliated companies, (ii) all sales and financial information concerning the Company and its affiliated companies, (iii) all customer and supplier lists of the Company and its affiliated companies, (iv) all information concerning products or projects under development by the Company or any of its affiliated companies or marketing plans for any of those products or projects, and (v) all information in any way concerning the products, projects, activities, business or affairs of customers of the Company or any of its affiliated companies which was furnished to him by the Company or any of its agents or customers; provided, however, that Confidential Information does not include information which (A) becomes available to the public other than as a result of a disclosure by Executive, (B) was available to him on a non-confidential basis outside of his employment with the Company, or (C) becomes available to him on a non- confidential basis from a source other than the Company or any of its agents, creditors, suppliers, lessors, lessees or customers.

	 	
(d)
	
Nonsolicitation.  Executive recognizes and acknowledges that it is essential for the proper protection of the business of the Company and its affiliated companies that Executive be restrained for a reasonable period following the termination of Executive's employment with the Company and its affiliated companies from: (i) soliciting or inducing any employee of the Company or any of its affiliated companies to leave the employ of the Company or any of its affiliated companies; (ii) hiring or attempting to hire any employee of the Company or any of its affiliated companies; or (iii) soliciting the trade of or trading with the customers of the Company or any of its affiliated companies for any competitive business purpose. Accordingly, Executive agrees that during the term of his employment hereunder, and for the Restricted Period thereafter following the termination of Executive's employment with the Company and its affiliated companies for any reason, Executive shall not, directly or indirectly, (x) hire, solicit, aid in or encourage the hiring and/or solicitation of, contract with, aid in or encourage the contracting with, or induce or encourage to leave the employment of the Company or any of its affiliated companies, any employee of the Company or any of its affiliated companies; and (y) solicit, aid in or encourage the solicitation of, contract with, aid in or encourage the contracting with, service, or contact any person or entity which is, or was, within three years prior to the termination of Executive's employment with the Company and its affiliated companies, a customer  of the Company or any of its affiliated companies for the purpose of offering or selling a product or service competitive with any of those offered by the Company of any of its affiliated companies. For purposes of this Paragraph 7(d), the "Restricted Period" shall be deemed to be the longer of (i) one(1) year following termination of Executive's employment for any reason or (ii) the period during which Executive is receiving salary continuation payments hereunder. This Paragraph 8(d) shall survive the termination or expiration of this Agreement.

	 	
(e)
	
Remedy for Breach.  Executive agrees that in the event of a breach or threatened breach of any of the covenants contained in this Paragraph 8, the Company shall have the right and remedy to have such covenants specifically enforced by any court having jurisdiction, it being acknowledged and agreed that any material breach of any of the covenants will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. 

	
9.
	
Termination.

	 	
(a)
	
For Cause.  Notwithstanding anything herein to the contrary, the Company may, without liability, terminate Executive's employment hereunder for Cause (as defined below) at any time upon written notice from the Board (or any duly authorized Committee thereof) specifying such Cause, and thereafter, the Company's obligations hereunder shall cease and terminate; provided, however, that such written notice shall not be delivered until after the Board (or any duly authorized Committee thereof) shall have given Executive written notice specifying the conduct alleged to have constituted such Cause and Executive has failed to cure such conduct, if curable, within fifteen (15) days following receipt of such notice. As used herein, the term "Cause" shall mean (i) Executive's willful misconduct, habitual neglect, dishonesty or other intentional actions (or failures to act) which are materially and demonstrably injurious to the Company, or (ii) a material breach by Executive of one or more terms of this Agreement.

	 	
(b)
	
Arbitration Required to Confirm Cause.  In the event of a termination  for Cause pursuant to subparagraph (a) above, the Company shall continue to pay Executive's then current compensation as specified in this Agreement until the issuance of an arbitration award affirming the Company's action. Such arbitration shall be held in accordance with the provisions of Paragraph 10(d) below. In the event the award upholds the action of the Company, Executive shall promptly repay to the Company any sums received pursuant to this subparagraph 9(b), following termination of employment.

	 	
(c)
	
Other than for Cause; Performance, Reorganization.  Notwithstanding anything herein to the contrary, the Company may also terminate Executive's employment (without regard to any general or specific policies of the Company relating to the employment or termination of its employees) (i) should Executive fail to perform his duties hereunder in a manner satisfactory to the Board, provided that Executive shall first be given written notice of such unsatisfactory performance and a period of ninety (90) days to improve such performance to a level deemed acceptable to the Board, (ii) should  Executive's position be eliminated as a result of a reorganization or restructuring of the Company or any of its affiliated companies or (iii) for any other reason or reasons.

	 	
(d)
	
Obligations of the Company on Termination of Employment.

	 	 	
i)
	
If the Company terminates Executive's employment pursuant to subparagraph 9(a) above and the Company's action is affirmed as specified in subparagraph 9(b) above or Executive terminates his employment with the Company other than for Good Reason (as defined in subparagraph (d)(iii)), then all of the Company's obligations hereunder shall immediately cease and terminate. Executive shall thereupon have no further right or entitlement to additional salary, incentive compensation payments or awards, or any perquisites from the Company whatsoever, and Executive's rights, if any, under the Company's employee and executive benefit plans shall be determined solely in accordance with the express terms of the respective plans;

	 	 	
ii)
	
If the Company terminates Executive's employment pursuant to subparagraph 9(c) above or Executive terminates his employment with the Company for Good Reason prior to the expiration of this Agreement, then in lieu of any benefits payable pursuant to the Company's Executive Severance Policy (so long as the compensation and benefits payable hereunder equal or exceed those payable under said Policy) and in complete satisfaction and discharge of all of its obligations to Executive hereunder (with the exception of Paragraph 6), the Company shall, provided Executive is not in breach of the provisions of Paragraph 8 hereof, and except as provided in Paragraph 10(c) below, (A) continue Executive's then base salary, without increase, for the remainder of the term of this Agreement, (B) continue Executive's incentive award compensation under the terms of the Company's Bonus Plan for each fiscal year ending with or within the term of this Agreement, such Bonus awards to be equal, in each  case, to Executive's Individual Target Award existing at the time of his termination of employment, (C) accelerate the vesting of all stock options granted to Executive and (D) terminate Executive's participation in the Company's tax-qualified profit-sharing plans and stock purchase plans, pursuant to the terms of the respective plans, as of the date of Executive's termination of employment.

	 	 	
iii)
	
For purposes of this Agreement, "Good Reason" shall mean any of  the following actions, if taken without the express written consent of Executive, (A) any material change by the Company in Executive's functions, duties or responsibilities, which change would cause Executive's position with the Company to become of less dignity, responsibility, importance, or scope as compared to the position and attributes that applied to Executive as of the Effective Date; (B) any significant reduction in Executive's base salary, other than a reduction effected as part of an across-the-board reduction affecting all executive employees of the Company; C) any material failure by the Company to comply with any of the provisions of the Agreement; (D) the Company's requiring Executive to be based at any office or location more than 25 miles from the office at which Executive is based as of the Effective Date, except for travel reasonably required in the performance of Executive's responsibilities; or (E) any failure by the Company to obtain the express assumption of the Agreement by any successor or assign of the Company.

	
10.
	
General Provisions.

	 	
(a)
	
Executive's rights and obligations hereunder shall not be transferable by assignment or otherwise. Nothing in this Agreement shall prevent the consolidation of the Company with, or its merger into, any other corporation, or the sale by the Company of all or substantially all of its properties or assets; and this Agreement shall inure to the benefit of, be binding upon and be enforceable by, any successor surviving or resulting corporation, or other entity to which such assets shall be transferred. This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company.

	 	
(b)
	
This Agreement (together with the Termination Agreement between the parties of even date herewith) and the rights of Executive with respect to the benefits of employment referred to in Paragraph 4(c) constitute the entire agreement between the parties hereto in respect of the employment of Executive by the Company. Unless specifically stated, nothing whatsoever in this Agreement shall diminish, impair, or in any manner adversely affect Executive's right to receive any benefits that Executive had accrued or to which he was otherwise entitled as of the date immediately prior to the Effective Date as a result of his previous employment by, or retirement from, the Company.

	 	
(c)
	
In the event Executive's employment with the Company shall terminate under circumstances otherwise providing Executive with a right to benefits under both Section 5 of the Termination Agreement and Paragraph 8(d)(ii) of this Agreement, Executive shall be entitled to receive the greater of the benefits provided therein or herein, calculated individually, without duplication.

	 	
(d)
	
Any dispute, controversy or claim arising under or in connection with this Agreement, or the breach hereof, shall be settled exclusively by arbitration in accordance with the Rules of the American Arbitration Association then in effect. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. Any arbitration held pursuant to this paragraph in connection with any termination of Executive's employment shall take place in Denver, Colorado at the earliest possible date. If any proceeding is necessary to enforce or interpret the terms of this Agreement, or to recover damages for breach thereof, the prevailing party shall be entitled to reasonable attorneys fees and necessary costs and disbursements, not to exceed in the aggregate one percent (1%) of the net worth of the other party, in addition to any other relief to which he or it may be entitled.

	 	
(e)
	
The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remainder of such provisions or parts hereof and the applicability hereof shall not be affected thereby.

	 	
(f)
	
This Agreement may not be amended or modified except by a written instrument executed by the Company and Executive.

	 	
(g)
	
This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Colorado without regard to its principles of conflict of laws.

	
10.
	
Indemnification.

	 	
(a)
	
General. The Company agrees that if the Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), by reason of the fact that the Executive is or was a director or officer of the Company or any of their affiliates or is or was serving at the request of the Company or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if the Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of her heirs, executors and administrators.

	 	
(b)
	
Expenses. As used in this Agreement, the term "Expenses" shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys' fees, accountants' fees, and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

	 	
(c)
	
Enforcement. If a claim or request under this Section 10 is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, the Executive may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, the Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Delaware law.

	 	
(d)
	
Partial Indemnification. If the Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Executive for the portion of such Expenses to which the Executive is entitled.

	 	
(e)
	
Advances of Expenses. Expenses incurred by the Executive in connection with any Proceeding shall be paid by the Company in advance upon request of the Executive that the Company pay such Expenses, but only in the event that the Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which the Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

	 	
(f)
	
Notice of Claim. The Executive shall give to the Company notice of any claim made against him for which indemnification will or could be sought under this Agreement. In addition, the Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within the Executive's power and at such times and places as are convenient for the Executive.

	 	
(g)
	
Defense of Claim. With respect to any Proceeding as to which the Executive notifies the Company of the commencement thereof:

	 	 	
(i)
	
The Company will be entitled to participate therein at its own expense;

	 	 	
(ii)
	
Except as otherwise provided below, to the extent that it may wish, the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Executive, which in the Company's sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. The Executive also shall have the right to employ his own counsel in such action, suit or proceeding if she reasonably concludes that failure to do so would involve a conflict of interest between the Company and the Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.

	 	 	
(iii)
	
The Company shall not be liable to indemnify the Executive under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on the Executive without the Executive's written consent. Neither the Company nor the Executive will unreasonably withhold or delay their consent to any proposed settlement.

	 	
(h)
	
Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 10 shall not be exclusive of any other right which the Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

	
11.
	
Legal Fees and Expenses. If any contest or dispute shall arise between the Company and the Executive regarding any provision of this Agreement, the Company shall reimburse the Executive for all legal fees and expenses reasonably incurred by the Executive in connection with such contest or dispute, but only if the Executive prevails to a substantial extent with respect to the Executive's claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

	
12.
	
Successors; Binding Agreement.

	 	
No rights or obligations of the Company under this Agreement may be assigned or transferred, except that the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall include any successor to its business and/or assets (by merger, purchase or otherwise) which executes and delivers the agreement provided for in this Section 12 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

	
13.
	
Establishment of Revolving Research Fund.

	 	
Osmotics agrees to advance the sum of Ten Thousand Dollars ($10,000) to be made payable to NCIRE to be used at Dr. Elias's discretion to carry out research and investigations directly related to the development and improvement of the Company's products, including, but not limited to Triceram, TriCerAm Rx and NeoCerAm Rx.  Dr. Elias agrees to provide periodic updates on the use of such funds, the research conducted and the results obtained.  As to further advances, Dr. Elias agrees to provide the Company with an estimated budget which shall be agreed upon by both parties prior to additional advances.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date

first above written.

	 	
Osmotics Pharma, Inc.

	 	
By /s/ Steven Porter        

   Steven Porter, President

	 	

/s/ Peter Elias             

ExecutiveEXHIBIT 4.0

            _________________________________________________________
            _________________________________________________________

                         INTERVEST MORTGAGE CORPORATION

                                       AND

                              THE BANK OF NEW YORK
                                   AS TRUSTEE

                                    INDENTURE

                            DATED AS OF APRIL 1, 2005

                                   $14,000,000
                     Series 3/21/05 Subordinated Debentures

                          $3,000,000 Due April 1, 2009
                          $4,500,000 Due April 1, 2011
                          $6,500,000 Due April 1, 2013

            _________________________________________________________
            _________________________________________________________

<PAGE>
<TABLE>
<CAPTION>
                              CROSS REFERENCE TABLE
                              ---------------------

     TIA Section                                               Indenture Section
----------------------                                         -----------------
<S>                                                            <C>

310(a)(1) and (2) . . . . .                                                 7.10
310(a)(3) and (4) . . . . .                                                 N.A.
310(b). . . . . . . . . .                                      7.08, 7.10, 11.02
310(c). . . . . . . . . .                                                   N.A.
311(a) and (b). . . . . .                                                   7.11
311(c). . . . . . . . . . .                                                 N.A.
312(a). . . . . . . . . . .                                                 2.05
312(b) and (c). . . . . .                                                   2.06
313(a). . . . . . . . . . .                                                 7.06
313(b)(1) . . . . . . . . .                                                 N.A.
313(b)(2) . . . . . . . . .                                                 7.06
313(c). . . . . . . . . .                                            7.06, 11.02
313(d). . . . . . . . . .                                                   7.06
 314(a) . . . . . . . . . .                                          4.02, 11.02
314(b). . . . . . . . . .                                                   N.A.
314(c)(1) and (c)(2). . . .                                                11.03
314(c)(3) and (d) . . . . .                                                 N.A.
314(e). . . . . . . . . . .                                                11.04
314(f). . . . . . . . . .                                                   N.A.
315(a), (c) and (d) . . .                                                   7.01
315(b). . . . . . . . . . .                                          7.05, 11.02
315(e). . . . . . . . . . .                                                 6.11
316(a)(1)(A). . . . . . .                                                   6.05
316(a)(1)(B). . . . . . .                                                   6.04
316(a)(2) . . . . . . . .                                                   9.02
316(a) Last Paragraph . .                                            2.10, 11.05
316(b). . . . . . . . . .                                                   6.07
317(a). . . . . . . . . . .                                           6.08, 6.09
317(b). . . . . . . . . . .                                                 2.04
318(a). . . . . . . . . . .                                                11.01
</TABLE>

__________
N.A. means Not Applicable.

NOTE:     This cross reference table shall not, for any purpose, be deemed to be
a part of the Indenture.

<PAGE>
<TABLE>
<CAPTION>
                                  ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

<S>                                                                                             <C>
SECTION 1.01.   Definitions.                                                                    1
                ------------

SECTION 1.02.   Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                -----------------

SECTION 1.03    Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . .  3
                -------------------------------------------------

SECTION 1.04.   Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
                ---------------

SECTION 1.05.   Rules of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
                ---------------------

                                  ARTICLE TWO

                                 THE DEBENTURES
                                 --------------

SECTION 2.01.   Form and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
                ---------------

SECTION 2.02.   Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . .   4
                ----------------------------

SECTION 2.03.   Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . .   4
                --------------------------

SECTION 2.04.   Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . . . . . . . . .   5
                -----------------------------------

SECTION 2.05.   Debentureholder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
                ---------------------

SECTION 2.07.   Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                ---------------------

SECTION 2.08.   Replacement Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                ----------------------

SECTION 2.09.   Outstanding Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                ----------------------

SECTION 2.10.   Treasury Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                -------------------

<PAGE>
SECTION 2.11.   Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                --------------------

SECTION 2.12.   Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
                ------------

SECTION 2.13.   Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
                ------------------

SECTION 2.14.   CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
                -------------

                                  ARTICLE THREE

                                   REDEMPTION
                                   ----------

SECTION 3.01.   Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
                ------------------

SECTION 3.02.   Selection of Debentures to be Redeemed . . . . . . . . . . . . . . . . . . . .   7
                --------------------------------------

SECTION 3.03.   Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
                --------------------

SECTION 3.04.   Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . .   8
                ------------------------------

SECTION 3.05.   Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . .   8
                ---------------------------

SECTION 3.06.   Debentures Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . .   8
                ---------------------------

SECTION 3.07.   Repurchase At Option of Holder . . . . . . . . . . . . . . . . . . . . . . . .   8
                ------------------------------

                                  ARTICLE FOUR

                                    COVENANTS
                                    ---------

SECTION 4.01.   Payment of Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
                ---------------------

SECTION 4.02.   SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
                -----------

SECTION 4.03.   Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
                ----------------------

SECTION 4.04.   Limitation on Dividends and Stock Purchases. . . . . . . . . . . . . . . . . .   9
                -------------------------------------------

<PAGE>
SECTION 4.05.   Pari Passu Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
                -----------------------

                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION
                              ---------------------

                                  ARTICLE SIX

                              DEFAULTS AND REMEDIES
                              ---------------------

SECTION 6.01.   Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
                -----------------

SECTION 6.02.   Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
                ------------

SECTION 6.03.   Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
                --------------

SECTION 6.04.   Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
                -----------------------

SECTION 6.05.   Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
                -------------------

SECTION 6.06.   Limitation of Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
                -------------------

SECTION 6.07.   Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . .  12
                ------------------------------------

SECTION 6.08.   Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .  12
                --------------------------

SECTION 6.09.   Trustee May File Proof of Claim. . . . . . . . . . . . . . . . . . . . . . . .  12
                -------------------------------

SECTION 6.10.   Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
                ----------

SECTION 6.11.   Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
                ---------------------

                                  ARTICLE SEVEN

                                    TRUSTEE
                                    -------

SECTION 7.01.   Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
                -----------------

SECTION 7.02.   Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
                -----------------

<PAGE>
SECTION 7.03.   Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . .  14
                ----------------------------

SECTION 7.04.   Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
                --------------------

SECTION 7.05.   Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
                ------------------

SECTION 7.06.   Reports by Trustees to Holders . . . . . . . . . . . . . . . . . . . . . . . .  15
                ------------------------------

SECTION 7.07.   Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . .  15
                --------------------------

SECTION 7.08.   Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
                ----------------------

SECTION 7.09.   Successor Trustee by Merger, etc . . . . . . . . . . . . . . . . . . . . . . .  16
                --------------------------------

SECTION 7.10.   Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . . . . .  16
                -----------------------------

SECTION 7.11.   Preferential Collection of Claims Against the Company  . . . . . . . . . . . .  16
                -----------------------------------------------------

SECTION 7.12.   Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
                -------------

                                  ARTICLE EIGHT

                             DISCHARGE OF INDENTURE
                             ----------------------

SECTION 8.01.   Termination of the Company's Obligations . . . . . . . . . . . . . . . . . . .  17
                ----------------------------------------

SECTION 8.02.   Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . .  18
                --------------------------

SECTION 8.03.   Repayment to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
                ------------------------

                                  ARTICLE NINE

SECTION 9.01.   Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . .  18
                --------------------------

SECTION 9.02.   With Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
                -----------------------

SECTION 9.03.   Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . .  19
                ------------------------------------

<PAGE>
SECTION 9.04.   Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . .  19
                -----------------------------------

SECTION 9.05.   Revocation and Effect of Consents. . . . . . . . . . . . . . . . . . . . . . .  19
                ---------------------------------

SECTION 9.06.   Notation on or Exchange of Debentures. . . . . . . . . . . . . . . . . . . . .  19
                -------------------------------------

SECTION 9.07.   Trustee to Sign Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . .  20
                -------------------------------

                                   ARTICLE TEN

                                  SUBORDINATION
                                  -------------

SECTION 10.01.   Agreement to Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . .  20
                 ------------------------

SECTION 10.02.   Debentures Subordinated to Prior Payment of All Senior. . . . . . . . . . . .  20
                 ------------------------------------------------------
       Indebtedness on Dissolution, Liquidation or
       -------------------------------------------
       Reorganization of the Company
       -----------------------------

SECTION 10.03.   Debentureholders to be Subrogated to Rights of Holders of Senior Indebtedness  21
                 -----------------------------------------------------------------------------

SECTION 10.04.   Obligation of the Company Unconditional . . . . . . . . . . . . . . . . . . .  21
                 ---------------------------------------

SECTION 10.05.   Knowledge of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
                 --------------------

SECTION 10.06.   Application by Trustee of Monies Deposited With It. . . . . . . . . . . . . .  22
                 --------------------------------------------------

SECTION 10.07.   Subordination Rights Not Impaired by Acts or Omissions of the Company . . . .  22
                 ---------------------------------------------------------------------
       or Holders of Senior Indebtedness
       ---------------------------------

SECTION 10.08.   Debentureholders Authorize Trustee to Effectuate Subordination of Debentures.  22
                 ----------------------------------------------------------------------------

SECTION 10.09.   Right of Trustee to Hold Senior Indebtedness. . . . . . . . . . . . . . . . .  23
                 --------------------------------------------

SECTION 10.10.   Article Ten Not to Prevent Events of Default. . . . . . . . . . . . . . . . .  23
                 --------------------------------------------

<PAGE>
SECTION 10.11.   No Fiduciary Duty Created to Holders of Senior Indebtedness . . . . . . . . .  23
                 -----------------------------------------------------------

SECTION 10.12.   Trustee's Compensation Not Prejudiced . . . . . . . . . . . . . . . . . . . .  23
                 -------------------------------------

                                 ARTICLE ELEVEN

                                  MISCELLANEOUS
                                  -------------

SECTION 11.01.   Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . . . . . . . .  23
                 ----------------------------

SECTION 11.02.   Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
                 -------

SECTION 11.03.   Certificate and Opinion as to Conditions Precedent. . . . . . . . . . . . . .  24
                 --------------------------------------------------

SECTION 11.04.   Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . .  24
                 ---------------------------------------------

SECTION 11.05.   Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 ---------------------------

SECTION 11.06.   Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 --------------

SECTION 11.07.   Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 -------------

SECTION 11.08.   No Recourse Against Others. . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 --------------------------

SECTION 11.09.   Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 ----------

SECTION 11.10.   Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 -------------------

SECTION 11.11.   Separability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
                 ------------
</TABLE>

<PAGE>
     INDENTURE,  dated  as  of  April  1,  2005,  between  INTERVEST  MORTGAGE
CORPORATION, a New York corporation (the "Company"), and THE BANK OF NEW YORK, a
New  York  banking  corporation,  as  trustee  (the  "Trustee").

     Intending  to be legally bound hereby, each party agrees as follows for the
benefit  of the other party and for the equal and ratable benefit of the Holders
of  the  Company's  Series  3/21/05  Subordinated  Debentures.

                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE
                   ------------------------------------------

     SECTION 1.01. Definitions.

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

     "Agent" means any Registrar, Paying Agent or co-Registrar.

     "Board  of  Directors"  means  the Board of Directors of the Company or any
committee  of  that  Board  duly  authorized  to  act  for  it  hereunder.

     "Business Day" means a day that is not a Legal Holiday.

     "Capital Stock" means any and all shares, interests, participations, rights
or  other  equivalents  (however  designated)  of  corporate  stock.

     "Company" means the party named as such in this Indenture until a successor
replaces  it  pursuant  to the applicable provisions hereof and thereafter means
any  such  successor.

     "Debentures"  means:  the  Series  3/21/05  Subordinated Debentures, issued
under  this  Indenture,  in three maturities as follows: April 1, 2009, April 1,
2011 and April 1, 2013; as amended or supplemented from time to time pursuant to
the  terms  of  this  Indenture;  "Debenture"  means any one of such Debentures.

     "Default"  means  any event which is, or after notice or passage of time or
both  would  be,  an  Event  of  Default.

     "Holder" or "Debentureholder" means the person in whose name a Debenture is
registered  on  the  Registrar's  books.

     "Indebtedness"  means, with respect to any person:  (i)(A) all indebtedness
of  such person for borrowed money, (B) all indebtedness of such person which is
evidenced  by  a  note,  debenture,  bond or other similar instrument (including
capitalized  lease  and  purchase  money  obligations), and (C) all indebtedness
(including  capitalized  lease  obligations)  incurred,  assumed or given in the
acquisition  (whether  by way of purchase, merger or otherwise) of any business,
real  property or other assets (except assets acquired in the ordinary course of
the  acquiror's  business);  (ii)  any  indebtedness  of others described in the
preceding  clause  (i)  which  such  person  has  guaranteed  or for which it is
otherwise  liable;  and  (iii) any amendment, renewal, extension or refunding of
any  indebtedness  referred to in clauses (i) and (ii) above.  "Indenture" means
this  instrument  as  originally  executed  or  as  it  may from time to time be
supplemented  or  amended  by one or more indentures supplemental hereto entered
into  pursuant  to  the  applicable  provisions  hereof.

<PAGE>
     "Maturity"  means  any  of  the three maturities of Debentures issued under
this  Indenture.

     "Officer" means the Chairman or co-Chairman of the Board, the Vice Chairman
of  the Board, the President, any Vice President, the Treasurer or the Secretary
of  the  Company.

     "Officers' Certificate" means a certificate signed by two Officers or by an
Officer  and  an  Assistant  Treasurer or an Assistant Secretary of the Company.

     "Opinion  of Counsel" means a written opinion from legal counsel who may be
counsel  for  the  Company  or  other  counsel who is acceptable to the Trustee.

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

     "principal" of a debt security means the principal of the security plus the
premium,  if  any,  on  the  security.

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

     "SEC" means the Securities and Exchange Commission.

     "Subsidiary" means a corporation, a majority of whose voting stock is owned
by  the  Company  or  a Subsidiary.  Voting stock is Capital Stock having voting
power  under  ordinary  circumstances  to  elect  directors.

     "TIA"  means  the  Trust  Indenture  Act  of  1939  (15  U.S.  Code  Sec.
77aaa-77bbbb)  as  in  effect on the date this Indenture was executed, except as
provided  in  Section  9.04.

     "Trustee" means the party named as such in this Indenture until a successor
replaces  it  and  thereafter  means  the  successor.

     "United States" means the United State of America.

     SECTION  1.02     Other  Definitions.
                       ------------------

Term                                   Defined in Section
----                                   ------------------

"Bankruptcy Law"                             6.01
"Custodian"                                  6.01
"Event of Default"                           6.01
"Legal Holiday"                             11.06
"Paying Agent"                               2.03
"Registrar"                                  2.03
"Restricted Payments"                        4.04
"Senior Indebtedness"                       10.01
"U.S. Government Obligations"                8.01

                                        2
<PAGE>
     SECTION  1.03     Incorporation  by  Reference  of  Trust  Indenture  Act.
                       --------------------------------------------------------
Whenever  this  Indenture  refers  to  a  provision of the TIA, the provision is
incorporated  by  reference  in and made a part of this Indenture. The following
TIA  terms  used  in  this  Indenture  have  the  following  meanings:

     "Commission" means the SEC.

     "indenture securities" means the Debentures.

     "indenture security holder" means a Debentureholder.

     "indenture to be qualified" means this Indenture.

     "indenture trustee" or "institutional trustee" means the Trustee.

     "obligor"  on  the  indenture  securities  means  the  Company or any other
obligor  on  the  Debentures.

     All  other  TIA  terms  used in this Indenture that are defined by the TIA,
defined  by  TIA  reference  to another statute or defined by SEC rules have the
meanings  assigned  to  them.

     SECTION  1.04.  Acts  of  Holders.  (a) Any request, demand, authorization,
                     ------------------
direction, notice, consent, waiver or other action provided by this Indenture to
be  given  or  taken  by Holders may be embodied in and evidenced by one or more
instruments  of  substantially similar tenor signed by such Holders in person or
by  agent  duly  appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are  delivered to the Trustee and, where it is hereby expressly required, to the
Company.  Such  instrument  or  instruments (and the action embodied therein and
evidenced  thereby)  are  herein  sometimes  referred to as the "Act" of Holders
signing  such  instrument  or  instruments.  Proof  of  execution  of  any  such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose  of  this  Indenture  and  conclusive  in  favor  of the Trustee and the
Company,  if  made  in  the  manner  provided  in  this  Section.

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

     (c)     The  ownership of Debentures shall be proved by the registration of
the  books  of  the  Registrar.

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

     (e)     If  the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at  its  option,  by  or pursuant to a Board Resolution, fix in advance a record
date  for  the  determination  of Holders entitled to give such request, demand,
authorization,  direction, notice, consent, waiver or other Act, but the Company
shall  have  no  obligation  to  do  so.  If  such  a record date is fixed, such
request,  demand, authorization, direction, notice, consent, waiver or other Act
may  be  given  before or after such record date, but only the Holders of record

                                        3
<PAGE>
at  the  close of business on such record date shall be deemed to be Holders for
the  purposes  of  determining  whether  Holders  of the requisite proportion of
outstanding  Debentures  have authorized or agreed or consented to such request,
demand,  authorization, direction, notice, consent, waiver or other Act, and for
that  purpose  the  outstanding  Debentures  shall be computed as of such record
date;  provided  that no such authorization, agreement or consent by the Holders
       --------
on  such  record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record  date.

     SECTION  1.05.  Rules  of  Construction.  Unless  the  context  otherwise
                     -----------------------
requires:  (i)  a  term  has the meaning assigned to it; (ii) an accounting term
not  otherwise  defined  has  the  meaning  assigned  to  it  in accordance with
generally  accepted accounting principles; (iii) "or" is not exclusive; and (iv)
words  in  the  singular include the plural, and words in the plural include the
singular.

                                   ARTICLE TWO
                                 THE DEBENTURES
                                 --------------
     SECTION  2.01.  Form  and  Dating.  The  Debentures  and  the  Trustee's
                     -----------------
certificate  of  authentication shall be substantially in the forms set forth in
Exhibits  A,  B  C, D, E and F which are incorporated in and form a part of this
Indenture.  The  Debentures may have notations, legends or endorsements required
by  law,  securities exchange rule or usage.  The Company shall approve the form
of  the  Debentures  and  any  notation,  legend  or endorsement on them and its
execution  shall constitute conclusive evidence of its approval.  Each Debenture
shall  be  dated  the  date  of  its  authentication.  The  terms and provisions
contained in the forms of Debenture annexed hereto as Exhibits A, B, C, D, E and
F shall constitute, and are hereby expressly made, a part of this Indenture.

     SECTION  2.02.  Execution  and  Authentication.  Two Officers shall execute
                     ------------------------------
the  Debentures for the Company by manual or facsimile signature.  The Company's
seal  shall  be  affixed  or  reproduced  on  the  Debentures.

     If an Officer whose signature is on a Debenture no longer holds that office
at  the time the Registrar, as hereinafter defined, authenticates the Debenture,
the  Debenture  shall  be  valid  nevertheless.

     A  Debenture  shall  not  be  valid  until the Registrar manually signs the
certificate  of  authentication  on  the  Debenture.  The  signature  shall  be
conclusive  evidence  that  the  Debenture  has  been  authenticated  under this
Indenture.

     The  Registrar  shall  authenticate  Debentures  for  original issue in the
aggregate  principal amount of up to $14,000,000 (but not more than:  $3,000,000
of Debentures maturing April 1, 2009; $4,500,000 of Debentures maturing April 1,
2011;  or  $6,500,000 of Debentures maturing April 1, 2013) upon a written order
of  the  Company  signed  by  two  Officers  or  by  an Officer and an Assistant
Treasurer  of  the  Company.  The order shall specify the amount and Maturity of
Debentures  to  be authenticated, whether interest on the Debentures will accrue
or  will  be  paid  quarterly,  and  the  date  on  which  the original issue of
Debentures is to be authenticated.  The aggregate principal amount of Debentures
outstanding  at  any  time  may  not exceed the amount set forth above except as
provided  in  Sections  2.08  and  2.09.

     The Registrar may appoint an authenticating agent acceptable to the Company
to authenticate Debentures.  Unless limited by the terms of said appointment, an
authenticating  agent  may authenticate Debentures whenever the Registrar may do
so.  Each  reference  in  this  Indenture  to  authentication  by  the Registrar
includes  authentication  by such authenticating agent.  An authenticating agent
has  the  same  rights  as  an  Agent  to deal with the Company or an Affiliate.

     The  Debentures  shall  be issuable only in registered form without coupons
and only in denominations of $10,000 and any integral multiple thereof.

     SECTION  2.03.  Registrar  and Paying Agent.  The Company shall maintain an
                     ---------------------------
office  or agency where Debentures may be presented for registration of transfer
or  for  exchange  ("Registrar")  and  an  office

                                        4
<PAGE>
or  agency  where Debentures may be presented for payment ("Paying Agent").  The
Registrar  shall  keep  a  register  of the Debentures and of their transfer and
exchange.  The  Company  may  have  one  or  more  co-Registrars and one or more
additional  Paying  Agents.  The  term  "Paying  Agent"  includes any additional
paying  agent.  The  Company or any of its Subsidiaries may act as Paying Agent,
Registrar  or  co-Registrar.

     The Company shall enter into an appropriate agency agreement with any Agent
not  a party to this Indenture.  The agreement shall implement the provisions of
this Indenture that relate to such Agent and shall incorporate the provisions of
the  TIA.  The  Company  shall notify the Trustee of the name and address of any
such  Agent.  If the Company fails to maintain a Registrar or Paying Agent, upon
notification  and  delivery  of necessary records, the Trustee shall act as such
and  shall  be  entitled  to  appropriate  compensation  in  accordance with the
provisions  of  Section  7.07.

     SECTION  2.04.  Paying  Agent  to  Hold  Money in Trust.  The Company shall
                     ---------------------------------------
require  each  Paying Agent to agree in writing to hold in trust for the benefit
of  the  Debentureholders  or the Trustee all money held by the Paying Agent for
the  payment  of principal of or interest on the Debentures, and the Company and
the  Paying Agent shall each notify the Trustee of any default by the Company in
making  any  such  payment.  While  any  such default continues, the Trustee may
require  a  Paying  Agent  to  pay  all money held by it to the Trustee.  If the
Company  or  a Subsidiary acts as Paying Agent, it shall segregate the money and
hold  it as a separate trust fund.  The Company at any time may require a Paying
Agent  to  pay  all  money  held by it to the Trustee.  Upon such payment to the
Trustee the Paying Agent shall have no further liability for the money delivered
to  the  Trustee.

     SECTION  2.05.  Debentureholder  Lists.  The  Trustee  shall preserve in as
                     ----------------------
current a form as is reasonably practicable the most recent list available to it
of  the  names  and  addresses  of  Debentureholders.  If the Trustee is not the
Registrar,  the  Company  shall furnish to the Trustee at least every six months
and  at  such other times as the Trustee may request in writing, a list, in such
form and as of such date as the Trustee may reasonably require, of the names and
addresses  of  Debentureholders.

     SECTION  2.06.  Access  of  Information  to  Debentureholders.  Within five
                     ---------------------------------------------
business  days  after the receipt by the Trustee of a written application by any
three or more Debentureholders stating that the applicants desire to communicate
with  other Debentureholders with respect to their rights under the Indenture or
under  the Debentures, and accompanied by a form of proxy or other communication
which  such  applicants  proposed to transmit, and by reasonable proof that each
such  applicant  has  owned  a  Debenture  for  a  period of at least six months
preceding  the  date  of  such  application, the Trustee shall, at its election,
either:

          (a)     afford  to  such  applicants  access to all information in the
possession of the Trustee as to the names and addresses of the Debentureholders;
or

          (b)     inform  such  applicants  as  to  the  approximate  number  of
Debentureholders  according  to  the  most  recent  information  so furnished or
received  by  the  Trustee,  and  as  to the approximate cost of mailing to such
Debentureholders  the form of proxy or other communication, if any, specified in
such  application.

     If  the  Trustee  shall  elect not to afford such applicants access to such
information,  the  Trustee  shall,  upon the written request of such applicants,
mail  to  all  the  Debentureholders  copies  of  the  form  of  proxy  or other
communication  which  is  specified  in  the request, with reasonable promptness
after  a  tender  to the Trustee of the material to be mailed and of payment, or
provision  for  the  payment, of the reasonable expenses of such mailing, unless
within  five  days after such tender, the Trustee shall mail to such applicants,
and  file  with  the  SEC  together  with a copy of the material to be mailed, a
written  statement  to  the  effect  that,  in  the opinion of the Trustee, such
mailing would be contrary to the best interests of the Debentureholders or would
be  in  violation  of  applicable law.  Such written statement shall specify the
basis  of  such  opinion.

                                        5
<PAGE>
     The  Company,  the  Trustee,  the  Registrar and anyone else shall have the
protection  of  TIA  Sec.312.

     SECTION  2.07.  Transfer  and  Exchange.  Where a Debenture is presented to
                     -----------------------
the  Registrar  or  a  co-Registrar  with  a request to register a transfer, the
Registrar  shall register the transfer as requested if its requirements for such
transaction  are  met.  Where  Debentures  of  one Maturity are presented to the
Registrar  or  a  co-Registrar  with  a  request  to  exchange them for an equal
principal  amount of Debentures of other denominations of the same Maturity, the
Registrar  shall  make  the  exchange  as requested if its requirements for such
transaction are met.  Debentures containing a particular CUSIP Number may not be
exchanged  for  Debentures containing another CUSIP Number.  To permit transfers
and  exchanges,  upon surrender of any Debenture for registration of transfer at
the  office  or  agency  maintained  pursuant to Section 2.03, the Company shall
execute  and  the  Registrar  shall  authenticate  Debentures  to be issued upon
transfer or exchange. If so requested by the Registrar, all Debentures presented
for  exchange,  registration  of  transfer,  redemption  or  payment  shall  be
accompanied  by  a  written  instrument  of transfer in form satisfactory to the
Registrar,  duly  executed  by  the  registered  owner  or  by his attorney duly
authorized  in  writing. Any exchange or transfer shall be without charge to the
Debentureholder,  except  that  the  Company  may  require  payment  from  the
Debentureholder  of  a  sum  sufficient  to  cover any tax or other governmental
charge that may be imposed in relation thereto. The Registrar shall not transfer
or  exchange any Debenture or portion of a Debenture selected for redemption, or
transfer  or  exchange any Debentures for a period of 15 days before a selection
of  Debentures  to  be  redeemed.

     SECTION  2.08.  Replacement  Debentures.  If  a  mutilated  Debenture  is
                     -----------------------
surrendered  to  the  Registrar  or if the Holder of a Debenture claims that the
Debenture  has been lost, destroyed or wrongfully taken, the Company shall issue
and the Registrar shall authenticate a replacement Debenture if the requirements
of the Company or the Registrar for such transaction are met.  The Registrar may
require  an  indemnity  bond  which  shall  be sufficient in the judgment of the
Registrar  and  the  Company to protect the Company, the Trustee, the Registrar,
any Agent or any authenticating agent from any loss which any of them may suffer
if  a  Debenture  is replaced, destroyed, lost or wrongfully taken.  The Company
may  charge  such  Holder  for  its expenses in replacing such Debenture.  Every
replacement  Debenture  is  an  additional  obligation  of  the  Company.

     SECTION  2.09.  Outstanding Debentures.  Debentures outstanding at any time
                     ----------------------
are  all  Debentures authenticated by the Registrar except for those canceled by
it,  those delivered to it for cancellation, and those described in this Section
2.09.  A  Debenture  does not cease to be outstanding because the Company or one
of  its  Subsidiaries  holds  the  Debenture.

     If  a  Debenture  is  replaced  pursuant  to  Section 2.08, it ceases to be
outstanding  unless  the Trustee or the Registrar receives proof satisfactory to
it  that  the  replaced  Debenture  is  held  by  a  bona  fide  purchaser.

     If  the  Paying  Agent  (other than the Company or a Subsidiary) holds on a
redemption  date  or maturity date money sufficient to pay Debentures payable on
that  date, then on and after that date such Debentures shall be deemed to be no
longer  outstanding  and  interest  on  them  shall  cease  to  accrue.

     SECTION  2.10.  Treasury Debentures.  In determining whether the Holders of
                     -------------------
the  required  amount  of  Debentures have concurred in any direction, waiver or
consent,  and for the purpose of calculating and making payments of interest and
selecting  Debentures  for  redemption,  Debentures  owned  by the Company or an
Affiliate  shall  be  disregarded,  except  that for the purposes of determining
whether  the  Trustee  shall be protected in relying on any direction, waiver or
consent,  only  Debentures  the  Trustee actually knows are so owned shall be so
disregarded.

     SECTION 2.11.  Temporary Debentures.  Until definitive Debentures are ready
                    --------------------
for  delivery,  the  Company  may  prepare  and  the  Trustee shall authenticate
temporary  Debentures.  Temporary  Debentures shall be substantially in the form
of  definitive  Debentures  but  may  have variations that the Company considers
appropriate  for  temporary Debentures.  Without unreasonable delay, the Company
shall  prepare  and  the  Trustee  shall  authenticate  definitive Debentures in
exchange  for  temporary  Debentures.  Until

                                        6
<PAGE>
such  exchange,  temporary  Debentures  shall  be  entitled  to the same rights,
benefits  and  privileges  as  definitive  Debentures.

     SECTION  2.12.  Cancellation.  The  Company  at  any  time  may  deliver
                     ------------
Debentures  to the Trustee or the Registrar for cancellation.  The Registrar and
Paying Agent shall forward to the Trustee any Debentures surrendered to them for
transfer,  exchange  or  payment.  The  Trustee or the Registrar and no one else
shall  cancel and may destroy any Debentures surrendered for transfer, exchange,
payment or cancellation and deliver a certificate of any such destruction to the
Company  unless the Company instructs the Trustee or the Registrar in writing to
deliver the Debentures to the Company.  The Company may not issue new Debentures
to  replace, or reissue or recall Debentures that it has (i) paid or redeemed or
(ii)  purchased  or  otherwise  acquired  and  delivered  to  the Trustee or the
Registrar  for  cancellation.

     SECTION 2.13.  Defaulted Interest.  If the Company defaults in a payment of
                    ------------------
interest  on  the Debentures, it shall pay the defaulted interest to the persons
who are Debentureholders on a subsequent special record date.  The Company shall
fix  the  special payment date and special record date.  The special record date
shall  be  at least 15 days prior to the special payment date.  At least 15 days
before  such special record date, the Company shall mail to each Debentureholder
a  notice that states such special record date, the special payment date and the
amount of defaulted interest to be paid.  The Company may pay defaulted interest
in  any  other  lawful  manner.  Pursuant to Section 4.01, the Company shall pay
interest  on  overdue  installments  of  interest,  to  the  extent  lawful.

     SECTION  2.14.  CUSIP  Numbers.  The  Company in issuing the Debentures may
                     ---------------
use  "CUSIP"  numbers  (if then generally in use), and, if so, the Trustee shall
use  "CUSIP"  numbers  in  notices  of  redemption  as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
--------
correctness  of such numbers either as printed on the Debentures or as contained
in  any notice of a redemption and that reliance may be placed only on the other
identification  numbers printed on the Debentures, and any such redemption shall
not  be  affected  by  any  defect  in  or  omission  of  such  numbers.

                                  ARTICLE THREE

                                   REDEMPTION
                                   ----------

     SECTION  3.01.  Notices  to Trustee.  The Debentures may be redeemed at any
                     -------------------
time  in  whole or in part, at the redemption price(s) set forth in section 5 of
the  Debentures.  The  Registrar  may  select  for  redemption  portions  of the
principal  amount  of  Debentures  that  have denominations larger than $10,000.
Debentures  and  portions  of  them it selects shall be in amounts of $10,000 or
integral  multiples  of $10,000.  If the Company elects to redeem Debentures, it
shall  notify  the Registrar in writing of the redemption date, the CUSIP number
or  numbers to be redeemed, and the principal amount of each group of Debentures
to  be  redeemed.  In the case of any such redemption, the Company shall deliver
to the Trustee an Officers' Certificate stating that such redemption will comply
with the provisions for redemption contained herein and in the Debentures.

     The  Company  shall  give  each notice provided for in this Section 3.01 at
least  45  days  before  the redemption date (except that the Trustee may in its
sole  discretion  waive  such  notice  period  at  any  time).

     SECTION  3.02.  Selection  of  Debentures to be Redeemed.  If less than all
                     ----------------------------------------
the  Debentures  containing  any particular CUSIP number are to be redeemed, the
Registrar  shall  select  the  Debentures  to  be redeemed by such method as the
Registrar  shall  deem fair and appropriate or if the Debentures are listed on a
national  securities  exchange,  in  accordance with the rules of such exchange.
The  Registrar  shall  make  the  selection  from Debentures outstanding and not
previously  called  for  redemption.  Provisions of this Indenture that apply to
Debentures called for redemption also apply to portions of Debentures called for
redemption.

                                        7
<PAGE>
     SECTION 3.03. Notice of Redemption.  At  least 30 days but not more than 90
                   --------------------
days  before a redemption date, the Company shall mail a notice of redemption by
first-class  mail  to each Holder of Debentures to be redeemed. The notice shall
identify the Debentures to be redeemed and shall state: (i) the redemption date;
(ii)  the  redemption  price  and  accrued  interest, if any; (iii) the name and
address of the Paying Agent; (iv) that, Debentures called for redemption must be
surrendered  to  the  Paying  Agent  to collect the redemption price and accrued
interest, if any; (v) that, unless the Company defaults in making the redemption
payments,  interest  on Debentures called for redemption ceases to accrue on and
after  the  redemption  date  and  the only remaining right of the Holders is to
receive  payment  of  the redemption price upon surrender to the Paying Agent of
the  Debentures; (vi) if any Debenture is being redeemed in part, the portion of
the  principal  amount  of  such  Debenture  to  be redeemed and (vii) the CUSIP
number, if any. At the Company's request and expense, the Trustee shall give the
notice of redemption in the Company's name.

     SECTION 3.04.  Effect of Notice of Redemption.  Once a notice of redemption
                    ------------------------------
is  mailed,  Debentures  called  for  redemption  become  due and payable on the
redemption  date  and  at  the  redemption  price.  Upon surrender to the Paying
Agent,  such  Debentures  shall  be  paid  at the redemption price, plus accrued
interest  to  the  redemption  date,  but  interest  installments  for which the
interest  payment date is on or prior to such redemption date will be payable to
the  Holders  of  record  at  the close of business on the relevant record dates
referred  to  in  the  Debentures.

     SECTION  3.05.  Deposit  of  Redemption  Price.  At  least one Business Day
                     ------------------------------
prior  to  the  redemption date, the Company shall deposit with the Paying Agent
(or  if  the Company is its own Paying Agent, shall segregate and hold in trust)
immediately  available  funds  sufficient  to  pay  the redemption price of, and
accrued  interest  on,  all  Debentures  to  be  redeemed  on  that  date.

     SECTION  3.06.  Debentures Redeemed in Part.  Upon surrender of a Debenture
                     ---------------------------
that  is  redeemed  in part, the Registrar shall authenticate for the Holder, at
the  expense  of  the  Company,  a  new  Debenture of the same Maturity equal in
principal amount to the unredeemed portion of the Debenture surrendered.

     SECTION  3.07.  Repurchase  At  Option  of  Holder.  Subject  to  and  in
                     ----------------------------------
compliance  with  the  provisions  of  this section, at the option of the Holder
thereof,  the  Company  will  repurchase Debentures at a price equal to the face
amount of the Debenture, together with all accrued interest thereon.  Such right
shall  commence  in  calendar  year  2009 and shall be subject to the limitation
that,  in  no  calendar year shall the Company be required to purchase more than
$100,000  principal  amount  of each maturity of Debentures, on a non-cumulative
basis.  Such  repurchases shall be made only once each calendar year, on April 1
of  each  year  commencing in 2009.  A Holder desiring the Company to purchase a
Debenture  must  deliver  a  written  request  to the Company, together with the
Debenture  and  a  written  instrument  of  transfer in form satisfactory to the
Company  and  the  Registrar,  duly  executed  by the registered owner or by his
attorney  duly  authorized  in  writing.  The request may be made only once each
year,  commencing  in 2009, and the Company will repurchase Debentures presented
by  Holders  on  a first-come, first-served basis, based on the date the Company
receives  the  completed documents.  The request and completed documents must be
delivered  no  earlier  than  February  1  and  no  later than February 28 for a
purchase  to  be  completed  as  of  April  1.  Only  whole  Debentures  may  be
surrendered  for  repurchase  and  the  Company  may  suspend  or  terminate its
obligation  to  repurchase  Debentures pursuant to this Section 3.07 if:  (i) it
determines,  in its sole discretion, that circumstances make such repurchase not
reasonably  practicable;  (ii)  it determines, in its sole discretion, that such
repurchase would cause adverse tax consequences to the Company or the Holders of
Debentures;  (iii)  any  governmental  or regulatory authority with jurisdiction
over  the Company so demands for the protection of the Holders of Debentures; or
(iv)  it  determines,  in  its  sole  discretion,  that such repurchase would be
unlawful.

                                        8
<PAGE>
                                  ARTICLE FOUR

                                    COVENANTS
                                    ---------

     SECTION  4.01.  Payment of Debentures.  The Company shall pay the principal
                     ---------------------
of and interest on the Debentures on the dates and in the manner provided in the
Debentures.  An installment of principal or interest shall be considered paid on
the  date due if the Paying Agent (other than the Company or a Subsidiary) holds
on  that  date  money designated for and sufficient to pay the installment.  The
Company  shall  deposit  with  the  Paying  Agent  immediately  available  funds
sufficient  to  pay  the principal of or interest on the Debentures at least one
Business Day prior to the dates provided in the Debentures.

     The Company shall pay interest on overdue principal and interest on overdue
installments  of  interest, to the extent lawful, at the rate per annum borne by
the  Debentures.

     SECTION 4.02.  SEC Reports.  Within 5 days after the Company files with the
                    -----------
SEC  copies  of  its annual reports and other information, documents and reports
(or  copies of such portions of any of the foregoing as the SEC may by rules and
regulations  prescribe)  which  it  is required to file with the SEC pursuant to
Section  13  or  15(d) of the Securities Exchange Act of 1934, the Company shall
file  the  same  with the Trustee.  The Company also shall comply with the other
provisions  of  TIA  Sec.  314(a).

     SECTION  4.03.  Compliance  Certificate.  The  Company shall deliver to the
                     -----------------------
Trustee  within  120  days  after  the end of each fiscal year of the Company an
Officers' Certificate stating that a review of the activities of the Company has
been  made  under  the  supervision  of  the  signing  Officers  with  a view to
determining  whether  a  Default or Event of Default has occurred and whether or
not  the  signers  know  of  any Default by the Company in performing any of its
obligations  under  this  Indenture.  If  they  do  know  of such a Default, the
certificate  shall describe all such Events of Default or Defaults, their status
and  what action the Company is taking or proposes to take with respect thereto.
Upon  becoming  aware  of  any  Default  or  Event of Default, the Company shall
deliver  an Officers' Certificate to the Trustee specifying the Default or Event
of  Default, its status and the action the Company proposes to take with respect
thereto.

     SECTION  4.04.  Limitation  on  Dividends and Stock Purchases.  The Company
                     ---------------------------------------------
shall  not  declare  or pay any dividend or make any distribution on its Capital
Stock  or  to its shareholders (other than dividends or distributions payable in
its Capital Stock) or purchase, redeem or otherwise acquire or retire for value,
or permit any Subsidiary to purchase or otherwise acquire for value, any Capital
Stock  of  the  Company (collectively, "Restricted Payments") if, at the time of
such Restricted Payment, or after giving effect thereto, (i) an Event of Default
shall have occurred and be continuing, or (ii) a Default shall occur as a result
thereof;  provided, however, that the provisions of this limitation on dividends
shall  not prevent (A) the payment of any dividend within 60 days after the date
of  declaration  thereof,  if  at said date of declaration such payment complied
with  the  provisions of this limitation on dividends, or (B) the acquisition or
retirement  of any shares of the Company's Capital Stock by exchange for, or out
of  the  proceeds  of  the  sale  of  shares  of,  its  Capital  Stock.

     SECTION  4.05.  Pari  Passu Indebtedness.  There shall be no restriction on
                     ------------------------
the  amount  or type of Indebtedness of the Company which may be pari passu with
(i.e.  having  no  priority  of  payment  over  and not subordinated in right of
payment to) or subordinate to the Debentures.  At December 31, 2003, the Company
had  outstanding  the  following  Debentures  which  rank  pari  passu  with the
Debentures:  $9,000,000  aggregate  principal  amount  of  its  Series  5/12/95
Registered Floating Rate Redeemable Subordinated Debentures (the "Series 5/12/95
Debentures") which were issued pursuant to an Indenture dated as of June 1, 1995
by  and  between  the  Company  and  The  Bank of New York, $9,000,000 aggregate
principal  amount  of  its  Series  10/19/95 Registered Floating Rate Redeemable
Subordinated  Debentures  (the  "Series  10/19/95 Debentures") which were issued
pursuant to an Indenture dated as of November 1, 1995 by and between the Company
and  The  Bank of New York, $12,000,000 aggregate principal amount of its Series
5/10/96 Registered Floating Rate Redeemable Subordinated Debentures (the "Series
5/10/96 Debentures") which were issued pursuant to an Indenture dated as of June
1,  1996  by  and  between  the

                                        9
<PAGE>
Company  and  The Bank of New York, and $5,500,000 aggregate principal amount of
its  Series 10/15/96 Registered Floating Rate Redeemable Subordinated Debentures
(the  "Series  10/15/96  Debentures") which were issued pursuant to an Indenture
dated  as  of  November  1,  1996 by and between the Company and The Bank of New
York, and $8,000,000 aggregate principal amount of its Series 4/30/97 Registered
Floating  Rate  Redeemable  Subordinated  Debentures  (the  "Series  4/30/97
Debentures"), which were issued pursuant to an Indenture dated as of May 1, 1997
by  and  between  the Company and The Bank of New York, and $4,000,000 aggregate
principal  amount  of  its  Series  11/10/98  Debentures  (the  "Series 11/10/98
Debentures")  which were issued pursuant to an Indenture dated as of December 1,
1998  by  and between the Company and The Bank of New York, $6,500,000 aggregate
principal  amount  of  its  Series  6/28/99  Debentures  (the  "Series  6/28/99
Debentures") which were issued pursuant to an Indenture dated as of July 1, 1999
by  and  between  the  Company  and  The  Bank of New York, $2,500,000 aggregate
principal  amount  of  its  Series  9/18/00  Debentures  (the  "Series  9/18/00
Debentures")  which  were  issued pursuant to an Indenture dated as of September
15,  2000  by  and  between  the  Company  and  The Bank of New York, $7,250,000
aggregate  principal  amount of its Series 8/1/01 Debentures (the "Series 8/1/01
Debentures")  which  were  issued pursuant to an Indenture dated as of August 1,
2001  by  and between the Company and The Bank of New York, $5,750,000 aggregate
principal  amount  of  its  Series  1/17/02  Debentures  (the  "Series  1/17/02
Debentures")  which were issued pursuant to an Indenture dated as of February 1,
2002  by  and between the Company and The Bank of New York, $7,750,000 aggregate
principal  amount  of  its  Series  8/5/02  Debentures  (the  "Series  8/5/02
Debentures")  which  were  issued pursuant to an Indenture dated as of August 1,
2002  by  and between the Company and The Bank of New York, $7,500,000 aggregate
principal  amount  of  its  Series  1/21/03  Debentures  (the  "Series  1/21/03
Debentures")  which  were issued pursuant to an Indenture dated as of January 1,
2003  by  and between the Company and The Bank of New York, $8,500,000 aggregate
principal  amount  of  its  Series  7/25/03  Debentures  (the  "Series  7/25/03
Debentures")  which  were  issued pursuant to an Indenture dated as of August 1,
2003  by and between the Company and The Bank of New York, $12,000,000 aggregate
principal  amount  of  its  Series  11/28/03  Debentures  (the  "Series 11/28/03
Debentures")  which were issued pursuant to an Indenture dated as of December 1,
2003  by  and  between  the  Company  and  The Bank of New York, and $11,500,000
aggregate  principal  amount of its Series 6/7/04 Debentures (the "Series 6/7/04
Debentures") which were issued pursuant to an Indenture dated as of June 1, 2004
by  and  between the Company and The Bank of New York. The Bank of New York, the
Trustee  herein  named,  presently  serves  as trustee for all of the debentures
which  rank  pari  passu  with  the  Debentures.

                                  ARTICLE FIVE
                              SUCCESSOR CORPORATION
                              ---------------------

     SECTION  5.01.  When  the  Company  May  Merge, etc.  The Company shall not
                     -----------------------------------
consolidate  with or merge with or into, or transfer all or substantially all of
its  assets  to,  any other person unless (i) such other person is a corporation
organized  or  existing  under the laws of the United States or a state thereof,
(ii)  such  surviving  person  (other  than  the  Company)  expressly assumes by
supplemental  indenture all the obligations of the Company under the Debentures,
this Indenture and the other agreements related thereto, (iii) immediately after
such transaction no Default or Event of Default exists, and (iv) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each
stating  that  such  consolidation,  merger  or  transfer  and such supplemental
indenture  comply  with  this  Article  and that all conditions precedent herein
provided  for  have  been complied with.  Thereafter all such obligations of the
predecessor  corporation  shall  terminate.

                                   ARTICLE SIX

                              DEFAULTS AND REMEDIES
                              ---------------------

     SECTION 6.01. Events of Default.  An "Event of Default" occurs if:
                   -----------------

          (1)     the  Company  defaults  in  the  payment  of  interest  on any
Debenture  when the same becomes due and payable and the default continues for a
period  of  30  days,  whether  or  not  such payment shall be prohibited by the
provisions  of  Article  Ten;

                                       10
<PAGE>
          (2)     the  Company  defaults  in  the  payment  of  principal of any
Debenture  when the same becomes due and payable at maturity, upon redemption or
otherwise,  whether or not such payment shall be prohibited by the provisions of
Article  Ten;

          (3)     the  Company  fails to comply with any of its other agreements
in the Debentures or this Indenture and the default continues for the period and
after  the  notice  specified  below;

          (4)     the  Company  pursuant  to  or  within  the  meaning  of  any
Bankruptcy  Law:  (A)  commences a voluntary case or proceeding, (B) consents to
the  entry  of  an  order  for  relief  against  it  in  an  involuntary case or
proceeding,  (C)  consents to the appointment of a Custodian (as defined herein)
of  it  or  for all or substantially all of its property, or (D) makes a general
assignment  for  the  benefit  of  its  creditors;

          (5)     a  court  of competent  jurisdiction enters an order or decree
under  any  Bankruptcy  Law  that:  (A)  is for relief against the Company in an
involuntary  case  or proceeding, (B) appoints a Custodian of the Company or for
all  or  substantially all of its property, or (C) orders the liquidation of the
Company, and in each case the order or decree remains unstayed and in effect for
60  days.

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

     A  default under clause (3) is not an Event of Default until the Trustee or
the  Holders  of  at  least  25%  in  principal  amount  of the then outstanding
Debentures  notify  the Company of the default and the Company does not cure the
default within 60 days after receipt of the notice.  The notice must specify the
default,  demand  that  it be remedied and state that the notice is a "Notice of
Default".  If  the  Holders  of  25%  in  principal  amount  of  the outstanding
Debentures  request the Trustee to give such notice on their behalf, the Trustee
shall  do  so.

     SECTION  6.02.  Acceleration.  If any Event of Default (other than an Event
                     ------------
of  Default  specified  in Section 6.01(4) or (5)) occurs and is continuing, the
Trustee  by  notice  to the Company, or the Holders of at least 25% in principal
amount  of  the outstanding Debentures by notice to the Company and the Trustee,
may  (but  shall  not  be obligated to) declare the principal of and all accrued
interest  on  all  the  Debentures to be due and payable immediately.  Upon such
declaration  such  principal  and interest shall be due and payable immediately.
If  an  Event  of Default specified in Section 6.01(4) or (5) occurs, all unpaid
principal  and  accrued  interest  on the Debentures then outstanding shall ipso
                                                                            ----
facto become and be immediately due and payable without any declaration or other
-----
act  on  the  part  of  the  Trustee  or  any Debentureholder.  The Holders of a
majority  in  principal  amount  of  the outstanding Debentures by notice to the
Trustee  may rescind an acceleration and its consequences if all existing Events
of Default have been cured or waived, except nonpayment of principal or interest
that  has  become  due solely because of the acceleration, and if the rescission
would not conflict with any judgment or decree.  No such rescission shall affect
any subsequent Default or impair any right consequent thereto.

     SECTION  6.03.  Other  Remedies.  If  an  Event  of  Default  occurs and is
                     ---------------
continuing,  the Trustee may pursue any available remedy by proceeding at law or
in  equity  to collect the payment of principal of or interest on the Debentures
or  to  enforce  the  performance  of  any  provision  of the Debentures or this
Indenture.

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

                                       11
<PAGE>
     SECTION  6.04.  Waiver of Past Defaults. Subject to Sections 6.07 and 9.02,
                     -----------------------
the  Holders  of a majority in principal amount of the outstanding Debentures by
notice  to  the  Trustee may waive a past Default and its consequences, except a
Default  under  Section 6.01(1) or (2). When a Default is so waived, it shall be
deemed cured and ceases.

     SECTION 6.05.  Control by Majority.  The Holders of a majority in principal
                    -------------------
amount  of  outstanding  Debentures  may  direct  the  time, method and place of
conducting  any proceeding for any remedy available to the Trustee or exercising
any  trust  or  power  conferred  on  the  Trustee; provided, however:  (i) such
direction  shall not be in conflict with any rule of law or with this Indenture;
(ii)  the  Trustee  shall  not  determine  that  the action so directed would be
unjustly  prejudicial  to  the  rights  of  any  Holder  not taking part in such
direction;  (iii) the Trustee shall have the right to decline to follow any such
direction  if  the Trustee, being advised by counsel, determines that the action
so  directed  may  not  lawfully  be taken or if the Trustee in good faith shall
determine  that  the  proceedings  so  directed  would  involve  it  in personal
liability;  or  (iv)  the Trustee may take any other action deemed proper by the
Trustee  which  is  not inconsistent with such direction.  In the event that the
Trustee  takes  any  action or follows any direction pursuant to this Indenture,
the  Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion  against  all  risk,  loss or expense caused by taking such action or
following  such  direction.

     SECTION  6.06.  Limitation  of Suits.  A Debentureholder may not pursue any
                     --------------------
remedy  with respect to this Indenture or the Debentures unless:  (i) the Holder
gives  to  the Trustee written notice of a continuing Event of Default; (ii) the
Holders of at least 25% in principal amount of the outstanding Debentures make a
written  request  to  the  Trustee  to  pursue  the remedy; (iii) such Holder or
Holders  offer  and, if requested, provide to the Trustee indemnity and security
satisfactory  to  the  Trustee  against any loss, liability or expense; (iv) the
Trustee  does  not  comply  with the request within 60 days after receipt of the
request  and  the  offer and, if requested, provision of indemnity and security;
and  (v) during such 60-day period the Holders of a majority in principal amount
of  the  Debentures  do  not give the Trustee a direction inconsistent with such
request.

     A  Debentureholder  may  not  use this Indenture to prejudice the rights of
another  Debentureholder  or  to  obtain  a  preference or priority over another
Debentureholder.

     SECTION  6.07.  Rights  of  Holders to Receive Payment.  Subject to Article
                     --------------------------------------
Ten and notwithstanding any other provisions of this Indenture, the right of any
Holder  of  a  Debenture  to receive payment of principal of and interest on the
Debenture,  on  or after the respective due dates expressed in the Debenture, or
to  bring  suit  for  the  enforcement  of  any  such  payment  on or after such
respective  dates,  shall not be impaired or affected without the consent of the
Holder,  except  as  to  a  postponement  of an interest payment consented to as
provided  in  clause  (ii)  of  Section  9.02.

     SECTION  6.08.  Collection  Suit  by  Trustee.  If  an  Event of Default in
                     -----------------------------
payment  of interest or principal specified in Section 6.01(1) or (2) occurs and
is  continuing,  the Trustee may recover judgment in its own name and as trustee
of  an  express  trust against the Company for the whole amount of principal and
interest  remaining  unpaid, together with interest on overdue principal and, to
the  extent  that  the  payment  of such interest is lawful, interest on overdue
installments  of  interest.

     SECTION  6.09.  Trustee May File Proof of Claim.  The Trustee may file such
                     -------------------------------
proofs  of  claim and other papers or documents as may be necessary or advisable
in  order  to  have  the  claims  of  the  Trustee  (including  any  claim  for
compensation,  expenses,  disbursements  and advances of the Trustee, its agents
and counsel) and any predecessor Trustee and the Debentureholders allowed in any
judicial  proceedings  relative  to  the Company, its creditors or its property.
Nothing  herein  contained shall be deemed to authorize the Trustee to authorize
or  consent  to  or accept or adopt on behalf of any Debentureholder any plan of
reorganization,  arrangement, adjustment or composition affecting the Debentures
or  the  rights  of  any  Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Debentureholder in any such proceedings.

                                       12
<PAGE>
     SECTION  6.10.  Priorities.  If  the Trustee collects any money pursuant to
                     ----------
this  Article Six, it shall pay out the money in the following order: (i) first,
to  the Trustee and any predecessor Trustee for costs and expenses of collection
of  such  monies  and  for compensation payable to the Trustee or its agents and
counsel  and  all  other  expenses,  liabilities,  advances  and  other  amounts
incurred,  made  or  due  under  Section 7.07; (ii) second, to holders of Senior
Indebtedness  of the Company to the extent required by Article Ten; (iii) third,
to  Debentureholders  for amounts due and unpaid on the Debentures for principal
and  interest, ratably, without preference or priority of any kind, according to
the  amounts  due  and  payable  on  the  Debentures for principal and interest,
respectively; and (iv) fourth, to the Company. The Trustee may fix a record date
and payment date for any payment to Debentureholders pursuant to this Section.

     SECTION  6.11.  Undertaking  for Costs.  In any suit for the enforcement of
                     ----------------------
any  right or remedy under this Indenture or in any suit against the Trustee for
any  action  taken  or  omitted  by it as Trustee, a court in its discretion may
require  the  filing  by any party litigant in the suit of an undertaking to pay
the  costs  of  the  suit, and the court in its discretion may assess reasonable
costs,  including  reasonable attorneys' fees, against any party litigant in the
suit,  having due regard for the merits and good faith of the claims or defenses
made  by  the party litigant.  This Section 6.11 does not apply to a suit by the
Trustee,  a  suit  by  a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the outstanding Debentures.

                                  ARTICLE SEVEN

                                    TRUSTEE
                                    -------

     SECTION 7.01.  Duties  of  Trustee.
                    -------------------

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

     (b)     Except  during  the  continuance  of  an  Event of Default; (i) the
Trustee  need  perform only those duties that are specifically set forth in this
Indenture  and  no others; and (ii) in the absence of bad faith on its part, the
Trustee  may  conclusively  rely,  as  to  the  truth  of the statements and the
correctness  of  the  opinions  expressed therein, upon certificates or opinions
furnished  to  the Trustee and conforming to the requirements of this Indenture;
the  Trustee,  however, shall examine the certificates and opinions submitted in
accordance  with  Section  11.03 to determine whether or not they conform to the
requirements  of  this  Indenture.

     (c)     The  Trustee  may  not  be  relieved  from  liability  for  its own
negligent  action,  its  own  negligent  failure  to  act  or  its  own  willful
misconduct,  except  that:  (i)  this  paragraph  does  not  limit the effect of
paragraph (b) of this Section 7.01; (ii) the Trustee shall not be liable for any
error  of  judgment  made  in  good faith by a Responsible Officer, unless it is
proved  that  the Trustee was negligent in ascertaining the pertinent facts; and
(iii)  the  Trustee  shall  not be liable with respect to any action it takes or
omits  to  take  in  good  faith  in  accordance with a direction received by it
pursuant  to  Section  6.05.

     (d)     Every  provision  of  this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

     (e)     The Trustee may refuse to perform any duty or exercise any right or
power or risk its own funds or otherwise incur any financial liability unless it
receives  indemnity  satisfactory  to  it against any and all loss, liability or
expense.

     (f)     The  Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with Company.

                                       13
<PAGE>
     (g)     Money  held  in  trust  by  the Trustee need not be segregated from
other funds except to the extent required by law.

     SECTION  7.02.  Rights  of  Trustee.  Subject  to  Section  7.01:
                     -------------------

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

     (b)     Before  the Trustee  cts or refrains from acting, it may require an
Officers'  Certificate  or  an  Opinion of Counsel, which shall conform with the
provisions  of Section 11.04.  The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or opinion.

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

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

     (e)     The  Trustee  may consult with counsel and the advice or opinion of
such  counsel  as to matters of law shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it  hereunder in good faith and in accordance with the advice or opinion of such
counsel.

     (f)     The  Trustee  shall  be  under no obligation to exercise any of the
rights  or  powers  vested  in  it  by  this  Indenture at the request, order or
direction of any of the Holders of the Debentures, pursuant to the provisions of
this  Indenture,  unless such Holders shall have offered to the Trustee security
and  indemnity,  satisfactory to the Trustee in its sole discretion, against all
costs,  expenses  and liabilities which might be incurred by the Trustee therein
or  thereby.

     (g)     The  Trustee  shall not be obligated to make any investigation into
the  facts  or  matters  stated  in  any  resolution,  certificate,  statement,
instrument,  opinion,  report, notice, request, direction, consent, order, bond,
debenture or any other paper or document; provided, however, the Trustee, in its
discretion,  may  make  such further inquiry or investigation into such facts or
matters  as it may see fit. Nothing contained in this Indenture shall create any
liability to the Trustee in the event it elects to make or not to make a further
inquiry  or  investigation  to  which  it  is  entitled  as  aforesaid.

     SECTION 7.03.  Individual Rights of Trustee.  The Trustee in its individual
                    ----------------------------
or  any  other  capacity  may  become the owner or pledgee of Debentures and may
otherwise  deal with the Company or its Affiliates with the same rights it would
have  if  it  were not the Trustee.  Any Agent may do the same with like rights.
The  Trustee,  however,  must  comply  with  Sections  7.10  and  7.11.

     SECTION  7.04.  Trustee's Disclaimer.  The Trustee shall not be responsible
                     --------------------
for and makes no representation as to the validity or adequacy of this Indenture
or  the  Debentures;  it  shall  not be accountable for the Company's use of the
proceeds from the Debentures; and, subject to any liabilities which may be found
to  exist  under  the  provisions  of  the Federal securities laws, shall not be
responsible  for  any statement of the Company in this Indenture or any document
issued  in  connection  with  the sale of the Debentures or any statement in the
Debentures  other  than  its  certificate of authentication or in any prospectus
used  in  connection  with  the  sale  of such Debentures, other than statements
provided in writing by the Trustee for use in such prospectus.

     SECTION  7.05.  Notice  of Defaults.  If a Default occurs and is continuing
                     -------------------
and  if  it  is  known  to  the  Trustee,  the  Trustee  shall  mail  to  each
Debentureholder  notice  of the Default within 90 days after it occurs, or if it
becomes known to the Trustee after such 90 days, as soon as practicable after it
becomes  known  to  the  Trustee.  Except in the case of a Default in payment of
principal  of  or  interest  on  any

                                       14
<PAGE>
Debenture  or any amounts due on redemption, the Trustee may withhold the notice
if  and  so  long as the board of directors of the Trustee, the executive or any
trust committee of such board and/or Responsible Officers of the Trustee in good
faith  determine(s)  that  withholding  the  notice  is  in  the  interest  of
Debentureholders.

     SECTION  7.06.  Reports  by Trustees to Holders.  Within 60 days after each
                     -------------------------------
May  15,  beginning  with  May  15,  2002,  the  Trustee  shall  mail  to  each
Debentureholder  a  brief  report dated as of such May 15 that complies with TIA
Sec. 313(a). The Trustee also shall comply with TIA Sec. 313(b), (c) and (d).

     A  copy  of each such report at the time of its mailing to Debentureholders
shall  be filed by the Company with the SEC and each stock exchange on which the
Debentures  are  listed.  The  Trustee  shall furnish the Company with copies of
such  reports  sufficiently  in  advance  of  its mailing to Debentureholders to
permit  the  Company to make such filings in a timely manner.  The Company shall
notify  the  Trustee  when  the  Debentures  are  listed  on any stock exchange.

     SECTION  7.07.  Compensation  and  Indemnity.  The Company shall pay to the
                     ----------------------------
Trustee  such compensation for its services as the Company and the Trustee shall
from  time to time agree in writing.  The Trustee's compensation hereunder shall
not  be limited by any law on compensation relating to the trustee of an express
trust.  The  Company  shall  reimburse  the  Trustee upon request for reasonable
disbursements,  advances  and expenses incurred or made by it in connection with
its  duties  hereunder.  The Company shall indemnify each of the Trustee and any
predecessor  Trustee  against any loss or liability incurred by it in connection
with  the  administration  of  this  trust  and  the  performance  of its duties
hereunder,  including  the  reasonable expenses and attorneys' fees of defending
itself  against  any  claim  of  liability arising hereunder.  The Company shall
defend  any  claim  against  the  Trustee  of which the Company has notice.  The
Trustee  may  have  separate  counsel, and if it does, the Company shall pay the
reasonable  fees  and  expenses of such counsel.  The Company need not reimburse
any  expenses or indemnify against any loss or liability incurred by the Trustee
through  the  Trustee's  negligence  or  bad  faith.

     The  obligations  of  the  Company under this Section 7.07 to indemnify and
compensate  the  Trustee  to  pay  or  reimburse  the Trustee for such expenses,
disbursements,  and  advances  shall  constitute  Indebtedness.  To  secure  the
Company's  payment  obligations  in  this Section, the Trustee shall have a lien
prior  to  the  Debentures  on  all  money  or property held or collected by the
Trustee, except that held in trust to pay principal of or interest on particular
Debentures.

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

     The  obligations  of  the Company under this Section 7.07 shall survive the
satisfaction  and  discharge  of  this  Indenture.

     SECTION  7.08.  Replacement  of  Trustee.  A  resignation or removal of the
                     ------------------------
Trustee  and  the appointment of a successor Trustee shall become effective only
upon  the  successor  Trustee's  acceptance  of  appointment as provided in this
Section.  The  Trustee may resign by so notifying the Company.  The Holders of a
majority  in  principal  amount  of  the  outstanding  Debentures may remove the
Trustee by so notifying the Trustee and the Company, and may appoint a successor
Trustee with the Company's consent.  The Company may remove the Trustee if:  (i)
the  Trustee  fails  to comply with Section 7.10; (ii) the Trustee is adjudged a
bankrupt  or an insolvent; (iii) a receiver or other public officer takes charge
of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.

     If  the  Trustee resigns or is removed or if a vacancy exists in the office
of  Trustee  for  any  reason,  the  Company  shall promptly appoint a successor
Trustee.

                                       15
<PAGE>
     A  successor  Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately thereafter, the retiring
Trustee  shall  transfer  all  property  held  by it as Trustee to the successor
Trustee  (subject  to the lien provided for in Section 7.07), the resignation or
removal  of  the  retiring  Trustee  shall  become  effective, and the successor
Trustee  shall  have all the rights, powers and duties of the Trustee under this
Indenture.  A  successor  Trustee  shall  mail  notice of its succession to each
Debentureholder.

     If  a  successor  Trustee  does  not  take  office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders  of  a  majority  in  principal amount of the outstanding Debentures may
petition  any court of competent jurisdiction for the appointment of a successor
Trustee.

     If  the  Trustee fails to comply with Section 7.10, any Debentureholder may
petition  any court of competent jurisdiction for the removal of the Trustee and
the  appointment  of a successor Trustee, provided, however, that if the Trustee
shall  fail  to  comply  with TIA Sec. 310(b)(i), only a Debentureholder who has
been  a  bona  fide  holder  of  the  Debentures for at least six months and has
requested  the  Trustee in writing to comply with such provision may so petition
such  court.

     SECTION  7.09.  Successor  Trustee  by  Merger,  etc.  If  the  Trustee
                     ------------------------------------
consolidates with, merges or converts into or transfers all or substantially all
of  its  corporate  trust  business  to,  another  corporation,  the  successor
corporation  without  any  further  act  shall  be  the  successor  Trustee.

     SECTION  7.10.  Eligibility; Disqualification.  There shall at all times be
                     -----------------------------
a  trustee  hereunder  which shall be a corporation organized and doing business
under  the  laws  of  the United States or of any state thereof authorized under
such laws to exercise corporate trust powers, shall be subject to supervision or
examination by Federal or state authority and shall at all times have a combined
capital  and  surplus of at least $1,000,000.  If such trustee publishes reports
of  condition  at least annually, pursuant to law or to the requirements of said
supervisory  or examining authority, then for the purposes of this Section 7.10,
the  combined  capital  and  surplus  of  such trustee shall be deemed to be its
combined  capital  and  surplus as set forth in its most recent published annual
report  of  condition.

     This  Indenture  shall always have a trustee who satisfies the requirements
of  TIA  Sec.  310(a)(1) and (2).  The Trustee shall comply with TIA Sec. 310(b)
and,  for  purposes  of  TIA Sec.310(b)(1), the following indentures satisfy the
requirements  for  such  exclusion  set  forth  in  TIA  Sec.  310(b)(1)(i): the
Indenture  dated  as of June 1, 1995, by and between the Company and The Bank of
New York, as Trustee, the Indenture dated as of November 1, 1995, by and between
the Company and The Bank of New York, as Trustee, the Indenture dated as of June
1,  1996,  by  and between the Company and The Bank of New York, as Trustee, the
Indenture  dated as of November 1, 1996, by and between the Company and The Bank
of  New  York, as Trustee, the Indenture dated as of May 1, 1997, by and between
the  Company  and  The  Bank  of New York, as Trustee, the Indenture dated as of
December  1,  1998,  by  and  between  the  Company and the Bank of New York, as
Trustee,  the Indenture dated as of July 1, 1999, by and between the Company and
The  Bank of New York, as Trustee, the Indenture dated as of September 15, 2000,
by  and  between the Company and The Bank of New York, as Trustee, the Indenture
dated as of August 1, 2001, by and between the Company and The Bank of New York,
the  Indenture  dated as of February 1, 2002, by and between the Company and The
Bank  of  New York, the Indenture dated as of August 1, 2002, by and between the
Company  and The Bank of New York, the Indenture dated as of January 1, 2003, by
and  between  the  Company  and The Bank of New York,  the Indenture dated as of
August  1,  2003,  by  and  between  the  Company  and The Bank of New York, the
Indenture  dated as of December 1, 2003, by and between the Company and The Bank
of  New York, and the Indenture dated as of June 1, 2004 between the Company and
The  Bank  of  New York.  The Bank of New York presently serves as trustee under
each  such  indenture.

     SECTION  7.11.  Preferential Collection of Claims Against the Company.  The
                     -----------------------------------------------------
Trustee shall be subject to TIA Sec. 311(a), excluding any creditor relationship
arising  as  provided  in  TIA  Sec. 311(b).  A Trustee who has resigned or been
removed shall be subject to TIA Sec. 311(a) to the extent indicated.

                                       16
<PAGE>
     SECTION  7.12.  Paying  Agents.  The  Company shall cause each Paying Agent
                     --------------
other  than  the  Trustee  to  execute  and  deliver  to  it  and the Trustee an
instrument  in  which  such  Agent  shall agree with the Trustee, subject to the
provisions  of this Section 7.12; (i) that it will hold sums held by it as Agent
for the payment of principal of or interest on the Debentures (whether such sums
have  been  paid  to  it  by the Company or by any obligor on the Debentures) in
trust  for  the  benefit  of Holders of the Debentures; (ii) that it will at any
time  during  the continuance of any Event of Default, upon written request from
the  Trustee, deliver to the Trustee all sums so held in trust by it; (iii) that
it  will  give  the  Trustee  written  notice  within three Business Days of any
failure  of  the Company (or by any obligor on the Debentures) in the payment of
any  installment of the principal of or interest on the Debentures when the same
shall  be  due  and payable; and (iv) that it will comply with the provisions of
the TIA applicable to it.

                                  ARTICLE EIGHT

                             DISCHARGE OF INDENTURE
                             ----------------------

     SECTION  8.01.  Termination  of the Company's Obligations.  The Company may
                     -----------------------------------------
terminate  all of its obligations under the Debentures and this Indenture if all
Debentures previously authenticated and delivered (other than destroyed, lost or
stolen  Debentures  which have been replaced or paid) have been delivered to the
Trustee  for  cancellation  or  if:

          (1)     the Debentures mature within one year or all of them are to be
     called  for  redemption  within one year under arrangements satisfactory to
     the  Trustee  for  giving  the  notice  of  redemption;

          (2)     the  Company  irrevocably  deposits  in trust with the Trustee
     money  or  direct  non-callable obligations of, or non-callable obligations
     guaranteed  by,  the  United  States  for the payment of which guarantee or
     obligation the full faith and credit of the United States is pledged ("U.S.
     Government  Obligations"),  sufficient  to pay principal of and interest on
     the  outstanding  Debentures to maturity or redemption, as the case may be,
     and  immediately after making the deposit, the Company shall give notice of
     such  event  to  the  Debentureholders;  provided,  however,  that  if such
     irrevocable  deposit  in  trust with the Trustee of cash or U.S. Government
     Obligations is made, the Company shall have delivered to the Trustee either
     an Opinion of Counsel with no material qualifications in form and substance
     satisfactory  to  the  Trustee to the effect that Holders of the Debentures
     (i) will not recognize income, gain or loss for Federal income tax purposes
     as  a result of such deposit (and the defeasance contemplated in connection
     therewith)  and  (ii)  will  be  subject  to Federal income tax on the same
     amounts and in the same manner and at the same times as would have been the
     case  if  such  deposit  and  defeasance had not occurred, or an applicable
     favorable  ruling  to  that  effect  is  received  from or published by the
     Internal  Revenue  Service;

          (3)     the  Company  has  paid  or  caused  to  be paid all sums then
     payable  by  the  Company  to  the Trustee hereunder as of the date of such
     deposit;  and

          (4)     the  Company  has   delivered  to  the  Trustee  an  Officers'
     Certificate  and  an  Opinion  of Counsel, each stating that all conditions
     precedent provided for herein relating to the satisfaction and discharge of
     this  Indenture  have  been  complied  with.  The  Company's obligations in
     paragraph 9 of the Debentures and in Sections 2.03, 2.04, 2.05, 2.07, 2.08,
     4.01,  7.07  and  8.03,  however, shall survive until the Debentures are no
     longer outstanding. Thereafter, the Company's obligations in such paragraph
     9  and  in  Sections  7.07  and  8.03  shall  survive.

     After such irrevocable deposit and delivery of an Officers' Certificate and
Opinion of Counsel pursuant to this Section 8.01, the Trustee upon request shall
acknowledge  in  writing  the  discharge  of the Company's obligations under the
Debentures  and  this Indenture except for those surviving obligations specified
above.

                                       17
<PAGE>
     SECTION  8.02.  Application of Trust Money. The Trustee shall hold in trust
                     --------------------------
money  and  U.S.  Government  Obligations  deposited with it pursuant to Section
8.01.  It  shall  apply  the  deposited  money  through  the Paying Agent and in
accordance  with  this  Indenture to the payment of principal of and interest on
Debentures.  Money and U.S. Government Obligations so held in trust shall not be
subject  to  Article  Ten.

     SECTION  8.03.  Repayment  to  the  Company.  Subject  to Section 7.07, the
                     ---------------------------
Trustee  and the Paying Agent shall promptly pay to the Company upon request any
excess money or securities held by them at any time.  The Trustee and the Paying
Agent  shall  pay  to  the  Company  upon request any money held by them for the
payment  of principal or interest that remains unclaimed for two years, provided
such request is made by the Company within one year after the expiration of such
two  year  period  that  such  money remains unclaimed.  Thereafter, the Company
shall  have no right to request repayment of unclaimed money, and such unclaimed
money shall be held and disposed of by the Trustee in accordance with applicable
law.  The Trustee and the Paying Agent shall have no right to request or require
that  the  Company  accept  repayment  of  any  unclaimed  money.

     The  Trustee  or  the  Paying  Agent,  before  being  required  to make any
repayment  to  the Company of unclaimed money, may at the expense of the Company
mail  to  each Holder who has failed to claim a payment of interest or principal
which  is  due,  notice that such money remains unclaimed and that, after a date
specified  therein  (which  shall not be less than 30 days from the date of such
mailing),  any  unclaimed balance of such money then remaining will be repaid to
the  Company.  After  payment  to the Company, Debentureholders entitled to such
money  must  look  to  the  Company  for  payment  as  general  creditors unless
applicable  abandoned  property law designates another person, and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon cease.

                                  ARTICLE NINE

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS
                       -----------------------------------

     SECTION  9.01.  Without  Consent of Holders.  The Company, with the consent
                     ---------------------------
of  Trustee,  may  amend  or supplement this Indenture or the Debentures without
notice  to  or  consent  of  any  Debentureholder:  (i)  to  cure any ambiguity,
omission, defect or inconsistency; (ii) to comply with Section 5.01; or (iii) to
make  any  change  that  does  not  adversely  affect  the  rights  of  any
Debentureholder.  The  Trustee  shall  not  be  obligated  to  enter  into  any
supplemental  indenture which affects its own rights, duties or immunities under
this  Indenture.

     SECTION  9.02.  With  Consent of Holders.  The Company, with the consent of
                     ------------------------
the  Trustee,  may  amend or supplement this Indenture or the Debentures without
notice to any Debentureholder, but with the written consent of the Holders of at
least  a majority in principal amount of the outstanding Debentures. The Holders
of  a  majority  in  principal  amount  of  the outstanding Debentures may waive
compliance by the Company with any provision of this Indenture or the Debentures
without  notice  to  any  Debentureholder.  Without  the  consent  of  each
Debentureholder affected, however, an amendment, supplement or waiver, including
a  waiver pursuant to Section 6.04, may not: (i) reduce the amount of Debentures
whose  Holders  must  consent to an amendment, supplement or waiver; (ii) reduce
the  rate of or extend the time for payment of interest on any Debenture (except
that  Holders  of  not  less  than  75%  in  principal amount of all outstanding
Debentures  may  consent,  on  behalf  of  the Holders of all of the outstanding
Debentures,  to  the  postponement  of  any  interest  payment  for a period not
exceeding  three  years  from  its  due  date); (iii) reduce the principal of or
extend  the fixed maturity of any Debenture; (iv) waive a default in the payment
of the principal of or interest on, or other redemption payment with respect to,
any Debenture, (v) make any Debenture payable in money other than that stated in
the  Debenture;  (vi)  make any change in Article Ten that adversely affects the
rights of any Debentureholder; or (vii) make any change in Section 6.04, 6.07 or
the  third  sentence  of  this  Section  9.02.

     After  an  amendment,  supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders a notice briefly describing the
amendment.

                                       18
<PAGE>
     It shall not be necessary for the consent of the Holders under this section
to  approve  the particular form of any proposed amendment or supplement, but it
shall be sufficient if such consent approved the substance thereof.

     Upon  the  request of the Company, accompanied by a resolution of the Board
of Directors or any duly authorized committee thereof, authorizing the execution
of  any  such  supplemental  indenture,  and upon the filing with the Trustee of
evidence  satisfactory  to the Trustee of the consent of the Debentureholders as
aforesaid,  the  Trustee  shall  join  with  the  Company  in  execution of such
supplemental  indenture unless such supplemental indenture affects the Trustee's
own  rights,  duties  or  immunities  under  this  Indenture.

     SECTION  9.03.  Execution  of  Supplemental  Indentures.  In  executing, or
                     ---------------------------------------
accepting  the additional trust created by, any supplemental indenture permitted
by  this  Article  or  the  modifications  thereby of the trusts created by this
Indenture,  the  Trustee  shall  be entitled to receive, and (subject to Section
7.01)  shall  be  fully protected in relying upon, an Opinion of Counsel stating
that  the execution of such supplemental indenture is authorized or permitted by
this  Indenture.  The Trustee may, but shall not be obligated to, enter into any
such  supplemental  indenture  which  affects  the Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.

     SECTION  9.04.  Compliance with Trust Indenture Act.  Every amendment to or
                     -----------------------------------
supplement of this Indenture or the Debentures shall comply with the TIA as then
in  effect.

     SECTION  9.05.  Revocation  and  Effect  of  Consents.  Until an amendment,
                     -------------------------------------
supplement or waiver becomes effective, a consent to an amendment, supplement or
waiver  by  a  Holder  of  a Debenture is a continuing consent by the Holder and
every  subsequent  Holder  of  that  Debenture or portion of that Debenture that
evidences  the  same debt as the consenting Holder's Debenture, even if notation
of  the  consent  is  not  made on any Debenture.  Any such Holder or subsequent
Holder,  however,  may  revoke  the  consent as to his Debenture or portion of a
Debenture.  Such  revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.  An amendment, supplement or waiver shall become effective on receipt
by  the Trustee of written consents from the Holders of the requisite percentage
in  principal  amount  of  the  outstanding  Debentures.

     The  Company  may, but shall not be obligated to, fix a record date for the
purpose  of  determining  the  persons  entitled  to  consent  to  any indenture
supplemental  hereto.  If  a  record  date  is fixed, the Holders on such record
date, or their duly designated proxies, and only such persons, shall be entitled
to  consent  to  such supplemental indenture, whether or not such Holders remain
Holders  after  such  record date; provided, that unless such consent shall have
become  effective  by  virtue  of  the requisite percentage having been obtained
prior  to  the date which is six months after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled  and  of  no  further  effect.

     After  an  amendment, supplement or waiver becomes effective, it shall bind
every  Debentureholder  unless it makes a change described in any of clauses (i)
through (vii) of Section 9.02.  In that case the amendment, supplement or waiver
shall  bind  each  Holder  of  a  Debenture  who  has  consented to it and every
subsequent  Holder  of  a Debenture or portion of a Debenture that evidences the
same  debt  as  the  consenting  Holder's  Debenture  (except that an amendment,
supplement  or wavier postponing any interest payment for a period not exceeding
three years from its due date shall, as provided in clause (ii) of Section 9.02,
bind  all  Debentureholders  upon the consent of Holders of not less than 75% in
principal  amount  of  all  outstanding  Debentures).

     SECTION  9.06.  Notation  on  or  Exchange of Debentures.  If an amendment,
                     ----------------------------------------
supplement  or  waiver changes the terms of a Debenture, the Trustee may require
the Holder of the Debenture to deliver it to the Trustee.  The Trustee may place
an  appropriate  notation  on  the  Debenture  about  the  changed  terms  and

                                       19
<PAGE>
return  it  to  the  Holder.  Alternatively,  if  the  Company or the Trustee so
determines,  the  Company  in  exchange  for  the  Debenture shall issue and the
Trustee  shall  authenticate  a  new  Debenture that reflects the changed terms.
Failure  to  make  the  appropriate  notation or issue a new Debenture shall not
affect the validity and effect of such amendment, supplement or waiver.

     SECTION  9.07.  Trustee  to Sign Amendments, etc.  The Trustee may but need
                     --------------------------------
not sign any amendment, supplement or waiver authorized pursuant to this Article
if  the  amendment,  supplement  or  waiver  adversely affects the rights of the
Trustee.  The  Trustee  shall  be  entitled  to request and receive an indemnity
satisfactory to it before signing any amendment, supplement or waiver.

                                   ARTICLE TEN

                                  SUBORDINATION
                                  -------------

     SECTION  10.01.  Agreement to Subordinate.  The Company, for itself and its
                      ------------------------
successors,  and  each  Holder, by his acceptance of Debentures, agrees that the
payment  of  the  principal  of,  interest  on  or  any other amounts due on the
Debentures  is subordinated in right of payment, to the extent and in the manner
stated  in  this  Article  Ten,  to  the  prior  payment  in  full of all Senior
Indebtedness.  Each  Holder  by  his acceptance of the Debentures authorizes and
directs  the  Trustee  on  his behalf to take such action as may be necessary or
appropriate  to  effectuate,  as  between the holders of Senior Indebtedness and
such  Holder,  the  subordination  provided in this Article Ten and appoints the
Trustee  his  attorney-in-fact  for  such  purpose.

     This Article Ten shall constitute a continuing offer to all persons who, in
reliance  upon  such  provisions, become holders of, or continue to hold, Senior
Indebtedness,  and  such provisions of this Article Ten are made for the benefit
of  the holders of Senior Indebtedness, and such holders are made obligees under
this  Article  Ten  and  they and/or each of them may enforce such provisions of
this Article Ten.  The Trustee has no fiduciary duties or obligations to holders
of  Senior  Indebtedness.

     "Senior  Indebtedness" means Indebtedness of the Company outstanding at any
time,  whether outstanding on the date hereof or hereafter created, which (i) is
secured,  in  whole or in part, by any asset or assets owned by the Company or a
Subsidiary,  or  (ii)  arises  from  unsecured  borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clause  (ii),  (iii)  or  (iv)  above.

     SECTION  10.02.  Debentures  Subordinated  to  Prior  Payment of All Senior
                      ----------------------------------------------------------
Indebtedness on Dissolution, Liquidation or Reorganization of the Company.  Upon
-------------------------------------------------------------------------
any  distribution  of  assets  of  the  Company  in any dissolution, winding up,
liquidation  or reorganization of the Company (whether in bankruptcy, insolvency
or  receivership  proceedings or upon an assignment for the benefit of creditors
or  otherwise);

     (a)     the  holders  of all Senior Indebtedness shall first be entitled to
receive payment in full of all principal thereof, interest due thereon and other
amounts due thereon before the Holders of the Debentures are entitled to receive
any payment on account of the principal of or interest on the Debentures;

                                       20
<PAGE>
     (b)     any payment or distribution of assets of the Company of any kind or
character,  whether in cash, property or securities, to which the Holders of the
Debentures  or  the  Trustee on behalf of the Holders of the Debentures would be
entitled  except  for  the  provisions  of  this Article Ten, including any such
payment  or  distribution  which  may be payable or deliverable by reason of the
payment  of  any  other  indebtedness  of  the Company being subordinated or the
payment  of the Debentures, shall be paid by the liquidating trustee or agent or
other  person making such payment or distribution directly to the holders of the
Senior  Indebtedness or their representative (pro rata as to each such holder or
representative  on  the  basis  of  the  respective  amounts  of  unpaid  Senior
Indebtedness  held  or  represented  by  each),  to the extent necessary to make
payment in full of all Senior Indebtedness remaining unpaid, after giving effect
to  any  concurrent payment or distribution or provision therefor to the holders
of  such  Senior  Indebtedness,  except  that Holders of the Debentures shall be
entitled  to  receive securities that are subordinated to Senior Indebtedness to
at least the same extent as the Debentures; and

     (c)     in  the event that notwithstanding the foregoing provisions of this
Section  10.02, any payment or distribution of assets of the Company of any kind
or  character,  whether  in  cash,  property  or  securities, including any such
payment  or  distribution  which  may be payable or deliverable by reason of the
payment  of  any  other  indebtedness  of  the Company being subordinated to the
payment  of  the  Debentures, shall be received by the Trustee or the Holders of
the  Debentures  on account of principal of or interest on the Debentures before
all  Senior  Indebtedness  is  paid in full, or effective provision made for its
payment,  such  payment  or  distribution (subject to the provisions of Sections
10.05  and 10.06) shall be received and held in trust for and shall be paid over
to  the holders of the Senior Indebtedness remaining unpaid or unprovided for or
their  representative  (pro  rata  as  provided  in  subsection  (b) above), for
application  to  the  payment  of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full, after giving effect to any concurrent
payment  or  distribution  or  provision  therefor to the holders of such Senior
Indebtedness, except that Holders of the Debentures shall be entitled to receive
securities  that  are  subordinated  to Senior Indebtedness to at least the same
extent  as  the  Debentures.

The  Company shall give prompt written notice to the Trustee of any dissolution,
winding  up,  liquidation or reorganization of the Company and of any fact known
to  the  Company  which  would  prohibit  the making of any payment to or by the
Trustee  in  respect  of  the  Debentures.

     SECTION  10.03.  Debentureholders  to be Subrogated to Rights of Holders of
                      ----------------------------------------------------------
Senior  Indebtedness.  Subject to the payment in full of all Senior Indebtedness
 -------------------
pursuant  to this Article Ten, the Holders of the Debentures shall be subrogated
equally  and  ratably  to the right of the holders of the Senior Indebtedness to
receive  payments  or  distributions  of assets of the Company applicable to the
Senior  Indebtedness  until all amounts owing on the Debentures shall be paid in
full,  and  for  the purpose of such subrogation no payments or distributions to
the  holders  of the Senior Indebtedness by or on behalf of the Company or by or
on  behalf  of the Holders of the Debentures by virtue of this Article Ten which
otherwise  would have been made to the Holders of the Debentures shall, as among
the Company, its creditors other than holders of the Senior Indebtedness and the
Holders  of  the  Debentures,  be  deemed  to be payment by the Company to or on
account  of  the Senior Indebtedness, it being understood that the provisions of
this  Article  Ten  are intended solely for the purpose of defining the relative
rights of the Holders of the Debentures, on the one hand, and the holders of the
Senior  Indebtedness,  on  the  other  hand.

     SECTION 10.04.  Obligation of the Company Unconditional.  Nothing contained
                     ---------------------------------------
in  this  Article  Ten  or  elsewhere  in  this Indenture or in any Debenture is
intended  to  or  shall impair, as between the Company, its creditors other than
Holders of Senior Indebtedness and the Holders of the Debentures, the obligation
of  the  Company,  which is absolute and unconditional, to pay to the Holders of
the  Debentures  the principal of and interest on the Debentures as and when the
same shall become due and payable in accordance with their terms, or is intended
to  or  shall  affect  the  relative rights of the Holders of the Debentures and
creditors of the Company, other than the holders of the Senior Indebtedness, nor
shall  anything  herein  or  therein  prevent  the  Trustee or the Holder of any
Debenture  from  exercising  all  remedies otherwise permitted by applicable law
upon  default  under  this  Indenture, subject to the rights, if any, under this
Article  Ten  of the holders of Senior Indebtedness in respect of cash, property
or  securities

                                       21
<PAGE>
of  the  Company  received  upon  the  exercise  of  any  such remedy.  Upon any
distribution  of  assets  of  the  Company  referred to in this Article Ten, the
Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders of
the  Debentures  shall  be entitled to rely upon any order or decree made by any
court  of  competent  jurisdiction  in  which  such  dissolution,  winding  up,
liquidation  or  reorganization proceedings are pending, or a certificate of the
liquidating  trustee  or  agent  or  other person making any distribution to the
Trustee  or  the  Holders of the Debentures, for the purpose of ascertaining the
persons  entitled to participate in such distribution, the holders of the Senior
Indebtedness  and  other  Indebtedness  of  the  Company,  the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts  pertinent  thereto  or  to  this  Article  Ten.

     Nothing  contained in this Article Ten or elsewhere in this Indenture or in
any  Debenture  is  intended to or shall affect the obligation of the Company to
make  or prevent the Company from making, at any time except during the pendency
of  any  dissolution,  winding-up,  liquidation  or  reorganization  proceeding,
payments at any time of the principal of or interest on the Debentures.

     SECTION  10.05.  Knowledge  of  Trustee.  Notwithstanding any provisions of
                      ----------------------
this  Indenture,  the  Trustee shall not be charged with actual knowledge of the
existence  of any facts which would prohibit the making of any payment of monies
to  or  by  the  Trustee, or the taking or not taking of any other action by the
Trustee, until two Business Days after the Trustee through a Responsible Officer
shall have received written notice thereon from the Company, any Debentureholder
or  any  Paying  Agent  or  the  holder or representative of any class of Senior
Indebtedness.

     SECTION  10.06.  Application by Trustee of Monies Deposited With It.  If at
                      --------------------------------------------------
least  two  Business  Days  prior  to  the  date  on  which by the terms of this
Indenture  any  monies deposited with the Trustee or any Paying Agent may become
payable  for  any  purpose (including, without limitation, the payment of either
the  principal  of  or the interest on any Debenture) the Trustee shall not have
received  with  respect to such monies the notice provided for in Section 10.05,
then  the Trustee shall have full power and authority to receive such monies and
to  apply  the same to the purpose for which they were received and shall not be
affected  by  any notice to the contrary which may be received by it on or after
such  date.  This  Section  shall  be  construed  solely  for the benefit of the
Trustee and Paying Agent and shall not otherwise affect the rights of holders of
Senior  Indebtedness.

     SECTION  10.07.  Subordination  Rights Not Impaired by Acts or Omissions of
                      ----------------------------------------------------------
the  Company  or  Holders  of  Senior  Indebtedness.  No right of any present or
 --------------------------------------------------
future  holders  of any Senior Indebtedness to enforce subordination as provided
herein  shall  at  any  time  in any way be prejudiced or impaired by any act or
failure  to  act  on the part of the Company or by any act or failure to act, in
good  faith, by any such holder, or by any noncompliance by the Company with the
terms  of  this  Indenture,  regardless  of any knowledge thereof which any such
holder  may  have  or  be  otherwise  charged  with.  The  holders  of  Senior
Indebtedness  may  extend,  renew,  modify  or  amend  the  terms  of the Senior
Indebtedness  or  any  security  therefor  and  release,  sell  or exchange such
security  and  otherwise deal freely with the Company, all without affecting the
liabilities  and obligations of the parties to the Indenture or the Holders.  No
provision  in  any supplemental indenture which affects the superior position of
the  holders of any then existing Senior Indebtedness shall be effective against
the  holders  of  the  Senior  Indebtedness  who  have  not  consented  thereto.

     SECTION  10.08.  Debentureholders  Authorize  Trustee  to  Effectuate
                      ----------------------------------------------------
Subordination  of  Debentures.  Each  Holder  of  the  Debentures  by acceptance
-----------------------------
thereof  authorizes  and expressly directs the Trustee on its, his or her behalf
to take such action as may be necessary or appropriate in the sole discretion of
the  Trustee  to  effectuate  the subordination provided in this Article Ten and
appoints  the  Trustee  its,  his  or  her  attorney-in-fact  for  such purpose,
including,  in  the  event  of  any  dissolution,  winding  up,  liquidation  or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings  or  upon  an assignment for the benefit of creditors or otherwise),
the  immediate  filing  of  a  claim  for  the unpaid balance of its, his or her
Debentures  in  the form required in said proceedings and cause said claim to be
approved; provided, however, that the Trustee shall not be liable for any action
or  failure to act in accordance with this Article Ten.  If the Trustee does not
file  a  proper  claim  or  proof  of

                                       22
<PAGE>
debt  in  the  form  required  in  such  proceeding  prior to 30 days before the
expiration  of the time to file such claim or claims, then the holders of Senior
Indebtedness  have  the  right  to  file  and  are  hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Debentures.

     SECTION  10.09.  Right of Trustee to Hold Senior Indebtedness.  The Trustee
                      --------------------------------------------
shall  be entitled to all of the rights set forth in this Article Ten in respect
of  any  Senior  Indebtedness  at  any time held by it to the same extent as any
other  holder  of  Senior  Indebtedness,  and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.

     SECTION  10.10.  Article Ten Not to Prevent Events of Default.  The failure
                      --------------------------------------------
to  make  a payment on account of principal shall not be construed as preventing
the occurrence of an Event of Default under Section 6.01.

     SECTION  10.11.  No  Fiduciary  Duty  Created  to  Holders  of  Senior
                      -----------------------------------------------------
Indebtedness.  With  respect  to the holders of Senior Indebtedness, the Trustee
------------
undertakes  to  perform or to observe only such of its covenants and obligations
as  are  specifically set forth in this Article Ten, and no implied covenants or
obligations  with  respect  to  the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee.  The Trustee shall not be deemed to owe
any  fiduciary  duty  to  the  holders  of  Senior Indebtedness by virtue of the
provisions  of  this  Article  Ten.

     SECTION  10.12.  Trustee's  Compensation  Not  Prejudiced.  Nothing in this
                      ----------------------------------------
Article  Ten shall apply to amounts due to the Trustee pursuant to Section 7.07.

                                 ARTICLE ELEVEN

                                  MISCELLANEOUS
                                  -------------

     SECTION  11.01.  Trust  Indenture  Act  Controls.  If any provision of this
                      -------------------------------
Indenture  limits,  qualifies  or  conflicts  with  another  provision  which is
required  to  be  included  in this Indenture by the TIA, the required provision
shall  control.

     SECTION 11.02.  Notices.  Any notice or communication shall be sufficiently
                     -------
given if in writing and delivered or mailed as follows:

     (a)     Notices  or  communications  to the Company or the Trustee shall be
given  only  by  hand  delivery  or by certified or registered first class mail,
return receipt requested, or by facsimile transmission promptly followed by hand
delivery  or certified or registered first class mail, return receipt requested,
as  follows:

     If to the Company, addressed to:

          INTERVEST  MORTGAGE  CORPORATION
          One  Rockefeller  Plaza,  Suite  400
          New  York,  New  York  10020-2002

     If to the Trustee, addressed to:

          THE  BANK  OF  NEW  YORK
          101  Barclay  Street  -  12W
          New  York,  New  York  10286
          Attention:  Corporate Trust Department

     Any  notice  or communication to the Company or the Trustee shall be deemed
given on the day delivered and receipted for if delivered by hand, or on the day
the  return  receipt  card  is signed on behalf of the Company or the Trustee if
sent  by  certified  or  registered  mail.  The  Company  or  the  Trustee  by

                                       23
<PAGE>
notice  to  the  other  and  to  Debentureholders  may  designate  additional or
different  addresses  for  subsequent  notices  or  communications.

     (b)     Notices  or  communications to a Debentureholder shall be mailed by
first  class  mail  to  such Debentureholder at the address which appears on the
registration  books  of  the  Registrar  and shall be sufficiently given to such
Debentureholder  if  so  mailed  within  the  time  prescribed.

     Failure  to  mail  a  notice  or  communication to a Debentureholder or any
defect  in  it  shall  not  affect  its  sufficiency  with  respect  to  other
Debentureholders. If a notice or communication is mailed to a Debentureholder in
the  manner provided in this paragraph (b), it is duly given, whether or not the
addressee  receives  it.  If  the  Company  mails  a  notice or communication to
Debentureholders  it  shall  mail  a copy of such notice to the Trustee and each
Agent  at  the  same  time.

     SECTION  11.03.  Certificate  and Opinion as to Conditions Precedent.  Upon
                      ---------------------------------------------------
any  request  or  application  by  the Company to the Trustee to take any action
under  this  Indenture,  the  Company  shall  furnish  to  the  Trustee:  (i) an
Officers'  Certificate in form and substance satisfactory to the Trustee stating
that  all  conditions precedent, if any, provided for in this Indenture relating
to  the proposed actions have been complied with; and (ii) an Opinion of Counsel
in  form  and substance satisfactory to the Trustee stating that, in the opinion
of such counsel, all such conditions precedent have been complied with.

     SECTION  11.04.  Statements  Required  in  Certificate  or  Opinion.  Each
                      --------------------------------------------------
certificate  or  opinion with respect to compliance with a condition or covenant
provided  for  in this Indenture shall include:  (i) a statement that the person
making  such  certificate or opinion has read such covenant or condition; (ii) a
brief  statement  as to the nature and scope of the examination or investigation
upon  which  the statements or opinions contained in such certificate or opinion
are  based;  (iii)  a statement that, in the opinion of such person, he has made
such  examination  or  investigation as is necessary to enable him to express an
informed  opinion  as  to  whether  or  not  such covenant or condition has been
complied with; and (iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

     SECTION  11.05.  Rules  by  Trustee  and  Agents.  The  Trustee  may  make
                      -------------------------------
reasonable  rules  for  action  by,  or  at a meeting of, Debentureholders.  The
Registrar or Paying Agent may make reasonable rules for its functions.

     SECTION  11.06.  Legal Holidays.  A "Legal Holiday" is a Saturday, a Sunday
                      --------------
or  a  day on which banking institutions are not required to be open in the City
of  New  York,  in  the  State  of New York, or in the city in which the Trustee
administers  its corporate trust business.  If a payment date is a Legal Holiday
at  a place of payment, payment may be made at such place on the next succeeding
day  that  is  not  a  Legal  Holiday,  and  no  interest  shall  accrue for the
intervening  period.

     SECTION  11.07.  Governing Law.  The laws of the State of New York, without
                      -------------
regard  to  the  principles of conflicts of law, shall govern this Indenture and
the  Debentures.

     SECTION  11.08.  No  Recourse  Against  Others.  Liabilities  of directors,
                      -----------------------------
officers,  employees  and  stockholders,  as such, of the Company are waived and
released  as  provided  in  paragraph  14  of  the  Debentures.

     SECTION  11.09.  Successors.  All  agreements  of  the  Company  in  this
                      ----------
Indenture  and  the Debentures shall bind its successors.  All agreements of the
Trustee  in  this  Indenture  shall  bind  its  successors.

     SECTION  11.10.  Duplicate  Originals.  The  parties may sign any number of
                      --------------------
copies  of  this  Indenture.  Each  signed copy shall be an original, but all of
them  together  represent  the  same  agreement.

                                       24
<PAGE>
     SECTION 11.11.  Separability. In case any provision in this Indenture or in
                     ------------
the  Debentures  shall  be  invalid,  illegal  or  unenforceable,  the validity,
legality  and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim against any party
hereto.

                                       25
<PAGE>
                                   SIGNATURES

Dated as of April 1, 2005          INTERVEST MORTGAGE CORPORATION

                                   By:    /s/  Lowell S. Dansker
                                   Name:  Lowell S. Dansker
                                   Title: President

Attest: /s/  Lawrence G. Bergman
Name:   Lawrence G. Bergman
Title:  Secretary

                                   THE BANK OF NEW YORK
                                   as Trustee

                                   By:    /s/  Dorothy Miller
                                   Name:  Dorothy  Miller
                                   Title: Vice President

Attest:
/s/  Patricia Gallagher
Name:  Patricia Gallagher
Title: Vice President

                                       26
<PAGE>
                                                                       Exhibit A
                                                                       ---------

               (FORM OF ACCRUAL DEBENTURE MATURING APRIL 1, 2009)
Number  R(032105/09)A-                                                   $

                         INTERVEST MORTGAGE CORPORATION
             Series 3/21/05 Subordinated Debenture due April 1, 2009

          INTERVEST  MORTGAGE  CORPORATION,  a  corporation  duly  organized and
existing  under  the  laws of the State of New York (the "Company"), promises to
pay to or registered assigns the principal sum of ______________________________
Dollars  on  April  1, 2009, together with interest accruing on principal at six
and one-quarter percent (6 1/4%) per annum, plus interest accruing each calendar
quarter on the balance of interest accrued as of (and including) the last day of
the  preceding  calendar  quarter  at  six  and one-quarter percent (6 1/4%) per
annum,  and with all accrued interest payable with the principal sum on April 1,
2009.  The provisions on the back of this certificate are incorporated as if set
forth  on  the  face  of  the  certificate.

                                             Record  Dates:
                                             The first day of the third month
                                             of the calendar quarter

DATED:

Authenticated to be one of the
Debentures described in the
Indenture referred to herein:

THE BANK OF NEW YORK, as                    INTERVEST  MORTGAGE  CORPORATION
  Registrar

By:  _______________________ (Seal)         By:   ___________________________
     Authorized  Signatory                        President

                                            By:   ___________________________
                                                  Secretary

                                       A-1
<PAGE>
                             (REVERSE OF DEBENTURE)

             Series 3/21/05 Subordinated Debenture due April 1, 2009

          1.     Interest.  The  Company  promises  to  pay  interest  on  the
                 --------
principal amount of this Debenture and interest on the balance of unpaid accrued
interest  at  the rate per annum shown above.  Interest will accrue on principal
from  the first closing date on which Debentures are approved for authentication
and  issuance.

     All interest will accrue quarterly but not be paid until maturity, at which
time  all  unpaid  accrued  interest will be payable together with the principal
amount.  Interest  on  unpaid accrued interest will accrue each calendar quarter
based  on  the balance of unpaid accrued interest as of (and including) the last
day  of  the  preceding calendar quarter. Interest will be credited on the first
day  of the calendar quarter following the calendar quarter in which it accrued.
The  first  date  on which interest will accrue on the balance of unpaid accrued
interest shall be the first day of the second calendar quarter after interest on
the  principal  balance  commences  accruing.  Interest accrues from the date of
closing  and interest will be computed on the basis of a 360-day year consisting
of  twelve  30-day  months.  For purposes hereof, January 1, April 1, July 1 and
October 1 shall be the first days of the calendar quarters.

          2.     Method  of  Payment.  Until  maturity,  the Company will accrue
                 -------------------
interest  on  the  Debentures  in each calendar quarter and reflect such accrued
interest  in  its  records  for  the  account  of the persons who are registered
holders  of  Debentures  at  the close of business on the first day of the third
month  of the calendar quarter in which such interest is accruing.  Holders must
surrender Debentures to a Paying Agent to collect accrued interest and principal
payments.  The  Company  will  pay principal and interest in money of the United
States  that  at  the  time of payment is legal tender for payment of public and
private  debts.  The  Company  may,  however,  pay principal and interest by its
check  payable  in  such  money.  It  may mail payments to a holder's registered
address.

          3.     Paying  Agent  and Registrar.  The Bank of New York, a New York
                 ----------------------------
banking corporation, will act as Registrar and will authenticate the Debentures.
The Bank of New York will also act as the initial Paying Agent.  The Company may
change  any  Paying  Agent,  Registrar  or  co-Registrar  without  notice.

          4.     Indenture.  This  Debenture  is one of a duly authorized series
                 ---------
of Debentures issued by the Company under an Indenture dated as of April 1, 2005
(the  "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").  The term "Debentures" being used herein refers to all Maturities of
Debentures  issued  under  the  Indenture.  Capitalized terms herein are used as
defined  in  the Indenture unless otherwise indicated.  Reference is hereby made
to  the  Indenture  for  a  description  of  the rights, obligations, duties and
immunities  of  the  Trustee  and  the  Debentureholders  and  for the terms and
conditions  upon  which the Debentures are and are to be issued.  The Debentures
are  general  unsecured  obligations  of  the  Company  limited to the aggregate
principal  amount  of  $14,000,000  of which a maximum of $3,000,000 will have a
maturity  date  of  April  1, 2009, a maximum of $4,500,000 will have a maturity
date  of April 1, 2011, and a maximum of $6,500,000 will have a maturity date of
April  1,  2013.

          5.     Optional  Redemption.  The Company may at its option redeem the
                 --------------------
Debentures  of any CUSIP Number in whole or in part at any time.  The redemption
price will be equal to (i) the face amount of the Debentures to be redeemed plus
a 1% premium if the date of redemption is prior to October 1, 2006, and (ii) the
face  amount of the Debentures to be redeemed if the date of redemption is on or
after  October  1,  2006.

                                       A-2
<PAGE>
          6.     Selection  and  Notice  of Redemption.  If less than all of the
                 -------------------------------------
Debentures  of  any  CUSIP Number are to be redeemed, the Registrar shall select
the  Debentures  to  be redeemed by such method as the Registrar shall deem fair
and  appropriate,  or  if  the  Debentures  are  listed on a national securities
exchange,  in  accordance  with the rules of such exchange.  The Registrar shall
make the selection from the Debentures outstanding and not previously called for
redemption.  The  Registrar may select for redemption portions (equal to $10,000
or  any  integral  multiple  thereof) of the principal amount of Debentures that
have  denominations larger than $10,000.  Provisions of the Indenture that apply
to  Debentures called for redemption also apply to portions of Debentures called
for  redemption.  Notice  of  redemption will be mailed at least 30 days but not
more  than 90 days before the redemption date to each holder of Debentures to be
redeemed  at his registered address.  On and after the redemption date, interest
ceases  to  accrue  on  Debentures  or  portions  thereof called for redemption.

          7.     Denominations, Transfer, Exchange.  The Debentures are issuable
                 ---------------------------------
in  registered  form  without  coupons  in denominations of $10,000 and integral
multiples of $10,000. A holder may transfer or exchange Debentures in accordance
with  the Indenture. A Debenture containing a particular CUSIP Number may not be
exchanged  for  a  Debenture  containing another CUSIP Number. The Registrar may
require  a  holder,  among other things, to furnish appropriate endorsements and
transfer  documents,  and to pay any taxes and fees required by law or permitted
by  the  Indenture. The Registrar need not transfer or exchange any Debenture or
portion  of  a  Debenture  selected  for redemption, or transfer or exchange any
Debentures  for  a  period  of  15  days  before a selection of Debentures to be
redeemed.

          8.     Persons  Deemed  Owners.  The  registered holder of a Debenture
                 -----------------------
may be treated as the owner of it for all purposes.

          9.     Unclaimed  Money.  If  money  for  the  payment of principal or
                 ----------------
interest  remains  unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company, if the Company requests such repayment within one
year  after  such  two  year  period that such money remains unclaimed.  If such
unclaimed  money is so paid back to the Company, thereafter, holders entitled to
the  money  must look to the Company for payment as general creditors, unless an
applicable  abandoned property law designates another person.  If such unclaimed
money  is  not so paid back to the Company, it may be disposed of by the Trustee
in  accordance  with  applicable  law.

          10.     Amendment, Supplement, Waiver.  Subject to certain exceptions,
                  -----------------------------
the  Indenture  or  the  Debentures may be amended or supplemented, and any past
default  or compliance with any provision may be waived, with the consent of the
holders  of  a  majority  in  principal  amount  of  the outstanding Debentures.
Without  the consent of any Debentureholder, the Company may amend or supplement
the  Indenture  or  the  Debentures  to  cure any ambiguity, omission, defect or
inconsistency,  to  comply with Article Five of the Indenture (providing for the
assumption  of the obligations of the Company under the Indenture by a successor
corporation), or to make any change that does not adversely affect the rights of
any  Debentureholder.

          11.     Defaults  and  Remedies.  The  Indenture  provides  that  the
                  -----------------------
Trustee will give the Debentureholders notice of an uncured Default known to it,
within  90  days  after the occurrence of an Event of Default (as defined in the
Indenture),  or  as  soon  as practicable after it learns of an Event of Default
which  occurred  more than 90 days beforehand; provided that, except in the case
of  Default  in the payment of principal of or interest on any of the Debentures
or  any  amount due on redemption, the Trustee may withhold such notice if it in
good  faith determines that the withholding of such notice is in the interest of
the Debentureholders.  In case an Event of Default occurs and is continuing, the
Trustee or the holders of not less than 25% of aggregate principal amount of the
Debentures  then  outstanding,  by

                                       A-3
<PAGE>
notice  in  writing  to  the  Company  (and  to  the  Trustee  if  given  by the
Debentureholders),  may declare the principal of and all accrued interest on all
the  Debentures  to  be  due  and  payable immediately.  Such declaration may be
rescinded  by holders of a majority in principal amount of the Debentures if all
existing  Events of Default (except nonpayment of principal or interest that has
become  due solely because of the acceleration) have been cured or waived and if
the  rescission  would  not conflict with any judgment or decree.  The Indenture
requires the Company to file periodic reports with the Trustee as to the absence
of  defaults.

          12.     Subordination.  The  indebtedness  evidenced  by  all  of  the
                  -------------
Debentures  is, to the extent provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness, and
this  Debenture  is issued subject to such provisions of the Indenture, and each
holder of this Debenture by accepting same, agrees to and shall be bound by such
provisions.  "Senior Indebtedness" means Indebtedness of the Company outstanding
at  any time, whether outstanding on the date hereof or hereafter created, which
(i) is secured, in whole or in part, by any asset or assets owned by the Company
or  a Subsidiary, or (ii) arises from unsecured borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clauses  (ii),  (iii)  or  (iv)  above.

          13.     Trustee  Dealings  with  the  Company.  The  Trustee,  in  its
                  -------------------------------------
individual  or  any other capacity, may make loans to, accept deposits from, and
perform  services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.

          14.     No  Recourse Against Others.  A director, officer, employee or
                  ---------------------------
stockholder,  as  such,  of  the  Company  shall  not have any liability for any
obligations  of  the  Company  under  the Debentures or the Indenture or for any
claim  based  on,  in  respect  of  or  by  reason of, such obligations or their
creation.  Each Debentureholder by accepting a Debenture waives and releases all
such  liability.  The  waiver  and release are part of the consideration for the
issue  of  the  Debentures.

          15.     Authentication.  This  Debenture  shall not be valid until the
                  --------------
Registrar  signs  the  certificate  of  authentication on the other side of this
Debenture.

          16.     Abbreviations.  Customary  abbreviations  may  be  used in the
                  -------------
name  of  the  Debentureholder  or  an  assignee, such as:  TEN COM (=tenants in
common),  TEN  ENT  (=tenants by entirety), JT TEN (=joint tenants with right of
survivorship  and  not  as  tenants  in  common), CUST (=custodian), and U/G/M/A
(=Uniform  Gifts  to  Minors  Act).

          The  Company  will furnish to any Debentureholder upon written request
and  without  charge a copy of the Indenture.  Requests may be made to Intervest
Mortgage  Corporation,  One  Rockefeller  Plaza,  Suite  400, New York, New York
10020-2002.

                                       A-4
<PAGE>
                                   ASSIGNMENT

If  you  want  to  assign  this  Debenture, fill in the form below and have your
signature  guaranteed  by a commercial bank or trust company or a member firm of
any national securities exchange registered under the Securities Exchange Act of
1934.

I or we assign and transfer this Debenture to

__________________________________________________________
(Please insert assignee's social security or tax identification number)

______________________________________________

______________________________________________

______________________________________________
(Print or type assignee's name, address and zip code)

and  irrevocably  appoint ________________________________________________ agent
to  transfer  this  Debenture  on  the  books  of  the  Company.  The  agent may
substitute  another  to  act  for  him.

Date:   _____________________        Your signature: _____________________

                                                    ____________________________
                                                    (Sign exactly as your name
                                                    appears on the other side
                                                    of this Debenture)

Signature  Guarantee: ______________________

                                       A-5
<PAGE>
                                                                       Exhibit B
                                                                       ---------

               (FORM OF ACCRUAL DEBENTURE MATURING APRIL 1, 2011)
Number  R(032105/11)A-                                                    $

                         INTERVEST MORTGAGE CORPORATION
             Series 3/21/05 Subordinated Debenture due April 1, 2011

          INTERVEST  MORTGAGE  CORPORATION,  a  corporation  duly  organized and
existing  under  the  laws of the State of New York (the "Company"), promises to
pay  to  or  registered  assigns  the  principal  sum  of
________________________________________ Dollars on April 1, 2011, together with
interest  accruing  on  principal  at six and one-half percent (6  %) per annum,
plus  interest accruing each calendar quarter on the balance of interest accrued
as  of (and including) the last day of the preceding calendar quarter at six and
one-half  percent  (6  %)  per annum, and with all accrued interest payable with
the  principal  sum  on  April  1,  2011.  The  provisions  on  the back of this
certificate  are  incorporated  as  if set forth on the face of the certificate.

                                                Record  Dates:
                                                The first day of the third month
                                                of the calendar quarter

DATED:

Authenticated to be one of the
Debentures described in the
Indenture referred to herein:

THE BANK OF NEW YORK, as                        INTERVEST  MORTGAGE  CORPORATION
  Registrar

By: ___________________  (Seal)                 By: _________________________
     Authorized  Signatory                            President

                                                By: _________________________
                                                      Secretary

                                       B-1
<PAGE>
                             (REVERSE OF DEBENTURE)

             Series 3/21/05 Subordinated Debenture due April 1, 2011

          1.     Interest.  The  Company  promises  to  pay  interest  on  the
                 --------
principal amount of this Debenture and interest on the balance of unpaid accrued
interest  at  the rate per annum shown above.  Interest will accrue on principal
from  the first closing date on which Debentures are approved for authentication
and  issuance.

     All interest will accrue quarterly but not be paid until maturity, at which
time  all  unpaid  accrued  interest will be payable together with the principal
amount.  Interest  on  unpaid accrued interest will accrue each calendar quarter
based  on  the balance of unpaid accrued interest as of (and including) the last
day  of  the preceding calendar quarter.  Interest will be credited on the first
day  of the calendar quarter following the calendar quarter in which it accrued.
The  first  date  on which interest will accrue on the balance of unpaid accrued
interest shall be the first day of the second calendar quarter after interest on
the  principal  balance  commences  accruing.  Interest accrues from the date of
closing  and interest will be computed on the basis of a 360-day year consisting
of  twelve  30-day  months.  For purposes hereof, January 1, April 1, July 1 and
October  1  shall  be  the  first  days  of  the  calendar  quarters.

          2.     Method  of  Payment.  Until  maturity,  the Company will accrue
                 -------------------
interest  on  the  Debentures  in each calendar quarter and reflect such accrued
interest  in  its  records  for  the  account  of the persons who are registered
holders  of  Debentures  at  the close of business on the first day of the third
month  of the calendar quarter in which such interest is accruing.  Holders must
surrender Debentures to a Paying Agent to collect accrued interest and principal
payments.  The  Company  will  pay principal and interest in money of the United
States  that  at  the  time of payment is legal tender for payment of public and
private  debts.  The  Company  may,  however,  pay principal and interest by its
check  payable  in  such  money.  It  may mail payments to a holder's registered
address.

          3.     Paying  Agent  and Registrar.  The Bank of New York, a New York
                 ----------------------------
banking corporation, will act as Registrar and will authenticate the Debentures.
The  Bank  of  New  York  will also act as initial Paying Agent. The Company may
change any Paying Agent, Registrar or co-Registrar without notice.

          4.     Indenture.  This  Debenture  is one of a duly authorized series
                 ---------
of Debentures issued by the Company under an Indenture dated as of April 1, 2005
(the  "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").  The term "Debentures" being used herein refers to all Maturities of
Debentures  issued  under  the  Indenture.  Capitalized terms herein are used as
defined  in  the Indenture unless otherwise indicated.  Reference is hereby made
to  the  Indenture  for  a  description  of  the rights, obligations, duties and
immunities  of  the  Trustee  and  the  Debentureholders  and  for the terms and
conditions  upon  which the Debentures are and are to be issued.  The Debentures
are  general  unsecured  obligations  of  the  Company  limited to the aggregate
principal  amount  of  $14,000,000  of which a maximum of $3,000,000 will have a
maturity  date  of  April  1, 2009, a maximum of $4,500,000 will have a maturity
date  of April 1, 2011, and a maximum of $6,500,000 will have a maturity date of
April  1,  2013.

          5.     Optional  Redemption.  The Company may at its option redeem the
                 --------------------
Debentures  of any CUSIP Number in whole or in part at any time.  The redemption
price will be equal to (i) the face amount of the Debentures to be redeemed plus
a 1% premium if the date of redemption is prior to October 1, 2006, and (ii) the
face  amount of the Debentures to be redeemed if the date of redemption is on or
after  October  1,  2006.

                                       B-2
<PAGE>
          6.     Selection  and  Notice  of Redemption.  If less than all of the
                 -------------------------------------
Debentures  of  any  CUSIP Number are to be redeemed, the Registrar shall select
the  Debentures  to  be redeemed by such method as the Registrar shall deem fair
and  appropriate,  or  if  the  Debentures  are  listed on a national securities
exchange,  in  accordance  with the rules of such exchange.  The Registrar shall
make the selection from the Debentures outstanding and not previously called for
redemption.  The  Registrar may select for redemption portions (equal to $10,000
or  any  integral  multiple  thereof) of the principal amount of Debentures that
have  denominations larger than $10,000.  Provisions of the Indenture that apply
to  Debentures called for redemption also apply to portions of Debentures called
for  redemption.  Notice  of  redemption will be mailed at least 30 days but not
more  than 90 days before the redemption date to each holder of Debentures to be
redeemed  at his registered address.  On and after the redemption date, interest
ceases  to  accrue  on  Debentures  or  portions  thereof called for redemption.

          7.     Optional  Repurchase.  Commencing  in  2009, a holder will have
                 --------------------
the  option  to  require  the  Company  to repurchase the Debenture for the face
amount  plus  accrued  interest,  provided  that  a  request  for  repurchase,
accompanied  by  the  Debenture  and  a  written and duly executed instrument of
transfer  is  submitted  to  the Company no earlier than February 1 and no later
than  February  28 to be effective as of April 1. Repurchases shall be made once
each  year  as  of April 1 and are subject to the limitation that the Company is
not  required to repurchase more than $100,000 principal amount of each maturity
in  any  calendar  year,  on a non-cumulative basis. The Company will repurchase
Debentures  on  a  first-come,  first-served  basis.

          8.     Denominations, Transfer, Exchange.  The Debentures are issuable
                 ---------------------------------
in  registered  form  without  coupons  in denominations of $10,000 and integral
multiples  of  $10,000.  A  holder  may  transfer  or  exchange  Debentures  in
accordance with the Indenture.  A Debenture containing a particular CUSIP Number
may  not  be  exchanged  for  a  Debenture containing another CUSIP Number.  The
Registrar  may  require  a  holder,  among  other things, to furnish appropriate
endorsements  and  transfer documents, and to pay any taxes and fees required by
law  or permitted by the Indenture.  The Registrar need not transfer or exchange
any  Debenture or portion of a Debenture selected for redemption, or transfer or
exchange any Debentures for a period of 15 days before a selection of Debentures
to  be  redeemed.

          9.     Persons  Deemed  Owners.  The  registered holder of a Debenture
                 -----------------------
may be treated as the owner of it for all purposes.

          10.     Unclaimed  Money.  If  money  for  the payment of principal or
                  ----------------
interest  remains  unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company, if the Company requests such repayment within one
year  after  such  two  year  period that such money remains unclaimed.  If such
unclaimed  money is so paid back to the Company, thereafter, holders entitled to
the  money  must look to the Company for payment as general creditors, unless an
applicable  abandoned property law designates another person.  If such unclaimed
money  is  not so paid back to the Company, it may be disposed of by the Trustee
in  accordance  with  applicable  law.

          11.     Amendment, Supplement, Waiver.  Subject to certain exceptions,
                  -----------------------------
the  Indenture  or  the  Debentures may be amended or supplemented, and any past
default  or compliance with any provision may be waived, with the consent of the
holders  of  a  majority  in  principal  amount  of  the outstanding Debentures.
Without  the consent of any Debentureholder, the Company may amend or supplement
the  Indenture  or  the  Debentures  to  cure any ambiguity, omission, defect or
inconsistency,  to  comply with Article Five of the Indenture (providing for the
assumption  of the obligations of the Company under the Indenture by a successor
corporation), or to make any change that does not adversely affect the rights of
any  Debentureholder.

                                       B-3
<PAGE>
          12.     Defaults  and  Remedies.  The  Indenture  provides  that  the
                  -----------------------
Trustee will give the Debentureholders notice of an uncured Default known to it,
within  90  days  after the occurrence of an Event of Default (as defined in the
Indenture),  or  as  soon  as practicable after it learns of an Event of Default
which  occurred  more than 90 days beforehand; provided that, except in the case
of  Default  in the payment of principal of or interest on any of the Debentures
or  any  amount due on redemption, the Trustee may withhold such notice if it in
good  faith determines that the withholding of such notice is in the interest of
the Debentureholders.  In case an Event of Default occurs and is continuing, the
Trustee or the holders of not less than 25% of aggregate principal amount of the
Debentures  then  outstanding,  by  notice in writing to the Company (and to the
Trustee  if given by the Debentureholders), may declare the principal of and all
accrued  interest on all the Debentures to be due and payable immediately.  Such
declaration may be rescinded by holders of a majority in principal amount of the
Debentures  if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or  waived and if the rescission would not conflict with any judgment or decree.
The  Indenture requires the Company to file periodic reports with the Trustee as
to  the  absence  of  defaults.

          13.     Subordination.  The  indebtedness  evidenced  by  all  of  the
                  -------------
Debentures  is, to the extent provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness, and
this  Debenture  is issued subject to such provisions of the Indenture, and each
holder of this Debenture by accepting same, agrees to and shall be bound by such
provisions.  "Senior Indebtedness" means Indebtedness of the Company outstanding
at  any time, whether outstanding on the date hereof or hereafter created, which
(i) is secured, in whole or in part, by any asset or assets owned by the Company
or  a Subsidiary, or (ii) arises from unsecured borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clauses  (ii),  (iii)  or  (iv)  above.

          14.     Trustee  Dealings  with  the  Company.  The  Trustee,  in  its
                  -------------------------------------
individual  or  any other capacity, may make loans to, accept deposits from, and
perform  services for the Company or its Affiliates, and may otherwise deal with
the  Company  or  its  Affiliates,  as  if  it  were  not  the  Trustee.

          15.     No  Recourse Against Others.  A director, officer, employee or
                  ---------------------------
stockholder,  as  such,  of  the  Company  shall  not have any liability for any
obligations  of  the  Company  under  the Debentures or the Indenture or for any
claim  based  on,  in  respect  of  or  by  reason of, such obligations or their
creation.  Each Debentureholder by accepting a Debenture waives and releases all
such  liability.  The  waiver  and release are part of the consideration for the
issue  of  the  Debentures.

          16.     Authentication.  This  Debenture  shall not be valid until the
                  --------------
Registrar  signs  the  certificate  of  authentication on the other side of this
Debenture.

          17.     Abbreviations.  Customary  abbreviations  may  be  used in the
                  -------------
name  of  the  Debentureholder  or  an  assignee, such as:  TEN COM (=tenants in
common),  TEN  ENT  (=tenants by entirety), JT TEN (=joint tenants with right of
survivorship  and  not  as  tenants  in  common), CUST (=custodian), and U/G/M/A
(=Uniform  Gifts  to  Minors  Act).

                                       B-4
<PAGE>
          The  Company  will furnish to any Debentureholder upon written request
and  without  charge a copy of the Indenture.  Requests may be made to Intervest
Mortgage  Corporation,  One  Rockefeller  Plaza,  Suite  400, New York, New York
10020-2002.

                                       B-5
<PAGE>
                                   ASSIGNMENT

If  you  want  to  assign  this  Debenture, fill in the form below and have your
signature  guaranteed  by a commercial bank or trust company or a member firm of
any national securities exchange registered under the Securities Exchange Act of
1934.

I or we assign and transfer this Debenture to

__________________________________________________________
(Please insert assignee's social security or tax identification number)

______________________________________________

______________________________________________

______________________________________________
(Print or type assignee's name, address and zip code)

and  irrevocably  appoint  _____________________________________________________
agent  to  transfer  this  Debenture on the books of the Company.  The agent may
substitute  another  to  act  for  him.

Date:   _____________________      Your signature: ____________________

                                                   _____________________________
                                                   (Sign exactly as your name
                                                   appears on the other side of
                                                   this Debenture)

Signature  Guarantee:  ___________________________

                                       B-6
<PAGE>
                                                                       Exhibit C
                                                                       ---------

               (FORM OF ACCRUAL DEBENTURE MATURING APRIL 1, 2013)
Number  R(032105/13)A-                                                    $

                         INTERVEST MORTGAGE CORPORATION
             Series 3/21/05 Subordinated Debenture due April 1, 2013

          INTERVEST  MORTGAGE  CORPORATION,  a  corporation  duly  organized and
existing  under  the  laws of the State of New York (the "Company"), promises to
pay to or registered assigns the principal sum of ______________________________
Dollars  on April 1, 2013, together with interest accruing on principal at seven
percent  (7%)  per  annum,  plus  interest accruing each calendar quarter on the
balance  of interest accrued as of (and including) the last day of the preceding
calendar  quarter at seven percent (7%) per annum, and with all accrued interest
payable  with  the principal sum on April 1, 2013. The provisions on the back of
this  certificate  are  incorporated  as  if  set  forth  on  the  face  of  the
certificate.

                                            Record  Dates:
                                            The first day of the third month of
                                            the calendar quarter

DATED:

Authenticated to be one of the
Debentures described in the
Indenture referred to herein:

THE  BANK  OF  NEW  YORK,  as               INTERVEST  MORTGAGE  CORPORATION
  Registrar

By:     _______________________  (Seal)     By: ____________________
     Authorized  Signatory                         President

                                            By: ____________________
                                                   Secretary

                                       C-1
<PAGE>
                             (REVERSE OF DEBENTURE)

             Series 3/21/05 Subordinated Debenture due April 1, 2013

          1.     Interest.  The  Company  promises  to  pay  interest  on  the
                 --------
principal amount of this Debenture and interest on the balance of unpaid accrued
interest  at  the rate per annum shown above.  Interest will accrue on principal
from  the first closing date on which Debentures are approved for authentication
and  issuance.

     All interest will accrue quarterly but not be paid until maturity, at which
time  all  unpaid  accrued  interest will be payable together with the principal
amount.  Interest  on  unpaid accrued interest will accrue each calendar quarter
based  on  the balance of unpaid accrued interest as of (and including) the last
day  of  the preceding calendar quarter.  Interest will be credited on the first
day  of the calendar quarter following the calendar quarter in which it accrued.
The  first  date  on which interest will accrue on the balance of unpaid accrued
interest shall be the first day of the second calendar quarter after interest on
the  principal  balance  commences  accruing.  Interest accrues from the date of
closing  and interest will be computed on the basis of a 360-day year consisting
of  twelve  30-day  months.  For purposes hereof, January 1, April 1, July 1 and
October  1  shall  be  the  first  days  of  the  calendar  quarters.

          2.     Method  of  Payment.  Until  maturity,  the Company will accrue
                 -------------------
interest  on  the  Debentures  in each calendar quarter and reflect such accrued
interest  in  its  records  for  the  account  of the persons who are registered
holders  of  Debentures  at  the close of business on the first day of the third
month  of  the calendar quarter in which such interest is accruing. Holders must
surrender Debentures to a Paying Agent to collect accrued interest and principal
payments.  The  Company  will  pay principal and interest in money of the United
States  that  at  the  time of payment is legal tender for payment of public and
private  debts.  The  Company  may,  however,  pay principal and interest by its
check  payable  in  such  money.  It  may mail payments to a holder's registered
address.

          3.     Paying  Agent  and Registrar.  The Bank of New York, a New York
                 ----------------------------
banking corporation, will act as Registrar and will authenticate the Debentures.
The  Bank  of  New  York will also act as initial Paying Agent.  The Company may
change any Paying Agent, Registrar or co-Registrar without notice.

          4.     Indenture.  This  Debenture  is one of a duly authorized series
                 ---------
of Debentures issued by the Company under an Indenture dated as of April 1, 2005
(the  "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").  The term "Debentures" being used herein refers to all Maturities of
Debentures  issued  under  the  Indenture.  Capitalized terms herein are used as
defined  in  the Indenture unless otherwise indicated.  Reference is hereby made
to  the  Indenture  for  a  description  of  the rights, obligations, duties and
immunities  of  the  Trustee  and  the  Debentureholders  and  for the terms and
conditions  upon  which the Debentures are and are to be issued.  The Debentures
are  general  unsecured  obligations  of  the  Company  limited to the aggregate
principal  amount  of  $14,000,000  of which a maximum of $3,000,000 will have a
maturity  date  of  April  1, 2009, a maximum of $4,500,000 will have a maturity
date  of April 1, 2011, and a maximum of $6,500,000 will have a maturity date of
April  1,  2013.

          5.     Optional  Redemption.  The Company may at its option redeem the
                 --------------------
Debentures  of any CUSIP Number in whole or in part at any time.  The redemption
price  will  be  equal to:  (i) the face amount of the Debentures to be redeemed
plus  a  1%  premium  if the date of redemption is prior to October 1, 2006, and
(ii)  the face amount of the Debentures to be redeemed if the date of redemption
is  on  or  after  October  1,  2006.

                                       C-2
<PAGE>
          6.     Selection  and  Notice  of Redemption.  If less than all of the
                 -------------------------------------
Debentures  of  any  CUSIP Number are to be redeemed, the Registrar shall select
the  Debentures  to  be redeemed by such method as the Registrar shall deem fair
and  appropriate,  or  if  the  Debentures  are  listed on a national securities
exchange,  in  accordance  with the rules of such exchange.  The Registrar shall
make the selection from the Debentures outstanding and not previously called for
redemption.  The  Registrar may select for redemption portions (equal to $10,000
or  any  integral  multiple  thereof) of the principal amount of Debentures that
have  denominations larger than $10,000.  Provisions of the Indenture that apply
to  Debentures called for redemption also apply to portions of Debentures called
for  redemption.  Notice  of  redemption will be mailed at least 30 days but not
more  than 90 days before the redemption date to each holder of Debentures to be
redeemed  at his registered address.  On and after the redemption date, interest
ceases to accrue on Debentures or portions thereof called for redemption.

          7.     Optional  Repurchase.  Commencing  in  2009, a holder will have
                 --------------------
the  option  to  require  the  Company  to repurchase the Debenture for the face
amount  plus  accrued  interest,  provided  that  a  request  for  repurchase,
accompanied  by  the  Debenture  and  a  written and duly executed instrument of
transfer  is  submitted  to  the Company no earlier than February 1 and no later
than  February 28 to be effective as of April 1.  Repurchases shall be made once
each  year  as  of April 1 and are subject to the limitation that the Company is
not  required to repurchase more than $100,000 principal amount of each maturity
in  any  calendar  year, on a non-cumulative basis.  The Company will repurchase
Debentures  on  a  first-come,  first-served  basis.

          8.     Denominations, Transfer, Exchange.  The Debentures are issuable
                 ---------------------------------
in  registered  form  without  coupons  in denominations of $10,000 and integral
multiples  of  $10,000.  A  holder  may  transfer  or  exchange  Debentures  in
accordance with the Indenture.  A Debenture containing a particular CUSIP Number
may  not  be  exchanged  for  a  Debenture containing another CUSIP Number.  The
Registrar  may  require  a  holder,  among  other things, to furnish appropriate
endorsements  and  transfer documents, and to pay any taxes and fees required by
law  or permitted by the Indenture.  The Registrar need not transfer or exchange
any  Debenture or portion of a Debenture selected for redemption, or transfer or
exchange any Debentures for a period of 15 days before a selection of Debentures
to  be  redeemed.

          9.     Persons  Deemed  Owners.  The  registered holder of a Debenture
                 -----------------------
may be treated as the owner of it for all purposes.

          10.     Unclaimed  Money.  If  money  for  the payment of principal or
                  ----------------
interest  remains  unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company, if the Company requests such repayment within one
year  after  such  two  year  period that such money remains unclaimed.  If such
unclaimed  money is so paid back to the Company, thereafter, holders entitled to
the  money  must look to the Company for payment as general creditors, unless an
applicable  abandoned property law designates another person.  If such unclaimed
money  is  not so paid back to the Company, it may be disposed of by the Trustee
in  accordance  with  applicable  law.

          11.     Amendment, Supplement, Waiver.  Subject to certain exceptions,
                  -----------------------------
the  Indenture  or  the  Debentures may be amended or supplemented, and any past
default  or compliance with any provision may be waived, with the consent of the
holders  of  a  majority  in  principal  amount  of  the outstanding Debentures.
Without  the consent of any Debentureholder, the Company may amend or supplement
the  Indenture  or  the  Debentures  to  cure any ambiguity, omission, defect or
inconsistency,  to  comply with Article Five of the Indenture (providing for the
assumption  of the obligations of the Company under the Indenture by a successor
corporation), or to make any change that does not adversely affect the rights of
any  Debentureholder.

                                       C-3
<PAGE>
          12.     Defaults  and  Remedies.  The  Indenture  provides  that  the
                  -----------------------
Trustee will give the Debentureholders notice of an uncured Default known to it,
within  90  days  after the occurrence of an Event of Default (as defined in the
Indenture),  or  as  soon  as practicable after it learns of an Event of Default
which  occurred  more than 90 days beforehand; provided that, except in the case
of  Default  in the payment of principal of or interest on any of the Debentures
or  any  amount due on redemption, the Trustee may withhold such notice if it in
good  faith determines that the withholding of such notice is in the interest of
the Debentureholders.  In case an Event of Default occurs and is continuing, the
Trustee or the holders of not less than 25% of aggregate principal amount of the
Debentures  then  outstanding,  by  notice in writing to the Company (and to the
Trustee  if given by the Debentureholders), may declare the principal of and all
accrued  interest on all the Debentures to be due and payable immediately.  Such
declaration may be rescinded by holders of a majority in principal amount of the
Debentures  if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or  waived and if the rescission would not conflict with any judgment or decree.
The  Indenture requires the Company to file periodic reports with the Trustee as
to  the  absence  of  defaults.

          13.     Subordination.  The  indebtedness  evidenced  by  all  of  the
                  -------------
Debentures  is, to the extent provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness, and
this  Debenture  is issued subject to such provisions of the Indenture, and each
holder of this Debenture by accepting same, agrees to and shall be bound by such
provisions.  "Senior Indebtedness" means Indebtedness of the Company outstanding
at  any time, whether outstanding on the date hereof or hereafter created, which
(i) is secured, in whole or in part, by any asset or assets owned by the Company
or  a Subsidiary, or (ii) arises from unsecured borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clauses  (ii),  (iii)  or  (iv)  above.

          14.     Trustee  Dealings  with  the  Company.  The  Trustee,  in  its
                  -------------------------------------
individual  or  any other capacity, may make loans to, accept deposits from, and
perform  services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.

          15.     No  Recourse Against Others.  A director, officer, employee or
                  ---------------------------
stockholder,  as  such,  of  the  Company  shall  not have any liability for any
obligations  of  the  Company  under  the Debentures or the Indenture or for any
claim  based  on,  in  respect  of  or  by  reason of, such obligations or their
creation.  Each Debentureholder by accepting a Debenture waives and releases all
such  liability.  The  waiver  and release are part of the consideration for the
issue  of  the  Debentures.

          16.     Authentication.  This  Debenture  shall not be valid until the
                  --------------
Registrar  signs  the  certificate  of  authentication on the other side of this
Debenture.

          17.     Abbreviations.  Customary  abbreviations  may  be  used in the
                  -------------
name  of  the  Debentureholder  or  an  assignee, such as:  TEN COM (=tenants in
common),  TEN  ENT  (=tenants by entirety), JT TEN (=joint tenants with right of
survivorship  and  not  as  tenants  in  common), CUST (=custodian), and U/G/M/A
(=Uniform  Gifts  to  Minors  Act).

                                       C-4
<PAGE>
          The  Company  will furnish to any Debentureholder upon written request
and  without  charge a copy of the Indenture.  Requests may be made to Intervest
Mortgage  Corporation,  One  Rockefeller  Plaza,  Suite  400, New York, New York
10020-2002.

                                       C-5
<PAGE>
                                   ASSIGNMENT

If  you  want  to  assign  this  Debenture, fill in the form below and have your
signature  guaranteed  by a commercial bank or trust company or a member firm of
any national securities exchange registered under the Securities Exchange Act of
1934.

I or we assign and transfer this Debenture to

__________________________________________________________
(Please insert assignee's social security or tax identification number)

______________________________________________

______________________________________________

______________________________________________
(Print or type assignee's name, address and zip code)

and  irrevocably  appoint  _____________________________________________________
agent  to  transfer  this  Debenture on the books of the Company.  The agent may
substitute  another  to  act  for  him.

Date:   ______________________       Your signature: ___________________

                                                    ___________________________
                                                    (Sign exactly as your name
                                                    appears on the other side of
                                                    this Debenture)

Signature  Guarantee: ___________________________

                                       C-6
<PAGE>
                                                                       Exhibit D
                                                                       ---------

          (FORM OF QUARTERLY PAYMENT DEBENTURE MATURING APRIL 1, 2009)
Number  R(032105/09)-          $

                         INTERVEST MORTGAGE CORPORATION
             Series 3/21/05 Subordinated Debenture due April 1, 2009

          INTERVEST  MORTGAGE  CORPORATION,  a  corporation  duly  organized and
existing  under  the  laws of the State of New York (the "Company"), promises to
pay to or registered assigns the principal sum of ______________________________
Dollars  on April 1, 2009, together with interest at six and one quarter percent
(6  1/4%)  per  annum.  The  provisions  on  the  back  of  this certificate are
incorporated as if set forth on the face of the certificate.

                                          Interest  Payment  Dates:
                                          The first day of each calendar quarter

                                          Record  Dates:
                                          The first day of the third month of
                                          the calendar quarter

DATED:

Authenticated to be one of the
Debentures described in the
Indenture referred to herein:

THE  BANK  OF  NEW  YORK,  as             INTERVEST  MORTGAGE  CORPORATION
  Registrar

By:     _______________________  (Seal)   By: ___________________________
     Authorized  Signatory                         President

                                          By: ___________________________
                                                   Secretary

                                       D-1
<PAGE>
                             (REVERSE OF DEBENTURE)

             Series 3/21/05 Subordinated Debenture due April 1, 2009

     1.     Interest.  The  Company  promises  to  pay interest on the principal
            --------
amount  of  this  Debenture at the rate per annum shown above.  The Company will
pay interest quarterly on January 1, April 1, July 1 and October 1 of each year.
With  respect  to  Debentures sold on the date $12,000,000 or more of Debentures
are first approved for issuance (the "First Closing Date"), interest will accrue
on principal from the First Closing Date.  With respect to Debentures sold after
the  First  Closing  Date,  interest  will accrue on principal commencing on the
first  day  of  the  month  of  sale,  if the Debenture is sold on or before the
fifteenth  day  of the month, or commencing on the sixteenth day of the month of
sale,  if  the  Debenture is sold after the fifteenth day of the month, provided
that interest shall not accrue from prior to the First Closing Date.  Debentures
sold  after  the First Closing Date shall be deemed sold on the date the Company
(or  an underwriter on its behalf) receives payment therefor.  The first payment
of  interest  shall  be  due  on  the  first  day of the second calendar quarter
following  the  date  of sale of the Debenture, or such earlier date selected by
the  Company  without  requirement  of  notice  After  the  first  payment date,
interest  on  the  Debenture  will  accrue  from  the  most recent date to which
interest  has been paid.  Interest accrues from the date of closing and interest
will  be  computed  on  the  basis of a 360 day year consisting of twelve 30-day
months.

     2.     Method  of  Payment. The Company will pay interest on the Debentures
            -------------------
to the persons who are registered holders of Debentures at the close of business
on  the  first  day  of  the  third month of the calendar quarter.  Holders must
surrender  Debentures  to  a  Paying  Agent  to collect principal payments.  The
Company  will  pay  principal and interest in money of the United States that at
the  time  of  payment  is legal tender for payment of public and private debts.
The  Company  may,  however,  pay principal and interest by its check payable in
such money. It may mail payments to a holder's registered address.

     3.     Paying  Agent  and  Registrar.  The  Bank  of  New  York, a New York
            -----------------------------
banking corporation, will act as Registrar and will authenticate the Debentures.
The  Bank  of  New  York will also act as initial Paying Agent.  The Company may
change any Paying Agent, Registrar or co-Registrar without notice.

     4.     Indenture.  This  Debenture  is  one  of a duly authorized series of
            ---------
Debentures  issued  by  the Company under an Indenture dated as of April 1, 2005
(the  "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").  The term "Debentures" being used herein refers to all Maturities of
Debentures  issued  under  the  Indenture.  Capitalized terms herein are used as
defined  in  the Indenture unless otherwise indicated.  Reference is hereby made
to  the  Indenture  for  a  description  of  the rights, obligations, duties and
immunities  of  the  Trustee  and  the  Debentureholders  and  for the terms and
conditions  upon  which the Debentures are and are to be issued.  The Debentures
are  general  unsecured  obligations  of  the  Company  limited to the aggregate
principal  amount  of  $14,000,000, of which a maximum of $3,000,000 will have a
maturity  date  of  April  1, 2009, a maximum of $4,500,000 will have a maturity
date  of April 1, 2011, and a maximum of $6,500,000 will have a maturity date of
April  1,  2013.

     5.     Optional  Redemption.  The  Company  may  at  its  option redeem the
            --------------------
Debentures  of any CUSIP Number in whole or in part at any time.  The redemption
price of Debentures will be equal to (i) the face amount of the Debentures to be
redeemed  plus  a 1% premium if the redemption date is prior to October 1, 2006,
and (ii) the face amount of the Debentures to be redeemed if the redemption date
is  on  or  after October 1, 2006.  In all cases, the Debenture holder will also
receive  interest  accrued  to  the  redemption  date.

                                       D-2
<PAGE>
     6.     Selection  and  Notice  of  Redemption.  If  less  than  all  of the
            --------------------------------------
Debentures  of  any  CUSIP Number are to be redeemed, the Registrar shall select
the  Debentures  to  be redeemed by such method as the Registrar shall deem fair
and  appropriate,  or  if  the  Debentures  are  listed on a national securities
exchange,  in  accordance  with the rules of such exchange.  The Registrar shall
make the selection from the Debentures outstanding and not previously called for
redemption.  The  Registrar may select for redemption portions (equal to $10,000
or  any  integral  multiple  thereof) of the principal amount of Debentures that
have denominations larger than  $10,000.  Provisions of the Indenture that apply
to  Debentures called for redemption also apply to portions of Debentures called
for  redemption.  Notice  of  redemption will be mailed at least 30 days but not
more  than 90 days before the redemption date to each holder of Debentures to be
redeemed  at his registered address.  On and after the redemption date, which is
the  date  specified  by the Company in its notice, interest ceases to accrue on
Debentures  or  portions  thereof  called  for  redemption.

     7.     Denominations,  Transfer,  Exchange.  The Debentures are issuable in
            -----------------------------------
registered  form  without  coupons  in  denominations  of  $10,000  and integral
multiples  of  $10,000.  A  holder  may  transfer  or  exchange  Debentures  in
accordance with the Indenture.  A Debenture containing a particular CUSIP Number
may  not  be  exchanged  for  a  Debenture containing another CUSIP Number.  The
Registrar  may  require  a  holder,  among  other things, to furnish appropriate
endorsements  and  transfer documents, and to pay any taxes and fees required by
law  or permitted by the Indenture.  The Registrar need not transfer or exchange
any  Debenture or portion of a Debenture selected for redemption, or transfer or
exchange any Debentures for a period of 15 days before a selection of Debentures
to  be  redeemed.

     8.     Persons  Deemed Owners.  The registered holder of a Debenture may be
            ----------------------
treated as the owner of it for all purposes.

     9.     Unclaimed  Money.  If money for the payment of principal or interest
            ----------------
remains  unclaimed for two years, the Trustee or Paying Agent will pay the money
back  to  the  Company,  if  the Company requests such repayment within one year
after such two year period that such money remains unclaimed.  If such unclaimed
money  is so paid back to the Company, thereafter, holders entitled to the money
must  look to the Company for payment as general creditors, unless an applicable
abandoned  property  law  designates another person.  If such unclaimed money is
not  so  paid  back  to  the  Company,  it  may be disposed of by the Trustee in
accordance  with  applicable  law.

     10.     Amendment,  Supplement, Waiver.  Subject to certain exceptions, the
             ------------------------------
Indenture or the Debentures may be amended or supplemented, and any past default
or  compliance with any provision may be waived, with the consent of the holders
of  a  majority  in principal amount of the outstanding Debentures.  Without the
consent  of  any  Debentureholder,  the  Company  may  amend  or  supplement the
Indenture  or  the  Debentures  to  cure  any  ambiguity,  omission,  defect  or
inconsistency,  to  comply with Article Five of the Indenture (providing for the
assumption  of the obligations of the Company under the Indenture by a successor
corporation), or to make any change that does not adversely affect the rights of
any  Debentureholder.

     11.     Defaults  and  Remedies.  The  Indenture  provides that the Trustee
             -----------------------
will  give the Debentureholders notice of an uncured Default known to it, within
90  days  after  the  occurrence  of  an  Event  of  Default  (as defined in the
Indenture),  or  as  soon as practicable after it learns of  an Event of Default
which  occurred  more than 90 days beforehand; provided that, except in the case
of  Default  in the payment of principal of or interest on any of the Debentures
or  any  amount due on redemption, the Trustee may withhold such notice if it in
good  faith  determines  that  the  withholding  of  such  notice  is  in

                                       D-3
<PAGE>
the interest of the Debentureholders.  In case an Event of Default occurs and is
continuing,  the  Trustee  or  the  holders  of  not  less than 25% of aggregate
principal amount of the Debentures then outstanding, by notice in writing to the
Company  (and  to the Trustee if given by the Debentureholders), may declare the
principal  of  and  all  accrued  interest  on  all the Debentures to be due and
payable immediately.  Such declaration may be rescinded by holders of a majority
in  principal amount of the Debentures if all existing Events of Default (except
nonpayment  of  principal  or interest that has become due solely because of the
acceleration) have been cured or waived and if the rescission would not conflict
with  any  judgment  or  decree.  The  Indenture  requires  the  Company to file
periodic reports with the Trustee as to the absence of defaults.

     12.     Subordination.  The indebtedness evidenced by all of the Debentures
             -------------
is, to the extent provided in the Indenture, subordinate and subject in right of
payment  to  the  prior  payment  in  full  of all Senior Indebtedness, and this
Debenture is issued subject to such provisions of the Indenture, and each holder
of  this  Debenture  by  accepting  same,  agrees  to and shall be bound by such
provisions.  "Senior Indebtedness" means Indebtedness of the Company outstanding
at  any time, whether outstanding on the date hereof or hereafter created, which
(i) is secured, in whole or in part, by any asset or assets owned by the Company
or  a Subsidiary, or (ii) arises from unsecured borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clauses  (ii),  (iii)  or  (iv)  above.

     13.     Trustee  Dealings with the Company.  The Trustee, in its individual
             ----------------------------------
or  any  other  capacity,  may  make loans to, accept deposits from, and perform
services  for  the  Company  or  its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

     14.     No  Recourse  Against  Others.  A  director,  officer,  employee or
             -----------------------------
stockholder,  as  such,  of  the  Company  shall  not have any liability for any
obligations  of  the  Company  under  the Debentures or the Indenture or for any
claim  based  on,  in  respect  of  or  by  reason of, such obligations or their
creation.  Each Debentureholder by accepting a Debenture waives and releases all
such  liability.  The  waiver  and release are part of the consideration for the
issue  of  the  Debentures.

     15.     Authentication.  This  Debenture  shall  not  be  valid  until  the
             --------------
Registrar  signs  the  certificate  of  authentication on the other side of this
Debenture.

     16.     Abbreviations.  Customary  abbreviations may be used in the name of
             -------------
the  Debentureholder or an assignee, such as:  TEN COM (=tenants in common), TEN
ENT  (=tenants  by  entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to
Minors  Act).

     The  Company  will  furnish to any Debentureholder upon written request and
without  charge  a  copy  of  the  Indenture.  Requests may be made to Intervest
Mortgage  Corporation,  One  Rockefeller  Plaza,  Suite  400, New York, New York
10020-2002.

                                       D-4
<PAGE>
                                   ASSIGNMENT

If  you  want  to  assign  this  Debenture, fill in the form below and have your
signature  guaranteed  by a commercial bank or trust company or a member firm of
any national securities exchange registered under the Securities Exchange Act of
1934.

I or we assign and transfer this Debenture to

__________________________________________________________
(Please insert assignee's social security or tax identification number)

______________________________________________

______________________________________________

______________________________________________
(Print or type assignee's name, address and zip code)

and  irrevocably  appoint  _____________________________________________________
agent  to  transfer  this  Debenture on the books of the Company.  The agent may
substitute  another  to  act  for  him.

Date:     ________________________          Your signature: __________________

                                                   _________________________
                                                   (Sign exactly as your name
                                                   appears on the other side
                                                   of this Debenture)

Signature  Guarantee: ___________________________

                                       D-5
<PAGE>
                                                                       Exhibit E
                                                                       ---------

          (FORM OF QUARTERLY PAYMENT DEBENTURE MATURING APRIL 1, 2011)
Number  R(032105/11)-          $

                         INTERVEST MORTGAGE CORPORATION
             Series 3/21/05 Subordinated Debenture due April 1, 2011

          INTERVEST  MORTGAGE  CORPORATION,  a  corporation  duly  organized and
existing  under  the  laws of the State of New York (the "Company"), promises to
pay to or registered assigns the principal sum of ______________________________
Dollars  on April 1, 2011, together with interest at six and one-half percent (6
%) per annum. The provisions on the back of this certificate are incorporated as
if  set  forth  on  the  face  of  the  certificate.

                                            Interest Payment Dates:
                                            The first day of each calendar
                                            quarter

                                            Record  Dates:
                                            The first day of the third month of
                                            the calendar quarter

DATED:

Authenticated to be one of the
Debentures described in the
Indenture referred to herein:

THE  BANK  OF  NEW  YORK,  as               INTERVEST  MORTGAGE  CORPORATION
  Registrar

By:     _______________________  (Seal)     By: ______________________
     Authorized  Signatory                            President

                                            By: ______________________
                                                      Secretary

                                       E-1
<PAGE>
                             (REVERSE OF DEBENTURE)

            Series 3/21/05 Subordinated Debenture due April 1, 2011

     1.     Interest.  The  Company  promises  to  pay interest on the principal
            --------
amount  of  this  Debenture at the rate per annum shown above.  The Company will
pay interest quarterly on January 1, April 1, July 1 and October 1 of each year.
With  respect  to  Debentures sold on the date $12,000,000 or more of Debentures
are first approved for issuance (the "First Closing Date"), interest will accrue
on principal from the First Closing Date.  With respect to Debentures sold after
the  First  Closing  Date,  interest  will accrue on principal commencing on the
first  day  of  the  month  of  sale,  if the Debenture is sold on or before the
fifteenth  day  of the month, or commencing on the sixteenth day of the month of
sale,  if  the  Debenture is sold after the fifteenth day of the month, provided
that interest shall not accrue from prior to the First Closing Date.  Debentures
sold  after  the First Closing Date shall be deemed sold on the date the Company
(or  an underwriter on its behalf) receives payment therefor.  The first payment
of  interest  shall  be  due  on  the  first  day of the second calendar quarter
following  the  date  of sale of the Debenture, or such earlier date selected by
the  Company  without  requirement  of  notice  After  the  first  payment date,
interest  on  the  Debenture  will  accrue  from  the  most recent date to which
interest  has been paid.  Interest accrues from the date of closing and interest
will  be  computed  on  the  basis of a 360 day year consisting of twelve 30-day
months.

     2.     Method  of Payment.  The Company will pay interest on the Debentures
            ------------------
to the persons who are registered holders of Debentures at the close of business
on  the  first  day  of  the  third month of the calendar quarter.  Holders must
surrender  Debentures  to  a  Paying  Agent  to collect principal payments.  The
Company  will  pay  principal and interest in money of the United States that at
the  time  of  payment  is legal tender for payment of public and private debts.
The  Company  may,  however,  pay principal and interest by its check payable in
such money. It may mail payments to a holder's registered address.

     3.     Paying  Agent  and  Registrar.  The  Bank  of  New  York, a New York
            -----------------------------
banking corporation, will act as Registrar and will authenticate the Debentures.
The  Bank  of  New  York  will also act as initial Paying Agent. The Company may
change any Paying Agent, Registrar or co-Registrar without notice.

     4.     Indenture.  This  Debenture  is  one  of a duly authorized series of
            ---------
Debentures  issued  by  the Company under an Indenture dated as of April 1, 2005
(the  "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").  The term "Debentures" being used herein refers to all Maturities of
Debentures  issued  under  the  Indenture.  Capitalized terms herein are used as
defined  in  the Indenture unless otherwise indicated.  Reference is hereby made
to  the  Indenture  for  a  description  of  the rights, obligations, duties and
immunities  of  the  Trustee  and  the  Debentureholders  and  for the terms and
conditions  upon  which the Debentures are and are to be issued.  The Debentures
are  general  unsecured  obligations  of  the  Company  limited to the aggregate
principal  amount  of  $14,000,000, of which a maximum of $3,000,000 will have a
maturity  date  of  April  1, 2009, a maximum of $4,500,000 will have a maturity
date  of April 1, 2011, and a maximum of $6,500,000 will have a maturity date of
April  1,  2013

     5.     Optional  Redemption.  The  Company  may  at  its  option redeem the
            --------------------
Debentures  of any CUSIP Number in whole or in part at any time.  The redemption
price  for  Debentures will be equal to (i) the face amount of the Debentures to
be  redeemed  plus  a  1%  premium if the redemption date is prior to October 1,
2006,  and  (ii)  the  face  amount  of  the  Debentures  to  be redeemed if the
redemption  date  is  on  or after October 1, 2006.  In all cases, the Debenture
holder will also receive interest accrued to the redemption date.

                                       E-2
<PAGE>
     6.     Selection  and  Notice  of  Redemption.  If  less  than  all  of the
            --------------------------------------
Debentures  of  any  CUSIP Number are to be redeemed, the Registrar shall select
the  Debentures  to  be redeemed by such method as the Registrar shall deem fair
and  appropriate,  or  if  the  Debentures  are  listed on a national securities
exchange,  in  accordance  with the rules of such exchange.  The Registrar shall
make the selection from the Debentures outstanding and not previously called for
redemption.  The  Registrar may select for redemption portions (equal to $10,000
or  any  integral  multiple  thereof) of the principal amount of Debentures that
have  denominations larger than $10,000.  Provisions of the Indenture that apply
to  Debentures called for redemption also apply to portions of Debentures called
for  redemption.  Notice  of  redemption will be mailed at least 30 days but not
more  than 90 days before the redemption date to each holder of Debentures to be
redeemed  at his registered address.  On and after the redemption date, which is
the  date  specified  by the Company in its notice, interest ceases to accrue on
Debentures  or  portions  thereof  called  for  redemption.

     7.     Optional  Repurchase.  Commencing  in  2009,  a holder will have the
            --------------------
option  to  require  the Company to repurchase the Debenture for the face amount
plus  accrued  interest,  provided that a request for repurchase, accompanied by
the  Debenture  and  a  written  and  duly  executed  instrument  of transfer is
submitted  to  the Company no earlier than February 1 and no later than February
28  to  be effective as of April 1.  Repurchases shall be made once each year as
of April 1 and are subject to the limitation that the Company is not required to
repurchase  more than $100,000 principal amount of each maturity in any calendar
year,  on  a  non-cumulative basis.  The Company will repurchase Debentures on a
first-come,  first-served  basis.

     8.     Denominations, Transfer, Exchange.  The Debentures are  issuable  in
            ---------------------------------
registered  form  without  coupons  in  denominations  of  $10,000  and integral
multiples of $10,000. A holder may transfer or exchange Debentures in accordance
with  the Indenture. A Debenture containing a particular CUSIP Number may not be
exchanged  for  a  Debenture  containing another CUSIP Number. The Registrar may
require  a  holder,  among other things, to furnish appropriate endorsements and
transfer  documents,  and to pay any taxes and fees required by law or permitted
by  the  Indenture. The Registrar need not transfer or exchange any Debenture or
portion  of  a  Debenture  selected  for redemption, or transfer or exchange any
Debentures  for  a  period  of  15  days  before a selection of Debentures to be
redeemed.

     9.     Persons  Deemed Owners.  The registered holder of a Debenture may be
            ----------------------
treated as the owner of it for all purposes.

     10.     Unclaimed Money.  If money for the payment of principal or interest
             ---------------
remains  unclaimed for two years, the Trustee or Paying Agent will pay the money
back  to  the  Company,  if  the Company requests such repayment within one year
after such two year period that such money remains unclaimed.  If such unclaimed
money  is so paid back to the Company, thereafter, holders entitled to the money
must  look to the Company for payment as general creditors, unless an applicable
abandoned  property  law  designates another person.  If such unclaimed money is
not  so  paid  back  to  the  Company,  it  may be disposed of by the Trustee in
accordance  with  applicable  law.

     11.     Amendment,  Supplement, Waiver.  Subject to certain exceptions, the
             ------------------------------
Indenture or the Debentures may be amended or supplemented, and any past default
or  compliance with any provision may be waived, with the consent of the holders
of  a  majority  in principal amount of the outstanding Debentures.  Without the
consent  of  any  Debentureholder,  the  Company  may  amend  or  supplement the
Indenture  or  the  Debentures  to  cure  any  ambiguity,  omission,  defect  or
inconsistency,  to  comply with Article Five of the Indenture (providing for the
assumption  of the obligations of the Company under the Indenture by a successor
corporation), or to make any change that does not adversely affect the rights of
any  Debentureholder.

                                       E-3
<PAGE>
     12.     Defaults  and  Remedies.  The  Indenture  provides that the Trustee
             -----------------------
will  give the Debentureholders notice of an uncured Default known to it, within
90  days  after  the  occurrence  of  an  Event  of  Default  (as defined in the
Indenture),  or  as  soon  as practicable after it learns of an Event of Default
which  occurred  more than 90 days beforehand; provided that, except in the case
of  Default  in the payment of principal of or interest on any of the Debentures
or  any  amount due on redemption, the Trustee may withhold such notice if it in
good  faith determines that the withholding of such notice is in the interest of
the Debentureholders.  In case an Event of Default occurs and is continuing, the
Trustee or the holders of not less than 25% of aggregate principal amount of the
Debentures  then  outstanding,  by  notice in writing to the Company (and to the
Trustee  if given by the Debentureholders), may declare the principal of and all
accrued  interest on all the Debentures to be due and payable immediately.  Such
declaration may be rescinded by holders of a majority in principal amount of the
Debentures  if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or  waived and if the rescission would not conflict with any judgment or decree.
The  Indenture requires the Company to file periodic reports with the Trustee as
to  the  absence  of  defaults.

     13.     Subordination.  The indebtedness evidenced by all of the Debentures
             -------------
is, to the extent provided in the Indenture, subordinate and subject in right of
payment  to  the  prior  payment  in  full  of all Senior Indebtedness, and this
Debenture is issued subject to such provisions of the Indenture, and each holder
of  this  Debenture  by  accepting  same,  agrees  to and shall be bound by such
provisions.  "Senior Indebtedness" means Indebtedness of the Company outstanding
at  any time, whether outstanding on the date hereof or hereafter created, which
(i) is secured, in whole or in part, by any asset or assets owned by the Company
or  a Subsidiary, or (ii) arises from unsecured borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clauses  (ii),  (iii)  or  (iv)  above.

     14.     Trustee  Dealings with the Company.  The Trustee, in its individual
             ----------------------------------
or  any  other  capacity,  may  make loans to, accept deposits from, and perform
services  for  the  Company  or  its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

     15.     No  Recourse  Against  Others.  A  director,  officer,  employee or
             -----------------------------
stockholder,  as  such,  of  the  Company  shall  not have any liability for any
obligations  of  the  Company  under  the Debentures or the Indenture or for any
claim  based  on,  in  respect  of  or  by  reason of, such obligations or their
creation.  Each Debentureholder by accepting a Debenture waives and releases all
such  liability.  The  waiver  and release are part of the consideration for the
issue  of  the  Debentures.

     16.     Authentication.  This  Debenture  shall  not  be  valid  until  the
             --------------
Registrar  signs  the  certificate  of  authentication on the other side of this
Debenture.

                                       E-4
<PAGE>
     17.     Abbreviations.  Customary  abbreviations may be used in the name of
             -------------
the  Debentureholder or an assignee, such as:  TEN COM (=tenants in common), TEN
ENT  (=tenants  by  entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to
Minors  Act).

     The  Company  will  furnish to any Debentureholder upon written request and
without  charge  a  copy  of  the  Indenture.  Requests may be made to Intervest
Mortgage  Corporation,  One  Rockefeller  Plaza,  Suite  400, New York, New York
10020-2002.

                                       E-5
<PAGE>
                                   ASSIGNMENT

If  you  want  to  assign  this  Debenture, fill in the form below and have your
signature  guaranteed  by a commercial bank or trust company or a member firm of
any national securities exchange registered under the Securities Exchange Act of
1934.

I or we assign and transfer this Debenture to

__________________________________________________________
(Please insert assignee's social security or tax identification number)

______________________________________________

______________________________________________

______________________________________________
(Print or type assignee's name, address and zip code)

and  irrevocably  appoint ______________________________________________________
agent  to  transfer  this  Debenture on the books of the Company.  The agent may
substitute  another  to  act  for  him.

Date:   ________________________          Your signature: __________________

                                                   _________________________
                                                   (Sign exactly as your name
                                                   appears on the other side
                                                   of this Debenture)

Signature  Guarantee: ___________________________

                                       E-6
<PAGE>
                                                                       Exhibit F
                                                                       ---------

          (FORM OF QUARTERLY PAYMENT DEBENTURE MATURING APRIL 1, 2013)
Number  R(032105/13)-          $

                         INTERVEST MORTGAGE CORPORATION
             Series 3/21/05 Subordinated Debenture due April 1, 2013

     INTERVEST  MORTGAGE  CORPORATION, a corporation duly organized and existing
under  the  laws of the State of New York (the "Company"), promises to pay to or
registered assigns the principal sum of ________________________________________
Dollars  on  April  1,  2013,  together  with interest at seven percent (7%) per
annum.  The  provisions  on  the back of this certificate are incorporated as if
set  forth  on  the  face  of  the  certificate.

                                            Interest Payment Dates:
                                            The first day of each calendar
                                            quarter

                                            Record  Dates:
                                            The first day of the third month
                                            of the calendar quarter

DATED:

Authenticated to be one of the
Debentures described in the
Indenture referred to herein:

THE  BANK  OF  NEW  YORK,  as               INTERVEST  MORTGAGE  CORPORATION
  Registrar

By:     _______________________  (Seal)     By: ________________________
     Authorized  Signatory                         President

                                            By: ________________________
                                                   Secretary

                                       F-1
<PAGE>
                             (REVERSE OF DEBENTURE)

             Series 3/21/05 Subordinated Debenture due April 1, 2013

     1.     Interest.  The  Company  promises  to  pay interest on the principal
            --------
amount  of  this  Debenture at the rate per annum shown above.  The Company will
pay interest quarterly on January 1, April 1, July 1 and October 1 of each year.
With  respect  to  Debentures sold on the date $12,000,000 or more of Debentures
are first approved for issuance (the "First Closing Date"), interest will accrue
on principal from the First Closing Date.  With respect to Debentures sold after
the  First  Closing  Date,  interest  will accrue on principal commencing on the
first  day  of  the  month  of  sale,  if the Debenture is sold on or before the
fifteenth  day  of the month, or commencing on the sixteenth day of the month of
sale,  if  the  Debenture is sold after the fifteenth day of the month, provided
that interest shall not accrue from prior to the First Closing Date.  Debentures
sold  after  the First Closing Date shall be deemed sold on the date the Company
(or  an underwriter on its behalf) receives payment therefor.  The first payment
of  interest  shall  be  due  on  the  first  day of the second calendar quarter
following  the  date  of sale of the Debenture, or such earlier date selected by
the  Company  without  requirement  of  notice  After  the  first  payment date,
interest  on  the  Debenture  will  accrue  from  the  most recent date to which
interest  has been paid.  Interest accrues from the date of closing and interest
will  be  computed  on  the  basis of a 360 day year consisting of twelve 30-day
months.

     2.     Method  of Payment.  The Company will pay interest on the Debentures
            ------------------
to the persons who are registered holders of Debentures at the close of business
on  the  first  day  of  the  third month of the calendar quarter.  Holders must
surrender  Debentures  to  a  Paying  Agent  to collect principal payments.  The
Company  will  pay  principal and interest in money of the United States that at
the  time  of  payment  is legal tender for payment of public and private debts.
The  Company  may,  however,  pay principal and interest by its check payable in
such money. It may mail payments to a holder's registered address.

     3.     Paying  Agent  and  Registrar.  The  Bank  of  New  York, a New York
            -----------------------------
banking corporation, will act as Registrar and will authenticate the Debentures.
The  Bank of New York will also act as the initial Paying Agent. The Company may
change any Paying Agent, Registrar or co-Registrar without notice.

     4.     Indenture.  This  Debenture  is  one  of a duly authorized series of
            ---------
Debentures  issued  by  the Company under an Indenture dated as of April 1, 2005
(the  "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").  The term "Debentures" being used herein refers to all Maturities of
Debentures  issued  under  the  Indenture.  Capitalized terms herein are used as
defined  in  the Indenture unless otherwise indicated.  Reference is hereby made
to  the  Indenture  for  a  description  of  the rights, obligations, duties and
immunities  of  the  Trustee  and  the  Debentureholders  and  for the terms and
conditions  upon  which the Debentures are and are to be issued.  The Debentures
are  general  unsecured  obligations  of  the  Company  limited to the aggregate
principal  amount  of  $14,000,000, of which a maximum of $3,000,000 will have a
maturity  date  of  April  1, 2009, a maximum of $4,500,000 will have a maturity
date  of  April 1, 2011 and a maximum of $6,500,000 will have a maturity date of
April  1,  2013.

     5.     Optional  Redemption.  The  Company  may  at  its  option redeem the
            --------------------
Debentures  of any CUSIP Number in whole or in part at any time.  The redemption
price for Debentures will be equal to:  (i) the face amount of the Debentures to
be  redeemed  plus  a  1%  premium if the redemption date is prior to October 1,
2006,  and  (ii)  the  face  amount  of  the  Debentures  to  be redeemed if the
redemption  date  is  on  or after October 1, 2006.  In all cases, the Debenture
holder will also receive interest accrued to the redemption date.

                                       F-2
<PAGE>
          6.     Selection and Notice of Redemption.  If less  than  all  of the
                 ----------------------------------
Debentures  of  any  CUSIP Number are to be redeemed, the Registrar shall select
the  Debentures  to  be redeemed by such method as the Registrar shall deem fair
and  appropriate,  or  if  the  Debentures  are  listed on a national securities
exchange,  in  accordance  with the rules of such exchange.  The Registrar shall
make the selection from the Debentures outstanding and not previously called for
redemption.  The  Registrar may select for redemption portions (equal to $10,000
or  any  integral  multiple  thereof) of the principal amount of Debentures that
have  denominations larger than $10,000.  Provisions of the Indenture that apply
to  Debentures called for redemption also apply to portions of Debentures called
for  redemption.  Notice  of  redemption will be mailed at least 30 days but not
more  than 90 days before the redemption date to each holder of Debentures to be
redeemed  at his registered address.  On and after the redemption date, which is
the  date  specified  by the Company in its notice, interest ceases to accrue on
Debentures  or  portions  thereof  called  for  redemption.

     7.     Optional  Repurchase.  Commencing  in  2009,  a holder will have the
            --------------------
option  to  require  the Company to repurchase the Debenture for the face amount
plus  accrued  interest,  provided that a request for repurchase, accompanied by
the  Debenture  and  a  written  and  duly  executed  instrument  of transfer is
submitted  to  the Company no earlier than February 1 and no later than February
28  to  be effective as of April 1.  Repurchases shall be made once each year as
of April 1 and are subject to the limitation that the Company is not required to
repurchase  more than $100,000 principal amount of each maturity in any calendar
year,  on  a  non-cumulative basis.  The Company will repurchase Debentures on a
first-come,  first-served  basis.

     8     Denominations,  Transfer,  Exchange.  The  Debentures are issuable in
           -----------------------------------
registered  form  without  coupons  in  denominations  of  $10,000  and integral
multiples of $10,000. A holder may transfer or exchange Debentures in accordance
with  the Indenture. A Debenture containing a particular CUSIP Number may not be
exchanged  for  a  Debenture  containing another CUSIP Number. The Registrar may
require  a  holder,  among other things, to furnish appropriate endorsements and
transfer  documents,  and to pay any taxes and fees required by law or permitted
by  the  Indenture. The Registrar need not transfer or exchange any Debenture or
portion  of  a  Debenture  selected  for redemption, or transfer or exchange any
Debentures  for  a  period  of  15  days  before a selection of Debentures to be
redeemed.

     9.     Persons  Deemed Owners.  The registered holder of a Debenture may be
            ----------------------
treated as the owner of it for all purposes.

     10     Unclaimed  Money.  If money for the payment of principal or interest
            ----------------
remains  unclaimed for two years, the Trustee or Paying Agent will pay the money
back  to  the  Company,  if  the Company requests such repayment within one year
after such two year period that such money remains unclaimed.  If such unclaimed
money  is so paid back to the Company, thereafter, holders entitled to the money
must  look to the Company for payment as general creditors, unless an applicable
abandoned  property  law  designates another person.  If such unclaimed money is
not  so  paid  back  to  the  Company,  it  may be disposed of by the Trustee in
accordance  with  applicable  law.

     11.     Amendment,  Supplement, Waiver.  Subject to certain exceptions, the
             ------------------------------
Indenture or the Debentures may be amended or supplemented, and any past default
or  compliance with any provision may be waived, with the consent of the holders
of  a  majority  in principal amount of the outstanding Debentures.  Without the
consent  of  any  Debentureholder,  the  Company  may
amend  or  supplement  the  Indenture  or  the Debentures to cure any ambiguity,
omission,  defect or inconsistency, to comply with Article Five of the Indenture
(providing  for  the  assumption  of  the  obligations  of the Company under the
Indenture  by  a  successor  corporation),  or  to make any change that does not
adversely  affect  the  rights  of  any  Debentureholder.

                                      F -3
<PAGE>
          12     Defaults and Remedies.  The Indenture provides that the Trustee
                 ---------------------
will  give the Debentureholders notice of an uncured Default known to it, within
90  days  after  the  occurrence  of  an  Event  of  Default  (as defined in the
Indenture),  or  as  soon  as practicable after it learns of an Event of Default
which  occurred  more than 90 days beforehand; provided that, except in the case
of  Default  in the payment of principal of or interest on any of the Debentures
or  any  amount due on redemption, the Trustee may withhold such notice if it in
good  faith determines that the withholding of such notice is in the interest of
the  Debentureholders. In case an Event of Default occurs and is continuing, the
Trustee or the holders of not less than 25% of aggregate principal amount of the
Debentures  then  outstanding,  by  notice in writing to the Company (and to the
Trustee  if given by the Debentureholders), may declare the principal of and all
accrued  interest  on all the Debentures to be due and payable immediately. Such
declaration may be rescinded by holders of a majority in principal amount of the
Debentures  if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or  waived and if the rescission would not conflict with any judgment or decree.
The  Indenture requires the Company to file periodic reports with the Trustee as
to  the  absence  of  defaults.

     13.     Subordination.  The indebtedness evidenced by all of the Debentures
             -------------
is, to the extent provided in the Indenture, subordinate and subject in right of
payment  to  the  prior  payment  in  full  of all Senior Indebtedness, and this
Debenture is issued subject to such provisions of the Indenture, and each holder
of  this  Debenture  by  accepting  same,  agrees  to and shall be bound by such
provisions.  "Senior Indebtedness" means Indebtedness of the Company outstanding
at  any time, whether outstanding on the date hereof or hereafter created, which
(i) is secured, in whole or in part, by any asset or assets owned by the Company
or  a Subsidiary, or (ii) arises from unsecured borrowings by the Company from a
commercial  bank,  a  savings bank, a savings and loan association, an insurance
company,  a company whose securities are traded in a national securities market,
or  any  wholly-owned  subsidiary  of any of the foregoing, or (iii) arises from
unsecured  borrowings  by  the Company from any pension plan (as defined in Sec.
3(2)  of  the  Employee  Retirement Income Security Act of 1974, as amended), or
(iv)  arises  from  borrowings  by the Company which are evidenced by commercial
paper, or (v) other unsecured borrowings by the Company which are subordinate to
Indebtedness  of  a  type  described  in  clauses  (i),  (ii)  or (iv) above if,
immediately  after the issuance thereof, the total capital, surplus and retained
earnings of the Company exceed the aggregate of the outstanding principal amount
of  such borrowings, or (vi) is a guarantee or other liability of the Company of
or  with  respect  to Indebtedness of a Subsidiary of a type described in any of
clauses  (ii),  (iii)  or  (iv)  above.

     14.     Trustee  Dealings with the Company.  The Trustee, in its individual
             ----------------------------------
or  any  other  capacity,  may  make loans to, accept deposits from, and perform
services  for  the  Company  or  its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

     15     No  Recourse  Against  Others.  A  director,  officer,  employee  or
            -----------------------------
stockholder,  as  such,  of  the  Company  shall  not have any liability for any
obligations  of  the  Company  under  the Debentures or the Indenture or for any
claim  based  on,  in  respect  of  or  by  reason of, such obligations or their
creation.  Each Debentureholder by accepting a Debenture waives and releases all
such  liability.  The  waiver  and release are part of the consideration for the
issue  of  the  Debentures.

     16.     Authentication.  This  Debenture  shall  not  be  valid  until  the
             --------------
Registrar  signs  the  certificate  of  authentication on the other side of this
Debenture.

     17.     Abbreviations.  Customary  abbreviations may be used in the name of
             -------------
the  Debentureholder or an assignee, such as:  TEN COM (=tenants in common), TEN
ENT  (=tenants  by  entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to
Minors  Act).

     The  Company  will  furnish to any Debentureholder upon written request and
without  charge  a  copy  of  the  Indenture.  Requests may be made to Intervest
Mortgage  Corporation,  One  Rockefeller  Plaza,  Suite  400, New York, New York
10020-2002.

                                      F -4
<PAGE>
                                   ASSIGNMENT

If  you  want  to  assign  this  Debenture, fill in the form below and have your
signature  guaranteed  by a commercial bank or trust company or a member firm of
any national securities exchange registered under the Securities Exchange Act of
1934.

I or we assign and transfer this Debenture to

__________________________________________________________
(Please insert assignee's social security or tax identification number)

______________________________________________

______________________________________________

______________________________________________
(Print or type assignee's name, address and zip code)

and  irrevocably  appoint ______________________________________________________
agent  to  transfer  this  Debenture on the books of the Company.  The agent may
substitute  another  to  act  for  him.

Date:   _________________________          Your signature: ________________

                                                 ___________________________
                                                 (Sign exactly as your name
                                                 appears on the other side
                                                 of this Debenture)

Signature  Guarantee: ___________________________

                                       F-5
<PAGE>

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