Document:

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         THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A PUBLIC UTILITY
           THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS

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                       OLD DOMINION ELECTRIC COOPERATIVE,

                                    GRANTOR,

                                       TO

                                  SUNTRUST BANK

                     (Successor by Merger to Crestar Bank),

                                     TRUSTEE

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

                        SIXTEENTH SUPPLEMENTAL INDENTURE
                            Dated as of July 1, 2003

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

           Supplemental to the Indenture of Mortgage and Deed of Trust
                             Dated as of May 1, 1992

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                  A Mortgage of Both Real and Personal Property

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                        SIXTEENTH SUPPLEMENTAL INDENTURE

       THIS SIXTEENTH SUPPLEMENTAL INDENTURE, dated as of July 1, 2003 (the
"Sixteenth Supplemental Indenture"), between Old Dominion Electric Cooperative,
a Virginia utility aggregation cooperative (the "Company"), whose mailing
address and address of its chief executive office is Innsbrook Corporate Center,
4201 Dominion Boulevard, Glen Allen, Virginia 23060, and SunTrust Bank, a
Georgia banking corporation and successor by merger to Crestar Bank, as trustee
(the "Trustee"), having a corporate trust office at 919 East Main Street, 10th
Floor, Corporate Trust Administration, Richmond, Virginia 23219.

       WHEREAS, the Company has heretofore executed and delivered an Indenture
of Mortgage and Deed of Trust, dated as of May 1, 1992 (the "Original
Indenture"), to secure, as provided therein, Bonds, to be issued in one or more
series as provided in the Original Indenture, as supplemented, modified or
amended (the Original Indenture as so supplemented, modified or amended and in
effect from time to time, the "Indenture"); and

       WHEREAS, the Original Indenture was recorded among the land records in
the counties of Albemarle, Fauquier, Halifax, Louisa, Spotsylvania and Orange,
Virginia, and a UCC Form 1 concerning the Original Indenture was recorded among
the financing statement records at the Virginia State Corporation Commission and
the Counties of Henrico, Halifax, Louisa, Spotsylvania and Orange, Virginia; and

       WHEREAS, each previous supplemental indenture to the Original Indenture
heretofore was recorded among the land records for the counties of Albemarle,
Fauquier, Halifax, Louisa, Spotsylvania and Orange, Virginia and among the
financing statement records at the Virginia State Corporation Commission and the
Counties of Albemarle, Fauquier, Henrico, Halifax, Louisa, Spotsylvania and
Orange, Virginia (other than the Thirteenth Supplemental Indenture, the
Fourteenth Supplemental Indenture and the Fifteenth Supplemental Indenture,
which were not recorded among the financing statement records of the County of
Henrico), which are all of the recording offices (excluding the County of
Henrico) in which this Sixteenth Supplemental Indenture will be recorded; and

       WHEREAS, the Board of Directors of the Company has established the 2003
Series A Bonds and the Board of Directors of the Company has authorized the
issuance thereof, and the Company has complied or will comply with all
provisions required to issue Additional Bonds provided for in the Indenture; and

       WHEREAS, the Company desires to execute and deliver this Sixteenth
Supplemental Indenture, in accordance with the provisions of the Indenture, for
the purposes of (i) providing for the creation of a new series of Bonds,
designating the series to be created and specifying the form and provisions of
the Bonds of such new series; and

       WHEREAS, Section 13.01 of the Indenture provides that, without the
consent of the Holders of any of the Bonds at any time Outstanding, the Company,
when authorized by a Board Resolution, and the Trustee may enter into a
Supplemental Indenture for the purpose and subject to the conditions set forth
in said Section 13.01; and

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       WHEREAS, all acts and proceedings required by law and by the Amended and
Restated Articles of Incorporation and Bylaws, as amended and restated, of the
Company necessary to secure the payment of the principal and Redemption Price of
and interest on the 2003 Series A Bonds, to make the 2003 Series A Bonds to be
issued hereunder, when executed by the Company, authenticated and delivered by
the Trustee and duly issued, the valid, binding and legal obligations of the
Company, and to constitute the Indenture a valid and binding mortgage for the
security of all of the Bonds prior to the Release Date, in accordance with its
and their terms, have been done and taken; and the execution and delivery of
this Sixteenth Supplemental Indenture has been in all respects duly authorized;

       NOW, THEREFORE, THIS SIXTEENTH SUPPLEMENTAL INDENTURE WITNESSETH, that,
to secure the payment of the principal of (and premium, if any) and interest on
the Outstanding Secured Bonds until the Release Date, to confirm the lien of the
Indenture upon the Trust Estate mentioned therein including all property
purchased, constructed or otherwise acquired by the Company since the date of
execution of the Original Indenture until the Release Date, to secure
performance of the covenants therein and herein contained, to declare the terms
and conditions on which the Outstanding Secured Bonds are secured, and in
consideration of the premises thereof and hereof, the Company by these presents
does grant, bargain, sell, alienate, remise, release, convey, assign, transfer,
mortgage, hypothecate, pledge, set over and confirm to the Trustee, in trust,
all property, rights, privileges and franchises (other than Excepted Property)
of the Company of the character described in the Granting Clauses of the
Indenture, including all such property, rights, privileges and franchises
acquired since the date of execution of the Original Indenture, including,
without limitation, all of those fee and leasehold interests in real property,
if any, which may hereafter be constructed or acquired by it, if any, but
subject to all exceptions, reservations and matters of the character therein
referred to, and expressly excepting and excluding from the lien and operation
of the Indenture all properties of the character specifically excepted by
paragraphs (A) through (K) of "Excepted Property" in the Indenture to the extent
contemplated thereby, and all property heretofore released or otherwise disposed
of pursuant to the provisions of the Indenture.

       PROVIDED, HOWEVER, that (i) if, upon the occurrence of an Event of
Default, the Trustee, or any separate trustee or co-trustee appointed under
Section 10.14 of the Indenture or any receiver appointed pursuant to statutory
provision or order of court, shall have entered into possession of all or
substantially all of the Trust Estate, all the Excepted Property described or
referred to in paragraphs (A) through (G), inclusive, of "Excepted Property" in
the Indenture then owned or thereafter acquired by the Company shall
immediately, and, in the case of any Excepted Property described or referred to
in paragraphs (H) through (J) inclusive, of "Excepted Property" in the
Indenture, upon demand of the Trustee or such other trustee or receiver, become
subject to the lien of the Indenture to the extent permitted by law, and the
Trustee or such other trustee or receiver may, to the extent permitted by law,
at the same time likewise take possession thereof, and (ii) whenever all Events
of Default shall have been cured and the possession of all or substantially all
of the Trust Estate shall have been restored to the Company, such Excepted
Property shall again be excepted and excluded from the lien of the Indenture to
the extent and otherwise as hereinabove set forth and as set forth in the
Indenture.

       The Company may, however, pursuant to Granting Clause Third of the
Indenture, subject any Excepted Property to the lien of the Indenture, whereupon
the same shall cease to be Excepted Property.

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         TO HAVE AND TO HOLD all said property, rights, privileges and
franchises of every kind and description, real, personal or mixed, hereby and
hereafter (by Supplemental Indenture or otherwise) granted, bargained, sold,
alienated, remised, released, conveyed, assigned, transferred, mortgaged,
hypothecated, pledged, set over or confirmed as aforesaid, or intended, agreed
or covenanted so to be, together with all the appurtenances thereto appertaining
unto the Trustee and its successors and assigns forever.

         SUBJECT, HOWEVER, to (i) Permitted Encumbrances, (ii) to the extent
permitted by Section 14.06 of the Indenture, as to property acquired since the
date of execution of the Original Indenture, (a) any duly recorded or perfected
prior mortgage or other lien that may exist thereon at the date of the
acquisition thereof by the Company, and (b) purchase money mortgages created by
the Company at the time of acquisition thereof, and (iii) defects of title to
and encumbrances on property described in Article IV of the First Supplemental
Indenture.

         BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the Holders from time to time of all the
Outstanding Secured Bonds without any priority of any such Bond over any other
such Bond and for the enforcement of the payment of such Bonds in accordance
with their terms.

         UPON CONDITION that, until the happening of an Event of Default and
subject to the provisions of Article Six of the Indenture, the Company shall be
permitted to possess and use the Trust Estate, except cash, securities and other
personal property deposited, or required to be deposited, with the Trustee and
to explore for, mine, extract and dispose of coal, ore, gas, oil and other
minerals, to harvest standing timber and to receive and use the rents, issues,
profits, revenues and other income, products and proceeds of the Trust Estate.

         AND IT IS HEREBY COVENANTED AND DECLARED that all the Bonds are to be
authenticated and delivered and the Trust Estate is to be held and applied by
the Trustee, subject to the further covenants, conditions and trusts set forth
in the Indenture, and the Company does hereby covenant and agree to and with the
Trustee, for the equal and proportionate benefit of all Holders of the Bonds as
follows:

                                    ARTICLE I

                   TERMS AND ISSUE OF THE 2003 SERIES A BONDS

Section 1.01. General. There is hereby established under the Indenture, as
further amended by this Sixteenth Supplemental Indenture, a series of Bonds,
known as and entitled "2003 Series A Bonds" (collectively, the "2003 Series A
Bonds"). The aggregate principal amount of 2003 Series A Bonds which may be
authenticated and delivered and Outstanding is limited to TWO HUNDRED FIFTY
MILLION AND NO/00 DOLLARS ($250,000,000.00). The 2003 Series A Bonds will mature
on December 1, 2028. The Trustee is hereby appointed as Authenticating Agent for
the 2003 Series A Bonds.

         The 2003 Series A Bonds shall be issuable without coupons and in
denominations of $1,000 and integral multiples thereof. The 2003 Series A Bonds
shall bear interest from their date of issuance, payable semi-annually on June 1
and December 1 of each year, commencing on

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December 1, 2003, at the rate of 5.676%. Interest on the 2003 Series A Bonds
shall be computed on the basis of a 360-day year of twelve 30-day months for the
actual number of days lapsed.

         The principal and the Redemption Price of and interest on the 2003
Series A Bonds shall be payable to the registered owner of the 2003 Series A
Bonds or its assignee in accordance with the provisions of the Indenture on the
applicable Interest Payment Date or Redemption Date. Interest on the 2003 Series
A Bonds shall be payable without presentation of the 2003 Series A Bonds for
payment. Payment of the principal and Redemption Price of and interest on any
2003 Series A Bond shall be payable at the office of the Trustee in Richmond,
Virginia. Such location is the Place of Payment.

         The Regular Record Date (referred to in Section 3.09 of the Indenture)
for the payment of interest on the 2003 Series A Bonds shall be the fifteenth
day (whether or not a business day) of the calendar month next preceding such
Interest Payment Date.

         Section 1.02. Sinking Fund Redemption.

         (a) The 2003 Series A Bonds are subject to redemption on December 1 on
each year, commencing with the year 2005 and ending with the year 2027, through
operation of the sinking fund for the 2003 Series A Bonds, at a Redemption Price
equal to 100% of the principal amount being redeemed, plus accrued interest
through the Redemption Date (subject to the right of holders of record on the
relevant record date to receive interest due on an interest payment date that is
on or prior to the Redemption Date). As a sinking fund for the 2003 Series A
Bonds, the Company shall redeem on December 1 in each year beginning with the
year 2005 and ending with the year 2027 the aggregate principal amount of the
2003 Series A Bonds specified in the following table:

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                                                        Aggregate Principal
            Year                                      Amount of 2003 Series A
            ----                                               Bonds
                                                               -----

            December 1, 2005 .....................           $10,417,000
            December 1, 2006 .....................           $10,417,000
            December 1, 2007 .....................           $10,417,000
            December 1, 2008 .....................           $10,417,000
            December 1, 2009 .....................           $10,417,000
            December 1, 2010 .....................           $10,417,000
            December 1, 2011 .....................           $10,417,000
            December 1, 2012 .....................           $10,417,000
            December 1, 2013 .....................           $10,417,000
            December 1, 2014 .....................           $10,417,000
            December 1, 2015 .....................           $10,417,000
            December 1, 2016 .....................           $10,417,000
            December 1, 2017 .....................           $10,417,000
            December 1, 2018 .....................           $10,417,000
            December 1, 2019 .....................           $10,417,000
            December 1, 2020 .....................           $10,417,000
            December 1, 2021 .....................           $10,416,000
            December 1, 2022 .....................           $10,416,000
            December 1, 2023 .....................           $10,416,000
            December 1, 2024 .....................           $10,416,000
            December 1, 2025 .....................           $10,416,000
            December 1, 2026 .....................           $10,416,000
            December 1, 2027 .....................           $10,416,000

         The principal amount of the 2003 Series A Bonds acquired and
surrendered for cancellation or redeemed by the Company (otherwise than through
operation of the sinking fund) shall be credited against sinking fund payments
for the 2003 Series A Bonds (including, for purposes of this paragraph, as a
sinking fund payment, $10,416,000 principal amount of 2003 Series A Bonds not to
be redeemed through operation of the sinking fund but to be repaid at maturity
on December 1, 2028) in proportion to the respective amounts of such required
sinking fund payments.

         (b) The particular 2003 Series A Bonds to be redeemed through sinking
fund payments, as provided in this Section 1.02, shall be selected by the
Trustee from the Outstanding 2003 Series A Bonds which have not been previously
been called for redemption by prorating, as nearly as may be subject to
adjustment as provided in Section 15.03 of the Indenture, the principal amount
of the 2003 Series A Bonds to be redeemed among the Holders thereof in
proportion to the aggregate principal amount thereof registered in their
respective names; EXCEPT that, if there shall have been previously filed with
the Trustee an Act of all of the Holders thereof satisfactory to the Trustee
specifying the method of selecting the 2003 Series A Bonds to be redeemed, such
selection shall be made by the Trustee in accordance with the terms of such Act.

         (c) The Trustee shall cause notice of each redemption pursuant to this
Section to be given to each Holder of the 2003 Series A Bonds then Outstanding
at its address as the same shall last appear upon the Bond Register, by first
class mail at least 30 and no more than 60 days prior to the Redemption Date;
provided that so long as the Book-Entry System is maintained in effect, notice
of redemption shall be given to the registered Holders at the time and in the
manner required in the DTC Letter of Representations executed in connection with
the issuance and sale of the 2003 Series

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A Bonds (as amended and in effect from time to time, the "2003 Series A DTC
Letter of Representations"), and the Trustee shall not be required to give any
other notice of redemption otherwise required herein. The notice of redemption
shall specify the Redemption Date, the place or places of payments, that payment
will be made only upon the presentation and surrender of the 2003 Series A Bonds
to be redeemed, that interest, if any, accrued to the Redemption Date will be
paid as specified in such notice and that on and after such date interest
thereon shall cease to accrue.

       Section 1.03. Make-Whole Redemption.

       (a) The 2003 Series A Bonds are subject to redemption, as a whole or in
part, on any date (whether or not an Interest Payment Date) at the election of
the Company at a Redemption Price equal to the greater of (i) 100% of the
principal amount of the 2003 Series A Bonds being redeemed plus all accrued, but
not yet due and payable, interest to the Redemption Date; and (ii) the sum of
the present values of all principal and interest payments scheduled to become
due after the date of such redemption in respect of the 2003 Series A Bonds
being redeemed discounted on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) and calculated using a discount rate equal
to the sum of (A) the yield to maturity of the U.S. Treasury security having a
life equal to the remaining average life of the 2003 Series A Bonds to be
redeemed and trading in the secondary market at the price closest to par, and
(B) twenty (20) basis points; provided, however, that if there is no U.S.
Treasury security having a life equal to the remaining average life of the 2003
Series A Bonds to be redeemed, such discount rate shall be calculated using a
yield to maturity interpolated or extrapolated on a straight-line basis
(rounding to the nearest calendar month, if necessary) from the yields to
maturity of two (2) U.S. Treasury securities having lives most closely
corresponding to the remaining average life of the 2003 Series A Bonds to be
redeemed and trading in the secondary market at the prices closest to par. In
addition, any interest due and payable but unpaid on 2003 Series A Bonds being
redeemed shall be paid on the Redemption Date therefor.

       (b) The calculations set forth in paragraph (a) above of this Section
1.03 shall be determined on the third business day prior to the scheduled
Redemption Date by an investment banking institution of national standing in the
United States selected by the Company or, if the Trustee does not receive notice
of such selection at least ten days prior to a scheduled Redemption Date or if
an Event of Default under the Indenture shall have occurred and be continuing,
selected by the Trustee.

       (c) If less than all the 2003 Series A Bonds are to be redeemed pursuant
to this Section 1.03, the particular 2003 Series A Bonds to be redeemed shall be
selected not more than sixty (60) days prior to the Redemption Date by the
Trustee from the Outstanding Obligations of such series or maturity within a
series which have not previously been called for redemption by such method as
the Trustee shall deem fair and appropriate. In any such selection pursuant to
this Section, the Trustee shall make such adjustments, reallocations and
eliminations as it shall deem proper to the end that the principal amount the
2003 Series A Bonds so selected shall be equal to $1,000, or an integral
multiple thereof. The Trustee in its discretion may determine the particular
2003 Series A Bonds (if there is more than one) registered in the name of any
Holder which are to be redeemed, in whole or in part. In any case where any of
the 2003 Series A Bonds are registered in the same name, the Trustee in its
discretion may treat the aggregate principal amount so registered as if it were
represented by one 2003 Series A Bond.

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       The Trustee shall promptly notify the Company in writing of the 2003
Series A Bonds selected for redemption and, in the case of any 2003 Series A
Bonds selected for partial redemption, the principal amount thereof to be
redeemed.

       (d) Upon receipt of a notice from the Company of its intent to effect an
optional redemption of the 2003 Series A Bonds, the Trustee shall cause notice
of such redemption to be given to each Holder of the 2003 Series A Bonds then
Outstanding at its address as the same shall last appear upon the Bond Register,
by first class mail at least 30 and no more than 60 days prior to the Redemption
Date; provided that so long as the Book-Entry System is maintained in effect,
notice of redemption shall be given to the registered Holders at the time and in
the manner required in the 2003 Series A DTC Letter of Representations, and the
Trustee shall not be required to give any other notice of redemption otherwise
required herein. The notice of redemption shall specify the Redemption Date, the
place or places of payments, that payment will be made only upon the
presentation and surrender of the 2003 Series A Bonds to be redeemed, that
interest, if any, accrued to the Redemption Date will be paid as specified in
such notice and that on and after such date interest thereon shall cease to
accrue.

       (e) Except as provided in Section 1.02 and Section 1.03, the 2003 Series
A Bonds are not redeemable at any time prior to their Stated Maturity.

       (f) Notwithstanding anything to the contrary contained herein or in the
Indenture, if, at the time the Company gives notice to the Trustee of a
redemption as provided for in this Section 1.03 the Trustee does not have on
deposit sufficient available funds designated for the purpose of paying the
principal of, premium, if any, and interest accrued and to accrue through the
applicable Redemption Date on the 2003 Series A Bonds so called for redemption,
then the Company's notice of redemption is conditional and revocable, that is,
the Company is under no obligation to provide, or cause to be provided, to the
Trustee funds to effect such redemption and, if the Company does not elect to do
so by 2:00 p.m., New York City time, on the Redemption Date, then the 2003
Series A Bonds called for redemption shall not be redeemed pursuant to this
notice of redemption or the notice of redemption given by the Trustee pursuant
to the Indenture. The Company will not be liable to any holder of the 2003
Series A Bonds if the Company does not provide, or cause to be provided, funds
sufficient to effect redemption of any such 2003 Series A Bonds with the result
that such 2003 Series A Bonds are not redeemed on the Redemption Date specified
in such notices. If, at the time the Company gives this notice, the Trustee has
on deposit sufficient funds designated for the purpose of and to effect such
redemption, then the Company's notice is unconditional and irrevocable and the
2003 Series A Bonds specified in the Company's notice and given by the Trustee
pursuant to the Indenture shall become due and payable at the specified
Redemption Price on the specified Redemption Date.

       Section 1.04. Exchangeability. When the 2003 Series A Bonds are held in a
Book-Entry System, the delivery of 2003 Series A Bonds, exchanges, transfers and
assignments of the 2003 Series A Bonds and issuance of the 2003 Series A Bonds
shall be determined by the provisions of the 2003 Series A DTC Letter of
Representations.

       Subject to Section 3.07 of the Indenture, all 2003 Series A Bonds not
held in the Book-Entry System shall be fully interchangeable, and, upon
surrender at the office or agency of the Trustee in a Place of Payment therefor,
shall be exchangeable for other 2003 Series A Bonds of the same maturity but of
a different authorized denomination or denominations, as requested by the Holder

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surrendering the same. The Company will execute, and the Trustee shall
authenticate and deliver, 2003 Series A Bonds whenever the same are required for
any such exchange.

       Section 1.05. Book-Entry System, Certificates, Registration and Payment.
When the 2003 Series A Bonds are held in a Book-Entry System, 2003 Series A
Bonds shall (except to the extent otherwise required by the 2003 Series A DTC
Letter of Representations) be evidenced by one or more certificates, in an
amount equal to the aggregate principal amount of such maturity of 2003 Series A
Bonds.

       The principal and Redemption Price of and interest on the 2003 Series A
Bonds shall be payable in lawful money of the United States of America. While
the 2003 Series A Bonds are held in the Book-Entry System, payment of the
principal and Redemption Price of and interest on the 2003 Series A Bonds shall
be made by wire transfer of Federal Reserve funds or equivalent same-day funds,
or in such other manner as permitted by the 2003 Series A DTC Letter of
Representations (as the same may be amended from time to time), to the account
of Cede & Co. In the event the 2003 Series A Bonds are not held in the
Book-Entry System, (i) interest on the 2003 Series A Bonds shall be payable on
each Interest Payment Date by check payable to the Holder (except that if so
instructed in writing by a Holder of $1,000,000 or more of the 2003 Series A
Bonds on or prior to the applicable Regular Record Date, such payments shall be
made by the wire transfer of Federal funds on the Interest Payment Date), mailed
to the Holder at his or her address as it appears on the Bonds Register on the
last day of the calendar month prior to the Interest Payment Date, or in such
other manner as such Holder and the Trustee may determine, and (ii) principal
shall be payable only upon presentation and surrender of each 2003 Series A
Bond, as the same becomes due, at the office from which the Trustee performs the
payment function for 2003 Series A Bonds. Except as may be provided in the 2003
Series A DTC Letter of Representations with respect to 2003 Series A Bonds then
held in the Book-Entry System, payment of principal shall be made only upon
presentation and surrender of each 2003 Series A Bond, as the same becomes due,
at the office from which the Trustee performs the payment function for the 2003
Series A Bonds.

       The Trustee shall act as Bond Registrar and shall maintain registration
books for the registration and the registration of transfer of the 2003 Series A
Bonds.

       So long as the 2003 Series A Bonds are held in the Book-Entry System:

       (a) The registered Holder of all of the 2003 Series A Bonds shall be DTC,
and the 2003 Series A Bonds shall be registered in the name of Cede & Co., as
nominee for DTC, pursuant to the 2003 Series A DTC Letter of Representations,
and the provisions of such Letter of Representations shall be incorporated
herein by this reference;

       (b) The Trustee and the Company may treat DTC (or its nominee) as the
sole and exclusive registered Holder of the 2003 Series A Bonds registered in
its name for the purposes of payment of the principal and Redemption Price of or
interest on the 2003 Series A Bonds, selecting the 2003 Series A Bonds or
portions thereof to be redeemed, giving notice as required under the Indenture,
registering the transfer of 2003 Series A Bonds, obtaining any consent or other
action to be taken by the Holders and for all other purposes whatsoever; and
neither the Trustee nor the Company shall be affected by any notice to the
contrary;

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       (c) Neither the Trustee nor the Company shall have any responsibility or
obligation to any person claiming a beneficial ownership interest in the 2003
Series A Bonds under or through DTC or any DTC Participant, or any other person
which is not shown on the Bond Register as being a registered Holder, with
respect to the accuracy of any records maintained by DTC or any DTC Participant;
the payment by DTC or any DTC Participant of any amount in respect of the
principal or Redemption Price of or interest on the 2003 Series A Bonds; any
notice or direction which is permitted or required to be given to or received
from Holders under the Indenture; the selection by DTC or any DTC Participant of
any Person to receive payment in the event of a partial redemption of the 2003
Series A Bonds; or any consent given or other action taken by DTC as Holder; nor
shall any DTC Participant or any such Person be deemed to be a third party
beneficiary of any Holders' rights under the Indenture;

       (d) The Trustee shall pay from moneys available hereunder all principal
and Redemption Price of and interest on the 2003 Series A Bonds only to or upon
the order of DTC or its designee, and all such payments shall be valid and
effective to fully satisfy and discharge the Company's obligations with respect
to the principal and Redemption Price of and interest on the 2003 Series A Bonds
to the extent of the sum or sums so paid;

       (e) No person other than DTC shall receive an authenticated 2003 Series A
Bond evidencing the obligation of the Company to make payments of principal and
Redemption Price of and interest pursuant to the Indenture; and (f) Upon
delivery by DTC to the Trustee of DTC's written notice to the effect that DTC
has determined to substitute a new nominee in place of Cede & Co., and subject
to the provisions of the Indenture with respect to transfers of 2003 Series A
Bonds, the term "Cede & Co." in this Sixteenth Supplemental Indenture shall
refer to such new nominee of DTC.

       Section 1.06. Availability of Bond Certificates. At any time it
determines that it is in the best interests of the Holders, the Company may
notify DTC and the Trustee, whereupon DTC will, if consistent with DTC's
then-current policies, notify the DTC Participants of the availability through
DTC of 2003 Series A Bond certificates. In such event, the Company shall prepare
and execute and the Trustee shall issue, transfer and exchange, at the expense
of the Company, 2003 Series A Bond certificates as requested in writing by DTC
in appropriate amounts. DTC may determine to discontinue providing its services
with respect to the 2003 Series A Bonds at any time by giving written notice to
the Company and the Trustee and discharging its responsibilities with respect
thereto under applicable law. If DTC resigns as securities depository for the
2003 Series A Bonds, the 2003 Series A Bond certificates shall be delivered
pursuant to this Section. Under such circumstances (if there is no successor
securities depository), the Company and the Trustee shall be obligated to
deliver 2003 Series A Bonds as described in the Indenture, provided that the
expense in connection therewith shall be paid by the Company. In the event that
certificates for 2003 Series A Bonds are issued, the provisions of the Indenture
shall apply to, among other things, the transfer and exchange of such
certificates and the method of payment of principal of and Redemption Price of
and interest on such 2003 Series A Bonds. Whenever DTC requests the Company to
do so, the Company will cooperate with DTC in taking appropriate action after
written notice (a) to make available one or more separate certificates
evidencing the 2003 Series A Bonds to any DTC Participant having 2003 Series A
Bonds credited to its DTC account, or (b) to arrange for another securities
depository to maintain custody of certificates evidencing the 2003 Series A
Bonds.

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       Section 1.07. Form of 2003 Series A Bonds. The 2003 Series A Bonds and
the Trustee's authentication certificate to be executed on the Bonds of such
series shall be substantially in the form attached hereto as Exhibit A, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the Officers executing such Bonds,
as evidenced by their execution of such Bonds.

                                   ARTICLE II

                  PRINCIPAL AMOUNT PRESENTLY TO BE OUTSTANDING

       Section 2.01. Principal Amount Presently To Be Outstanding. The total
aggregate principal amount of Bonds of the Company issued and Outstanding and
presently to be issued and Outstanding under the provisions of and secured by
the Indenture will be ONE BILLION SEVEN MILLION FIVE HUNDRED EIGHTY-NINE
THOUSAND ONE HUNDRED FIVE AND 73/00 DOLLARS ($1,007,589,105.73).

                                   ARTICLE III

                                 MISCELLANEOUS

       Section 3.01. This Sixteenth Supplemental Indenture is executed and shall
be construed as an indenture supplemental and amendatory to the Original
Indenture, and shall form a part thereof, and the Indenture, as hereby
supplemented, amended and modified, is hereby confirmed. Except to the extent
inconsistent with the express terms hereof, all of the provisions, terms,
covenants and conditions of the Indenture shall be applicable to the 2003 Series
A Bonds to the same extent as if specifically set forth herein. All capitalized
terms used in this Sixteenth Supplemental Indenture shall be taken to have the
same meanings as in the Indenture, except in cases where the context clearly
indicates otherwise.

       Section 3.02. All recitals in this Sixteenth Supplemental Indenture are
made by the Company only and not by the Trustee; and all of the provisions
contained in the Indenture, in respect of the rights, privileges, immunities,
powers and duties of the Trustee shall be applicable in respect hereof as fully
and with like effect as if set forth herein in full.

       Section 3.03. Whenever in this Sixteenth Supplemental Indenture any of
the parties hereto is named or referred to, this shall, subject to the
provisions of Articles Ten and Twelve of the Indenture, be deemed to include the
successors and assigns of such party, and all the covenants and agreements in
this Sixteenth Supplemental Indenture contained by or on behalf of the Company,
or by or on behalf of the Trustee shall, subject as aforesaid, bind and inure to
the respective benefits of the respective successors and assigns of such
parties, whether so expressed or not.

       Section 3.04. Nothing in this Sixteenth Supplemental Indenture, expressed
or implied, is intended, or shall be construed, to confer upon, or to give to,
any person, firm or corporation, other than the parties hereto and the Holders
of the Outstanding Bonds, any right, remedy or claim under or by reason of this
Sixteenth Supplemental Indenture or any covenant, condition, stipulation,
promise or agreement hereof, and all the covenants, conditions, stipulations,
promises and

                                       10

<PAGE>

agreements in this Sixteenth Supplemental Indenture contained by or on behalf of
the Company shall be for the sole and exclusive benefit of the parties hereto,
and of the Holders of Outstanding Bonds.

       Section 3.05. This Sixteenth Supplemental Indenture may be executed in
several counterparts, each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts, or as many of them as the Company
and the Trustee shall preserve undestroyed, shall together constitute but one
and the same instrument.

       Section 3.06. Although this Sixteenth Supplemental Indenture is dated for
convenience and for the purpose of reference as of July 1, 2003, the actual date
or dates of execution by the Company and by the Trustee are as indicated by
their respective acknowledgments hereto annexed.

       Section 3.07. To the extent permitted by applicable law, this Sixteenth
Supplemental Indenture shall be deemed to be a Security Agreement and Financing
Statement whereby the Company grants to the Trustee, until the Release Date, a
security interest in all of the Trust Estate that is personal property or
fixtures under the Uniform Commercial Code, as adopted or hereafter adopted in
one or more of the states in which any part of the properties of the Company are
situated. The mailing address of the Company, as debtor, is Innsbrook Corporate
Center, 4201 Dominion Boulevard, Glen Allen, Virginia 23060, and the mailing
address of the Trustee, as secured party, is SunTrust Bank, Attention: Corporate
Trust Administration, 919 East Main Street, 10th Floor, Richmond, Virginia
23219.

                    [SIGNATURES APPEAR ON THE FOLLOWING PAGE]

                                       11

<PAGE>

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

Company:                                      OLD DOMINION ELECTRIC COOPERATIVE
Innsbrook Corporate Center
4201 Dominion Boulevard
Glen Allen, Virginia 23060

                                              By: /s/ Daniel M. Walker
                                                 -------------------------------
                                                 Name:  Daniel M. Walker
                                                 Title: Senior Vice President
                                                        Accounting and Finance

Trustee:                                      SUNTRUST BANK, as Trustee

919 East Main Street, 10th Floor
Corporate Trust Administration
Richmond, Virginia 23219

                                              By: /s/ Jackie Shornak
                                                 -------------------------------
                                                 Name:  Jackie Shornak
                                                 Title: Assistant Vice Presiden

<PAGE>

ACKNOWLEDGMENT

COMMONWEALTH OF VIRGINIA            )
                                    )
CITY/COUNTY OF HENRICO              )

         The foregoing instrument was acknowledged before me this 24th day of
July, 2003, by Daniel M. Walker, the Senior Vice President of Old Dominion
Electric Cooperative, a Virginia utility aggregation cooperative.

                                               /s/ Susan M. Friedman
                                               ________________________________
                                               Notary Public

My Commission expires:  January 31, 2007

                                 ACKNOWLEDGMENT

COMMONWEALTH OF VIRGINIA            )
                                    )
CITY/COUNTY OF RICHMOND             )

         The foregoing instrument was acknowledged before me this 24th day of
July, 2003, by Jackie Shornak, the Assistant Vice President of SunTrust Bank, a
Georgia banking corporation, on behalf of the Bank.

                                               /s/ Susan D. Clark
                                               ________________________________
                                               Notary Public

My Commission expires:  December 31, 2007

<PAGE>

                                    EXHIBIT A

                           FORM OF 2003 SERIES A BONDS

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGES OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                        Old Dominion Electric cooperative

                    2003 Series A Bonds Due December 1, 2028

No.  _____                                                    $________________

         Old Dominion Electric Cooperative, a Virginia utility aggregation
cooperative (herein called the "Company," which term includes any successor
corporation under the Indenture of Mortgage and Deed of Trust, dated as of May
1, 1992, as supplemented and amended) for value received, hereby promises to pay
to ____________, or registered assigns, the principal sum of _____________
Dollars on December 1, 2028, and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) thereon from the date of issuance or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 1 and December 1 in each year, commencing on
December 1, 2003, at the rate of 5.676% per annum, until the principal hereof is
paid or made available for payment. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Bond (or one or more
Predecessor Bonds) is registered at the close of business on the Regular Record
Date for such interest, which shall be the fifteenth day (whether or not a
business day), of the calendar month next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Bond (or one or more Predecessor Bonds) is
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Bonds of this series not more than 15 and not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which Bonds of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.

         Payment of the principal and Redemption Price of and any such interest
on this Bond will be made at the office or agency of the Trustee maintained for
that purpose in Richmond, Virginia, in

<PAGE>

such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; PROVIDED, HOWEVER, that
(subject to the terms on the reverse hereof) at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Bond Register.

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

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

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

Dated:  [Date of Authentication]

                                           OLD DOMINION ELECTRIC COOPERATIVE

                                           By: SPECIMEN
                                               ------------------------------
                                               Authorized Officer

ATTEST:

_________________________
Name:
Title:

                                [Reverse of Bond]

         This is one of the Bonds referred to in and secured by the Indenture of
Mortgage and Deed of Trust, dated as of May 1, 1992, by and between Old Dominion
Electric Cooperative and Crestar Bank, as trustee, as the same has been and may
be supplemented, modified or amended and effective from time to time prior to
the Release Date (the "Original Indenture"), under which the undersigned now
acts as Trustee. From and after the Release Date (as defined in the Eleventh
Supplemental Indenture to the Original Indenture), this shall constitute one of
the unsecured Obligations referred to in and entitled to the benefits of that
Amended and Restated Indenture, dated as of September 1, 2001, between Old
Dominion Electric Cooperative and SunTrust Bank, successor by merger to Crestar
Bank, as trustee, as the same has been and may be supplemented, modified or
amended and effective from time to time (the "Restated Indenture"), which
Restated Indenture amends and supersedes the Original Indenture in its entirety
from and after the Release Date. The Original Indenture, including all
indentures supplemental thereto and effective prior to the Release Date,
contains a statement of the description of the properties thereby mortgaged,
pledged and assigned, the nature and extent of the security and the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Bonds

                                       A-2

<PAGE>

and of the terms upon which the Bonds are, and are to be, authenticated and
delivered, in each case prior to the Release Date. The Restated Indenture
contains a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Obligations and of the terms upon which the Obligations are, and are to be,
authenticated and delivered from and after the Release Date. From and after the
Release Date, the term "Bond" as used in this instrument shall be construed to
mean "Obligation" as that term is used in the Restated Indenture and all
indentures supplemental thereto. The term "Indenture" as used herein means the
Original Indenture prior to the Release Date and the Restated Indenture from and
after the Release Date. This Bond is one of the series and maturity designated
on the face hereof, limited in aggregate principal amount to Two Hundred Fifty
Million Dollars ($250,000,000).

         The 2003 Series A Bonds are subject to redemption on December 1 on each
year, commencing with the year 2005 and ending with the year 2027, through
operation of the sinking fund for the the 2003 Series A Bonds at a Redemption
Price equal to 100% of the principal amount being redeemed plus accrued interest
through the Redemption Date (subject to the right of holders of record on the
relevant record date to receive interest due on an interest payment date that is
on or prior to the Redemption Date). As a sinking fund for the 2003 Series A
Bonds, the Company shall redeem on December 1 in each year beginning with the
year 2005 and ending with the year 2027 the aggregate principal amount of the
2003 Series A Bonds specified in the following table:

                                                    Aggregate Principal
         Year                                     Amount of 2003 Series A
         ----                                              Bonds
                                                           -----
         December 1, 2005.............................  $10,417,000
         December 1, 2006.............................  $10,417,000
         December 1, 2007.............................  $10,417,000
         December 1, 2008.............................  $10,417,000
         December 1, 2009.............................  $10,417,000
         December 1, 2010.............................  $10,417,000
         December 1, 2011.............................  $10,417,000
         December 1, 2012.............................  $10,417,000
         December 1, 2013.............................  $10,417,000
         December 1, 2014.............................  $10,417,000
         December 1, 2015.............................  $10,417,000
         December 1, 2016.............................  $10,417,000
         December 1, 2017.............................  $10,417,000
         December 1, 2018.............................  $10,417,000
         December 1, 2019.............................  $10,417,000
         December 1, 2020.............................  $10,417,000
         December 1, 2021.............................  $10,416,000
         December 1, 2022.............................  $10,416,000
         December 1, 2023.............................  $10,416,000
         December 1, 2024.............................  $10,416,000
         December 1, 2025.............................  $10,416,000
         December 1, 2026.............................  $10,416,000
         December 1, 2027.............................  $10,416,000

                                      A-3

<PAGE>

         The principal amount of the 2003 Series A Bonds acquired and
surrendered for cancellation or redeemed by the Company (otherwise than through
operation of the sinking fund) shall be credited against sinking fund payments
for the 2003 Series A Bonds (including, for purposes of this paragraph, as a
sinking fund payment, $10,416,000 principal amount of 2003 Series A Bonds not to
be redeemed through operation of the sinking fund but to be repaid at maturity
on December 1, 2028) in proportion to the respective amounts of such required
sinking fund payments.

         The particular 2003 Series A Bonds to be redeemed through sinking fund
payments, shall be selected by the Trustee from the Outstanding 2003 Series A
Bonds which have not been previously been called for redemption by prorating, as
nearly as may be, the principal amount of the 2003 Series A Bonds to be redeemed
among the Holders thereof in proportion to the aggregate principal amount
thereof registered in their respective names; EXCEPT that, if there shall have
been previously filed with the Trustee an Act of all of the Holders thereof
satisfactory to the Trustee specifying the method of selecting the 2003 Series A
Bonds to be redeemed, such selection shall be made by the Trustee in accordance
with the terms of such Act.

         In addition, this Bond is subject to redemption, as a whole or in part,
at the election of the Company at a Redemption Price equal to the greater of (i)
100% of the principal amount of the portion of the Bond being redeemed plus all
accrued, but not yet due and payable, interest to the Redemption Date; and (ii)
the sum of the present values of all principal and interest payments scheduled
to become due after the date of such redemption in respect of the portion of the
Bond being redeemed, discounted on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) and calculated using a discount rate equal
to the sum of (A) the yield to maturity of the U.S. Treasury security having a
life equal to the remaining average life of the Bond to be redeemed and trading
in the secondary market at the price closest to par, and (B) twenty (20) basis
points; provided, however, that if there is no U.S. Treasury security having a
life equal to the remaining average life of the Bond to be redeemed, such
discount rate shall be calculated using a yield to maturity interpolated or
extrapolated on a straight-line basis (rounding to the nearest calendar month,
if necessary) from the yields to maturity of two (2) U.S. Treasury securities
having lives most closely corresponding to the remaining average life of the
Bond to be redeemed and trading in the secondary market at the prices closest to
par. The foregoing calculations shall be made in accordance with the Sixteenth
Supplemental Indenture to the Indenture. In addition, any interest due and
payable but unpaid on the portion of this 2003 Series A Bond being redeemed
shall be paid on the Redemption Date therefor.

         The calculations set forth in the immediately preceding paragraph shall
be determined on the third business day prior to the scheduled Redemption Date
by an investment banking institution of national standing in the United States
selected by the Company or, if the Trustee does not receive notice of such
selection at least ten days prior to a scheduled Redemption Date or if an Event
of Default under the Indenture shall have occurred and be continuing, selected
by the Trustee. If less than all the 2003 Series A Bonds are to be redeemed
pursuant to the preceding paragraph, the particular 2003 Series A Bonds to be
redeemed shall be selected not more than sixty (60) days prior to the Redemption
Date by the Trustee from the Outstanding Obligations of such series or maturity
within a series which have not previously been called for redemption by such
method as the Trustee shall deem fair and appropriate. In any such selection,
the Trustee shall make such adjustments, reallocations and eliminations as it
shall deem proper to the end that the principal amount the 2003 Series A Bonds
so selected shall be equal to $1,000, or an integral multiple thereof.

                                       A-4

<PAGE>

         In the event of a redemption of all or a portion of this Bond, the
Company shall cause notice of such redemption to be given to each Holder of such
Bonds to be redeemed at his or her address as the same shall last appear upon
the Bond Register, by first class mail at least 30 and no more than 60 days
prior to the Redemption Date; provided that so long as the Bonds to be redeemed
are held in a Book-Entry System, notice of redemption shall be given to the
registered Holders thereof at the time and in the manner required in the DTC
Letter of Representations executed among the Company, the Trustee and DTC in
connection with the issuance and sale of such Bonds, and the Trustee shall not
be required to give any other notice of redemption otherwise required in the
Indenture.

         In the event of a redemption of this Bond in part only, a new Bond or
Bonds of this series and maturity for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.

         Except as otherwise provided above, this Bond is not redeemable at any
time prior to its Stated Maturity.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of this Bond under the Indenture at any
time by the Company with the consent of the Holders of a majority in aggregate
principal amount of Bonds of all series at the time Outstanding affected by such
modification. The Indenture also contains provisions permitting the Holders of a
majority in principal amount of Bonds at the time Outstanding, on behalf of the
Holders of all Bonds to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Bond shall be
conclusive and binding upon such Holder and upon all future Holders of this Bond
and of any Bond issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Bond.

         No reference herein to the Indenture and no provision of this Bond or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal and Redemption Price of and
interest on this Bond at the times, places and rates, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond is registrable in the Bond Register, upon
surrender of this Bond for registration of transfer at the office or agency
maintained by the Bond Registrar in the Place of Payment therefor, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Bond Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series and maturity, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

         The Bonds of this series and maturity are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Bonds of this series and maturity are exchangeable for a like
aggregate principal amount of Bonds of this series of a different authorized
denomination as requested by the Holder surrendering the same.

                                       A-5

<PAGE>

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

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

         The Bonds of this series initially shall be held in a Book-Entry
System. While the Bonds or this series are held in the Book-Entry System,
payment of the principal and Redemption Price of and interest on such Bonds
shall be made by wire transfer of Federal Reserve funds or equivalent same-day
funds, or in such other manner as permitted by the DTC Letter of Representations
executed by the Company in connection with such series (as the same may be
amended from time to time), to the account of Cede & Co. In the event the Bonds
of this series are no longer held in the Book-Entry System, (i) interest on such
Bonds shall be payable on each Interest Payment Date by check payable to the
Holder (except that if so instructed in writing by a Holder of $1,000,000 or
more of such Bonds on or prior to the applicable Regular Record Date, such
payments shall be made by wire transfer of Federal Reserve funds on the Interest
Payment Date), mailed to the Holder at his or her address as it appears on the
Bond Register on the last day of the calendar month prior to the Interest
Payment Date, or in such other manner as such Holder and the Trustee may
determine, and (ii) principal shall be payable only upon presentation and
surrender of each such Bond, as the same becomes due, at the office from which
the Trustee performs the payment function for such Bonds. Except as may be
provided in the DTC Letter of Representations with respect to Bonds of this
series then held in the Book-Entry System, payment of principal (other than
through operation of the sinking fund) shall be made only upon presentation and
surrender of each such Bond, as the same becomes due, at the office from which
the Trustee performs the payment function for such Bonds.

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

                                       A-6

<PAGE>

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Bonds referred to in and secured by the Indenture of
Mortgage and Deed of Trust dated as of May 1, 1992 by and between Old Dominion
Electric Cooperative and Crestar Bank, as trustee, as the same may be
supplemented, modified or amended and effective from time to time prior to the
Release Date (the "Original Indenture"), under which the undersigned now acts as
Trustee. From and after the Release Date, this shall constitute one of the
unsecured Obligations referred to in and entitled to the benefits of that
Amended and Restated Indenture, dated as of September 1, 2001, between Old
Dominion Electric Cooperative and SunTrust Bank, successor by merger to Crestar
Bank, as trustee, as the same may be supplemented, modified or amended and
effective from time to time, which Restated Indenture amends and supersedes the
Original Indenture in its entirety from and after the Release Date.

                                                    SUNTRUST BANK, as Trustee

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

                                       A-7<PAGE>

                                                                    Exhibit 4.17

                                   $75,000,000

                             ASM INTERNATIONAL N.V.

                  5.25% CONVERTIBLE SUBORDINATED NOTES DUE 2010

                             SUBSCRIPTION AGREEMENT

April 28, 2003

<PAGE>

                                                                  April 28, 2003

Morgan Stanley & Co. Incorporated
   1585 Broadway
   New York, New York 10036

Dear Sirs and Mesdames:

     ASM International N.V., a public limited liability company organized under
the laws of the Netherlands (the "Company"), proposes to issue and sell to
Morgan Stanley & Co. Incorporated ("Morgan Stanley") $75,000,000 principal
amount of its 5.25% Convertible Subordinated Notes due 2010 (the "Firm
Securities") to be issued pursuant to the provisions of an Indenture, to be
dated on or about May 6, 2003 (the "Indenture") between the Company and Citibank
N.A, as Trustee (the "Trustee"). The Company also proposes to issue and sell to
Morgan Stanley not more than an additional $15,000,000 principal amount of its
5.25% Convertible Subordinated Notes due 2010 (the "Additional Securities") if
and to the extent that you shall have determined to exercise the right to
purchase such 5.25% Convertible Subordinated Notes due 2010 granted to Morgan
Stanley in Section 2 hereof. The Firm Securities and the Additional Securities
are hereinafter collectively referred to as the "Securities". The Securities
will be convertible into common shares, (euro)0.04 par value, of the Company
(the "Underlying Securities") registered with the Company either in the United
States (in book-entry form) or in the Netherlands (in bearer form or book-entry
form) subject to certain restrictions contained in the Indenture.

     The Securities and the Underlying Securities will be offered without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
to qualified institutional buyers ("QIBs") in compliance with the exemption from
registration provided by Rule 144A under the Securities Act ("Rule 144A") and in
offshore transactions in reliance on Regulation S under the Securities Act
("Regulation S").

     Morgan Stanley and its direct and indirect transferees will be entitled to
the benefits of a Registration Rights Agreement to be dated on or about May 6,
2003 between the Company and Morgan Stanley (the "Registration Rights
Agreement").

     In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and will prepare
a final offering memorandum (the "Final Memorandum" and, with the Preliminary
Memorandum, each a "Memorandum") including or incorporating by reference a
description of the terms of the Securities and the Underlying Securities, the
terms of the offering and a description of the Company. As used

                                       2

<PAGE>

herein, the term "Memorandum" shall include in each case the documents
incorporated by reference therein. The terms "supplement", "amendment" and
"amend" as used herein with respect to a Memorandum shall include all documents
deemed to be incorporated by reference in the Preliminary Memorandum or Final
Memorandum that are filed subsequent to the date of such Memorandum with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

     1. Representations and Warranties. The Company represents and warrants to,
and agrees with, you that:

          (a) (i) Each document, if any, filed or to be filed pursuant to the
     Exchange Act and incorporated by reference in either Memorandum complied or
     will comply when so filed in all material respects with the Exchange Act
     and the applicable rules and regulations of the Commission thereunder and
     (ii) the Preliminary Memorandum does not contain and the Final Memorandum,
     as of the date hereof and on the Closing Date (as defined in Section 4),
     will not contain any untrue statement of a material fact or omit to state a
     material fact necessary to make the statements therein, in the light of the
     circumstances under which they were made, not misleading, except that the
     representations and warranties set forth in this paragraph do not apply to
     statements or omissions in either Memorandum based upon information
     relating to Morgan Stanley furnished to the Company in writing by Morgan
     Stanley expressly for use therein.

          (b) The financial statements of the Company and its subsidiaries
     (including all notes and schedules thereto) included or incorporated by
     reference in either Memorandum present fairly the financial position, the
     results of operations, the statements of cash flows and the statements of
     shareholders' equity and the other information purported to be shown
     therein of the Company and its subsidiaries at the respective dates and for
     the respective periods to which they apply; and such financial statements
     and related schedules and notes have been prepared in conformity with
     United States generally accepted accounting principles, consistently
     applied throughout the periods involved, and all adjustments necessary for
     a fair presentation of the results for such periods have been made.

          (c) The Company and each of its consolidated subsidiaries (each such
     subsidiary, referred to herein as a "subsidiary") is a corporation, limited
     liability company or the like, duly organized, validly existing and duly
     qualified to do business and, where such concept is legally relevant, is in
     good standing as a foreign corporation or other business organization in
     each jurisdiction in which the nature of the business conducted by it or

                                       3

<PAGE>

     location of the assets or properties owned, leased or licensed by it
     requires such qualification, except for such jurisdictions where the
     failure to so qualify, individually or in the aggregate, would not have a
     material adverse effect on the assets or properties, business, results of
     operations or financial condition of the Company and its subsidiaries,
     taken as a whole (a "Material Adverse Effect"). The Company and each of its
     subsidiaries has all requisite corporate or other business organization
     power and authority, and all necessary authorizations, approvals, consents,
     orders, licenses, certificates, designations, declarations and permits of
     and from all governmental or regulatory bodies or any other person or
     entity (collectively, the "Permits"), to own, lease and license its assets
     and properties and conduct its business, all of which Permits are valid and
     in full force and effect, as described in each Memorandum, except where the
     lack of such Permits, individually or in the aggregate, would not have a
     Material Adverse Effect. The Company and each of its subsidiaries has
     fulfilled and performed in all material respects all of its material
     obligations with respect to such Permits and no event has occurred that
     allows, or after notice or lapse of time would allow, revocation or
     termination thereof or results in any other material impairment of the
     rights of the Company or any of its subsidiaries thereunder.

          (d) All necessary action has been duly and validly taken by the
     Company to authorize the execution, delivery and performance of this
     Agreement, the Registration Rights Agreement and the Indenture, and the
     issuance and sale of the Securities by the Company. Each of this Agreement,
     the Indenture and Registration Rights Agreement has or will be duly and
     validly authorized, executed and delivered by, and constitutes and will
     constitute a valid and binding agreement of, the Company, and the Indenture
     is enforceable in accordance with its terms, except as the enforceability
     thereof may be limited by applicable bankruptcy, insolvency or similar laws
     affecting creditors' rights generally and by general principles of
     reasonableness and fairness.

          (e) The Company and each of its subsidiaries owns or possesses
     adequate and enforceable rights to use all patents, patent applications,
     trademarks, trademark applications, trade names, service marks, logos,
     copyrights, copyright applications, licenses, trade secrets, know-how and
     other similar rights and proprietary knowledge (collectively,
     "Intangibles") necessary for or used in the conduct of its business. Except
     as disclosed in each Memorandum, (i) neither the Company nor any of its
     subsidiaries has received any notice of, or is aware of, any infringement
     of or conflict with any rights of others with respect to the Company's use
     of any Intangibles, and (ii) neither the Company nor any of its
     subsidiaries has given notice of, or is aware of, any third parties that
     are infringing or

                                       4

<PAGE>

     are in conflict with any rights of the Company or any of its subsidiaries
     in any Intangibles, except in each case where such infringement or
     conflict, individually or in the aggregate, would not have a Material
     Adverse Effect.

          (f) The Company and each of its subsidiaries has good and marketable
     title to all real property and good and marketable title to all personal
     property described in each Memorandum as being owned by it, free and clear
     of all liens, encumbrances, claims, security interests and defects, except
     such as are described in each Memorandum or, individually or in the
     aggregate, would not have a Material Adverse Effect. Any real property and
     buildings described in each Memorandum as being held under lease by the
     Company or any of its subsidiaries are held by it under valid, existing and
     enforceable leases, free and clear of all liens, encumbrances, claims,
     security interests and defects, except such as are described in each
     Memorandum or, individually or in the aggregate, would not have a Material
     Adverse Effect.

          (g) There are no legal or governmental proceedings (including
     proceedings by or before the Dutch Securities Board (Autoriteit Financiele
     Markten) or Euronext Amsterdam Stock Exchange or any other regulatory or
     other governmental body) pending or threatened to which the Company or any
     of its subsidiaries is a party or to which any of the properties of the
     Company or any of its subsidiaries is subject other than proceedings
     accurately described in all material respects in each Memorandum and
     proceedings that, individually or in the aggregate, would not have a
     Material Adverse Effect, or would not materially and adversely affect the
     power or ability of the Company to perform its obligations under this
     Agreement, the Indenture, the Registration Rights Agreement or the
     Securities or to consummate the transactions contemplated by the Final
     Memorandum.

          (h) Neither the Company nor any of its subsidiaries is in violation of
     any term or provision of any of its organizational documents or of any
     franchise, license or other agreement, permit, judgment, decree, order,
     statute, rule or regulation, where the consequences of such violation,
     individually or in the aggregate, would have a Material Adverse Effect.

          (i) The execution and delivery by the Company of, and the performance
     by the Company of its obligations under, this Agreement, the Registration
     Rights Agreement, the Indenture and the Securities will not contravene any
     provision of applicable law or the deed of incorporation or articles of
     association of the Company or any agreement or other instrument binding
     upon the Company or any of its subsidiaries that is material to the Company
     and its subsidiaries, taken as a whole, or any

                                       5

<PAGE>

     judgment, order or decree of any governmental body, agency or court having
     jurisdiction over the Company or any subsidiary, and no consent, approval,
     authorization or order of, or qualification with, any governmental body or
     agency is required for the performance by the Company of its obligations
     under this Agreement, the Registration Rights Agreement, the Indenture or
     the Securities, except such as may be required by the securities or Blue
     Sky laws of the various states and governments and non-U.S. jurisdictions
     in connection with the offer and sale of the Securities.

          (j) The Company has authorized, issued and paid up share capital as
     set forth under the caption "Description of Share Capital" in each
     Memorandum (except for any additional shares pursuant to stock option and
     purchase plans described in each Memorandum). All of the issued and
     outstanding common shares of the Company have been duly and validly issued
     and are fully paid and nonassessable. There are no statutory preemptive or
     other similar rights to subscribe for or to purchase or acquire any shares
     of capital stock of the Company or its subsidiaries or any such rights
     pursuant to its organizational documents or any agreement or instrument to
     or by which the Company or any of its subsidiaries is a party or is bound,
     except for rights pursuant to Netherlands law and the Articles of
     Association of the Company which have been waived. Except as disclosed in
     each Memorandum, there is no outstanding option, warrant or other right
     calling for the issuance of, and there is no commitment, plan or
     arrangement to issue, any shares of capital stock of the Company or any of
     its subsidiaries or any security convertible into, or exercisable or
     exchangeable for, any such capital stock. All outstanding shares of capital
     stock of each subsidiary have been duly authorized and validly issued and
     are fully paid. Except as set forth in each Memorandum, all outstanding
     shares of capital stock of each subsidiary are owned directly by the
     Company or by another wholly-owned subsidiary of the Company, free and
     clear of any security interests, liens, encumbrances, equities or claims.

          (k) The Securities have been duly authorized and, when executed and
     authenticated in accordance with the provisions of the Indenture and
     delivered to and paid for by Morgan Stanley in accordance with the terms of
     this Agreement, will be valid and binding obligations of the Company,
     enforceable in accordance with their terms, subject to the effects of
     applicable bankruptcy, insolvency, moratorium of payments and similar laws
     or regulations affecting creditors' rights generally and principles of
     reasonableness and fairness, and will be entitled to the benefits of the
     Indenture and the Registration Rights Agreement pursuant to which such
     Securities are to be issued; and the Securities conform in all material
     respects to the description thereof contained in each Memorandum.

                                       6

<PAGE>

          (l) The Underlying Securities issuable upon conversion of the
     Securities have been duly authorized and reserved and, when issued upon
     conversion of the Securities in accordance with the terms of the
     Securities, will be validly issued, fully paid, and the issuance of the
     Underlying Securities will not be subject to any preemptive or similar
     rights; the Underlying Securities conform in all material respects to the
     description thereof contained in each Memorandum.

          (m) Neither the Company nor any of its subsidiaries is involved in any
     labor dispute nor, to the knowledge of the Company, is any such dispute
     threatened, which dispute, individually or in the aggregate, could
     reasonably be expected to have a Material Adverse Effect. The Company is
     not aware of any existing or imminent labor disturbance by the employees of
     any of its principal suppliers or contractors or of any other third party
     with which the Company has a contractual or other relationship which,
     individually or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

          (n) Neither the Company nor any of its subsidiaries has taken, nor
     will it take, directly or indirectly, any action designed to or which might
     reasonably be expected to cause or result in, or which has constituted or
     which might reasonably be expected to constitute, the stabilization or
     manipulation of the price of the Securities or the Underlying Securities to
     facilitate the sale or resale of any of the Securities.

          (o) The books, records and accounts of the Company and its
     subsidiaries accurately and fairly reflect, in reasonable detail, the
     transactions in and dispositions of the assets of the Company and its
     subsidiaries and the results of operations of the Company and its
     subsidiaries. The Company and each of its subsidiaries maintains a system
     of internal accounting controls sufficient to provide reasonable assurances
     that (i) transactions are executed in accordance with management's general
     or specific authorizations, (ii) transactions are recorded as necessary to
     permit preparation of financial statements in accordance with United States
     generally accepted accounting principles and to maintain asset
     accountability, (iii) access to assets is permitted only in accordance with
     management's general or specific authorization and (iv) the recorded
     accountability for assets is compared with the existing assets at
     reasonable intervals and appropriate action is taken with respect to any
     differences.

          (p) The Company and its subsidiaries and their respective directors
     and, where such concept is legally relevant, officers are insured

                                       7

<PAGE>

     by insurers of recognized financial responsibility against such losses and
     risks and in such amounts, if any, as are customary in the businesses in
     which they are engaged or propose to engage; the Company and each of its
     subsidiaries is in compliance with the terms of such policies and
     instruments in all material respects; and neither the Company nor any
     subsidiary has any reason to believe that it will not be able to renew its
     existing insurance coverage as and when such coverage expires or to obtain
     similar coverage from similar insurers as may be necessary to continue its
     business at a cost that, individually or in the aggregate, would not have a
     Material Adverse Effect. Neither the Company nor any subsidiary has been
     denied any insurance coverage which it has sought or for which it has
     applied.

          (q) (i) The Company and each of its subsidiaries is in compliance in
     all material respects with all rules, laws and regulations relating to the
     use, treatment, storage and disposal of toxic substances and protection of
     health or the environment ("Environmental Laws") which are applicable to
     its business; (ii) neither the Company nor any of its subsidiaries has
     received any notice from any governmental authority or third party of an
     asserted claim under Environmental Laws; (iii) each of the Company and its
     subsidiaries has received all permits, licenses or other approvals required
     of it under applicable Environmental Laws to conduct its business and is in
     compliance in all material respects with all terms and conditions of any
     such permit, license or approval; (iv) to the Company's knowledge, no facts
     currently exist that will require the Company or its subsidiaries to make
     future material capital expenditures to comply with Environmental Laws; and
     (v) no property which is or has been owned, leased or occupied by the
     Company or any of its subsidiaries has been designated as a Superfund site
     pursuant to the Comprehensive Environmental Response, Compensation and
     Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.
     ("CERCLA 1980"), or otherwise designated as a contaminated site under
     applicable federal, state, local or non-U.S. law, except where such
     noncompliance with Environmental Laws, failure to receive required permits,
     licenses or other approvals or failure to comply with the terms and
     conditions of such permits, licenses or approvals would not, individually
     or in the aggregate, have a Material Adverse Effect on the Company. Neither
     the Company nor any of its subsidiaries has been named as a "potentially
     responsible party" under CERCLA 1980.

          (r) In the ordinary course of its business, the Company periodically
     reviews the effect of Environmental Laws on the business, operations and
     properties of the Company and its subsidiaries, in the course of which the
     Company identifies and evaluates associated costs and liabilities
     (including, without limitation, any capital or operating

                                       8

<PAGE>

     expenditures required for clean-up, closure of properties or compliance
     with Environmental Laws, or any permit, license or approval, any related
     constraints on operating activities and any potential liabilities to third
     parties). On the basis of such review, the Company has reasonably concluded
     that such associated costs and liabilities would not, individually or in
     the aggregate, have a Material Adverse Effect.

          (s) The Company is not, and, after giving effect to the offering and
     sale of the Securities and the application of proceeds thereof as described
     in the Final Memorandum, will not be an "investment company" within the
     meaning of the Investment Company Act of 1940, as amended (the "Investment
     Company Act").

          (t) None of the Company, its subsidiaries or any other person
     associated with or acting on behalf of the Company or its subsidiaries
     including, without limitation, any director, officer, agent or employee of
     the Company or its subsidiaries has, directly or indirectly, while acting
     on behalf of the Company or its subsidiaries, (i) used any corporate funds
     for unlawful contributions, gifts, entertainment or other unlawful expenses
     relating to political activity; (ii) made any unlawful payment to foreign
     or domestic government officials or employees or to foreign or domestic
     political parties or campaigns from corporate funds; (iii) violated any
     provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv)
     made any other unlawful payment.

          (u) The Company has not incurred any liability for a fee, commission
     or other compensation on account of the employment of a broker or finder in
     connection with the transactions contemplated by this Agreement other than
     the underwriting discounts and commissions contemplated hereby.

          (v) Neither the Company nor any affiliate (as defined in Rule 501(b)
     of Regulation D under the Securities Act, an "Affiliate") of the Company
     has directly, or through any agent, (i) sold, offered for sale, solicited
     offers to buy or otherwise negotiated in respect of, any security (as
     defined in the Securities Act) which is or will be integrated with the sale
     of the Securities in a manner that would require the registration under the
     Securities Act of the Securities or (ii) offered, solicited offers to buy
     or sold the Securities or the Underlying Securities by any form of general
     solicitation or general advertising (as those terms are used in Regulation
     D under the Securities Act) or in any manner involving a public offering
     within the meaning of Section 4(2) of the Securities Act.

                                       9

<PAGE>

          (w) None of the Company, its Affiliates or any person acting on its or
     their behalf has engaged or will engage in any directed selling efforts
     (within the meaning of Regulation S) with respect to the Securities or the
     Underlying Securities and the Company and its Affiliates and any person
     acting on its or their behalf have complied and will comply with the
     offering restrictions requirement of Regulation S, except no
     representation, warranty or agreement is made by the Company in this
     paragraph with respect to Morgan Stanley.

          (x) It is not necessary in connection with the offer, sale and
     delivery of the Securities to Morgan Stanley in the manner contemplated by
     this Agreement to register the Securities under the Securities Act or to
     qualify the Indenture under the Trust Indenture Act of 1939, as amended.

          (y) The Securities satisfy the requirements set forth in Rule
     144A(d)(3) under the Securities Act.

          (z) The Company meets all the conditions necessary for the use of Form
     F-3 under the Securities Act and the rules and regulations promulgated
     thereunder.

          (aa) Neither the Company nor any of its subsidiaries currently is, and
     the Company will use its best efforts so that none of them will become, a
     personal holding company within the meaning of Section 542 of the Internal
     Revenue Code of 1986, as amended (the "Code") (a "PHC") or a foreign
     personal holding company within the meaning of Section 552 of the Code (a
     "FPHC"), for its current taxable year.

          (bb) The Company is not and upon the consummation of the transactions
     described hereby and the application of the proceeds as described in the
     Preliminary Memorandum under the caption "Use of Proceeds" will not become
     a Passive Foreign Investment Company ("PFIC") within the meaning of Section
     1297 of the Code and will use its best efforts to continue to manage its
     business so as to avoid PFIC status. If the Company becomes a PFIC, it will
     comply with all the requirements of the Code so that its shareholders will
     be able to elect to treat the Company as a "qualified electing fund" within
     the meaning of section 1295 of the Code.

     2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
Morgan Stanley, and Morgan Stanley, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Company the Firm
Securities at a purchase price of 96.5% of the principal amount thereof (the

                                       10

<PAGE>

"Purchase Price") plus accrued interest, if any, from the date of issuance of
the Firm Securities to the Closing Date.

     On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to Morgan Stanley the Additional Securities, and Morgan Stanley shall have the
right to purchase from time to time up to $15,000,000 principal amount of
Additional Securities at the Purchase Price plus accrued interest, if any, to
the date of payment and delivery. If you elect to exercise such option, you
shall so notify the Company in writing not later than 30 days after the Closing
Date which notice shall specify the principal amount of Additional Securities to
be purchased by you and the date on which such Additional Securities are to be
purchased. Such date may be the same as the Closing Date but not earlier than
the Closing Date nor later than ten business days after the date of such notice.

     The Company hereby agrees that, without the prior written consent of Morgan
Stanley, it will not, during the period ending 90 days after the date of the
Final Memorandum, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the common stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of common stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the sale of the Securities under this Agreement
or (B) the issuance by the Company of any shares of common stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which Morgan Stanley has been advised in writing or which is
disclosed in the Preliminary Memorandum, or (C) the grant of up to an aggregate
amount of 200,000 options over common shares or common shares under the
Company's existing stock, incentive, dividend reinvestment and other employee
ownership or benefit plans as described in the Preliminary Memorandum.

     3. Terms of Offering. You have advised the Company that you will make an
offering of the Securities purchased hereunder on the terms to be set forth in
the Final Memorandum, as soon as practicable after this Agreement is entered
into as in your judgment is advisable.

     4. Payment and Delivery. Payment for the Firm Securities shall be made to
the Company in funds immediately available in New York against delivery of such
Firm Securities for your account at 10:00 a.m., New York time, on Tuesday, May
6, 2003, or at such other time on the same or such other date,

                                       11

<PAGE>

not later than Friday, May 16, 2003, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "Closing
Date."

     Payment for any Additional Securities shall be made to the Company in funds
immediately available in New York against delivery of such Additional Securities
for your account at 10:00 a.m., New York time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than 10 business days after the date of such
notice, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Option Closing Date."

     Certificates for the Securities shall be in global form, as specified by
you, and registered in such names and in such denominations as you shall request
in writing not later than one full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the
Securities shall be delivered to you on the Closing Date or the Option Closing
Date, as the case may be, for your account, with any transfer taxes payable in
connection with the transfer of the Securities to Morgan Stanley duly paid,
against payment of the Purchase Price therefor plus accrued interest, if any, to
the date of payment and delivery.

     5. Conditions to Morgan Stanley's Obligations. Morgan Stanley's obligation
to purchase and pay for the Firm Securities on the Closing Date is subject to
the following conditions:

          (a) Subsequent to the execution and delivery of this Agreement and
     prior to the Closing Date:

               (i) there shall not have occurred any downgrading, nor shall any
          notice have been given of any intended or potential downgrading or of
          any review for a possible change that does not indicate the direction
          of the possible change, in the rating accorded the Company or any of
          the Company's securities or in the rating outlook for the Company by
          any "nationally recognized statistical rating organization," as such
          term is defined for purposes of Rule 436(g)(2) under the Securities
          Act; and

               (ii) there shall not have occurred any change, or any development
          involving a prospective change, in the condition, financial or
          otherwise, or in the earnings, business or operations of the Company
          and its subsidiaries, taken as a whole, from that set forth in the
          Preliminary Memorandum provided to prospective purchasers of the
          Securities that, in your judgment, is material and adverse and that
          makes it, in your judgment, impracticable to

                                       12

<PAGE>

          market the Securities on the terms and in the manner contemplated in
          the Final Memorandum.

          (b) Morgan Stanley shall have received on the Closing Date a
     certificate, dated the Closing Date and signed by a member of the
     Management Board of the Company, to the effect set forth in Section 5(a)(i)
     and to the effect that the representations and warranties of the Company
     contained in this Agreement are true and correct as of the Closing Date and
     that the Company has complied with all of the agreements and satisfied all
     of the conditions on its part to be performed or satisfied hereunder on or
     before the Closing Date.

          The member of the Management Board signing and delivering such
     certificate may rely upon the best of his or her knowledge as to
     proceedings threatened.

          (c) Morgan Stanley shall have received on the Closing Date an opinion
     of Quarles & Brady LLP, U.S. counsel for the Company, to the effect set
     forth in Exhibit A-1, an opinion of Stibbe, Netherlands counsel for the
     Company, to the effect set forth in Exhibit A-2, an opinion of Jennifer
     Cheung & Co., Hong Kong counsel for the Company, to the effect set forth in
     Exhibit A-3, an opinion of Sumio Takeuchi Law Offices, Japanese counsel for
     the Company, to the effect set forth in Exhibit A-4, and an opinion of
     Baker & McKenzie, Netherlands tax counsel for the Company, to the effect
     set forth in Exhibit A-5, in each case dated the Closing Date. Such
     opinions shall be rendered to Morgan Stanley at the request of the Company
     and shall so state therein.

          (d) Morgan Stanley shall have received on the Closing Date an opinion
     of Davis Polk & Wardwell, U.S. counsel for Morgan Stanley, to the effect
     set forth in Exhibit B-1 dated the Closing Date.

          (e) Morgan Stanley shall have received on each of the date hereof and
     the Closing Date a letter, dated the date hereof or the Closing Date, as
     the case may be, in form and substance satisfactory to Morgan Stanley, from
     Deloitte & Touche Accountants, independent public accountants, containing
     statements and information of the type ordinarily included in accountants'
     "comfort letters" to underwriters with respect to the financial statements
     and certain financial information contained in or incorporated by reference
     into each Memorandum; provided that the letter delivered on the Closing
     Date shall use a "cut-off date" not earlier than the date hereof.

                                       13

<PAGE>

          (f) The "lock-up" agreements, each substantially in the form of
     Exhibit C hereto, between you and (i) each member of the Company's
     management board and (ii) the chairman of the Company's supervisory board
     relating to sales and certain other dispositions of shares of common stock
     or certain other securities, delivered to you on or before the date hereof,
     shall be in full force and effect on the Closing Date.

          (g) Morgan Stanley shall have received counterparts of the
     Registration Rights Agreement duly executed by the Company.

          (h) Morgan Stanley shall have received a copy of the Indenture duly
     executed by each of the parties thereto.

     Morgan Stanley's obligation to purchase Additional Securities hereunder is
subject to the delivery to you on the Option Closing Date of such documents as
you may reasonably request with respect to the good standing of the Company, the
due authorization, execution and authentication of the Additional Securities and
other matters related to the execution and authentication of the Additional
Securities.

     6. Covenants of the Company. In further consideration of the agreements of
Morgan Stanley contained in this Agreement, the Company covenants with Morgan
Stanley as follows:

          (a) To furnish to you in New York, without charge, prior to 10:00 a.m.
     New York time on the business day next succeeding the date of this
     Agreement and during the period mentioned in Section 6(c), as many copies
     of the Final Memorandum, any documents incorporated by reference therein
     and any supplements and amendments thereto as you may reasonably request.

          (b) Before amending or supplementing either Memorandum, to furnish to
     you a copy of each such proposed amendment or supplement and not to use any
     such proposed amendment or supplement to which you reasonably object.

          (c) If, during such period after the date hereof and prior to the date
     on which all of the Securities shall have been sold by Morgan Stanley, any
     event shall occur or condition exist as a result of which it is necessary
     to amend or supplement the Final Memorandum in order to make the statements
     therein, in the light of the circumstances when the Final Memorandum is
     delivered to a purchaser, not misleading, or if, in the opinion of counsel
     for Morgan Stanley, it is necessary to amend or supplement the Final
     Memorandum to comply with applicable law,

                                       14

<PAGE>

     forthwith to prepare and furnish, at its own expense, to Morgan Stanley,
     either amendments or supplements to the Final Memorandum so that the
     statements in the Final Memorandum as so amended or supplemented will not,
     in the light of the circumstances when the Final Memorandum is delivered to
     a purchaser, be misleading or so that the Final Memorandum, as amended or
     supplemented, will comply with applicable law.

          (d) To endeavor to qualify the Securities for offer and sale under the
     securities or Blue Sky laws of such jurisdictions as you shall reasonably
     request.

          (e) Whether or not the transactions contemplated in this Agreement are
     consummated or this Agreement is terminated, to pay or cause to be paid all
     expenses incident to the performance of its obligations under this
     Agreement, including: (i) the fees, disbursements and expenses of the
     Company's counsel and the Company's accountants in connection with the
     issuance and sale of the Securities and all other fees or expenses in
     connection with the preparation of each Memorandum and all amendments and
     supplements thereto, including all printing costs associated therewith, and
     the delivering of copies thereof to Morgan Stanley, in the quantities
     herein above specified, (ii) all costs and expenses related to the transfer
     and delivery of the Securities to Morgan Stanley, including any transfer or
     other taxes payable thereon, (iii) the cost of printing or producing any
     Blue Sky or legal investment memorandum in connection with the offer and
     sale of the Securities under state securities laws and all expenses in
     connection with the qualification of the Securities for offer and sale
     under state securities laws as provided in Section 6(d) hereof, including
     filing fees and the reasonable fees and disbursements of counsel for Morgan
     Stanley in connection with such qualification and in connection with the
     Blue Sky or legal investment memorandum, (iv) all document production
     charges in connection with the preparation of this Agreement, (v) the fees
     and expenses, if any, incurred in connection with the admission of the
     Securities for trading in PORTAL or any appropriate market system, (vi) the
     costs and charges of the Trustee and any transfer agent, registrar or
     depositary, (vii) the cost of the preparation, issuance and delivery of the
     Securities, (viii) the costs and expenses of the Company relating to
     investor presentations on any "road show" undertaken in connection with the
     marketing of the offering of the Securities, including, without limitation,
     expenses associated with the production of road show slides and graphics,
     fees and expenses of any consultants engaged in connection with the road
     show presentations with the prior approval of the Company, travel and
     lodging expenses of the representatives and officers of the Company and any
     such consultants, and the cost of any aircraft chartered in connection with
     the road show, and (ix) all other costs and

                                       15

<PAGE>

     expenses incident to the performance of the obligations of the Company
     hereunder for which provision is not otherwise made in this Section. It is
     understood, however, that except as provided in this Section, Section 8,
     and the last paragraph of Section 10, Morgan Stanley will pay all of its
     costs and expenses, including fees and disbursements of its counsel,
     transfer taxes payable on resale of any of the Securities by it and any
     advertising expenses connected with any offers it may make.

          (f) Neither the Company nor any Affiliate will sell, offer for sale or
     solicit offers to buy or otherwise negotiate in respect of any security (as
     defined in the Securities Act) which could be integrated with the sale of
     the Securities in a manner which would require the registration under the
     Securities Act of the Securities.

          (g) Not to solicit any offer to buy or offer or sell the Securities or
     the Underlying Securities by means of any form of general solicitation or
     general advertising (as those terms are used in Regulation D under the
     Securities Act) or in any manner involving a public offering within the
     meaning of Section 4(2) of the Securities Act.

          (h) While any of the Securities or the Underlying Securities remain
     "restricted securities" within the meaning of the Securities Act, to make
     available, upon request, to any seller of such Securities the information
     specified in Rule 144A(d)(4) under the Securities Act, unless the Company
     is then subject to Section 13 or 15(d) of the Exchange Act.

          (i) If requested by you, to use its best efforts to permit the
     Securities to be designated PORTAL securities in accordance with the rules
     and regulations adopted by the National Association of Securities Dealers,
     Inc. relating to trading in the PORTAL Market.

          (j) None of the Company, its Affiliates or any person acting on its or
     their behalf (other than Morgan Stanley) will engage in any directed
     selling efforts (as that term is defined in Regulation S) with respect to
     the Securities, and the Company and its Affiliates and each person acting
     on its or their behalf (other than Morgan Stanley) will comply with the
     offering restrictions requirement of Regulation S.

          (k) During the period of two years after the Closing Date or the
     Option Closing Date, if later, the Company will not, and will not permit
     any of its Affiliates (as defined in Rule 144 under the Securities Act) to
     resell any of the Securities or the Underlying Securities which constitute
     "restricted securities" under Rule 144 that have been reacquired by any of
     them.

                                       16

<PAGE>

          (l) Not to take any action prohibited by Regulation M under the
     Exchange Act in connection with the distribution of the Securities
     contemplated hereby.

          (m) To ensure that the Dutch Securities Board (Autoriteit Financiele
     Markten) is furnished with a copy of the Preliminary Memorandum and the
     Final Memorandum prior to any issuance of the Securities, pursuant to
     Article 2 section 2 of the Exemption Regulation under the Dutch Securities
     Act 1995 (Vrijstellingsregeling Wet toezicht effectenverkeer 1995).

     7. Offering of Securities; Restrictions on Transfer. (a) Morgan Stanley
represents and warrants that it is a qualified institutional buyer as defined in
Rule 144A under the Securities Act (a "QIB"). Morgan Stanley agrees with the
Company that (i) it will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for such Securities only from, and will
offer such Securities only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States, QIBs and (B) in the case of offers
outside the United States, to persons other than U.S. persons ("foreign
purchasers," which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)) in reliance upon Regulation S under the
Securities Act that, in each case, in purchasing such Securities are deemed to
have represented and agreed as provided in the Final Memorandum under the
caption "Transfer Restrictions".

(b) Morgan Stanley represents, warrants, and agrees with respect to offers and
sales outside the United States that:

          (i) it understands that no action has been or will be taken in any
     jurisdiction by the Company that would permit a public offering of the
     Securities, or possession or distribution of either Memorandum or any other
     offering or publicity material relating to the Securities, in any country
     or jurisdiction where action for that purpose is required;

          (ii) it will comply with all applicable laws and regulations in each
     jurisdiction in which it acquires, offers, sells or delivers Securities or
     has in its possession or distributes either Memorandum or any such other
     material, in all cases at its own expense;

                                       17

<PAGE>

          (iii) the Securities have not been registered under the Securities Act
     and may not be offered or sold within the United States or to, or for the
     account or benefit of, U.S. persons except in accordance with Rule 144A or
     Regulation S under the Securities Act or pursuant to another exemption from
     the registration requirements of the Securities Act;

          (iv) it has offered the Securities and will offer and sell the
     Securities (A) as part of their distribution at any time and (B) otherwise
     until 40 days after the later of the commencement of the offering and the
     Closing Date (or Option Closing Date, if later), only in accordance with
     Rule 903 of Regulation S or as otherwise permitted in Section 7(a);
     accordingly, neither Morgan Stanley, its Affiliates nor any persons acting
     on its or their behalf have engaged or will engage in any directed selling
     efforts (within the meaning of Regulation S) with respect to the
     Securities, and it, its Affiliates and any such persons have complied and
     will comply with the offering restrictions requirements of Regulation S;

          (v) it (A) has not offered or sold and, prior to the date six months
     after the Closing Date, will not offer or sell any Securities to persons in
     the United Kingdom except to persons whose ordinary activities involve them
     in acquiring, holding, managing or disposing of investments (as principal
     or agent) for the purposes of their businesses or otherwise in
     circumstances which have not resulted and will not result in an offer to
     the public in the United Kingdom within the meaning of the Public Offers of
     Securities Regulations 1995; (B) has complied and will comply at your own
     cost with all applicable provisions of the Financial Services and Markets
     Act 2000 (the "FSMA") with respect to anything done by you in relation to
     the Securities in, from or otherwise involving the United Kingdom, and (C)
     will only communicate or cause to be communicated any invitation or
     inducement to engage in investment activity (within the meaning of Section
     21 of the FSMA) received by it in connection with the sale of the
     Securities in circumstances in which Section 21(1) of the FSMA does not
     apply to the Company;

          (vi) the Securities which it purchases will be purchased by it as
     principal and it has not offered or sold, and will not offer or sell, any
     Securities, directly or indirectly, in Japan or to, or for the benefit of,
     any resident of Japan (including Japanese corporations), or to others for
     reoffering or resale, directly or indirectly, in Japan or to, or for the
     benefit of, any resident of Japan (including Japanese corporations), except
     as permitted under the applicable laws of Japan;

          (vii) it agrees that, at or prior to confirmation of sales of the
     Securities, it will have sent to each distributor, dealer or person
     receiving a

                                       18

<PAGE>

     selling concession, fee or other remuneration that purchases Securities
     from it during the restricted period a confirmation or notice to
     substantially the following effect:

          "The Securities covered hereby have not been registered under the U.S.
     Securities Act of 1933 (the "Securities Act") and may not be offered and
     sold within the United States or to, or for the account or benefit of, U.S.
     persons (i) as part of their distribution at any time or (ii) otherwise
     until 40 days after the later of the commencement of the offering and the
     final closing date, except in either case in accordance with Regulation S
     (or Rule 144A if available) under the Securities Act, including for the
     avoidance of doubt, the Category 2 offering restrictions contained in Rule
     903(b)(2) of the Securities Act. Terms used above have the meaning given to
     them by Regulation S"; and

          (viii) it has complied and shall comply with Section 2(1)of the
     Exemption Regulation pursuant to the Dutch Act for the Supervision of
     Securities Trading 1995 (Vrijstellingsregeling Wet toezicht effectenverkeer
     1995), according to which the Securities (including rights representing an
     interest in any of the Securities in global form) may only be offered,
     transferred, delivered or sold as part of its initial distribution or at
     any time thereafter, directly or indirectly, to individuals or legal
     entities who or which trade or invest in securities in the conduct of their
     profession, or trade, which include banks, brokers, dealers, insurance
     companies, pension funds and other institutional buyers, and commercial
     enterprises which regularly, as an ancillary activity, invest in
     securities.

     Terms used in this Section 7(b) have the meanings given to them by
Regulation S.

     8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless Morgan Stanley and each person, if any, who controls Morgan Stanley
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and each affiliate of Morgan Stanley within the meaning of Rule
405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in either Memorandum (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in the light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or

                                       19

<PAGE>

alleged untrue statement or omission based upon information relating to Morgan
Stanley furnished to the Company in writing by Morgan Stanley expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to any Preliminary Memorandum shall not inure to the benefit of Morgan Stanley,
or any person controlling Morgan Stanley or any affiliate of Morgan Stanley,
from whom the person asserting any such losses, claims, damages or liabilities
purchased the Securities, if a copy of the Final Memorandum (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of Morgan Stanley, controlling
person or affiliate to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Final Memorandum (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the Company
with Section 6(a) thereof.

     (b) Morgan Stanley agrees to indemnify and hold harmless the Company, its
directors, and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to Morgan Stanley,
but only with reference to information relating to Morgan Stanley furnished to
the Company in writing by Morgan Stanley expressly for use in either Memorandum
or any amendments or supplements thereto.

     (c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties

                                       20

<PAGE>

and that all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by Morgan Stanley, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.

     (d) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and Morgan Stanley on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 8(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(d)(i) above but also the
relative fault of the Company on the one hand and of Morgan Stanley on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and Morgan Stanley on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total discounts and commissions received by
Morgan Stanley, in each case as set forth in the Final Memorandum, bear to the
aggregate offering price of the Securities. The relative fault of the Company on
the one hand and of Morgan Stanley on the

                                       21

<PAGE>

other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by Morgan Stanley and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

     (e) The Company and Morgan Stanley agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, Morgan
Stanley shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities resold by it in the initial
placement of such Securities were offered to investors exceeds the amount of any
damages that Morgan Stanley has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for in
this Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.

     (f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of Morgan Stanley or any person controlling Morgan Stanley or by
or on behalf of the Company, its directors, or any person controlling the
Company and (iii) acceptance of and payment for any of the Securities.

     9. Termination. Morgan Stanley may terminate this Agreement by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, or Euronext Amsterdam Stock Exchange, (ii) trading of any securities
of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a material disruption in securities settlement,
payment or clearance services in the United States, the

                                       22

<PAGE>

United Kingdom or the Netherlands shall have occurred, (iv) any moratorium on
commercial banking activities shall have been declared by U.S. Federal or New
York State, European or Dutch authorities or (v) there shall have occurred any
outbreak or escalation of hostilities, or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and which,
singly or together with any other event specified in this clause (v), makes it,
in your judgment, impracticable or inadvisable to proceed with the offer, sale
or delivery of the Securities on the terms and in the manner contemplated in the
Final Memorandum.

     10. Effectiveness. This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.

     If this Agreement shall be terminated by Morgan Stanley, because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse Morgan Stanley for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by Morgan
Stanley in connection with this Agreement or the offering contemplated
hereunder.

     11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

     12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

     13. Submission to Jurisdiction. The Company expressly accepts jurisdiction
of any federal or state court sitting in the County of New York in respect of
any suit, proceeding or other action against the Company instituted by Morgan
Stanley or by any person controlling Morgan Stanley as to which Morgan Stanley
or any such controlling person is a party and based upon this Agreement arising
out of the offering made by each Memorandum or any purchase or sale of
securities in connection therewith. The Company hereby irrevocably waives any
objection that it may have or hereafter have to the laying of venue of any such
action or proceeding arising out of or based on the Securities or this Agreement
or otherwise relating to the offering, issuance and sale of the Securities in
any federal or state court sitting in the County of New York and hereby further
irrevocably waives any claim that any such action or proceeding in any such
court has been brought in an inconvenient forum. The Company agrees that any
final judgment after exhaustion of all appeals or the expiration of time to
appeal in any such action or proceeding arising out of the sale of the
Securities or this Agreement rendered by any such federal court or state court
shall be conclusive and, subject

                                       23

<PAGE>

to any limitations on enforcement, may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by law.

     14. Consent to Service of Process. By the execution and delivery of this
Agreement, the Company hereby designates and appoints Corporation Service
Company as the authorized agent of the Company, upon whom process may be served
in any suit, proceeding or other action against the Company instituted by Morgan
Stanley or by any person controlling Morgan Stanley as to which Morgan Stanley
or any such controlling person is a party and based upon this Agreement arising
out of the offering made by each Memorandum or any purchase or sale of any
securities in connection therewith. Such designation and appointment shall be
irrevocable, unless and until a successor authorized agent in the County and
State of New York reasonably acceptable to Morgan Stanley shall have been
appointed by the Company, such successor shall have accepted such appointment
and written notice thereof shall have been given to Morgan Stanley. The Company
further agrees that service of process upon its authorized agent or successor
(and written notice of said service to the Company mailed by certified mail or
delivered) shall be deemed in every respect personal service of process upon the
Company in any such suit, proceeding or other action. In the event that service
of any process or notice of motion or other application to any such court in
connection with any such motion in connection with any such action or proceeding
cannot be made in the manner described above, such service may be made in the
manner set forth in conformity with the Hague Convention on the Service Abroad
of Judicial and Extrajudicial Documents on Civil and Commercial Matters or any
successor convention or treaty. Nothing contained in this Agreement shall affect
or limit the right of Morgan Stanley to serve any process or notice of motion or
other application in any other manner permitted by law or limit or affect the
right of Morgan Stanley to bring any action or proceeding against the Company or
any of its property in the courts of any other jurisdiction. The Company further
agrees to take any and all action, including the execution and filing of all
such instruments and documents, as may be necessary to continue such
designations and appointments or such substitute designations and appointments
in full force and effect for a period of six years from the date hereof. The
Company hereby agrees with Morgan Stanley to the exclusive jurisdiction of the
courts of the State of New York, or the federal courts sitting in the County of
New York, in connection with any action brought by the Company.

     15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

                                       24

<PAGE>

                                         Very truly yours,

                                         ASM INTERNATIONAL N.V.

                                         By: /s/ Robert L. de Bakker
                                             -----------------------------------
                                             Name:  Robert L. de Bakker
                                             Title: Chief Financial Officer

Accepted as of the date hereof

MORGAN STANLEY & CO. INCORPORATED

By: /s/ David Schwarzbach
    ----------------------------------
    Name:  David Schwarzbach
    Title: Vice President

                                       25

<PAGE>

                                                                     EXHIBIT A-1

                     OPINION OF U.S. COUNSEL FOR THE COMPANY

     The opinion of U.S. counsel for the Company, to be delivered pursuant to
Section 5(c) of the Subscription Agreement shall be to the effect that:

<PAGE>

                                                                     EXHIBIT A-2

                 OPINION OF NETHERLANDS COUNSEL FOR THE COMPANY

     The opinion of Netherlands counsel for the Company, to be delivered
pursuant to Section 5(c) of the Subscription Agreement shall be to the effect
that:

                                      A-2

<PAGE>

                                                                     EXHIBIT A-3

                  OPINION OF HONG KONG COUNSEL FOR THE COMPANY

     The opinion of Hong Kong counsel for the Company, to be delivered pursuant
to Section 5(c) of the Subscription Agreement shall be to the effect that:

                                      A-3

<PAGE>

                                                                     EXHIBIT A-4

                  OPINION OF JAPANESE COUNSEL FOR THE COMPANY

     The opinion of Japanese counsel for the Company to be delivered pursuant to
Section 5(c) of the Subscription Agreement shall be to the effect that:

                                      A-4

<PAGE>

                                                                     EXHIBIT A-5

               OPINION OF NETHERLANDS TAX COUNSEL FOR THE COMPANY

     The opinion of Netherlands tax counsel for the Company to be delivered
pursuant to Section 5(c) of the Subscription Agreement shall be to the effect
that:

                                      A-5

<PAGE>

                                                                     EXHIBIT B-1

                   OPINION OF U.S. COUNSEL FOR MORGAN STANLEY

     The opinion of U.S. counsel to Morgan Stanley to be delivered pursuant to
Section 5(d) of the Subscription Agreement shall be to the effect that:

<PAGE>

                                                                       EXHIBIT C

                            [FORM OF LOCK-UP LETTER]

                                                          , 2003
                                             -------------

     Morgan Stanley & Co. Incorporated
        1585 Broadway
        New York, New York 10036

     Dear Sirs and Mesdames:

     The undersigned understands that Morgan Stanley & Co. Incorporated ("Morgan
Stanley") proposes to enter into a Subscription Agreement (the "Subscription
Agreement") with ASM International N.V., a public limited liability company
organized under the laws of the Kingdom of the Netherlands (the "Company"),
providing for the offering (the "Offering") by Morgan Stanley of $75,000,000
principal amount of 5.25% Convertible Subordinated Notes due 2010 (the
"Securities"). The Securities will be convertible into shares of common stock of
the Company, (euro)0.04 par value (the "Common Stock").

     To induce Morgan Stanley to continue its efforts in connection with the
Offering, the undersigned hereby agrees that, without the prior written consent
of Morgan Stanley, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the final offering memorandum relating to
the Offering (the "Final Memorandum"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written
consent of Morgan Stanley, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the Final Memorandum, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with

<PAGE>

the Company's transfer agent and registrar against the transfer of the
undersigned's share of Common Stock except in compliance with the foregoing
restrictions.

     The undersigned understands that the Company and Morgan Stanley are relying
upon this Lock-Up Agreement in proceeding toward consummation of the Offering.
The undersigned further understands that this Lock-Up Agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors and assigns.

     Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to a
Subscription Agreement, the terms of which are subject to negotiation between
the Company and Morgan Stanley.

                                         Very truly yours,

                                         ---------------------------------------
                                         (Name)

                                         ---------------------------------------
                                         (Address)

                                      C-2

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